Opinion of the Economic and Social Committee on the 'Commission Communication "Agenda 2000"'
Date: 1997-10-30
Institutions: European Economic and Social Committee
Subjects: Central and Eastern Europe, Community budget, EU policy, accession to the European Union, enlargement of the Union

21. 1. 98

EN

Official Journal of the European Communities

C 19/111

Opinion of the Economic and Social Committee on the ‘Commission Communication
“Agenda 2000”’

(98/C 19/29)

In a letter dated 17 July 1997, the European Commission asked the Economic and Social
Committee for an opinion on the above-mentioned communication.

At its meeting of 10 July 1997 the Plenary Assembly decided, in accordance with Rule 19(1) of
the rules of procedure, to set up a subcommittee to prepare the Committee’s work on the
matter.

The subcommittee adopted a draft opinion on 24 October 1997 (co-rapporteurs: Mr Cal and
Mr Moreland).

At its 349th plenary session (meeting of 30 October 1997), the Economic and Social Committee
adopted the following opinion by 126 votes to 18, with six abstentions.

1. The Commission proposals

1.1.
The set of papers entitled ‘Agenda 2000’ has been
submitted by the Commission in response to requests
from the European Council. It includes the financial
perspectives for the period 2000-2006, opinions on
the accession applications from central and eastern
European countries, and guidelines for proposals which
are to be fleshed out later concerning the common
agricultural policy, economic and social cohesion and
the various internal policies. The adoption of an overall
approach to these key issues for the future shape of the
Union will enable all the Community bodies to analyse
the challenges facing the EU and to take the decisions
needed in order to provide the right conditions for
addressing these challenges.

The Commission’s approach is coloured by the
1.2.
remit given to it, by EU budgetary restrictions and by
the revised Treaty signed in Amsterdam. This revision
did not go far enough as regards the internal institutional
reforms needed to adapt the Community decision-
making process to a much larger Union. Accordingly, the
Commission proposes that a further intergovernmental
conference be convened in the year 2000 with the specific
aim of adapting the workings of the institutions to
future enlargement.

1.3.
The Commission proposes reinforcing the pre-
accession strategy as of now, and establishing a new
instrument (the accession partnership). This will facili-
tate a bilateral approach to the various aspects involved
in preparing the countries that embark on accession
negotiations, and will see that the budget resources
made available to the applicant countries under the new
financial perspectives are managed in a coherent and
integrated manner, with scheduling covering several
years.

1.4.
In order to meet the estimated needs for pre-
accession aid, the Commission proposes that the finan-
cing currently granted mainly through the Phare pro-

gramme be supplemented by contributions from the
Community’s agricultural and Structural Funds, produc-
ing a total annual figure of ECU 3 000 million throughout
the period.

1.5.
For the post-accession period, the Commission
works on the assumption that a first wave of countries
will join in 2002-2003. The financial perspectives include
the sums which will be made available to the new
Member States; these sums will rise steadily to reach
some ECU 15 700 million in 2006.

1.6.
The Commission’s financial perspectives include
figures for the common agricultural policy and economic
and social cohesion. They assume that the CAP reform
will be extended, that the EU will anticipate the effects
of the next round of WTO negotiations, and that the
Structural Funds will be applied in a more concentrated
manner than hitherto. This will mean the transfer of
ECU 38 000 million of Structural Fund resources to the
new Member States over the period, in addition to the
ECU 7 000 million granted as pre-accession aid.

2. General comments

The present opinion does not seek to analyse in
2.1.
detail the policies and practical measures which the
Commission is proposing for the CAP, economic and
social cohesion, internal policies and enlargement. These
will be dealt with in a more detailed additional opinion
which the subcommittee will draw up in the light of the
opinions and information reports drafted by the relevant
sections. The present opinion is addressed to the
Luxembourg European Council, which will decide
on the opening of negotiations with those applicant
countries which it considers already fulfil the requisite
conditions. Preliminary consideration is also given to the
proposed financial framework for the period 2000-2006;
and the Committee will deal at a later date with the
proposal for an interinstitutional financial agreement
when it is presented by the Commission.

