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No C 19 / 74 Official Journal of the European Communities 25 . 1 . 93

4 . Further consideration port costs especially for the weaker and smaller firms
of peripheral countries is likely to adversely affect their
competitiveness '.

4.1 . The Committee finds it alarming that the Com ­
mission states in its ' Impact Assessment Form ' that ' the
application of this directive is likely to lead to an
increase of the transport costs especially for the periph ­
eral countries of the Community ' and ' Increased trans ­

Done at Brussels, 24 November 1992 .

4.2 . This is hardly in the interest of ' cohesion ' and
serious attention should be given by the Commission
and Council to measures to help the peripheral regions
offset these effects .

The Chairman

of the Economic and Social Committee

Susanne TIEMANN

Opinion on EC Relations with the Countries of Central and Eastern Europe

Bulgaria and Romania

( 93 / C 19 / 23 )

On 30 June 1992 the Economic and Social Committee, acting under the third paragraph of
Article 20 of the Rules of Procedure, decided to draw up a Opinion on EC Relations with
the Countries of Central and Eastern Europe .

The Section for External Relations, Trade and Development Policy, which was asked to
prepare the Committee 's work on the subject, adopted its Opinion on 5 November 1992 .
The Rapporteur was Mr Petersen .

At its 301st Plenary Session ( meeting of 25 November 1992 ) the Economic and Social
Committee adopted the following Opinion by a large majority with two votes against .

Summary

The blueprint for Association Agreements presented by
the EC Commission at the beginning of 1990 embraces
not only the step-by-step creation of a free trade area,
the free movement of workers, the liberalization of
services, the approximation of legislation and the inten ­
sification of economic, social and financial cooperation,
but also the institutionalization of political dialogue
and cultural cooperation ( point 1.8 ).

These preferential agreements, termed Europe Agree ­
ments because of the inclusion of political dialogue,
may in principle be concluded with all countries of
Eastern Europe for an indefinite period of time . In the
case of the Commonwealth of Independent States ( CIS )

and Georgia, however, a separate approach needs to be
adopted on the basis of the European Community 's
blueprint for partnership and cooperation agreements .
The crucial precondition for the conclusion of Europe
Agreements is that ( a ) real progress is being made in
the political, social and economic transformations now
under way there, and that ( b ) the point of no return
for democracy and the market economy has already
been reached . The Committee has appealed to the EC
Commission on several occasions to monitor political
and economic reforms in each case before launching
into specific association discussions ( point 1.9 ).

In its Opinion on the Europe Agreements concluded
with the Visegrad countries ( Poland, Hungary and the
CSFR ) the Economic and Social Committee made an
in-depth analysis of the European Community 's associ ­
ation blueprint and found it could offer its support .

25 . 1 . 93 Official Journal of the European Communities No C 19 / 75

The Committee is pleased that the EC Commission has
now also begun association negotiations with Bulgaria
and Romania . The aim of the negotiations is to con ­
clude Europe Agreements which are largely similar in
content to those signed on 16 December 1991 with
Poland, Hungary and the CSFR . The Committee 's criti ­
cal comments and recommendations concerning the
agreements with the Visegrad triangle remain equally
valid as far as one can make out for the current Draft
Agreements with Bulgaria and Romania ( points 2.1 and
2.2 ).

The Committee emphatically approves the commitment
of the contracting parties to strengthening political and
economic freedoms, which constitute the very basis of
Association . It also strongly supports their declared
intention to act in unison in order to ( a ) carry forward
the construction of a new political and economic order
based on the rule of law, respect for human rights and
the rights of minorities, ( b ) guarantee a multi-party
system with free, democratic and secret elections and

( c ) speed up the pace of economic liberalization in
accordance with the principles of a market economy

( point 2.3 ).

Europe Agreements whereby the Association Council
guarantees that economic and social interest groups
will be involved in the political dialogue during the first
stage of the transitional period . From the second stage
this dialogue would take place within the framework
of a Consultative Association Committee representing
economic and social interest groups . Such cooperation
would form part of a wide-ranging dialogue between
the economic and social interest groups of the European
Community and those of countries in Central and East ­
ern Europe ( points 2.7 and 2.8 ).

The Committee approves the inclusion of a provision
in the Agreements whereby respect for democratic prin ­
ciples and human rights, as well as adherence to free
market principles, are regarded as vital elements of
Association . At the same time the Committee also rec ­
ommends that the safeguarding of basic social rights
and the rights of minorities should be regarded as a
' vital element of Association '. Appropriate measures
could be taken if these obligations are not met ( point
2.9 ).

