Opinion of the European Economic and Social Committee on the "Economic and social consequences of enlargement in the candidate countries"
Date: 2002-12-11
Institutions: European Economic and Social Committee
Subjects: accession negotiations, economic consequence, enlargement of the Union, social situation

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— the European Food Safety Authority (1);

— the European Maritime Safety Agency (3).

— the European Aviation Safety Agency (2);

( 1) Regulation (EC) No 178/2002 of the European Parliament and of
the Council of 28 June 2002 laying down the general principles
and requirements of food law, establishing the European Food
Safety Authority and laying down procedures in matters of food
safety (OJ L 31, 1.2.2002, p. 1) — EESC opinion: OJ C 155,
29.5.2001, p. 32.

( 2) Regulation (EC) No 1592/2002 of the European Parliament and
of the Council on establishing common rules in the field of civil
aviation and creating a European Aviation Safety Agency (OJ
L 240, 7.9.2002, p. 1) — EESC opinion: OJ C 221, 7.8.2001,
p. 38.

Amending the legal acts establishing these agencies
3.
involves consulting the European Economic and Social Com-
mittee.

The European Economic and Social Committee wel-

4.
comes the Commission’s proposals.

(3) Regulation (EC) No 1406/2002 of the European Parliament and
of the Council establishing a European Maritime Safety Agency
(OJ L 208, 5.8.2002, p. 1) — EESC opinion: OJ C 221, 7.8.2002,
p. 54.

Brussels, 11 December 2002.

The President

of the European Economic and Social Committee

Roger BRIESCH

Opinion of the European Economic and Social Committee on the ‘Economic and social
consequences of enlargement in the candidate countries’

(2003/C 85/18)

On 16 and 17 January 2002, the European Economic and Social Committee decided, under Rule 23 of
its Rules of Procedure, to draw up an opinion on the ‘Economic and social consequences of enlargement
in the candidate countries’.

The Section for External Relations, which was responsible for drawing up the Committee’s work on the
subject, adopted its opinion on 7 November 2002. The rapporteur was Mr Dimitriadis and the co-
rapporteur was Mrs Belabed.

At its 395th plenary session (meeting of 11 December 2002), the European Economic and Social
Committee adopted the following opinion by 98 votes to 2 with 3 abstentions.

Summary

The present opinion clearly demonstrates the special interest
taken by the EESC in the completion of
the accession
negotiations for the candidate countries in the current enlarge-
ment exercise, even if certain important parameters remain to
be decided. The enlargement presents the EU with its most
demanding test since it was set up, but at the same time poses
the great challenge of achieving the Lisbon Council’s objective
of making the EU the most competitive economy in the world.

The EESC supports enlargement in every way and shares
the view of the Danish Presidency that the timetable for
enlargement must be respected, taking account of the progress
achieved by each candidate state individually.

The EESC offers various kinds of support to the enlargement
process, and in particular in the development of cooperation
with and support for the socio-occupational organisations, the
in the candidate
social partners and specialised NGOs
countries, so that (a) they can operate productively at national
(b) they organise more effectively by acquiring the
level,

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necessary know-how, (c) they can take part in problem-solving
at local level, (d) they can take an active part in European
activities. The EESC endorses this idea and will make every
effort to achieve it, even after accession, which in itself is not
the solution to all the candidate countries’ socio-economic
problems. The EESC is committed to promoting enlargement
as a horizontal
in
accordance with the aims of the 2002 action programme for
enlargement.

theme running through all

its work,

1.

Introduction

1.1.
The enlargement procedure constitutes a dynamic
progress towards the unification of Europe, strengthening
peace, security and prosperity throughout the continent. In
the course of the last decade, under particularly unfavourable
conditions, the countries which are candidates for accession
have achieved particularly striking economic and administrat-
ive progress on the road to membership of the EU. Nonetheless,
continued efforts are needed in order to maintain this progress,
particularly in the next few years, which are regarded as critical
on the one hand for the successful conclusion of
their
accession negotiations, and on the other for tackling the
problems of adjustment which will arise from the full,
substantive implementation of the Community acquis.

The vision of creating a united Europe with a large single
market of more than 500 million European citizens, including
those from the candidate countries, could become a reality,
provided that (a) the economic and social changes in those
countries proceed rapidly and without setbacks of any kind (1),
and (b) that the socio-economic conditions allow it, i.e. if the
citizens of the candidate countries accept the new situation
and feel secure in a united Europe.

1.2.
The candidate countries face a double challenge: while
still endeavouring to reform their whole political, economic
and social system, it is necessary at the same time for them to
adjust immediately to the Community acquis. These are two
parallel, often overlapping, but still distinct processes imposed
by a whole series of commitments and obligations to inter-
national actors which often point in different political and
economic directions on the basis of their respective strategies
and social models. Accession to the EU is therefore very much
influenced by the transition and vice versa. In addition to the
economic and social effects of enlargement in the candidate

countries, the EU will experience a considerable impact from
the systems established in the candidate countries, once these
countries join the EU. It seems that the current Member States
are not yet aware of the full extent of this impact.

