Opinion of the Economic and Social Committee on "EU enlargement: the challenge faced by candidate countries of fulfilling the economic criteria for accession"
Date: 2001-04-25
Institutions: European Economic and Social Committee
Subjects: accession to the European Union, economic conditions, enlargement of the Union, third country

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The Committee recognises that

5.4.
the Commission’s
proposals will require some Member States to forego some of
the information which they currently require to be included
on an invoice and to relax some of the regulations which are
currently in force in the territory under their jurisdiction.
Conversely, the harmonised invoice contents may require
businesses in some Member States to furnish information
which they are not currently required to produce. The
Committee believes that such sacrifices are necessary for the

completion of the Single Market and will ultimately be to the
benefit of businesses and tax administrations alike. It calls
upon the Member States to accept these changes as a necessary
adjunct of Single Market harmonisation and co-ordination.

The Committee hopes that any derogations given to
5.5.
Member States in respect of
to accept
electronic invoicing will be limited to the shortest possible
time.

the requirement

Brussels, 26 April 2001.

The President

of the Economic and Social Committee

Göke FRERICHS

Opinion of the Economic and Social Committee on ‘EU enlargement: the challenge faced by
candidate countries of fulfilling the economic criteria for accession’

(2001/C 193/14)

On 13 July 2000 the Economic and Social Committee decided, under Rule 23 of its Rules of Procedure,
to draw up an opinion on ‘EU enlargement: the challenge faced by candidate countries of fulfilling the
economic criteria for accession’.

The Section for Economic and Monetary Union and Economic and Social Cohesion, which was
responsible for preparing the Committee’s work on the subject, adopted its opinion on 13 March 2001.
The rapporteur was Mr Vever.

At its 381st plenary session on 25 and 26 April 2001 (meeting of 25 April) the Economic and Social
Committee adopted unanimously the following opinion.

1.

Summary

1.1.
In the course of this decade the European Union will
be expanding on a large scale, making a reality of the new
political ambition to unify the greater part of the European
continent from west to east. The guidelines of the enlargement
strategy, updated by the Commission in November 2000 and
since approved by the Council, deem that the preconditions
on the EU’s side have now been met, on the financial level by
the Berlin agreement on Agenda 2000, and on the institutional
level by the Nice agreement reforming the Treaty. The new
enlargements essentially depend on the ‘road maps’ for each of
the applicant countries,
i.e. their progress in adopting the
Community acquis, considered to be going well for the great
majority of the applicants, and in concluding the accession
negotiations, considered to be possible as of 2002 for the
applicant countries which are in the best position. While

subscribing to the main points of this assessment, the Com-
mittee would also stress that responsibilities will necessarily
still have to be shared between the 15 EU Member States and
the applicant countries for taking up the economic challenge
of enlargement. This is a moving target and the stakes are
threefold: effective adoption of the acquis, more effective
support methods and preparation for new cohesion in an
enlarged Union.

1.2.
Taking on board the Community acquis effectively is
very exacting because of the high level of integration which
the Union has already achieved and will continue to work on.
The issue is inevitably complicated by the high number of
applicant countries,
the gaps between them in terms of
development and the diverse nature of their adjustment needs.
The Commission’s report of November 2000 set out the highly
encouraging progress achieved in the applicant countries,
demonstrated by increasing trade with the European Union.
This progress opens up the prospect of accession for a large

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majority of these applicant countries in the near future. The
remaining priorities vary from one country to another and
must therefore be targeted. However, over and above the
diverse nature of the work still to be done, the Committee
underlines that one point in common is the need to involve
civil society fully in this work in order to ensure its completion.

Success in the integration process requires more effec-
1.3.
tive support methods. Community aid programmed in Agen-
da 2000 in Berlin will not in itself be enough to finance
measures to ensure that the applicant countries catch up on
the rest of the EU. The Committee would underline that
Community aid must above all help to create a favourable
climate for attracting private investment which alone is able to
pull in all the resources needed. This presupposes stepping up
training measures in close cooperation with socio-occu-
pational operators, with Community support. The Com-
mission’s evaluation reports must be supplemented by joint
monitoring undertaken by the Ecofin Council with direct
involvement of socio-occupational representatives from civil
society who are well placed to assess what progress has really
been made in the field. The Committee will contribute to
this through its annual conferences and joint consultative
committees.
It would also be appropriate to involve the
applicant countries as of now in some common policies (single
market, intellectual property, customs, the environment, trade
policy).

