Challenges after the Treaty of Amsterdam

The pending problems

The Commission adopted in July 1997 the so-called Agenda 2000. This document tackled the big questions facing the European Union at the beginning of the 21st century. It is organised in three parts:

  • The first was focused on the EU's internal operation, especially the reform of the CAP and the cohesion policy. It also gave some recommendations on the way to deal with the challenge of enlargement and put forward a possible new financial framework for the period 2000-2006.

  • The second strengthened the pre-accession strategy, creating the partnership for accession and extending the participation of applicant countries in Community programmes, for instance, the educational ones.

  • The third was a study on the effects of enlargement on EU policies.

These were the main problems that the EU had to confront in the period up to the year 2000:

  • Reform of the Common agricultural policy (CAP) that goes on absorbing an enormous percentage of the whole Union budget. It is no surprise that this reform unleashed protests among affected peasants.

  • Reform of Structural and Cohesion Fund. Structural Fund was aimed at three territories: regions with GDP per person inferior to 75% of Union average, regions with urgent necessity of social and economic restructuring and another sort of regions not included in the former ones but whose educational, training and employement systems should be modernised. First kind of regions took 2/3 of the whole fund. The Cohesion Fund was focused on helping countries whose GDP per capita is inferior to 90% of the Union average. A great problem pending for the future was the reform of these funds with the future accession of less developed countries of Central and Eastern Europe.

The European agriculture: an agriculture based on quality

  • Reform of the financial framework of the Union. Some of the richest countries, like Germany, complain about the imbalance between their contribution to the Community (around 28,2% of the total) and what they receive via Structural Fund and CAP. Poorer countries refuse to a rebalance the contributions.

  • The termination of the Economic and Monetary Union in the 2002. After their launching on 1 January 1999,  the Euro has plummeted against US dollar. The strength of the North American economy was the main reason of this evolution, seen with mixed feelings from European markets and theEuropean Central Bank

Euro Notes

Greece, after complying with the convergence criteria, joined Euroland. From January 2001, twelve countries will adopt the Euro. Although Labour Tony Blair's government is in favour of following its European partners, surveys show that a lot of Britons kept a eurosceptic position.

As well as giving solution to major problems as unemployement or the lack of a genuine Community policy on taxation, the great challenge that the European Union faces in the next future was, and is and will be over some years, its enlargement towards the former communist countries of Central and Eastern Europe (CCEE).

The fifth enlargement of the European Union

1989 launched a radical transformation of our continent. The collapse of the communist systems, the break-up of the Soviet Union, the birth of new European States, the war in Yugoslavia..., all those events transformed Europe. 

From the very beginning, accession to the EEC (EU from 1992) was seen by these countries as the best means to overcome their two main problems:

  • The establishment of democratic systems, based on the respect of human rights.

  • The transition of a communist planified system to a market economy. This transition, with no previous example in history, had to be carried out in the middle of a deep economic crisis.

Another major problem that these countries had to face was finding security in a uncertain context (disintegration of the USSR, violent break-up of Yugoslavia...). The new democratic governments contemplated the NATO, the Western military alliance led by the USA, as the best guarantee for their security. In spite of the discontent of  Russia, the USSR's heiress, Hungary, Poland and the Czech Republic joined the Atlantic Alliance in 1999. 

Serbian tank in Kosovo

Fleeing the Russian sphere of influence and joining an area of economic development and security caused the urgent interest of former communist countries to join Western institutions, especially, the European Union. 

Future enlargement of the Union toward CCEE, Cyprus, Malta and Turkey means for the EU an historical opportunity. The accession of these new countries will increase the weight and the influence of the Union in the international scene.

European Union's enlargement towards Central and Eastern Europe

Enlargement will be the major issue of EU policies in the next future. The accession of countries with very different economic and political features, confronts the European Union with unprecedented institutional and political challenges. 