At the Conference on Enlargement held on 16 Novem-
1.3.
ber 2000 (in Brussels) under the aegis of the EESC, representa-
tives of various social groups discussed the actual situation
and the impact of the candidate countries’ accession to the EU.
The Conference ‘signalled to the Council and the other EU
institutions, as well as to the governments of the candidate
countries,
the need to properly anchor the forthcoming
accessions of new members in the civil society... The Confer-
ence expressed its conviction that a sustainable and prosperous
enlargement of, and accession to, the European Union, relies
much on these actors’ successful involvement in the prepara-
tory efforts.’

1.4.
In the course of the meetings on enlargement held at
the EESC from 5 to 7 November 2001 (2), Mr Günter
Verheugen, the Commissioner responsible for enlargement,
called on the EESC to concentrate its attention on the economic
and social effects which enlargement would have on the
candidate countries.

1.5.
In addition, the members of the Joint Consultative
Committees (JCCs) set up with the candidate countries were
called upon (3) to help ensure the success of enlargement, both
for the EU and for the candidate countries. Their meetings deal
with the most important issues affecting the enlargement
countries and there is unrestricted dialogue covering some of
the main questions relating to agricultural payments and
quotas, regional policy, bureaucracy in public administration,
the absence of social dialogue, the free movement of people,
the causes of the delays observed in EU funding, the economic
contribution of SMEs, the limited research in the scientific
field, vocational training, low competitiveness and, finally, the
lack of public information on enlargement in the candidate
countries.

1.5.1.
The criteria for assessing the progress of each
country, as defined by the Copenhagen Summit in 1993, still
remain in force. Apart from Turkey, the candidate countries
continue to meet the political criteria laid down in Copenhag-
en. In most of the enlargement countries, a good deal of
progress has been made in deepening and consolidating
democracy, in respect for the rule of law, in protecting human
rights and in strengthening democratic structures.

( 1) See also the EESC opinions: The employment and social situation
in the central and eastern European candidate states (OJ C 193,
10.7.2001) EU enlargement: the challenge faced by candidate
countries of fulfilling the economic criteria for accession (OJ
C 193, 10.7.2001).

(2) Summary Report on the European EESC Enlargement Meetings 5-

7 November 2001.

(3) EESC Enlargement Week Conference ‘Towards a partnership for
economic growth and social rights’, 14 to 17 November 2000.

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1.6.
Every effort, however, will need to be focused on
the capacity of the candidate countries to fully adopt the
Community acquis and particularly to transpose it into national
legislation. It is noteworthy that, while a good many laws were
adopted to complete the Community acquis, these have not
been accompanied by the necessary supporting measures and,
above all, we do not know what the effects will be when they
are fully implemented in practice. In general the candidate
countries have clear objectives to achieve with a view to
accession; this is particularly helpful to them in defining their
priorities and in speeding up specific reform procedures.

The opinion gives priority to examining the following themes:

2.1.3.
Economic restructuring has generated new jobs in
new sectors, while simultaneously eliminating a large number
of jobs from the traditional branches of industry, thus leaving
high unemployment, inadequate infrastructure and gloomy
prospects for large geographical areas. This, in combination
with financing problems, is the greatest development challenge
in those regions. Efforts must centre on bringing all the parties
involved together to develop a strategy for these regions and
to create the right conditions for investment and job creation.
In addition to skill-development measures, there is a need for
an effective labour market policy, improved infrastructure, and
a balanced policy for social benefits, wages and salaries, so as
to foster the right climate both for investors and for workers
so that new job vacancies can be offered and filled.

2. Present economic situation — Restructuring

2.1.4.
The trade of the candidate countries has undergone
significant restructuring in recent years, with the EU now the
main trading partner for most of them. Moreover, as expected,
the increase in imports of goods and services has created a
deficit in the trade balances of the majority of these countries.

2.1.

Economic data — Statistics

2.1.1.
On average, the increase in the real GDP of ten of
the candidate countries almost reached 5 % in 2001. In the
first half of 2001, there was a slowdown in the increase in the
GDP of the candidate countries. The per capita GDP as a
percentage of the Community average (measured in purchasing
power standards, PPS) reached 39 % in 2000, as against 38 %
in 1999 for the ten central and eastern European countries.
The total GDP of the candidate countries amounts to only 5 %
of the EU’s GDP (1). The large rises in the price of oil caused
inflation to rise from 10 % to 15 % in 2000. Despite the good
growth figures, unemployment rose from almost 11 % to
12,5 % in 2000, and to 18 % in 2001 (even reaching 25-31 %
in some regions). The rise in unemployment reflects the
negative effect of structural changes on the labour force,
distortions in the labour market and the lack of correlation
between vocational capacities and the jobs on offer.