Lastly,

1.4.
it is important to start now on laying the
foundations for new economic and social cohesion in an
enlarged Europe; this is a complex issue which entails joint
innovative action. The Committee would stress the need to
undertake organisational reforms in the legislative, adminis-
trative, economic and social spheres. As regards legislation, a
first priority is to simplify Community regulations by improv-
ing their quality and effectiveness while making implemen-
tation more disciplined. On an administrative level, applicant
countries should be involved in stepping up checks in the
single market, with all national administrations being made
aware of their responsibilities. On the economic and social
front, steps to further EMU should be continued by preparing
the applicant countries which are to join the EMS2 exchange
rate mechanism as of their accession. These countries should
also be involved right now in the Lisbon mandate which urged
all Member States to undertake structural adjustments to boost
European competitiveness.

the 15 for preserving cohesion in an enlarged Europe. This
programme will have to be completed before the end of the
current Parliament and Commission mandates. It will have to
help the applicant countries take up the economic challenge
of accession by creating genuine synergy between these
countries and the 15 current Member States. An interactive
process of this type carried out in close cooperation with civil
society will not only allow the European Union to expand
without endangering its economic and social cohesion, but
will also allow its competitiveness to be strengthened by
optimising its underlying strengths and assets through unifi-
cation.

2.

Preliminary comments

2.1.
Enlargement of the European Union on a grand scale
represents the major challenge for this decade which will have
a far-reaching impact on the Union. This will be more than a
simple enlargement; what is at stake is unifying Europe and
making this unification its asset in the 21st century, unlike the
20th century where division constituted its handicap. This is a
global, complex challenge which affects the European Union’s
political aims,
its
internal organisation methods, its geographical and regional
dimensions and its ability to compete world-wide. It is an
interactive challenge because these various factors influence
one another in a dynamic process which needs to be planned
and controlled. The economic and social challenge is clearly at
the hub of this issue, in terms of both the opportunities created
and the preconditions for such a process to succeed (1).

the changes to its institutional set-up,

2.2.
Enlargement will entail unheard-of new economic
opportunities: the challenge is to create a large single market
bringing together more than five hundred million Europeans,
thereby helping to ensure that the economic changes which
have taken place in the applicant countries cannot be reversed
and to stabilise the European continent on the basis of the
principles and disciplines of a market economy. This large
market will make it possible to consolidate economic develop-
ment and social progress in Europe, boost global competi-
tiveness, and step up investment and trade by exploiting the
potential synergies between the Member States’ markets. It will
increase the European Union’s clout in world trade at both
bilateral and multilateral levels at a time when new rules will

1.5.
To achieve these three objectives the Committee is
launching an appeal for a global multi-annual programme to
be undertaken as from 2001 in preparation for enlargement,
aimed at boosting the effectiveness of support methods for
applicant countries while creating the right conditions amongst

(1) See also the opinions of the Economic and Social Committee:

The employment and social situation in the CEEC;
The EU’s northern dimension, OJ C 139, 11.5.2001;
The impact of enlargement on the single market, OJ C 329,
17.11.1999.

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have to be negotiated to provide a framework for economic
globalisation.

2.3.
The guidelines for the enlargement strategy, updated
by the Commission in November 2000 and since approved by
the Council, deem that the preconditions on the EU’s side have
now been met, on the financial level by the Berlin agreement
of March 1999 on Agenda 2000 and on the institutional level
by the Nice agreement of December 2000 on reforming the
Treaty. New enlargements therefore now depend solely on the
state of progress in the ‘road maps’ associated with each of the
applicant countries,
i.e. progress in adopting the acquis,
considered to be going well for the large majority of the
applicants, and completion of the accession negotiations,
considered to be possible as of 2002 for the best placed of
these countries.

2.4. While subscribing to the main point of this evaluation
and supporting the idea of seeing the first enlargements take
place in the near future, the Committee would stress that the
economic and social challenge still remains at the heart of the
process today. The problems raised are matched only by the
opportunities created. The number of applicant countries and
the current development differences will create greater diversity
in new terms, the issue of the Union’s
which will raise,
cohesion.

2.5.
Above all, for the applicant countries the objective of
integrating their economies into the European economy is a
moving target. In fact the European Union is still far from full
economic and political maturity and far from having com-
pleted the social adjustments it has set for itself. The Economic
and Monetary Union set up in 1999 between 11 Member
States, and now enlarged to include 12, is only in its early
stages and will considerably extend the integration process
between national economies. In addition, the EU 15 agreed at
the Lisbon European Council in March 2000 to speed up their
structural reforms so as to adjust their economies to the new
competitive challenges, and they confirmed this commitment
at the Stockholm European Council of March 2001.

The Committee has focused its thinking on three key
2.6.
issues directly linked to the preliminary comments set out
above:

— the challenge of effectively taking on board the acquis;

— the challenge of more effective support measures;

2.7.
A hearing of socio-occupational representatives from
the different applicant countries (1) allowed the Committee’s
analyses and recommendations to be discussed in greater
depth; they therefore incorporate the assessments put forward
by these representatives. A broad consensus was reached at
this hearing on the main thrust of this opinion.

3.