C 19/112

EN

Official Journal of the European Communities

21. 1. 98

2.2.
In view of current conditions and the scale of the
challenges facing Community policy, the package of
proposals submitted by the Commission provides a
practical and detailed basis for pursuing discussions on
the future of the Union and preparing the ground for
the requisite decisions. The Committee is pleased to see
references to sustainable development in Agenda 2000
and hopes that more decisive and deliberate consider-
ation will be given to these across the whole range of
Community policy.

by an increase in income support and the creation of a
horizontal rural development instrument distinct from
the current Structural Funds. This proposal will be
analysed more thoroughly in the ESC opinion on the
subject.

2.3.
The first financial framework was influenced by
the single market project and the Single Act, which
placed a new emphasis on economic and social cohesion.
The second financial framework was influenced by
plans for economic and monetary union and the revised
Treaty that was signed in Maastricht. The new third
financial framework will be affected by the plan for the
accession of a succession of new countries to the
EU, and by the revised Treaty that was approved in
Amsterdam.

The Commission’s proposals for economic and
3.3.
social cohesion have caused concern among some of the
current beneficiaries, who fear that cutting the volume
of transfers and support between the existing Member
States could threaten the progress already made in closing
the gap between their economies and the economies of
the most advanced EU countries and regions. Before
accepting the Commission’s proposals, the Committee
seeks reassurance that these proposals will not reverse
progress on economic and social cohesion within the
EU. The Committee will analyse these proposals further
in a separate opinion.

2.4. However, the Committee thinks that when draw-
ing up its financial perspectives, the Commission should
have given more thorough and systematic consideration
to the entry into force of the third stage of EMU, and to
the impact which these new challenges will have on
employment. If the situation evolves in accordance with
the perspectives presented by the Commission, in the
first few years of the 21st century there will be some EU
Member States participating in the single currency,
others which are not participating, new Member States
with differing transitional periods, applicant countries
engaged in accession negotiations, and applicant
countries taking part in the ‘accession partnerships’ and
in the European conference which is to be convened.

In the

current

situation,

3.4.
the question of
employment is crucially important. The Committee
has often spoken of the need to give the problems of
employment and greater competitiveness the priority
which the EU public demands. Boosting the competi-
tiveness of the EU, whether with its present or future
is a prerequisite for ensuring that
membership,
employment evolves in a positive way and for achieving
sustainable development. These points were brought
out
in the recent ESC opinion intended for the
European summit on employment.

3. Situation and challenges regarding the EU inte-

gration process

3.1.
In order to become stronger in these new circum-
stances, and bearing in mind the need for the European
citizen to identify more with the challenges of deepening
and enlargement, the EU must remain true to its
principles and must press ahead with economic and social
integration. This new stage in the EU’s development will
not succeed if measures are taken which jeopardize the
past achievements of the various Community policies.

3.2.
The Commission’s proposals for the common
agricultural policy seek to continue the reform that
began in 1992, and to anticipate the next round of WTO
negotiations. A reduction in prices will be partly offset

3.5.
Enlargement of the EU as now being postulated
involves a huge challenge, as it concerns countries whose
economic development levels are far below those of the
current Member States. Although the Commission more
often refers to the per capita GDP of the applicant
countries taken together as being around 32 % of the
Community average, the fact is that this figure is based
on ‘purchasing power parities’ and serves only to
compare living standards. To make a more accurate
assessment of the economic and social problems arising
from enlargement, this figure should be calculated on
the basis of ‘exchange rates’. When so doing, Eurostat
data show that the GDP of all the applicant countries
represents less than 4 % of Community GDP, and
the average per capita GDP is around 13 % of the
Community average; this shows clearly the scale of the
progress which still has to be made to boost these
countries’ competitiveness and to integrate them in the
single market.

21. 1. 98

EN

Official Journal of the European Communities

C 19/113

The extension of the single market, with no
3.6.
controls at internal borders,
is a key issue in the
negotiating process. The disparities in development and
social protection between the applicant countries and
the existing Member States will invariably justify a
transitional stage for their economic integration, involv-
ing the application of the customs union, the strengthen-
ing of social support mechanisms, and the setting of
limits on free movement of persons and agricultural
goods and on the application of environmental and
social regulations. The use of EU financial aid should be
stepped up in the applicant countries in the pre-accession
phase in order to help create and stabilize employment.
The Commission should prepare a white paper on the
social situation and policies of the applicant countries
as a way of ensuring adequate consideration of the social
dimension from the pre-accession stage onward.