With regard to the free movement of goods, the Com ­
mittee welcomes the asymmetrical approach, which will
help to prop up the difficult restructuring processes
in Bulgaria and Romania . In view of the dramatic
deterioration in these countries ' overall economic per ­
formances, the Community should make a serious
attempt to shorten the six-year period before it removes
all its customs duties on industrial goods, and should
try to complete the inevitable liberalization of the mar ­
kets by an earlier date . Article 110 of the Rome
Treaty — which should also be borne in mind from time
to time — expressly obliges the Community to press for
a liberal trade policy in the common interest . The
Committee thinks that this obligation is too frequently
neglected ( point 2.12 ).

The Committee has repeatedly emphasized that, given mittee welcomes the asymmetrical approach, which will
the social and cultural conditions prevailing in Europe help to prop up the difficult restructuring processes
today, an ' economic area ' which is not at the same time in Bulgaria and Romania . In view of the dramatic
a ' social area ' is unthinkable . The Committee therefore deterioration in these countries ' overall economic per ­
once more calls upon the Council to refer in the pre ­ formances, the Community should make a serious
ambles of the Europe Agreements to the social dimen ­ attempt to shorten the six-year period before it removes
sion of European unification and to mention the Com ­ all its customs duties on industrial goods, and should
munity Charter of the Fundamental Social Rights of try to complete the inevitable liberalization of the mar ­
Workers adopted, albeit not unanimously, by the Heads kets by an earlier date . Article 110 of the Rome
of State or of Government of the Community in Treaty — which should also be borne in mind from time
December 1989 . The Committee further notes with to time — expressly obliges the Community to press for
concern that although advocacy of the principle of a liberal trade policy in the common interest . The
' social justice ' remains a ' Fundamental Element of Committee thinks that this obligation is too frequently
Association ' and is underlined as such in the Europe neglected ( point 2.12 ).
Agreements with Poland, Hungary and the CSFR, the
concept has been dropped in the preambles of the new
Agreements ( point 2.4 ). As far as sensitive sectors — textiles, ECSC products and
agriculture — are concerned, the Committee would refer

With regard to the EC membership option incorporated once more to the relevant provisions of the General

Agreement on Tariffs and Trade ( GATT ) and the

in the preambles of the new Europe Agreements, it will material conditions needed for the creation of free trade
have to be assumed that any future enlargement of the areas . The main condition is that customs duties and
EEC will take place under vastly different circum ­ other trade restrictions on bilateral trade are eliminated
stances — achievement of the Single Market, Economic '

on substantially all the trade '. Because of the need to

and Monetary Union, Foreign and Security Policy, the
Acquis able demands Communautaire on potential . These members will all — place demands consider which ­ comply run to exclude with GATT any area, it will — not not even be possible agriculture in the — long from

market liberalization ( point 2.15 ).

With regard to the EC membership option incorporated
in the preambles of the new Europe Agreements, it will
have to be assumed that any future enlargement of the
EEC will take place under vastly different circum ­
stances — achievement of the Single Market, Economic
and Monetary Union, Foreign and Security Policy, the
Acquis Communautaire . These will all place consider ­
able demands on potential members — demands which
cannot be fulfilled by all applicant countries within
a short period of time . The EC Commission should
therefore as soon as possible test and flesh out new
forms and options for a coherent EC membership blue ­
print ( point 2.5 ).

In its Opinion on the Europe Agreements with the
Visegrad states, the Committee has already called on
the contracting parties to involve economic and social
interest groups in the political dialogue . It therefore
proposes the incorporation of provisions in the new

In order not to perturb the Community 's agricultural
markets any further through excessive imports of par ­
ticularly sensitive products, the Committee would
reiterate its proposal that much of the agricultural
surplus from Bulgaria and Romania should be exported
to other neighbouring Eastern European countries for
hard currency . At the same time the agricultural and
industrial capacity of Eastern European countries
should also be channelled into finding industrial and

No C 19 / 76 Official Journal of the European Communities 25 . 1 . 93

energy outlets for agricultural products ( point 2.27 to the Community or in Bulgaria and Romania ( points
2.29 ). 2.25 and 2.47 ).

The Committee considers the proposed consultation
procedure in established cases of dumping to be particu ­
larly important . It assumes that the GATT codes will
be fully observed . It is acceptable on political grounds
to treat the associated counties from the very outset as
countries with functioning market economies . Objec ­
tively, it will not be at all easy for the Commission in
future years to make a fair comparison — within the
meaning of the EC anti-dumping Regulation — between
the export price and ' normal value ' ( point 2.32 ).

Free trade arrangements can only be enjoyed if there is
concrete proof of the origin of products . The Com ­
mittee has frequently supported the call of the Eastern
European contracting partners for multilateral cumu ­
lation . The Commission did not accept this call, with
the result that the extremely restrictive rules of origin
laid down in the Interim Agreements with the Visegrad
states have proved to be a major obstacle to increased
trade . Since only a uniform system for the determi ­
nation of origin can serve to further the division of
labour within Europe, the Committee calls for the EC ­
European Free Trade Association ( EFTA ) rules of ori ­
gin currently in force, or the future rules of European
Economic Area ( EEA ) with an alternative percentage
criterion, to be inserted into all the Europe Agreements
with the countries of Central and Eastern Europe (' pan ­
European ' cumulation ) ( points 2.33 to 2.35 ).