2.1.2.
The collapse of the ‘command economy’ system in
1989 and the transition to a market economy have given rise
to a new conception of economic, social and entrepreneurial
processes in the candidate countries, with a parallel shift of
their economic orientation from east to west. In most cases,
there was intense public reaction to the drastic change in socio-
economic conditions, because of (a) the increased political and
socio-economic cost of
the inefficiency of
transition,
public authorities and (c) the collapse of internal economic
mechanisms and processes.

(b)

( 1) Eurostat — Statistical Yearbook 2002.

2.1.5.
The new competition conditions which will be
created by accession will most probably lead to significant
realignments in key sectors of these countries’ economies
(agriculture, processing etc.). Particular importance will need
to be given to preparation for all the complex factors involved
in the new competition conditions arising from enlargement,
and the probable effects of these on apparently ‘healthy’
sectors.

2.2.

Industry — Services — Trade

2.2.1.
Foreign direct investment has contributed signifi-
cantly to balancing the external debts of all the candidate
countries. It has also been an important source of new jobs,
preventing a serious employment crisis both in large firms and
in SMEs. The bulk of this foreign direct investment comes
from privatisations, mainly of public industrial firms, yielding
the majority of inward capital flows. One fifth of foreign direct
investment in the commercial sector goes to labour-intensive
branches, such as textiles, clothing, electrical machinery and
motor-vehicle manufacturing. Foreign direct investment also
remains the principal means of replacing obsolete heavy
equipment, and introducing and teaching new technologies
and forms of management as well as modern sales promotion

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tools. Despite the substantial changes which have taken place,
heavy industry remains a vital economic and social factor in
many regions; if it is not supported significantly it will give
rise to further social problems.

to entrepreneurial activity. Similarly, the absence of firms
providing mutual guarantees for credits to SMEs significantly
increases the investment risk.

2.2.2.
Privatisations have been a key tool in the transition
process. They had and still have varying results depending on
country, sector, size of companies, selected method and the
In many cases,
legislative and institutional environment.
although privatisation has considerably boosted individual
companies’ productivity, this has been at the expense of a rise
in unemployment and growing income disparities.

2.2.3.
Privatisation has spread from industry to other
sectors such as the public utilities, transport and energy, in
tandem with efforts to achieve the overall restructuring of
these sectors. Banking sector privatisation programmes have
been completed in most of the candidate countries, but
governments continue to intervene in some state banks in
operational matters or in framing credit policies. Special
attention should focus on the lack of privatisation procedures
in other financial and economic sectors in the candidate
countries. It is, however, worth stressing that privatisations in
the finance and credit system, and particularly in the banking
sector, have not been and are not always a solution to all
economic and social problems.

2.2.4.
Transport in candidate countries faces a tremendous
challenge in transforming and implementing acquis into legis-
lation. Specific measures should be streamlined in administrat-
ive and organisational support for the candidate countries in
order to implement in practice transport legislation (1).

2.2.5.
The lack of up-to-date financial instruments acts as a
deterrent to investment in the growing private sector. In most
cases, further progress is needed prior to accession, in order to
boost the efficient transposition of instruments for establishing
monetary policy. It should be emphasised that the existence of
controls to verify that the banking sector is operating in
compliance with the law does not mean that similar regulatory
machinery exists in other sectors, where intermediary service
companies could be developed, offering development and
efficiency. It should be emphasised that the regulatory machin-
ery is not absolutely strict and secure in financial terms,
while it often creates considerable delays and hindrances

2.2.6.
Unjustifiable delays in implementing the necessary
land ownership reform remain the major cause of the lack
of development in the housing, construction and property
markets, with a direct and negative impact on the labour
market, SME growth, new enterprises and financial intermedi-
aries. This particular problem is also hindering the entry of
domestic and foreign investors in both these and a wide range
of other sectors, especially when compounded by the legal
loopholes affecting property rights.

2.2.7.
Horizontal infrastructures need to be put in place or
reinforced in the internal market sector, particularly those
which facilitate a good business environment and entreprene-
urship. Examples of areas where there is considerable room
for improvement include: market supervision, standardisation,
certification and industrial and intellectual property rights.

2.2.8.
Competition in the broad sense has only been
fostered as an economic, social and entrepreneurial principle
over the last decade in the candidate countries. The progress
made so far must be maintained and stepped up by creating
institutional bodies to monitor the competitive framework and
individual competition policies, as in the EU 15.

2.2.9.
The lack of the necessary culture for producing
innovation and the unclear definition of the research and
development contribution to sectors of the economy call for
special attention on the part of the candidate countries.

2.3.

Small and medium-sized enterprises

2.3.1.
The EESC takes the view that SMEs are the most
important source of growth for the CEECs because of their
flexibility and adaptability, and that
they can make an
important contribution to reducing unemployment. Enter-
prises, and especially SMEs, have an important role to play in
the enlargement process. The EESC has already pointed out
that ‘Enterprises have an essential contribution to make to the
creation of new jobs and the generation of income, which are
prerequisites for further economic and social development’.
Thus it is particularly important to encourage the authorities
in the candidate countries to speed up the machinery for
informing firms affected by the Community acquis and boost-
ing the entrepreneurial spirit in SMEs.