The challenge of effectively taking on board the
acquis

3.1.
The 1993 Copenhagen European Council had already
established as a condition for accession that the applicant
countries should be able to set up an effective market economy
and cope with competition in the single market. The aim of
the negotiations with each of the applicant countries is to
ensure that the Community acquis is fully and effectively
incorporated into national laws, keeping the scope and time
lengths of any post-accession transitional arrangements to a
strict minimum. Taking on board the acquis and implementing
it effectively is a truly demanding challenge for the applicant
countries. The European single market is in fact already highly
integrated, based on a plethora of common rules (estimated at
around 80 000 pages), often recently introduced. European
coordination became much more exacting with the implemen-
tation of Economic and Monetary Union (EMU) in 1999. It
was agreed that the new Member States should join the EMU
without the possibility of politically opting out, as long as they
met the economic criteria.

3.2. Measuring the challenge

3.2.1.
Incorporating the acquisinto national legislation will
be complicated by the number of applicant countries, their
geographical diversity, their different development levels and
their social requirements.

3.2.1.1.
The number of applicant countries is high: the
European Union is today negotiating simultaneously with
twelve applicant countries; in addition a thirteenth country,
Turkey, was officially recognised as an applicant country at
the Helsinki European Council in December 1999 (even if the
launch of accession negotiations with this country remains
subject to compliance with the political criteria set out in
Copenhagen).

is

There

3.2.1.2.
geographical diversity
considerable
amongst the candidate countries: there are pronounced differ-
ences in population size (from 400 000 inhabitants in Malta
to 38,7 million in Poland and 64,3 million in Turkey). There
is also regional diversity: ten applicant countries belong to
central and eastern Europe (Poland, Hungary,
the Czech
Republic, Slovakia, Estonia, Lithuania, Latvia, Slovenia, Rom-
ania and Bulgaria) and three to the Mediterranean area (Cyprus,
Malta and Turkey).

— the challenge of preparing for new cohesion in an

enlarged Union.

(1) Conference entitled ‘Towards a partnership for economic growth
and social rights’ held at the Economic and Social Committee
from 14 to 17 November 2000.

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3.2.1.3.
There are major differences in development levels,
with an average standard of living in the applicant countries
of only about 40 % of the Community average: although the
total population of
countries
(170 million inhabitants) amounts to 45 % of the population
size of the Union of 15, their GDP is in statistical terms only
6,7 % of the EU’s GDP and the differences between the
applicant countries themselves are very pronounced (a differ-
ential higher than 1,3 between the applicant countries).

thirteen applicant

the

3.2.1.4.
Accession has implications for society: the econ-
omic integration of the applicants into the EU will entail
radical changes within these countries, affecting fundamental
aspects of the economy and economic management, economic
agents (businesses, employees and consumers) and the admin-
istrative and judicial institutions. Although the current nego-
tiations give the parties an opportunity to agree on the rules
and the arrangements for applying them, they have a lesser
impact on economic and social development and on the
administrative, judicial and social changes (‘institution build-
ing’) necessary for adopting the acquissuccessfully. All elements
of civil society must be involved in the reforms.

3.2.2.
facilitate the incorporation of the acquis:

On the other hand, other factors ought to help

3.2.2.1.
For the most part, the applicant countries have
markets of a limited size, which may make it easier for them
to change.

3.2.2.2.
Community investments in these countries have
mushroomed, thus helping to export a common EU system of
references and to disseminate this fairly widely (through sub-
contracting, etc.).

Legal monitoring of the adoption of the Com-
3.2.2.3.
munity acquis can at last be based on clear and measurable
Community criteria, which makes it easier to assess the
situation.

3.3. Basing the approach on current progress

3.3.1.
A long adjustment process in the applicant countries’
economies has already been unfurling since the launch of the
pre-accession process agreed in Essen in 1994, with the Europe
the partnerships for accession and the pre-
agreements,
accession instruments (Phare programmes — institutional
capability and investment aid; ISPA — environmental and
transport infrastructures; and Sapard — agricultural and rural
development), and the involvement of applicant countries in
several Community programmes. The aim was to speed up the
development of a market economy in these countries able to
cope with competition in the single market and in the external
trade of a European Union open to the rest of the world.
Initially, converting the countries of central and eastern Europe
to a market economy was done under conditions which
in the competi-
revealed accumulated underdevelopment

tiveness of the state economies (as with the integration of the
East German economy), creating in most of these countries
strong inflationary pressures, sharp drops in productivity and
an increase in unemployment.

3.3.1.1.
However, these difficult beginnings were followed,
particularly in those countries which speeded up the reform
process and redirected their trade flows, by a clear upturn once
the positive effects of restructuring and private investment had
trickled through. One sensitive area in most of the applicant
countries is still unemployment which has inevitably risen as
a result of economic restructuring: one priority is to improve
the labour market’s response to growth-related developments,
which will significantly help to keep unemployment down;
this is already happening in those applicant countries which
have advanced furthest down the road to reform such as
Hungary and Slovenia.