The Commission recognizes

3.7.
the difficulties
which the economies of the applicant countries must
overcome if they are to compete and develop in the
single market. However, the opinions on the individual
countries concentrate on the conditions for applying the
‘acquis communautaire’ and do not pay sufficient
attention to the issues raised by the economic transition
which these countries are undergoing — issues which
require a different approach from those facing the least
developed regions of today’s EU, which are engaged in
a catching-up process. It would therefore be more
sensible to define the absorption capacity of these
countries’ economies not only in terms of their respective
GNPs but also in terms of the related gross fixed capital
formation, in order to boost investment while bearing
in mind the needs in terms of human capital.

3.8.
For payments, the Commission proposes to keep
the existing own resources ceiling of 1,27 % of GDP, as
decided by the EU-12 in Edinburgh. This should bring
in roughly ECU 67 000 million more during the reference
period, if the anticipated economic growth rate proves
correct. The Community budget would thus increase
from ECU 98 000 million in 1999 to ECU 115 000 million
in 2006 (commitment appropriations). Although such
an increase might be felt insufficient given the scale of
challenges that will face the EU at the start of the
21st century, the Committee endorses the Commission’s
proposal to retain the present ceiling.

4. Challenges for enlargement and financial perspec-

tives

In its opinion on enlargement (1), the Committee
4.1.
recommends that negotiations should open with all the

(1) Opinion on the enlargement of the European Union,

adopted on 29 October 1997.

applicant countries simultaneously, as this would give a
highly encouraging signal to the enlargement process
and make it easier to track each applicant’s progress in
applying the ‘acquis communautaire’, in improving its
competitiveness in the single market, and in consolidat-
ing its democratic system.

4.2.
The applicant countries will be able to join as
and when negotiations are concluded, without having
to wait for the conclusion of negotiations with the
other countries. The membership criteria should be as
objective as possible. They should be based not only on
the EU’s ability to ‘assimilate’ the new Member States,
but also on the latter’s ability to respect the principles
underpinning the current stage of EU integration, which
the time of earlier
is not the same as it was at
enlargements.

4.3.
The Commission proposes to set up a European
conference for establishing joint measures in the fields
of foreign policy and the fight against drugs and
crime. The conference should be convened as soon as
negotiations begin, and should involve all the applicant
countries. It should also provide an opportunity for
detailed talks on the broad lines of the Phare programme,
and of other resources made available to the applicant
countries, in order to improve coordination of this
assistance and gear it more effectively to the needs of
the countries concerned.

The accession partnerships will provide the
4.3.1.
instrument for deepening relations between the EU and
the applicant countries. These partnerships must be
reinforced and deepened so as to provide better coverage
of all the key issues surrounding application of the
criteria for opening negotiations, and not only questions
related to the ‘acquis communautaire’.

4.4.
Bearing in mind the question marks over the
likely accession dates of the various countries, and
their progress in adopting and respecting the ‘acquis
communautaire’, the Commission should draw up a
short range of financial perspectives based on different
assumptions as to when accession will take place. It
would avoid uncertainty and the need for future debate
to cater now for more than one assumption regarding
the most critical variable factor within the period of the
next financial framework.

4.4.1.
Pre-accession aid could thus be concentrated
on the economic restructuring of the applicant countries,
as part of the proposed partnership; the intergovern-
mental conference for the revision of the Treaty could
be held in the meantime; and consideration could be
given to the problem of the contributions of existing
Member States which benefit less than the rest from
Community transfers.

C 19/114

EN

Official Journal of the European Communities

21. 1. 98

4.4.2.
In relation to the question of the costs and
benefits for the various Member States, the Committee
agrees with the Commission that the benefits which
each country gains from participating in the integration
process cannot be measured simply in terms of the
respective financial flows from and to the Community
budget. However, the Committee considers that these
issues need to be widely debated, given the importance
which the convergence criteria have given to the
budgetary aspects. The Commission’s proposed revision
of the financial perspectives does not alter the system
of own resources. Any such alteration would require
a unanimous vote and could need parliamentary
ratification in some Member States. Nonetheless, this
does not make it any less important to create the
conditions for securing a broad consensus on the
general outline.