( 1) See EESC Opinion on Transport/Enlargement, September 2002.

2.3.2.
The SME sector has shown itself capable of growth
and flexibility, despite its relative lack of experience and the

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absence of specific financial resources, and it contributes very
substantially to GDP and employment in all the countries
concerned. SMEs in the high technology/informatics, special-
ised production and services sectors, in particular, tend to have
similar characteristics and results in terms of employment to
larger companies benefiting from direct foreign investment.

2.4.3.
The public services urgently need to be modernised
in most of the candidate countries, particularly in terms of
serving the citizen in his dealings with public authorities.
Special emphasis will also need to be placed on introducing IT
management solutions in the public sector.

2.3.3.
In other sectors, however, SMEs operate in an
economic environment where the ‘parallel economy’ has a
considerable influence on their chances of surviving and
maintaining their place in the market. The impact of the
parallel economy on labour relations leads to: (a) precarious
forms of employment;
the level of the
minimum wage or even lower; (c) in some cases, additional
limited-duration contracts or
‘cash-in-hand’ payments;
complete absence of contracts, ignoring labour agreements
and the rules on working hours.

(b) payments at

(d)

2.3.4.
The EESC calls upon the Commission to give more
attention to improving conditions for SMEs in the candidate
countries, further encouraging the entrepreneurial spirit and
always
proposing measures
and training,
accompanied by the fullest
information on the European
Union’s policies on SMEs.

support

for

2.4.

Public services

2.4.1.
The public-interest services sector (public utility
bodies) deserves special attention. As experience in Western
countries has shown, the total liberalisation of this sector, in
competition with private enterprises, can lead to problems of
supply and/or safety. In some candidate countries, the rise in
energy prices has left households unable to pay for their
electricity consumption, so that their supply is cut off. This
has often led to serious social unrest. A common problem in
the privatisation process is the failure to set up a statutory
legal
framework in sectors which provide such services
(transport, energy, telecommunications). This can lead to the
creation of monopolies.

2.5. Agriculture

2.5.1.
The process of bringing CEEC agriculture into the
CAP is a difficult and lengthy one. The starting points situations
differ very considerably. There are fundamental differences as
regards agricultural structures. Major differences also occur in
the way in which structural problems and the issue of
competitiveness are being tackled. In most of the candidate
states agriculture accounts for a very much higher percentage
of overall employment and GDP than is the case in the existing
EU Member States. The percentage of the total working
population employed in agriculture varies from 5,1 % in the
Czech Republic to 42,8 % in Romania (the average figure for
the EU Member States is 4,3 %). There are similar major
differences as regards agriculture’s contribution to GDP, which
varies from 2,9 % in Slovenia to 15,8 % in Bulgaria (the
average figure for the EU Member States is below 2 %).

2.5.2.
As the figures make clear, there is a very considerable
difference between the economic importance of agriculture
and the social importance of this sector. A relatively large
number of workers makes a relatively small contribution to
the economy. Particularly in the case of rural areas in the large
candidate states, such as Poland and Romania, special note
needs to be taken and particular consideration paid to the high
level of importance of agriculture to local
labour markets,
bearing in mind, in particular, the above average level of
unemployment in rural areas and the difficulty in creating new
jobs in these very areas.

2.5.3.
Restructuring in certain branches of industry and the
unemployment which has been generated in urban areas have
led many people in the candidate countries to return to the
countryside (2).

2.4.2.
The European Parliament has highlighted the crucial
role of investment in developing and enhancing the social
fabric of the countries of central and eastern Europe (1). This
represents an important factor in forestalling the unfavourable
social effects the implementation process is likely to produce.

2.5.4.
The percentage of declared employment accounted
in agriculture in the 13 countries has remained close to 1999
levels, falling slowly in most of them but with a slight increase
in employment in the farm sector in certain cases, such as
Poland and Romania.

( 1) European Parliament Resolution of 17 April 1996 on the White
Paper on Preparing the associated countries of Central and Eastern
Europe for integration into the internal market of the Union (OJ
C 141, 13.5.1996).

(2) DIW-Wochenbericht

1-2/02: Grundlinien

der Wirtsch-
aftsentwicklung 2002/2003, DIW, Berlin, 2002; Eurostat:
Regional unemployment rates in the Central European Candidate
Countries 2000.

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2.5.5.
The impact of the CAP budget on rural areas and on
the overall economy will vary greatly depending on how funds
If decoupling were to apply it could have
are applied.
implications for employment in rural areas. This of course will
have social implications, which will require alternative sources
of employment needing education and training.