3.3.2.
The Commission’s report published on 8 November
2000 instances several examples of progress in improving
economic performance, productivity and employment in the
private sector. According to this report Cyprus, Malta, Estonia,
Hungary, Poland, the Czech Republic and Slovenia are today
market economies which are ready to join the European Union
in the near future, subject to a range of — generally positive
— comments on the situation in each of these countries.
Latvia, Lithuania and Slovakia are also deemed to be viable
market economies and should be ready to join in the medium
term, subject to the current reforms being extended. On the
other hand, Bulgaria, Romania and Turkey still have to further
develop or even launch reforms in order to meet the economic
criteria for accession at some future, as yet unspecified,
stage (there are prior political criteria for Turkey which will
determine when negotiations start). Overall, the progress noted
by the Commission means that for seven and perhaps ten
applicant countries there is a prospect of accession in the near
future, probably as of the year 2004 for the best placed
amongst them.

3.3.3.
In addition to economic growth, which was last
year assessed overall at around 4 % annually, progress was
particularly clear in the increase in trade with the EU: this has
grown at an annual rate of 20 % since 1993 and has increased
threefold; it currently averages 60 % of the external trade of
these countries (a percentage equivalent to that of the EU 15
in intra-Community trade). The applicant countries have
become the second trading partner of the EU after the United
States. This trade is still hallmarked today by a strong surplus
for the EU, more than EUR 25 thousand million in 1999 i.e.
nearly a quarter of all Community exports to these countries.

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3.3.4.
The following evaluations and recommendations by
the Committee, mainly based on its hearings of socio-
occupational representatives from the applicant countries, are
grouped together according to the main points arising. They
must of course be seen in the light of the diversity of situations
in the applicant countries.

3.4.2.1.
in general terms: inadequate competitiveness in the
face of increased competition, the complexity of applying
Community legislation, the limited level of Community aid,
the difficulties businesses experience in expanding, particularly
SMEs (lack of capital and access to credit);

3.3.5.
based on several positive developments in most of
applicant countries, inter alia:

The Committee notes that progress in trade has been
the

— acceptance of the process of change and adjustment to

the single market;

— stronger trade, trade union and consumers’ organisations;

— a new business and management culture going hand in

hand with productivity gains;

— a sharp increase in foreign investment;

— modernisation of

infrastructures and the production

apparatus;

— development of the services sector (banks,

insurance,

commerce, audiovisual);

— increased cooperation on technical standardisation.

3.4. Endeavouring to tackle the main problems

The Committee’s questionnaires and auditions have
3.4.1.
meant that it is possible to highlight several
instances of
problems and delays in the applicant countries; these are set
out below. The list in no way implies, however, that all these
problems exist in each of the applicant countries. Given the
progress already made or under way in the applicant countries,
it is only those countries which are the furthest behind on the
path to accession that are still experiencing the majority of
these problems. This should be borne in mind when inter-
preting the data. The Committee’s hearings have indicated that
— over and above the general difficulties and costs associated
with meeting standards — the principal problems are:

insufficient modernisation of

3.4.1.1.
(pro-
duction apparatus, workforce training and qualifications, the
financial system, distribution networks, administrative and
judicial systems and transport and communications infrastruc-
ture;

structures

in the trade sphere: deficits in trade with the EU
3.4.2.2.
and also restricted access to the EU markets for agricultural
products despite the more open market;

3.4.2.3.
in the social sphere: adjustments needed to the
workforce, where there is often a surplus of labour in farming
but not enough in other sectors; concerns that skilled labour
might
leave; and problems in establishing, adjusting and
properly running social welfare systems.

The concerns mentioned most often by the socio-
3.4.3.
economic players in the European Union are much more
pronounced amongst
those exporting to the applicant
countries than amongst those investing in these countries.
They are:

in general terms: problems of legal uncertainty
3.4.3.1.
and the institutional capacity of
the applicant countries’
administrations (relating to bureaucratic procedures and the
absence of legal remedies, competence and independence of
supervisory authorities, recurrent customs protection, ineffec-
tiveness of some regulatory, standardisation and certification
bodies, mutual recognition difficulties, fraud and corruption);

3.4.3.2.
in the economic sphere: the complexity and level
of taxation; persistent non-tariff barriers and technical and
administrative barriers to trade; a lack of transparency in
privatisation programmes; a lack of predictability in the legal
and fiscal framework; and partial, albeit limited, maintenance
of price regulation;

3.4.3.3.
in connection with competition policy: some
restrictions on the freedom of establishment, restrictions on
location (authorisation to set up businesses, branches); prop-
erty purchase restrictions (although these can be overcome by
setting up subsidiaries); the level of State aid in some sectors
facing adjustment and competitiveness problems; failure to
open up public procurement; abnormal competition (price
dumping — which is still relatively limited however in view of
the open procedures, non-compliance with environmental
standards, illegal work).