The Committee welcomes the agreements on the free
movement of workers, but would still like to see agree ­
ments covering workers from Eastern partner states
who are employed illegally in the Community . The
Committee likewise regrets once more that the Com ­
mission has not even referred in a protocol to the
Community 's limited scope for action on freedom of
movement in the medium term . In the Committee 's
view it is high time to ponder in depth the complex
and many-layered issue of freedom of movement for
workers between the European Community and associ ­
ated partner states and work out durable solutions,
within the framework of a coherent immigration policy,
which do not arouse great expectations today only to
dash them by tomorrow at the latest ( points 2.37 to
2.39 ).

The Committee warmly welcomes the Arrangement
whereby all state aid granted in Bulgaria and Romania
is to be scrutinized in terms of the relevant provisions
of the EEC Treaty . In addition, EC aid monitoring
instruments should be incorporated in the Agreements
in order to effectively protect competition against dis ­
tortions caused by state aid, be it granted anywhere in

Alignment of the laws of Bulgaria and Romania on
those of the Community is an important condition for
the economic and social integration of both countries
into the European Community . The Committee regrets,
however, that no priorities have been set . What firms
on both sides need more than anything else is a reliable
climate for action and more scope for reorganizing
themselves in order to strengthen their competitiveness,
find a flexible response to the growing pressures from
international firms based outside the Community, and
create and permanently safeguard jobs ( points 2.48 to
2.50 ).

With regard to economic cooperation the Committee
feels that it would have been much more sensible to
have concentrated initially on just one or two key
areas where urgent action is needed . The Committee
primarily has in mind policy areas such as infrastruc ­
ture, education and training, and nuclear power ( point
2.53 ).

In the field of financial cooperation, the contracting
parties will inevitably need to closely coordinate avail ­
able funds . This means that it will be necessary for all
spending by, and funding of, Bulgaria and Romania to
be continuously monitored and coordinated within the
Association Committee ; both sides will also have to
monitor the situation to ensure that the funds are used
efficiently . The Association Council will also have to
be regularly informed of the findings, ( point 2.62 ).

1 . Introduction

1.1 . Twenty years ago the Heads of State and of
Government of the EC Member States affirmed their
intention of pursuing a common trade policy vis-a-vis
the Eastern Bloc countries from 1 January 1973 onwards
and Member States voiced their determination to pro ­
mote a policy of cooperation with these countries based
on the principle of reciprocity . 1 January 1973 was an
important date since from this time onwards individual
Member States were not allowed to either negotiate or
conclude bilateral trade agreements with the countries
of Central and Eastern Europe . When the bilateral trade
agreements signed before 1973 ran out at the end of
1974, the European Community proposed to members
of the Council for Mutual Economic Aid that bilateral
trade agreements be henceforth concluded with the
Community as a whole . With the exception of Romania
there was no immediate reaction from the Council for
Mutual Economic Assistance ( CMEA ) states . At the
beginning of 1976 the CMEA instead submitted a draft
framework agreement between the Council for Mutual

25 . 1 . 93 Official Journal of the European Communities No C 19 / 77

Economic Aid and the European Community on the
principles of mutual relations . In a countermove the
Commission presented a paper which clearly reflected
the Community 's twin-track approach, i.e. a policy
which encouraged the conclusion of bilateral trade
agreements between the Community and individual
members of the Council for Mutual Economic Aid to
improve the framework for the expansion of trade in
visibles and services . The idea was also to forge working
links between the two bodies in order to discuss general

matters .

1.2 . In adopting this approach the European Com ­
munity could be certain of the support of the smaller
Central and Eastern European countries which, through
bilateral agreements with the Community, were thus
given the opportunity to escape at least partly from the
dominant political and economic influence of the Soviet
Union . However, Romania was the only country which
was able to seize this opportunity . At the end of 1980
the Community signed two agreements with Romania
which not only facilitated the access of a large number
of Romanian „ products to the Common Market, but
also provided for the establishment of a Joint Com ­
mittee with the task of continuously monitoring trade
developments and the smooth functioning of existing

agreements .