The first challenge was to reform the EU institutions to make them efficient for a new enlarged Union. This reform brought about serious discrepancies among member States. Topics like the composition of the Commission, the weight of each country's vote, the powers of Parliament..., all those subjects arose the debate among the governments. To give a solution to those questions an Intergovernmental Conference was called. It will end in an European Council in Nice, France, at the end of 2000. The future of the EU will largely depend on the success of the institutional reform to be approved in Nice. 

The real problem of these countries is their backwardness and their economic difficulties. It provokes that, in spite of the enormous efforts the CCEE have made, their integration in the EU will be an extremely delicate task, since it will hardly affect on the main funds and policies -Structural Fund and CAP- that today shape the Union policies.

After the collapse of the communist regimes, the EU launched in 1989 the Phare to help the CCEE reconstruct their economies. The aid (EUR 6.7 billion during the period 1995-1999) covered mainly sectors as infrastructure, agricultural restructuring, education, development of the private sector of the economy and environmental protection.

In June 1993, the Copenhagen European Council accepted the right of the CCEE to join the European Union when three criteria were complied with:

  • political: stable institutions guaranteeing democracy, the rule of law, human rights and respect for minorities;

  • economic: an operative market economy;

  • incorporation of the Community acquis: adherence to the diverse political, economic and monetary objectives of the EU.

However, at the Madrid European Council, held in 1995, problems started coming into view. 

On the one hand, how will the enlargement affect the community policies, such as : CAP, structural and cohesion funds, or financial framework of the EU? To what extent will the enlargement damaged the countries, like Spain, that profited more of those funds? The Agenda 2000, approved in 1997, was, a proposal of reforms that tried to answer to these queries.

On the other hand, the richest countries in the Union started fearing a genuine avalanche of immigrants when free movement of persons was implemented after the CCEE accession. This alarm has brought about the strengthening of far-right xenophobic parties, like Haider's in Austria.

The Luxembourg European Council, held in December 1995, gave a favourable reception to ten countries applications to join EU. In 1995, negotiations had started with Cyprus. In spite of that, the Council decided to proceed in two phases or waves. In March 1998, negotiations began with the six first wave countries (Cyprus, the Czech Republic, Estonia, Hungary, Poland, and Slovenia). The other CCEE (Bulgaria, Latvia, Lithuania, Malta, Romania and Slovakia), the second wave, were allowed to join the first wave in February 2000, as it was considered that their reforms had made quick enough progress. 

Bearing in mind the economic hardships of these countries, the Agenda 2000 established financial aid and the Council signed, in 1998, different accession partnerships to coordinate this aid provided by the European Community, the applicants' complying with several priorities set for each sector in adapting to EU legislation, determines the EU's financial assistance. 

This adaptation to the EU standards and legislation, especially as far as industrial and environmental rules are concerned, required huge investment. A pre-accession aid scheme for the period 2000-2006 for the CCEE was passed. The plan involved two main elements:

  • the aid of Phare programme is focused on adapting the applicant countries' administrative and legal systems and developing their infrastructure (EUR 10.5 billion);

  • two new funds were set up to manage additional aid for agriculture and infrastructure, especially environment and transport. The fund devoted to infrastructure development is known as the structural pre-accession instrument and will play a similar role for the applicant countries as the cohesion fund does for Spain, Portugal, Greece and Ireland.

To end with the enlargement question, we should comment the cases of Cyprus, Malta and Turkey.

Cyprus, although having started negotiations sooner than the rest of applicant countries, has a serious political problem in the division of the island in two confronted sectors after the Turk military invasion that followed the Greek military coup in 1974. It will be very difficult to accomplish the accession process meanwhile this problem had not been solved.

Malta decided to paralysed its application for two years, from 1996 to 1998. A special report by the Commission will decide whether this country is included in the first or in the second wave of applicant nations.

As far as Turkey is concerned, The Luxembourg European Council affirmed that this country did not satisfy the political and economic conditions to start accession negotiations and, thus, the EU strategy to prepare Turkey for joining the Union should be continued. Turkey's government and public opinion were dismayed by this declaration, and there were reactions claiming that anti-islamic prejudices underlay this decision.