4.4.3.
The Edinburgh Council decisions brought
greater equity as regards costs, in that contributions
to the Community budget have become more pro-
portionate with national wealth. However, the situation
as regards benefits is more complex. Expenditure on
economic and social cohesion benefits the neediest
countries and regions, but expenditure on internal
policies is distributed differently and has a regressive
impact in cohesion terms. Expenditure on the CAP in
particular tends to favour the countries in which this
policy has applied longest, and which have a higher
aid capitation, although the 1992 reform has reduced
this imbalance.

4.4.4.
Consequently, the distortions which emerge in
calculations of the net balance of contributions to and
from the Community budget are not so much a matter
of resources (Member States’ contributions) as of the
relative weight of the various expenditure headings.
Agriculture still represents the lion’s share (around 50 %
of the total) and structural policies account for around
a third of the total.

developed and the geographically closest countries.
These considerations must not cloud the fact that the
main reasons for enlargement are political rather than
economic.

4.4.6. One of the principles of economic and social
cohesion is solidarity, and the financial perspectives
for the EU-15 must continue to support the neediest
countries and regions,
in order to enable them to
consolidate the progress they have already made and
help them to tackle the additional tasks which the third
stage of EMU will require, as competition conditions
become more difficult. However, under the Com-
mission’s Agenda 2000 proposals, economic and social
cohesion is the only budget heading which will be
reduced in size for the existing Member States during
the reference period (down ECU 10 100 million over the
reference period as a whole in relation to the 1999
situation). Moreover, it is inconsistent for the Com-
mission to propose that expenditure should be maintai-
ned at ECU 2 900 million (1997 prices) particularly when
it cannot yet be established which countries will meet
the GNP criterion at the beginning and at the mid-point
of the six-year period.

4.4.7.
The Commission should analyse the financial
perspectives for the existing Member States, taking
into account the effects on the individual Member
States of these issues and transfers from the Structural
Funds. This will provide a sound basis for discussions
concerning the future of
the Community budget.
Clearly it is essential that the Community budget takes
full account of the support required for the neediest
countries and regions to tackle the third stage of EMU
and the objectives of economic and social cohesion so
that economic disparities can be reduced and eventually
eliminated.

4.4.5.
Alongside these ‘accounting’ considerations, it
must be remembered that the most developed Member
States also draw the greatest economic and trade benefits
from economic integration, the establishment of the
single market and other internal policies. This is why
structural actions were stepped up in the past, enabling
the least developed countries of the EU to experience
economic growth at a rate higher than the Community
average. Studies also show that enlargement will produce
the greatest economic and trade benefits in the most

4.5.
A balance has to be struck — although this
will not always be easy — between the principle
of Community solidarity, budgetary discipline and
restrictions, and the social and political costs and
benefits of EU enlargement. This is a political decision,
and as such is a matter for the European Council.
However, the Committee calls for the Council to build
on the Commission proposals and carry through a
politically ambitious exercise commensurate with the
building of a more solid, more integrated and more

21. 1. 98

EN

Official Journal of the European Communities

C 19/115

united European Union over the last fifteen years, which
has been perceived by many of its citizens as a shared

project for the future, and not as an extreme, short-term
defence of national interests.

Brussels, 30 October 1997.

The President

of the Economic and Social Committee

Tom JENKINS

APPENDIX

to the opinion of the Economic and Social Committee

The following amendment, which received at least one quarter of the votes cast, was defeated during
the discussion:

Point 4.4.1

In the first sentence, replace ‘the Committee agrees’ with:

‘the Committee acknowledges that it would be reasonable for the balance of receipts from and
contributions to the Community budget to correspond overall to the relative prosperity of the Member
State concerned. The Committee agrees ...’.

Reason

The point of the amendment is that the Committee is bringing the so-called ‘net contribution’ debate
back to the principle of economic capability generally accepted in the EU. This debate should concern,
not absolute net balances by Member State, but the results of contributions to and receipts from the EU
budget, which in overall terms are proportional to the relative prosperity of the Member State concerned
within the EU.

Result of the vote

For: 41, against: 105, abstentions: 18.