1.3 . Many attempts have been made to explain why
Romania was able to go it alone in relations with
the European Community . However, what cannot be
denied is that in foreign policy areas Romania did not
go beyond the limits set by the Soviet Union . It is
equally true to say that for historical and political
reasons Romania was once more playing its own dis ­
tinct role in the community of Eastern European states .
By mid-1958 Soviet troops had withdrawn whilst the
firmly established regime of communist terror was turn ­
ing Romania into one of the most reliable fraternal
countries of the Soviet Union . This was also one of the
main reasons why Romania was able to introduce some
temporary liberalization under the cloak of socialism,
whereas progress in this area was unknown to other
members of the CMEA ( H. Vastag, G. Mandics and
M. Engelmann : Temesvar, Symbol of Freedom,
Vienna / Munich 1992 ). The many and varied contacts
with Western governments were also a factor, as was
the liberalization which tended to manifest itself in
the Romanian economy . The decision taken by the
Government in Bucharest not to take part in the crush ­
ing of the Prague spring was an aspect of foreign policy
which should not be underestimated . This temporary
liberalization — which was presumably also a political
manoeuvre for the benefit of the West — was immedi ­
ately rewarded by the Western world . In 1972 Romania
was the sole CMEA state allowed to become a member
of the International Monetary Fund ( IMF ) and the
World Bank . Furthermore, at the beginning of 1974,
Romania was included among the countries granted
unilateral preferential treatment by the European Econ ­
omic Community in its scheme to help developing
countries .

1.4 . Since the trade agreement of 1980 was relatively
limited, the Community recommended in the mid 1980s
that its trade policy section be expanded, e.g. by
improving the access of Romanian agricultural products
to Community markets and by intensifying industrial
and scientific cooperation . Negotiations began in 1987
but had to be suspended in April 1989 when widespread
human rights abuses in Romania hit the headlines and
Securitate was turning into a prop of the political
absolutism of the dictator Ceaucescu . Even the obli ­
gations stemming from the trade agreement of 1980
were no longer respected . Finally, the Community
decided on 20 December 1989, under the influence of
the bloody massacre in Temesvar, to temporarily freeze
the trade agreement . Only two days later the collapse
of the Ceaucescu dictatorship opened the way to free ­
dom for the Romanian people . Diplomatic relations
with the Community were resumed at the end of March
1990 and the Council charged the EC Commission
with the task of negotiating a trade and cooperation
agreement . This was signed on 22 October 1990 . Fur ­
ther human rights abuses nevertheless delayed the
approval of the European Parliament so that the agree ­
ment only came into force on 1 May 1991 .

1.5 . The signing of the Joint Declaration on the
establishment of official relations between the Euro ­
pean Community and the Council for Mutual Economic
Aid was a milestone in the long-overdue normalization
of relations between the EEC and other CMEA
countries, including Bulgaria . In this Declaration both
negotiating partners committed themselves to
developing cooperation in areas of mutual interest and
within their respective terms of reference . This finally
put an end to the CMEA 's repeated call for an EC /
CMEA umbrella . Under the terms of the Joint Declar ­
ation each CMEA country decides individually on the
establishment of diplomatic relations and trade talks
with the Community . At its meeting in Rhodes
( December 1988 ) the European Council said that it
welcomed the readiness of the European members of
the CMEA to develop relations with the European
Community and reaffirmed its willingness to further
economic relations and cooperation with them, taking
into account each country 's specific situation, in order
to be able to use the opportunities in a mutually ben ­
eficial way .

1.6 . Only a few weeks after the signing of the Joint
Declaration, the European Community established
diplomatic relations with six of the European Member
States of the CMEA . On 24 September 1990 a ten-year
agreement was signed with Bulgaria on trade as well
as on commercial and economic cooperation . This
agreement came into force on 1 November 1990 . In

No C 19 / 78 Official Journal of the European Communities 25 . 1 . 93

addition, the Community extended its Generalized Sys ­
tem of Preferences to include Bulgaria from 1 January

1991, and quotas on imports from Bulgaria were either
abolished or suspended .

1.7 . The Committee is convinced that the establish ­
ment of diplomatic relations and the conclusion of trade
and cooperation agreements are the cornerstone of the
process of political and economic integration, strength ­
ening inter-state dialogue and deepening European pol ­
itical cooperation . With these agreements the Com ­
munity possesses a useful instrument which not only
permits many different types of short-term aid to East ­
ern European countries but also contributes, in the
medium term, to the economic underpinning of the
process of transformation and renewal now under way
in these countries .

1.8 . There is no doubt that first generation agree ­
ments have also been important milestones in paving
the way for the next stage in the process of pan ­
European rapprochement, namely the raising of cooper ­
ation with Central and Eastern European countries to
an even higher qualitative level . In reality, what is at
stake is the transition from cooperation to association .
The blueprint for Association Agreements presented by
the EC Commission at the beginning of 1990 embraces
not only the step-by-step creation of a free trade area,
the free movement of workers, the liberalization of
services, the approximation of legislation and the inten ­
sification of economic, social and financial cooperation,
but also the institutionalization of political dialogue
and cultural cooperation .