2.5.11.
In putting forward its proposals, the European
Commission has clearly indicated that it wishes to make
greater use of the CAP instruments set out under the second
pillar of Agenda 2000, these instruments promote, in particu-
lar, rural development and agri-environmental programmes.
The EESC has already pointed out in a variety of opinions that,
in principle, it regards this policy as the right policy to follow;
this observation applies also, and in particular, in the case of
the candidate states.

Because of the way in which it is structured, labour-
2.5.6.
intensive agriculture in the candidate countries is often not
competitive. There is clearly considerable pressure for change
within agriculture in these countries. Higher productivity is
needed, but this could have severe social and environmental
consequences.

2.5.7.
For the EESC, it is important to reiterate firmly that
the development of agriculture and rural areas in the candidate
countries must respect the principles of sustainability and that
past mistakes must not be repeated.

2.5.8.
The preparatory programmes will play an important
role right up to the time of accession. The EESC is in favour of
decentralising the implementation procedure for the ISPA and
especially the Sapard programmes, which ought to be up and
running in all the candidate countries as soon as possible.
However,
it is particularly regrettable that the Sapard pro-
gramme is being implemented in some countries only after
considerable delay — and then in some cases not even in the
planned form. This hinders the necessary adaptation process
and the reorientation of agriculture towards sustainable pro-
duction.

2.5.9.
At its meeting of 25 October 2002, the European
Council decided to phase in direct payments to farmers in the
in line with the proposal made by the
candidate states,
Commission. The EESC believes that
this represents an
important step towards ensuring that the negotiations on the
difficult agriculture chapter are concluded successfully and on
time. The EESC hopes that, when judging this decision, the
candidate states also take account of the other aid measures,
particularly those designed to improve agricultural structures
and develop rural areas.

3. Current social situation

3.1.

Employment

3.1.1.
In spite of rising overall unemployment, significant
labour market differences exist between urban and rural areas.
The restructuring of most branches of industry and the growth
the service sector, particularly in urban centres, have
of
accentuated the employment disparities between urban centres
and the regions (1), leaving large numbers of workers, especially
in rural areas, without the right qualifications to match the
needs of the new economy, which is increasingly service-
oriented. In addition to the measures referred to above for
regional development and for attracting investors, a balance
must be struck between the jobs on offer, the qualifications
required and the salaries offered, in order to use and develop
human potential in the candidate countries in line with the
Lisbon strategy objectives.

3.1.2.
The blueprint of reforms as part of the process of
social transformation in the CEECs is based on the assumption
that there will be high rates of economic growth, especially
through development of a vibrant private sector
in the
economy. Foreign direct investment (FDI) inflows and SME
development have had to serve as the main ‘shock absorbers’
for the inevitable shedding of manpower and falling living
standards. Despite the dramatic changes in the structure and
operation of the economies in the region, results have fallen
far short of expectations. In most of the cases, employment
problems remain a key determinant for success in the accession
process.

Experience gained to date from the ‘transition’ to the
3.1.3.
free market indicates that high economic growth rates have
not been matched by the creation of more or better jobs as an
automatic consequence of efforts to restructure and modernise.
In some cases (Poland) the highest growth rates have been
accompanied by persistent and often growing unemployment
problem.

2.5.10.
The Committee supports efforts to develop the CAP
further, in such a way that European agriculture can not only
better match the expectations of society, but also cope well
with the new challenges arising from enlargement.

(1) OJ C 51, 23.2.2000.

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3.1.4.
Significant segments of the ‘pools of cheap labour’
have been tapped by the rapid development of the ‘parallel
economy’ and proliferation of cases of ‘parallel’ practices in
legitimate companies. The cumulative effect of the freedoms
brought by the reforms and intended as a foil to poverty and a
mainstay of social order has helped to fuel the spread of
corruption and has had a severely detrimental
impact on
budget revenues and the financial resources of social funds.
No less significant is the impact on the efficient operation of
market institutions and mechanisms and the distortion of fair
competition in the emerging commodity and labour markets.

measures’ and incorporating policy packages on taxation,
investment, education, etc. to provide real opportunities for
stable and quality job creation.

3.1.10.
Talks with the social partners in the joint consulta-
tive committees have raised the issues of professional training
and the brain drain, among others. The EESC has undertaken
to conduct an in-depth study of these issues and make
appropriate proposals (1).

Large foreign companies have created the prospect
3.1.5.
of stable, better-paid and better-quality new jobs for one
section of the labour market. They are among the limited
group of firms which invest in health and safety at the
workplace. However, the number of new jobs can only limit
and not reverse the exodus of manpower.

3.1.6.
Given the limitations of the economic environment
in which SMEs operate, such as light industry, foodstuffs,
construction, wood processing and furniture manufacturing,
they have a low capacity to absorb unemployment.