3.4.1.2.
delays in legislative adjustment (restrictions on
capital movements, compatibility with technical and account-
ing standards, shortcomings in intellectual property and
industrial property rules, environmental protection and prob-
lems caused by the expansion of the black economy).

3.5. Targeting the remaining adjustment priorities

3.4.2.
economic players in the applicant countries are:

The problems mentioned most often by the socio-

3.5.1.
for the applicant countries are:

The Committee’s hearings indicate that priority areas

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3.5.1.1.
in general terms: consolidation of progress already
achieved (economic management, productivity, quality of
goods and services, enterprise culture; consumer education),
with the direct involvement of civil society;

3.5.1.2.
in economic policy terms: consolidation of macro-
economic stabilisation; abolition of barriers to trade in goods
and services; continuing and speeding up privatisation; further
price liberalisation; tax reforms to support the market econ-
omy; compliance with monetary discipline; a reliable system
for the protection of
intellectual and industrial property;
support for SMEs; further transposition of European standards;
certification and mutual recognition; and environmental pro-
tection;

3.5.1.3.
in connection with public administration: bolster-
ing the reform of the State, the administration, the judicial
system and competition policy; acceptance of OECD and
Council of Europe rules for combating corruption (civil and
penal conventions);

industrial, commercial,

3.5.1.4.
in connection with economic structures: strength-
ening independent and representative trade bodies; modernis-
ation of
financial and agricultural
structures (with new reciprocal trade concessions); adjustments
to transport, energy and telecommunications infrastructures,
particularly across borders between applicant countries and
the EU;

in the social sphere: transposition of Community
legislation; steps to build up social dialogue; and

3.5.1.5.
social
combating the black economy.

4.

The challenge of more effective support measures

4.2.2.
The European Union should not consider itself to
have discharged its responsibilities for providing financial
support to applicant countries merely because it has adopted
Agenda 2000: to the Committee’s mind, the main thing is to
target Community intervention on support for an effective
market economy, by priming and promoting private invest-
ment, which is the only factor capable of raising the resources
needed. To achieve this, the Committee would highlight several
requirements:

4.2.2.1.
firstly, it is vital to step up partnership with socio-
occupational operators in national programmes for adjusting
to the acquis and for using Community aid, by ensuring
consultation at all stages: planning, implementation, follow-
up and evaluation;

there must be stricter monitoring of the impact
4.2.2.2.
of aid on economic development, especially by using this
partnership with socio-occupational agents;

4.2.2.3.
the business environment must be modernised,
inter alia by speeding up the reform of public administrations
the courts are qualified, effective and
and ensuring that
independent (warranting the development of twinning projects
already launched between Member States’ and applicant
countries’ national administrations);

support programmes

4.2.2.4.
trans-
national aspects more, boosting regional cooperation amongst
the applicant countries;

should promote

4.1.
Support for bringing applicant countries’ economies
up to standard will require efforts to adjust the approach,
based on four key areas: refocusing Community aid, stepping
up training action, improving evaluation reports, and advance
involvement in some Community policies.

developing public/private partnerships would
4.2.2.5.
appear vital, in particular for trans-European infrastructure
networks (cf. transport, energy, telecommunications and the
environment);

4.2. Optimising Community aid

4.2.1.
Community aid programmes for the 2000-2006
period in Agenda 2000, adopted in Berlin in March 1999, still
have a Community budgetary ceiling set at 1,27 % of GNP.
They have earmarked for this period around EUR 20 thousand
million
around
EUR 50 thousand million for new member countries as of
2002. Whilst these are significant amounts, such aid will not
be enough on its own to finance the development needs of the
countries concerned and to enable them to catch up with the
rest of the EU.

pre-accession

instruments

and

for

4.2.2.6.
in addition to checking that Community aid com-
plies with competition rules, it is important to ensure that
conditions are genuinely attached to Community aid, taking
account of a) common rules, b) legal certainty in respect of
people, goods, transactions and investment, and c) stronger
mechanisms to combat irregularities, fraud, corruption and
the black economy;

lastly,

is especially necessary to secure the
4.2.2.7.
development of a strong, closely monitored financial and
banking system.

it

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4.2.3.
It would also be valuable to facilitate twinning
between Community aid and national Member State aid to
boost the impact of financing on some projects; this would be
a way of offsetting the limited level of Community aid and
concentrating European aid, be it EU or national, more on
certain priority projects.

4.2.4.
Lastly, the Committee would stress the need to work
out in the long term a way of reducing rather than increasing
non-repayable aid, leading to an overall reduction in public
aid for the European economy: such public aid should
therefore be flanked by soft loans, preferential interest rates,
loan guarantees and capital participation, with better coordi-
nation between aid from the Funds and loans from the
European Investment Bank, banks and the finance sector.