1.9 . These preferential agreements, termed Europe
Agreements because of the inclusion of political dia ­
logue, may in principle be concluded with all countries
of Eastern Europe for an indefinite period of time . In
the case of the Commonwealth of Independent States

( CIS ) and Georgia, however, a separate approach needs
to be adopted on the basis of the European Com ­
munity 's blueprint for partnership and cooperation
agreements . The crucial precondition for the conclusion
of Europe Agreements with these countries, however,
is that ( a ) real progress is being made in the political,
social and economic transformations now under way
there, and that ( b ) the point of no return for democracy
and the market economy has already been reached . The
Committee has appealed to the EC Commission on
several occasions to monitor political and economic
reforms in each case before launching into specific
association discussions . The Committee likewise

assumes that its Eastern European negotiating partners
will have stable, democratic and legitimate govern ­

ments .

the grounds that it is likely, by virtue of the principles
set out therein, to secure and further the establishment
of wider political, economic and social relations
between the European Community and the EC 's neigh ­
bours in Eastern Europe ( 1 ). Only an active association
policy can gradually remove the economic and social
imbalances between the Community and its negotiating
partners . This task has become all the more urgent as
the moral energy of people who first paved the way for
democracy in those Eastern European countries now
undergoing reform is likely — given the conditions
experienced in every-day life in the post-communist
era — to be rapidly eroded by ( a ) half-hearted reforms,

( b ) the collapse of existing foreign trade relations, ( c )
economic contraction, ( d ) high inflation, and ( e ) grow ­
ing unemployment . [ K.A. Koerber in : After socialism .
How are the new democracies in Europe to proceed in
the future ? ( Minutes of the 93rd Bergedorf Discussion
Group on questions relating to a free industrial society ).
Berlin, 13 / 14 July 1991 .] The European Community is
urged to offer these countries realistic prospects and
also convince them that they cannot afford to stand on
the sidelines .

2.2 . The Committee is pleased that in May of this
year the EC Commission began association negotiations
with Bulgaria and Romania . The aim of the nego ­
tiations is to conclude Europe Agreements which are
largely similar in content to those signed on 16 Decemb ­
er 1991 with Poland, Hungary and the CSFR . The
Committee 's critical comments and recommendations
concerning the agreements with the Visegrad triangle
remain equally valid as far as one can make out for the
Draft Agreements with Bulgaria and Romania . Since,
pending the entry into force of the Agreements, pro ­
visions on trade and trade-related matters will be
implemented first under Interim Agreements, the Com ­
mittee will also comment on the experiences with such
Interim Agreements at the appropriate time .

Preamble

2.3 . The Committee emphatically approves the will ­
ingness of the contracting parties to contribute to the
strengthening of political and economic freedoms,
which constitute the very basis of Association . It strong ­
ly supports their declared intention to act in unison in
order to ( a ) carry forward the construction of a new
political and economic order based on the rule of law,
respect for human rights and the rights of minorities,

assumes that its Eastern European negotiating partners ( b ) guarantee a multi-party system with free, democratic
will have stable, democratic and legitimate govern ­ ( and secret ) elections, and ( c ) speed up the pace of
ments . economic liberalization in accordance with the prin ­

ciples of a market economy . Particularly worth noticing
is the explicit undertaking of the contracting parties to
abide by their CSCE commitments, more especially in
2 . Europe Agreements with Bulgaria and Romania

2.1 . In its Opinion on the Europe Agreements with
the Visegrad countries, the Economic and Social Com ­
mittee makes an in-depth analysis of the European
Community 's association blueprint and welcomes it on ( J ) OJ No C 339, 31 . 12 . 1991, p. 12 .

25 . 1 . 93 Official Journal of the European Communities No C 19 / 79

respect of the full implementation of the principles and
provisions contained in the Final Act of the Helsinki
Conference, the concluding documents of subsequent
meetings in Vienna and Madrid, the Charter of Paris
for a new Europe, and the European Energy Charter .

2.4 . The Committee has repeatedly emphasized that,
given the social and cultural conditions prevailing in
Europe today, an ' economic area ' which is not at the
same time a ' social area ' is unthinkable . The Committee
therefore once more calls upon the Council to refer in
the preambles of the Europe Agreements to the social
dimension of European unification and to mention the
Community Charter of the Fundamental Social Rights
of Workers adopted, albeit not unanimously, by the
Heads of State or of Government of the Community in
December 1989 . What is the point — the Committee
wonders — of having a detailed protocol on social policy
in the Draft Treaty on European Union, including a
statement that eleven Member States ' wish to continue