3.1.7.
Foreign companies’ policies naturally attract the most
highly skilled labour, which may lead to structural tensions in
local labour markets. Territorial FDI concentrations tend to
preserve or deepen regional disparities between labour markets
both across the CEEC region (80 % in Poland, Hungary and
Czech Republic) and within each country. The integration of
foreign companies in the local economic systems is still
insufficient and the spill-over effects (through new subsidiaries
or subcontracting) have so far had limited input in employment
creation.

3.2. Wages and salaries

3.2.1.
As wages and salaries still remain relatively low,
unemployment is rising and fiscal problems do not permit
high transfer payments, the candidate countries face growing
inequality and persistent poverty. In the candidate countries in
the 1990s, the wage gap widened and the number of people
living below the poverty line rose (2).

The diversity of economic factors and forms of
3.2.2.
working spells a much more complex relationship between
wages and total income than there often appears to be. Wage
income in many cases constitutes less than half of the total
income of households (as aggregate national indicator). Also
quite important is the distribution of wages by size in the
different countries. In some countries (Bulgaria) there is a
tendency towards polarisation with a concentration of wages
in the low skill/low pay branches of industries, with the next
peak around the average wage and a low peak in the very high
pay levels (MNCs, big state companies and utilities) with the
private sector lagging behind the public sector.

3.2.3.
One of the results of restrictive incomes policies in
different forms in the individual countries is that it is often
possible to observe the emergence of a new category in these
societies — the ‘working poor’, fertile ground for the parallel
economy.

3.3.

Social security systems

3.1.8.
The process of accession and harmonisation of
standards, norms and practices involving tighter rules, better
control and increased competition could exert pressure to
‘clean up’ and operate transparently from now on, but this
process could be accompanied by a serious negative impact
on the employment situation if measures are not provided in
time to alleviate this by supporting ‘healthy’ companies.

3.3.1.
As the EU has only a limited acquis in the area of
social policy, changes to the social security systems of the
candidate countries have been influenced considerably by
other international organisations, e.g. the IMF and the World
Bank, which have a broader jurisdiction for strategic aid to

In conclusion, the overall employment situation and
3.1.9.
its prospects necessitate an approach to employment and
‘active
labour market policies reaching well beyond just

(1) Summary Report — European EESC Enlargement Meetings 5 and

7 November 2001.

(2) Presentation by a Commission representative at the study group

meeting on 28.5.2002.

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these countries. Their influence has geared the changes towards
a social model with private elements, with accountability and
risk-taking centred more specifically on the individual.

3.3.2. While warmly supporting the European social model,
which is based on the principles of social and territorial
cohesion, the EU has limited competence or presence to
influence the changes and planning of these systems. As a
result, in many cases, including the field of social security, the
way in which the social model has been planned cannot in the
EESC’s view serve as a model for Europe (1). The EESC proposes
that greater attention be given to these questions through the
open method of coordination,
laid down by the Lisbon
Council, in which the candidate countries have already been
included by the Barcelona Council; thus they have the oppor-
tunity to plan and develop their social security systems
according to their own needs and the principles of
the
European social model.

3.4.

The role of social dialogue and civil society

3.4.1.
The arrangements for social dialogue in the central
and eastern European countries (CEECs) feature similar combi-
nations of central tripartite agreements at national level and
bipartite collective bargaining concentrated mainly in private
companies and in some cases employers’ groups. The example
of Slovenia is a clear-cut exception as a leading role is played
by sectoral bargaining and the established works council
system.

3.4.2.
The tripartite approach has been introduced mainly
with the ‘transfer’ of a model from abroad, which is also based
on the need to preserve social order in the critical stages of the
transition process, while the old political system is dismantled
and the foundations laid for the development of a market
economy — the roller coaster of liberalisation and the initial
restructuring of the economy. As the new political and market
systems have stabilised, the importance of social dialogue is
not so immediately obvious, and interest in it, especially on
the part of governments, has diminished significantly.

3.4.4.
In the light of the growing pressure and trend for
labour relations to be individualised, the development of
labour legislation as the legal basis for labour relations will
need to be closely monitored in order to ensure that it proceeds
according to the principles of the European social model, of
which the social dialogue constitutes an important pillar.

3.4.5.

Development is still hampered by:

— a limited understanding of

the meaning of national
sovereignty in decision making by the executive and
legislative powers and their frequent reluctance to inform
the social partners in practice and to consult them on
matters in their areas of expertise;

— problems with the representation of the social partners,
the lack of the necessary institutional framework, and the
fragmented representation of
interests by the social
partners, complicating joint decision-making within the
social dialogue structures; there are signs that certain
trade associations will
join forces, but the problem
remains for employers’ organisations in a number of
cases;

— identity and clearly-defined roles of social dialogue in the

new circumstances.

3.4.6.
There are still three areas presenting serious chal-
lenges for the future development of social dialogue in line
with EU standards and practices:

— the development of substantive rules for bargaining at

general and sectoral level;

— full acceptance and effective operation of works councils

in the workplace;

— the development of social dialogue structures, mechan-

isms and procedures for SMEs.