4.3. Stepping up training action

4.3.1.
Bringing the applicant countries up to scratch in this
area will also require a major training effort, in which the
Member States’ socio-occupational operators will play a key
role by developing cooperation and mutual assistance agree-
ments with their counterparts in applicant countries, informing
them of their rights and obligations vis-à-vis the acquis and
providing them with back-up to adapt to their specific needs.

4.3.2.
These training actions by socio-occupational players
and the social partners, which have already begun with
Community support, especially from the Phare programme,
should be further expanded by sending experts on mission,
training courses and exchanges. They should help incorporate
all the adjustment factors, including:

— support for a legislative and judicial framework favour-

able to private initiative;

— dissemination of the same management yardsticks;

— learning how to turn European legal tools to good use,
such as the European patent, the Community trademark
and EC certification;

— the development of mutual recognition agreements;

— the promotion of social dialogue.

tation with the governments of the applicant countries, the
last one having been presented on 8 November 2000.

4.4.2.
The ECOFIN Council agreed in November 2000 also
to discuss some particularly important aspects of economic
policy in the applicant countries, especially their economic
programmes and finance policies to bring them ever closer to
European Union practice (economic forecasts, notification of
aggregates, stability of public finances, etc.). The Committee
welcomes this initiative, which will also enable the applicant
countries to be associated more closely with the Cardiff process
on strengthening the economic fluidity of the single market
and adapting the service and capital markets.

4.4.3. Moreover, the Committee underlines that its meet-
ings with socio-occupational representatives in the applicant
countries frequently elicit direct assessments of what is hap-
pening in the field in these countries — quite different from
the official reports, particularly on the following points: the
stage reached in reforms and progress made, implementation
of new legislation, delays in adopting the acquis, problems of
competition, and possible obstacles to the single market. The
debate on accession to the European Union — its progress,
arrangements and conditions — must be carried to the heart
of civil society by means of a permanent dialogue with its
organised representatives. The Committee therefore rec-
ommends that henceforth the socio-occupational operators be
directly involved in compiling these reports so that a better
assessment can be made of the real situation in terms of
the stage reached in reforms and progress made, actual
implementation of new legislation, local obstacles, etc.

In the same spirit

4.4.3.1.
the European Commission
should ensure that the evaluation reports incorporate the
analyses and recommendations from the annual conferences
organised by the Economic and Social Committee with the
socio-occupational representatives from applicant countries
joint consultative committees (JCC)
and from the bilateral
established with a number of these countries. Moreover, the
public authorities in the applicant countries which have not
yet proposed setting up a JCC should do so shortly.

4.5.

Involving the applicant countries as of now in certain common
policies

4.4.

Improving the evaluation reports

The inventory of the Community acquis incorporated
4.4.1.
into national legislation is dealt with in the annual reports
compiled by the European Commission after direct consul-

4.5.1.
It would be valuable to speed up the operational
preparations of the applicant countries by involving them
from the pre-accession stage onwards in the implementation
of common policies, seeking to ensure that some limited —
but real — areas affected by accession function smoothly as of
now. This would help speed up negotiations as well as
the definition of target accession deadlines for each of the
countries.

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4.5.2.
A good example of this approach is provided by
the Commission’s recent signature of mutual recognition
agreements for industrial products (PECA — Protocol to
the European agreement on Conformity assessment and
acceptance of industrial products) with Hungary, the Czech
Republic and Latvia. These agreements ought to be extended
to other applicant countries.

4.5.3.
Another case in point is the now agreed full involve-
ment of applicant countries in the European research area,
particularly in the 6th framework programme.

4.5.4. Moreover, the Committee supports the European
Commission’s proposal which it had itself formulated in a
previous opinion on the impact of enlargement on the single
market, namely to extend the coordination centres and ‘single
market’ contact points already established in each of the
15 Member States to the applicant countries, in order to help
sort out on a bilateral basis any outstanding obstacles to
mutual trade.

Such a cooperative approach could also apply to
4.5.5.
Community customs policy, since the majority of the new
applicant countries will, when they enter the European Union,
have a border with a non-member state.

5.

The challenge of preparing for new cohesion in an
enlarged Europe

5.1.
Enlargement will noticeably change the European
Union’s internal cohesion at a time when it is committed to
more far-reaching integration; this is at present far from being
achieved. The quest for optimal cohesion will be complicated
by delays and differences in development in the applicant
countries, which most of them will only be able to partially
make up by the time they actually join. Such problems will
largely persist during the first few years, if not the first few
decades following accession. An enlarged Union will therefore
have to live with considerable differences in the economic
levels of its Member States and regions and will have to find
ways not only to adjust to this but also to gradually correct
the imbalances. Neither the Agenda 2000 adopted in Berlin
1999 nor the Treaty reform resulting from the Nice agreement
in December 2000 will be enough to reconcile enlargement
with greater integration, unless it is part of a more overall
framework of reorganisation. New action should therefore be
undertaken, fully involving the applicant countries, to simplify
Community regulations, coordinate national government
action on joint tasks, consolidate EMU and strengthen Europe’s
competitiveness.