along the path laid down in the 1989 Social Charter ',
if the preambles of Europe Agreements do not even
mention the Community Charter of the Fundamental
Social Rights of Workers ? The Committee further notes
with concern that although advocacy of the principle
of ' social justice ' remains a ' fundamental element of
association ' and is underlined as such in the Europe
Agreements with Poland, Hungary and the CSFR, the
concept has been dropped in the preambles of the new
Agreements . Has the European Community not come
recently increasingly under the influence of advisors
who have long been disturbed by the fact that ' Western
economic systems have had to make concessions to
social needs — the establishment of a welfare state, help
for the poor, the provision of public services, cooper ­
ation with trade unions, attempts to distribute incomes
fairly, and the economic, financial and social responsi ­
bility of the state for the functioning of the economic
system as a whole ' [ J.K. Galbraith, Ein Rezept namens
Kapitalismus (A recipe by the name of capitalism ). In
Die Zeit, No 44 of 26 October 1990 ] via the creation
of an appropriate framework and a sound general cli ­
mate ? A clarification by the Council on this point
would seem to be called for, not least because the
European Council emphasized at the end of its meeting
in June 1991 ' the need to strengthen the Community
social dimension in the context of political union and
economic and monetary union '.

2.5 . At some future time Bulgaria and Romania will
seek, like the Visegrad countries, to join the European
Community . The Committee supports the contracting
parties of Eastern Europe in their desire to incorporate
in the preambles of their Europe Agreements the EC
membership option . At the same time the Committee
shares the view of the Council and EC Commission
that the dynamic and evolutive structures of Europe
Agreements should be used to achieve closer partner ­
ship with these countries and so systematically prepare

the way for entry . At the same time it must be assumed
that any future enlargement of the EEC will, as the EC
Commission makes clear in its report on Europe and
the Problems of Enlargement, take place under vastly
different circumstances — achievement of the Single
Market, Economic and Monetary Union, Foreign and
Security Policy, the Acquis Communautaire . These will
all place considerable demands on potential mem ­
bers — demands which cannot be fulfilled by all appli ­
cant countries within a short period of time . The EC
Commission should therefore draw up as rapidly as
possible a coherent EC membership blueprint, testing
and fleshing out new forms and options which are ( a )
based on the existing architecture of European organiz ­
ations and ( b ) create a European political area . [ Report
of the EC Commission ' Europe and the Problems of
Enlargement ' ( Appended to the conclusions of the Euro ­
pean Council of 26 / 27 June 1992 )].

Political dialogue

2.6 . The Europe Agreements form the institutional
framework for a political dialogue which is intended
to accompany and consolidate the rapprochement
between the European Community and the associated
partners . As a platform for an exchange of views on
urgent bilateral and multilateral problems it establishes
new relations based on solidarity and creates new forms
of cooperation between the contracting parties . At min ­
isterial level the political dialogue takes place in the
Association Council, at parliamentary level in the Par ­
liamentary Association Committee .

2.7 . The ESC has always seen political dialogue as
pointing the way towards pan-European integration . In
the present phase of wider European and multilateral
cooperation and increasingly complex political and
economic processes, reciprocal information and consul ­
tation play a decisive role for both political decision ­
makers and social groups . In its Opinion on the Europe
Agreements with Poland, Hungary and the CSFR, the
Committee called on the contracting parties to involve
the economic and social interest groups in the political
dialogue . These groups are a vital element in a plural ­
istic society and pillars of Europe 's social and political
life . The more the social groups speak to each other, the
more fruitful will be their contribution to the political
dialogue .

2.8 . The Committee therefore proposes that two fur ­
ther Articles be inserted in the Europe Agreements
under Title I (' Political Dialogue '), reading as follows :

' Article ...

The Association Council shall guarantee that econ ­
omic and social interest groups will be involved in
the political dialogue during the first stage of the
transitional period . From the second stage this dia ­
logue will take place within the framework of a
Consultative Association Committee representing
economic and social interest groups .

No C 19 / 80 Official Journal of the European Communities 25 . 1 . 93

Article ...

Protocol No . 1 concerns the cooperation of the
economic and social interest groups .' ( Protocol
No 1 concerning the cooperation of the economic
and social interest groups . The contracting parties
are agreed that this dialogue shall form part of a
more wide-reaching dialogue embracing the econ ­
omic and social interest groups of the European
Community and those of the Central and Eastern
European countries .)

General principles

2.9 . The treaties now include the provision that
respect for democratic principles and human rights, as
enshrined in the Helsinki Final Acts and the Charter of
Paris for a New Europe, as well as adherence to free
market principles, are vital elements of Association . In
consequence, appropriate measures could be taken if
these obligations are not met . The Committee regrets,
however, that there is no longer any possibility of
resorting to Article 60 of the Vienna Agreement on
Treaty Law, as originally provided for . The Committee
urges at the same time that the protection of basic social
rights be regarded as an ' element of association '. The
same holds good for the rights of minorities : in the
view of the Committee these are inalienable rights
and likewise constitute a vital element of Association .
Finally, it should not be forgotten that minorities are
human beings and not expendable by-products of the
vicissitudes of history ( F. Elbe in : Zwischen Integration
und nationer Eigenstandigkeit : wie findet Europa zus ­
atnmen ? Minutes of the 93rd Bergedorfer Discussion
Group on questions relating to a free industrial society .
Tallium, 30 / 31 May 1992 ). The Committee furthermore
assumes that this new provision — the result of recent
experience with Yugoslavia — will also apply to future
Europe Agreements .