4. Equal opportunities

3.4.3.
The accession negotiations have given new impetus
to the development of arrangements for social dialogue. They
have accelerated the introduction of works councils in the
workplace and improved the prospects of CEEC representatives
taking part in the European Works Councils of the correspond-
ing multinational companies. However, more efforts are
needed to ensure that the harmonisation process leads to
effective integration in everyday practice.

4.1.
Legislation in the individual candidate states is largely
consistent with the key requirements of EU law relating to the
equal treatment of women and men. Unfortunately, practice
often differs. As in the Union, the main problems arise above
all because economic difficulties affect women and men in
different ways (2). In addition, publicity on the importance of
equal opportunities for men and women remains at a low
level.

( 1) Employment, economic reform and social cohesion — Towards a
Europe of innovation and knowledge — OJ C 117, 26.4.2000.

(2) Agenda 2000, Vol. II: The challenge of enlargement (impact

study), p. 46 (COM(97) 2000).

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4.2.
Equal opportunities, however, relate not only to the
relationship between men and women, but also to the
avoidance of any kind of discrimination based on ‘racial or
ethnic origin, religion or belief, disability, age or sexual
orientation’ (Article 13, EC Treaty). With regard to the situation
of minorities in particular, there are still considerable problems
to be addressed in the candidate states.

4.3.
Forceful measures will need to be put forward to deal
with the continuing problems relating to conditions and terms
of detention in certain candidate countries, the exploitation of
women and children, equality of the sexes and prevention of
discrimination.

4.4.
In particular, the socio-economic gap between the
Roma people and the majority appears to be widening. Special
measures will need to be taken with a view to facilitating their
access to social services and infrastructures (1).

4.5.
The ethnic dimension of economic and social problems
must be addressed systematically. Business opportunities,
living and working conditions, schooling, access to public
services, etc., differ greatly for ethnic minorities. Minorities
tend to remain closed in on themselves for a variety of reasons,
some cultural and relating to economic motives, others
systemic problems arising from the fact that a number of EU
policy measures do not work, as they were designed for the
West (2).

5. Consumer rights

5.1.
The EESC supports the efforts of bodies representing
civil society, and more specifically consumers’ associations, as
they enter the fray in the candidate countries and make a start
on the difficult tasks facing them. They deserve support and
encouragement. The EESC calls on the Consumer Protection
Directorate-General to use all possible means to bolster the
consumer movement in the enlargement countries and provide
the necessary know-how.

The EESC is closely following legislative and adminis-
5.2.
trative developments in the field of consumer protection,
particularly with regard to food safety in the candidate
countries, where efforts have begun in a fairly difficult
environment and with very substantial shortcomings in protec-
tion measures.

6. Environmental issues

6.1.
Protection of the environment had in the past a very
low priority in the candidate countries, with the result that, for
example, heavy industry has caused considerable environmen-
tal damage, which is in many cases irreversible. In recent years
very positive changes have taken place; many types of efforts
have been made, above all
in technical protection of the
environment. However, a great deal remains to be done in
order to meet the EU environment standards, to complete the
mainstreaming of environmental protection in other policy
fields, and to ensure sustainable development. The Committee
regrets that, in the debate on environmental matters in the
candidate countries, the social and economic aspect has hardly
been mentioned. The opportunities of future job creation
offered by environmental protection, but also the social
questions which can be linked with increased environmental
expenditure, should be given greater attention. The EESC calls
upon the Commission to promote this hitherto all too brief
process, at the same time further to assist the efforts now
underway by transferring funds and know-how, and to press
strongly for the necessary reforms where the need to protect
and conserve the environment has not yet been understood.

6.2.
Special attention will have to be paid to protection of
the environment and ecosystems — including the protection
of the still relatively rich biodiversity — in relation to the
other accession questions. The development of environmental
infrastructure and use of effective control mechanisms to
implement effective regulations will play an important role
here in all the candidate countries.

6.3.
The EESC urges all EU institutions to review even
more closely the environmental impact of their pre-accession
programmes and investment aid.

7. Safety

Public safety remains a key issue in the enlargement
7.1.
process. Safety in general covers various areas such as food
safety, nuclear safety, road safety, etc. The social implications
need to be examined more carefully when implementing safety
measures. For instance, unemployment in the Koslodui region
is still at 21 %.

8. Conclusions and recommendations

( 1) EU-BULGARIA JCC Working Document on Social Policy Issues

in Bulgaria.

( 2) e.g. funds for minorities to preserve their identity.

8.1.
The EESC would reaffirm its view that EU enlargement
presents an historic opportunity to unite Europe and its
citizens under the same roof, securing stability and prosperity
for the European continent.

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8.2.
The EESC expresses its serious concern at the rise in
Euro-scepticism and the fluctuations in public opinion in the
Member States and the candidate countries.

strain on the efforts at economic and social convergence made
by the current partners, unless the necessary mechanisms and
procedures are provided for.

