SPEECH/06/316

Mr Olli Rehn

Member of the European Commission, responsible for Enlargement




"Building a New Consensus on Enlargement: How to match the strategic interest and functioning capacity of the EU?”

European Policy Center
Brussels, 19 May 2006

Thank you for inviting me to share with you some thoughts on the current state and next steps of our enlargement policy. It is always a pleasure to address the insightful audience of the European Policy Centre.

Ladies and gentlemen,

On 1 May, we celebrated the second anniversary of the Union's latest enlargement with ten new Member States. Looking at the past two years, we have every reason to be satisfied and proud. Once again, the accession of new countries to the Union has been a success.

The 2004 enlargement was a formidable challenge. It involved absorbing – yes, the a-word – the largest ever number of new members. It implied an unprecedented increase in the Union's diversity. It took place in a difficult political atmosphere in Europe and in the whole wide world.

Before 1 May 2004, there was no shortage of doomsday scenarios. Yet the Cassandras have been proven wrong. None of the catastrophes materialised. The Union's institutions are not paralysed. Our budget has not collapsed. There has been no invasion of job-thirsty migrants from Central Europe. Economies of the ‘old’ Member States were not destroyed by unfair practices of the newcomers. Economies of the new Member States did not collapse under the pressure of competition.

On the contrary, as substantiated by several recent studies, eastward enlargement has brought positive economic effects on both new and incumbent member states, and convergence between them has continued. Above all, who can overlook the spectacular economic and democratic transformation that has taken place in the last 15 years in Central Europe? And who can contest the fact that EU accession has been the main driving force in this process of transformation?

How can we then explain the paradox that support for enlargement in public opinion has suffered? And why has scepticism risen among policy-makers, in some countries, over further steps in enlargement?

Clearly, we cannot ignore the enlargement fatigue, but we should not raise our hands up in the face of it. In other words, we must resist the temptations of populism and instead underline what concrete added value a gradual and carefully managed EU accession process provides for Europe by extending the zone of peace, liberty and democracy. I trust every serious political leader worth his salt and our respect would rather dislike being referred to in the way Winston Churchill once quipped of his successor: “He is their leader – that’s why he has to follow them.”

Instead, we must understand the social pains of contemporary Europe and address their causes. The enlargement blues could equally be called the unemployment blues, the globalisation blues, or the welfare state blues. We must tackle the real concerns of our citizens – such as unemployment and social insecurity – with appropriate and resolute policies that enhance economic growth and job creation, while resisting and tackling myths and misperceptions on enlargement.

For these reasons, we must build a new consensus on EU enlargement. It should both respect Europe’s strategic interest and ensure the Union’s functioning capacity. Successive enlargements of the EU have made it what it is today. Enlargement has been a powerful force for extending the zone of peace, democracy and prosperity and for projecting Europe’s values, interests and influence in the world. Through enlargement the EU has responded positively to new circumstances – such as the fall of dictatorships or the collapse of communism. Enlargement has proven to be a successful shock absorber for Europe.

At every enlargement, there have been doubts: but each time the Union has shown it has the institutional, financial and political capacity to absorb new members.

However, while a majority of Europeans continue to regard enlargement as positive – 55% according to the latest Eurobarometer – many citizens question its pace and scope. While the Union must honour existing commitments, there is a need for an informed, responsible debate on the future enlargements and what they mean for the Union as a whole.

Recently, many politicians have called for a definition of the ‘borders of Europe’. The EU Treaty indicates that any European country which respects the values of democracy and the rule of law may apply for EU membership. The Union defines itself through its members’ shared values, rather than by geography. But this does not mean that all European countries must apply for membership, or that the EU has to accept all applications. It is not an automatic process, but one where each key decision requires unanimity and where conditionality is the key.

We have taken the concerns on the pace of enlargement seriously. To avoid an overstretch of commitments and ensure the capacity of absorption, EU enlargement policy today is based on consolidation. This means that we are cautious about taking any new commitments, but stick to our existing commitments to the countries already in the process.

Our consolidated enlargement agenda covers Southeast Europe: the EU has committed itself to completing the fifth enlargement with the accession of Bulgaria and Romania, conducting accession negotiations with Croatia and Turkey, and maintaining a European perspective to the other countries of the Western Balkans – which means that the EU is committed to their eventual membership, once each of them succeeds in meeting all the conditions. While the 2004 enlargement sealed the peaceful reunification between Western and Eastern Europe, now we focus our energy on the peaceful unification in Southeast Europe.

Can we absorb these countries into the EU? In my view, absorption capacity is determined by two major factors: the transformation of the applicants into worthy member-states, and the development of the Union’s policies and institutions. The capacity of would-be members to integrate smoothly into the EU is measured and rigorously assessed by the Commission on the basis of well-established conditionality.

Rigorous conditionality is applied to all candidate and potential candidate countries. New steps in the process depend on each country's own progress with political and economic reforms. Bulgaria and Romania need to redress the remaining shortcomings before accession. Fulfilment of the accession criteria is the key for progress in the negotiations with Croatia and Turkey. Before entering the accession process proper, the Western Balkans countries have to fulfil the conditions of the Stabilisation and Association Process, including full cooperation with the International Criminal Tribunal for the former Yugoslavia.