2.10 . The Committee sees problems in that part of
the draft Agreement according to which the Association
Council will meet in the course of the twelve months
before expiry of the first stage to discuss — against the
background of the experience acquired since the entry
into force of the Agreement — the transition to the
second stage and any amendments to current
implementing provisions . The intention is unreservedly
welcomed, but the passage is worded too generally and
could act as a block on decisions regarding trans ­
frontier cooperation between firms . Necessary invest ­
ment decisions might then be deferred until the overall
economic climate had settled down .

Free movement of goods

2.11 . The aim in the field of trade policy is to phase
in a free-trade area over a period of no more than ten

years . As was already the case with the Visegrad states,
the European Community will introduce free trade
before Bulgaria and Romania do . The Community is
to abolish customs duties and quota restrictions on
industrial goods within six years . Special rules are to
apply once again for textiles, European Coal and Steel
Community ( ECSC ) products and agricultural prod ­
ucts . Bulgaria and Romania will probably need to use
the whole of the ten-year transitional period to lib ­
eralize trade at their end . However, if the overall econ ­
omic situation and developments in particular sectors
allow, customs duties affecting trade with the European
Community will be lowered before the agreed date .

2.12 . The Committee welcomes this asymmetrical
approach, which will help to prop up the difficult
restructuring processes in Bulgaria and Romania . In
view of the dramatic deterioration in these countries '
overall economic performances, the Community should
make a serious attempt to shorten the six-year period
before it removes all its customs duties on imported
industrial goods, and should try to speed up the inevi ­
table liberalization of the markets . Article 110 of the
Rome Treaty — which should also be borne in mind
from time to time — expressly obliges the Community
to press for a liberal trade policy in the common inter ­
est . The Committee thinks that this obligation is too
frequently neglected . Whenever this happens, the
necessary restructuring fails to materialize and the
Community loses political credibility .

2.13 . Bulgaria and Romania will be able to introduce
temporary derogations in the form of higher customs
duties for fledgling industries and sectors in the throes
of restructuring or facing other difficulties, e.g. serious
social problems . The Committee endorses these dero ­
gations, but trusts that they will not become the rule ;
the way they are worded leaves them open to interpret ­
ation . The Association Council should also make sure
that the five-year limit is strictly observed in each indi ­
vidual case and that all derogations will cease to apply
by the end of the transitional period at the latest .

2.14 . Once again the Committee would urge that the
Community 's partners in Eastern Europe be obliged to
take over the Combined Nomenclature in full by a
specific date so that trade can flow smoothly . The
customs and foreign trade authorities in Bulgaria and
Romania must also be reorganized . The technical assist ­
ance which the Community has promised should be
provided forthwith . In addition, the Community should
take advantage of the vast experience of Community
trade associations and firms and ask for their active

support .

25 . 1 . 93 Official Journal of the European Communities No C 19 / 81

2.15 . Sensitive sectors — textiles, ECSC products and
agriculture — are dealt with separately in additional pro ­
tocols ; the content of these protocols was not known
with certainty at the time of this Opinion 's drafting . It
is to be assumed that the provisions are based in part
on the provisions contained in the Europe agreements
with Poland, Hungary and the CSFR . The Committee
would refer once more at this point to the relevant
GATT provisions and the material conditions needed
for the creation of free trade areas . The main condition

is that customs duties and other trade restrictions on

bilateral trade are eliminated in both directions ' on
substantially all the trade ' ( GATT Article XXIV 8b ).
Because of the need to comply with GATT, it will not
be possible in the long run to exclude any area — not
even agriculture — from market liberalization .

welcomed . However, the Commission considers that
freedom from customs duties is to apply only to out ­
ward processing traffic subject to quotas, and this is to
be criticized . The outward processing of quota-free
clothing products, on the other hand, will be subject to
the phasing out of customs duties . There is no convinc ­
ing reason, the Committee believes, why products sub ­
ject to quotas should be treated any differently from
products not subject to quotas . It would be more correct
to extend the freedom from customs duties, as soon as
the textile protocols enter into force, to all outwardly
processed knitted and woven clothing products .

2.19 . The steps to be taken to liberalize ECSC prod ­
ucts will be dealt with in a second additional protocol .