4.5.6.
The Committee also supports the proposals submit-
ted by the Commission in January 2001 designed to allow the
applicant countries to join the European Environment Agency
as of 2001.

5.2. Simplifying Community regulations

in any new patent

4.5.7.
The Committee would also draw attention to the
need to provide for the possibility of the applicant countries
being associated with the Community patent as soon as it is
adopted by the EU, even before these countries join the Union
(without such involvement complicating the adoption of the
Community patent by the 15 in any way). Going ahead with
the Community patent with the applicant countries excluded
from its benefits would prevent these countries being taken
into account
It would prove
impossible to include them subsequently in Community
patents issued before their accession because of the restrictive
rules on intellectual and industrial property rights, which do
not permit the subsequent addition of other countries to the
list of those countries for which the patent was delivered in
the first place. For a large number of Community patents such
a situation would create a division within the single market at
a time when it is in the process of enlarging; this would be
quite a variance with the legitimately expected advantages of
such patents.

issued.

Lastly,

the Committee

4.5.8.
the applicant
countries’ involvement in the European Union’s objectives in
international trade negotiations; this warrants close cooper-
ation between these countries and the Commission so as to
boost the European Union’s clout on the international scene.

supports

5.2.1.
The applicant countries’ incorporation of the acquis
into national legislation is complicated by the great complexity
of Community rules and regulations. Although the European
Union ought to lead to simpler regulations in Europe, now-
adays it continues to introduce provisions which are too
complicated for users, too uncoordinated — if not actually
inconsistent — to form a genuinely coherent whole and too
close to existing national laws to genuinely harmonise them.

For their part, Member States are not being strict
5.2.2.
enough in applying the common regulations, constantly
accumulating delays in transposing legislation and increasingly
entering into legal disputes with the Commission and the
European Court of Justice. The 15 Member States are in this
way now showing a bad example to the applicant countries.

Efforts therefore have to be made to tighten up on
5.2.3.
the effectiveness of Community intervention by improving the
relevance and quality of regulations and being stricter in
ensuring that they are applied. What is needed is to consolidate
the long-term operation of the single market by making it
easier for applicant countries to take on board the acquis and
by minimising disputes.

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In an opinion issued in October 2000 (1), the Com-
5.2.4.
mittee issued its views on the need to undertake a multi-annual
programme for simplifying rules, including codes of conduct
for the institutions and Member States themselves — the
Committee having shown the way by adopting its own code;
such a programme should likewise include closer dialogue
with representatives of users of the regulatory measures,
independent assessment of the impact of Commission projects,
and a systematic examination of possible alternatives to
regulatory measures, through voluntary undertakings, contrac-
tual agreements, self-regulation and co-regulation between
the professional partners concerned and effective follow-up
methods (scoreboards and annual reports), by promoting
comparative benchmarking of best practice.

5.2.5.
The Committee would like the applicant countries to
be involved in this programme for simplifying rules by
themselves adopting codes of good conduct and promoting
formal dialogue between the economic and social partners.

5.3. Coordinating national administrations

need for the Commission to intervene could warrant the
establishment of Community inspections, particularly for
monitoring and cracking down on Europe-wide fraud.

5.3.4.
As regards customs, the Committee would draw
attention to the need for identical procedures at the Union’s
external borders, following the abolition of intra-Community
checks. This could warrant moving beyond the stage of closer
cooperation between national administrations and aiming for
genuine unification of European customs from enlargement
onwards, under a single Community administration.

5.4. Consolidating EMU

5.3.1.
The Committee would stress that this simplification
of legislation should be backed up by stricter checks and better
law, under
transposition of EU regulations into national
conditions which allocate more responsibility to the Member
States. The European Commission alone will not be able to
manage an enlarged single market properly at a time when
safety requirements and checks will have to be stepped up.

Economic and Monetary Union, fully integrating the
5.4.1.
economies of Member States participating in the euro,
is
reaching the stage of being able to take up the challenge of
consolidating economic and social cohesion in an enlarged
Europe. It will have to bolster greater economic integration
throughout the enlargement process and gradually — and
inescapably — draw the new EU members in towards EMU.

5.3.2.
The Committee is therefore favourable to the direct
involvement of the Member State governments in reinforcing
the various on-the-spot checks, by adopting common methods
which would have to be approved by the Commission. The
applicant countries will have to be asked to become involved
in these projects, which will be the best way of learning in
preparation for their future accession. In this way synergies
can be developed between national governments acting in
accordance with single market interests, along the lines of
Single Market Coordination Centres recently set up in each of
the 15 Member States. This approach will have to be applied
in such areas as competition policy, environmental protection,
product and food safety, health and safety at work and
measures to counter fiscal and commercial fraud.