The EESC notes that the improved organisation of
8.3.
public administration, reduced bureaucracy, the crackdown on
crime and the creation of flexible and modern mechanisms for
legal, administrative and judicial protection will contribute to
an increased sense of security among the public in the
candidate countries and to further growth in foreign invest-
ment and increased confidence on the part of foreign investors
in these countries, which have an ongoing need for direct
foreign investment and support
from international credit
organisations.

The EESC urges the Commission to cooperate with
8.9.
governmental bodies in the candidate countries to provide
fuller information for citizens on the enlargement of the EU
and its institutional set-up,
through publicity campaigns,
putting special emphasis on introducing relevant branches of
learning into the educational and vocational training systems
in these countries. The EESC welcomes additional efforts by
the candidate countries to strengthen communication with the
citizens on progress in the EU accession procedure.

for greater

The EESC calls

8.4.
transparency in the
implementation of the European programmes and initiatives
concerning the candidate countries. The lack of know-how
and of transparency could very easily result in resources being
wasted.

8.5.
The EESC is doing everything it can to support the
efforts of the Commission and those of the candidate countries
to successfully push through agricultural reforms, which will
be crucial to these countries’ integration into the EU.

8.6.
The EESC warmly supports the efforts to set up and
articulate organisations and bodies representing civil society
organisations and NGOs, basic elements in democratic devel-
opment.

The ESC believes that a key point in the enlargement
8.7.
process is the free movement of workers, which is also a
particularly sensitive matter.

In its common position, the EU has already agreed
8.7.1.
on transitional provisions with nearly all
the candidate
countries. The EESC welcomes this fact and expresses the hope
that during the transitional periods every effort will be made
to move forward, by bringing in the necessary preparatory
measures and ensuring that the EU will provide an efficient
common labour market for all its future Member States.

8.8.
The EESC would emphasise the fact that economic and
social convergence remains the most important factor today.
As the EU falls short of full economic, political and social
integration, the greater diversification which is likely to arise
from the successful accession of certain countries will put a

Entrepreneurship is the most important source of
8.10.
growth for the candidate countries. Enterprises and especially
SMEs have an important role to play in the enlargement
process. Enterprises have an essential contribution to make to
the generation of income and creation of new jobs, which are
prerequisites for further economic and social development.
Thus it is essential to really encourage the authorities in the
candidate countries to speed up the information to firms
affected by the Community acquis and to foster entrepreneur-
ship.

A number of different European as well as inter-
8.11.
national organisations are active in the candidate countries.
These institutions and organisations represent different models
of society and policy, and their recommendations should be
coordinated in order to ensure that the future Member States
advance towards the European social model, which is based
on the idea of promoting social and territorial cohesion and
combating poverty and social exclusion, as the basic principle
of economic policy.

8.12.
During the enlargement conference in Novem-
ber 2000, it was suggested in this context that the Committee
take a co-ordinating role between the different institutions
involved — a role which matches its capabilities and which it
shows every sign of fulfilling successfully.

8.13.
The EESC supports the communication strategy laun-
ched in May 2000 by the European Commission with the aim
of providing appropriate information on the enlargement
procedure. Similarly, it warmly supports the participation of
EU bodies,
together with elected representatives, political
leaders and governments, the economic and social partners
and representatives of civil society in general, both from the
Member States and from the candidate countries,
in the
developing dialogue.

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8.14.
The EESC attaches importance to the role of countries
outside the EU which border on those preparing for accession.
Specific plans need to be drawn up in this area, given that new
opportunities and challenges will arise after enlargement, such
as free trade areas,
illegal migration, customs checks and
trafficking in human beings and drugs. The enlarged Union
will need to develop further its relations with the emerging
markets of neighbouring countries and develop a common
approach, particularly with the Western Balkans, the Com-
monwealth of Independent States and the countries of the
Mediterranean Basin and North Africa.

environment, with corresponding progress in legislation on
bankruptcy.

8.16.
In the first half of 2001, the Ecofin Council agreed to
begin cooperating more closely with the candidate state
finance ministers and central bank governors by meeting twice
a year and through regular reports to the Ecofin Council on
the economic situation in those countries. The Committee
welcomes this development and suggests that it should be
extended to other Councils in order to promote dialogue with
the enlargement countries, especially in the light of the
objectives set at the Lisbon summit.

8.15.
The EESC supports the strengthening of an indepen-
dent and unimpeachable judicial authority in the candidate
countries, which constitutes a guarantee for the proper oper-
ation of the administrative and political system. The fight
against corruption needs to be speeded up, and tangible
results are required to ensure transparency in the business

8.17.
The candidate countries should remain within the
exchange rate mechanism (ERM2) for at least two years. The
EESC would repeat its recommendation that the new Member
States should enter ERM2 immediately on joining the EU so
that their exchange-rate policies are conducted within a more
stable Community environment.

Brussels, 11 December 2002.

The President

of the European Economic and Social Committee

Roger BRIESCH