Absorption capacity is about whether the EU can take in new members while continuing to function effectively. It is a functional concept, not a geographical one. The Copenhagen European Council of 1993 stated as follows: "The Union’s capacity to absorb new members, while maintaining the momentum of European integration, is also an important consideration in the general interest of both the Union and the candidate countries". Absorption capacity was dealt with for the 2004 enlargement by the Commission’s Agenda 2000 document (produced in 1997), which proposed reforms of institutions, policies and the budget of the EU.

It paved the way for the decisions in 1999-2003 that prepared the Union for a successful accession of the ten new member states in May 2004.

Recently, last November, the Commission defined absorption capacity as follows: “The pace of enlargement must take into consideration the EU’s absorption capacity.

Enlargement is about sharing a project based on common principles, policies and institutions. The Union has to ensure it can maintain its capacity to act and decide according to a fair balance within institutions; respect budgetary limits; and implement common policies that function well and achieve their objectives.”

In the preparation for the accession negotiations with Turkey, the Commission conducted an assessment of the effects of Turkey’s possible accession on the Union and its policies. The issues examined were most relevant to the consideration on the capacity of the EU to absorb new members. The Commission monitors this capacity during the negotiations and takes the EU's absorption capacity into account when presenting draft common positions on the negotiation chapters.

Economically, the EU started to prepare the latest enlargement as early as in 1991, when the EU signed the first Europe Agreements with Hungary and Poland, followed by other candidate countries. Thanks to these agreements, a free trade area was established in 2001 for 85% of bilateral trade, thus avoiding any trade shock in May 2004. As CER’s Katynka Barysch puts it, economically enlargement is yesterday’s news.

The story goes on in Southeast Europe. Recent economic dynamism in Turkey is a result of the bold economic reforms undertaken in the country, stimulated by the EU Customs Union. In the Western Balkans, the countries are being prepared by the Stabilisation and Association Agreements, which provide for free trade and economic assistance, and support for building better institutions. Moreover, the enlargement and modernisation of the Central European Free Trade Agreement (CEFTA) paves the way for deeper regional economic integration in Southeast Europe, which also prepares this region for eventual EU membership.

With the view of these regional and gradual arrangements of economic and political integration, I don’t see any real need for further “third ways” in terms of multilateral frameworks, or alike. Instead, I am all in favour of reinforcing European Neighbourhood Policy, especially for such countries as Ukraine, Moldova, and one day when free, Belarus.

The Nice Treaty provides institutional rules for up to 27 members, i.e. up to the accession of Bulgaria and Romania. Before the next enlargement after that, a new institutional arrangement should have been born. We expect the European Council in June to adopt a step by step approach, to be taken by the future Presidencies, which should pave the way for a new institutional settlement. This should be concluded by 2008-9, prior to the next enlargement. We don’t need it for the sake of enlargement; we need if for the sake of making the current EU to function better.

As to the financing of the Union, a budget review, as agreed at the last European Council, will be conducted in 2008 or 2009. The Commission will return then with ideas for a comprehensive reform of the budget – and thus, by definition, of common policies – which will support competitiveness and solidarity through a new policy agenda.

By revisiting the institutional settlement and budgetary arrangements and by suggesting a new policy agenda, altogether a sort of “Agenda 2009” or “Agenda 2014” if you like, we shall on the side, or as a significant spillover, prepare the Union for next enlargements. It is a major challenge, certainly, but no rocket science – we’ve done it before.

How about the public opinion, then? For any of its policies, including enlargement, the EU has to win the support of its citizens. Both the member states and the EU institutions need to communicate the successes and challenges of enlargement better, address the real concerns and tackle myths by facts. In the European tradition of representative and deliberative democracy, public opinion is channelled into decision-making through democratically elected bodies.

Democratic legitimacy is indeed essential for the EU accession process. Every key decision leading to a country’s accession is taken unanimously by the democratically elected governments of the EU member states. National parliaments must ratify the decision. The Members of the European Parliament, who are directly elected, must give their assent. Thus, all the key decisions are taken by all the relevant democratically elected bodies in each member state and in the Union.

To facilitate a new consensus on EU enlargement as a part of the future of Europe, the Commission will take forward the debate on the concrete added value of enlargement and the Union’s capacity to absorb new members. We shall report on the EU’s enlargement strategy later this year, ahead of the European Council in December. I hope the June European Council can endorse this and give its political guidance.

Let me conclude: we need to underline both the strategic interest and functioning capacity to build a new consensus on EU enlargement. As we have many years before the next accession, we should indeed focus on improving the immediate functioning capacity of the current EU now, not only the more abstract absorption capacity in the distant future.

The EU needs to reinforce its “shock absorption capacity” by reforming its policies and institutions to deal with a changing world. But we must keep making progress on these matters in parallel with enlargement, not hold the Western Balkans and Turkey hostage to our internal debates.

The current enlargement countries are chugging along the track to the EU, not rushing towards accession like a high-speed train. But it would only undermine our own conditionality and strategic interest if we gave them the impression that they are on the road to nowhere.