5.3.3.
The Commission would have to focus again on
closely monitoring the proper operation of these decentralised
checks. It would have to be empowered to intervene directly
to offset any failings in national administrations in this
connection. Faced with the prospect of a Union of 30 mem-
bers, all with quite different national administrations, the

(1) ‘Simplifying rules in the single market’, OJ C 14, 16.1.2001, p. 1.

5.4.2.
The Committee stresses the need to strengthen
economic coordination in the ECOFIN Council. The Eurogroup
will be required to act as the driving force and will have to
organise itself to meet this challenge. Over and above the
ministers for economic and financial affairs, other Council
meetings such as the Social Affairs Council will also have to
incorporate all the new consequences of the euro into their
debates and decision-making.

The ECOFIN Council should encourage the applicant
5.4.3.
countries to lay down the legal and economic basis for their
future participation in EMU, particularly by undertaking
structural reforms to this end (such as the independence of
central banks, which has already made considerable progress).
The Committee recommends that the applicant countries
undertake — as of their accession — to join the European
Exchange Rate Mechanism (ERM2), which succeeded the EMS
and which will provide a solid basis for trade stability within
an enlarged single market and will constitute a first — and
incidentally mandatory — step towards their subsequent
participation in EMU.

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5.5. Working together to boost Europe’s competitiveness

A brief was agreed on at

the Lisbon European
5.5.1.
Council in March 2000 to boost Europe’s competitiveness by
securing major structural adjustments in the Member States.
This brief should be implemented with all the necessary
determination so as to boost the competitive capacity of
businesses, encourage innovation, keep collective costs and
public expenditure in check, improve the operation of the
labour market, boost employment levels and guarantee the
sustainability of social welfare schemes.

The Committee recommends that

5.5.2.
the applicant
countries be involved in the objectives laid down in Lisbon
and in the annual evaluation reports issued at the spring
European Council meetings, for:

— boosting the competitive capacity of businesses, encour-
aging innovation, keeping collective costs and public
expenditure in check, improving the operation of the
labour market, boosting employment levels and securing
the modernisation of social welfare schemes;

— promoting comparative benchmarking of best practices.

The Committee welcomes the fact that the March 2001
Stockholm European Council explicitly expressed an interest
in this type of involvement.

Such involvement will encourage these countries to
5.5.3.
speed up their reforms and will create a certain synergy, not
only amongst themselves, but also between them and the
15 current Member States. Each applicant state will then have
the opportunity, above all in areas where it has undertaken
new reforms with new resources and a strong will to succeed,
such as opening up the economy and innovation, to keep up
with the 15 current Member States in adjusting competi-
tiveness, and even to match the best amongst them.

6. Conclusions

Basing its approach on the discussions it has carried
6.1.
out with the socio-occupational representatives from the

Brussels, 25 April 2001.

candidate countries, the Committee, in the run up to enlarge-
ment, stresses the need to (i) bolster these countries’ efforts to
incorporate the Community acquis effectively into their
national legislation, (ii) make the European Union’s support
measures more effective and (iii) step up preparations for new
economic cohesion in an enlarged Union.

The Committee notes that the Member States and the
6.2.
applicant countries will henceforth be part of
the same
community. This warrants permanent, effective support from
the European Union and its socio-occupational players for the
efforts which the applicant countries will have to undertake
and step up in every area to comply with the necessarily strict
accession conditions required to reach the — albeit still
incomplete — level of integration attained by the Union.

The Committee also notes that it would be quite wrong
6.3.
to think that, following the preliminary decisions of the
European Union regarding Agenda 2000 and then the Treaty
reform, these adjustments are only a matter for the applicant
countries. Preparations for the enlarged Europe will, on the
contrary, require in-depth adjustments by the European Union,
over and above the agreed budgetary and institutional reforms,
to adapt to the new effects of such an enlargement.

6.4.
The Committee feels that this double challenge for
both applicant countries and Member States must be seen as a
unique opportunity to launch an in-depth renewal of European
Union where all parties will benefit, in that as they will secure
the economic competitiveness and social progress of a bigger
and stronger Europe.

6.5.
For this reason, the Committee is launching an appeal
for the European Union to undertake an ambitious and
coherent multiannual programme as of 2001 in preparation
for enlargement in order to increase the effectiveness of the
support methods for the applicant countries, while already
establishing the right conditions amongst the 15 for preserving
cohesion in an enlarged Europe. Such a programme should
involve the Member States and the applicant countries and
entail front-line involvement for the economic and social
players in civil society. The target should be to complete the
programme before the end of the current Parliament and
Commission mandates.

The President

of the Economic and Social Committee

Göke FRERICHS