2.16 . The Community 's customs duties on textile
products are to be phased out in the same way as in
the other Europe Agreements . This means that there
will be complete freedom from customs duties in the
seventh year after the preferential agreements come into
force . Bulgaria and Romania will abolish their customs
duties by the end of the ten-year transitional period in
accordance with a timetable which has still to be laid
down . A special safeguard clause has been agreed stat ­
ing that account will be taken of the transitional
arrangements still to be negotiated in the GATT Urug ­
uay Round for textiles and clothing .

. on 2.20 . In the steel sector the parties are also to apply
products are to be phased out in the same way as in a step-by-step approach . The Community will probably
the other Europe Agreements . This means that there abolish customs duties completely within five years .
will be complete freedom from customs duties in the Bulgaria and Romania will require the ten-year tran ­
seventh year after the preferential agreements come into sitional period to abolish their customs duties, with
force . Bulgaria and Romania will abolish their customs the timetables adopted for their phasing-out likely to
duties by the end of the ten-year transitional period in depend on the sensitivity of ECSC steel products . The
accordance with a timetable which has still to be laid quota restrictions on ECSC steel imports and measures
down . A special safeguard clause has been agreed stat ­ of similar effect will be lifted — as in the case of the
ing that account will be taken of the transitional agreements with Poland, Hungary and the
arrangements still to be negotiated in the GATT Urug ­ CSFR — when the steel protocols come into force . Judg ­
uay Round for textiles and clothing . ing from what the Commission says in its industrial

policy blueprint, ' an open approach requires that the
rules of the game be respected by all trading partners
since the Community 's economy will become more
sensitive to such practices in line with its even greater

openness .
2.17 . The Committee would urge the EC Com ­
mission to bear in mind that the Generalized Tariff
Preferences already granted to Bulgaria and Romania
Interim are must to not be Agreements terminated, however ., The put before these removal the countries entry of these into in force preferences a worse of the 2.21 crude . steel In view capacities of our — two 15 million Eastern tonnes European per year partners in the '
position states ). The retroactively Committee ( believes as happened that with it would the be Visegrad a piece case case of of Romania Bulgaria — and the 5 Committee million tonnes endorses per year the in Com the ­
of and were trading clothing in future nonsense exports subject if to to Bulgarian the the Community planned and Romanian phased, for reduction example textile, develop ket mission both . The countries smoothly 's steel plan to industries ' steel make and exports not it clear in upset the to during the the countries Community Community negotiations of Eastern must mar that ­
of customs duties whereas previously they were totally
exempt . Such action would clearly impede both Europe have considerable problems selling products
countries ' exports and would hardly be commensurate because of the collapse of their domestic markets and
with the Community 's much vaunted market liberaliza ­ other markets in Eastern Europe . They will therefore
tion policy . Nor would it accord with the Commission 's attempt to offset this at all cost by increasing their
original assurance that the Conclusion of Europe Agree ­ exports elsewhere and especially to the Community .
ments would under no circumstances lead to a deterio ­

ration of the status quo .

2.21 . In view of our two Eastern European partners '
crude steel capacities — 15 million tonnes per year in the
case of Romania and 5 million tonnes per year in the
case of Bulgaria — the Committee endorses the Com ­
mission 's plan to make it clear during negotiations that
both countries ' steel exports to the Community must
develop smoothly and not upset the Community mar ­
ket . The steel industries in the countries of Eastern
Europe have considerable problems selling products
because of the collapse of their domestic markets and
other markets in Eastern Europe . They will therefore
attempt to offset this at all cost by increasing their
exports elsewhere and especially to the Community .

2.18 . The outward processing of knitted and woven
clothing products is to be free from customs duties once
the trading agreements come into force . This is to be

2.22 . The removal of national import quotas with
the entry into force of the Interim Agreements has in
the case of Poland and the CSFR already produced
serious disturbances on the Community market . In the
first half of 1992, for example, the CSFR more than
doubled its exports of ECSC rolled steel products to
the Federal Republic of Germany compared with the

No C 19 / 82 Official Journal of the European Communities 25 . 1 . 93

same period the previous year . In Poland 's case there
was an approximately 90 % increase . It is the EC steel
industry 's view that these growth rates can only be
achieved by fixing low prices which undercut the mar ­
ket prices by almost 25% ( weighted average ). The
exports of some steel products to the Community have
taken on such proportions that, at the insistence of
France, Italy and the Federal Republic of Germany, the
Commission has been forced to introduce measures to
protect against imports of hot-rolled wide strip, light
sheet and wire rod from the CSFR ( 1 ). Further protective
measures are being advocated by the EC steel industry
in the meantime .

2.23 . In order to avoid the recurrence of serious
disturbances on the steel market once the agreements
are signed with Bulgaria and Romania, the EC steel
industry — with the backing of the Spanish Govern ­
ment — has suggested that Community steel imports
from both countries be restricted during a transitional
period to past levels . The transitional period is defined
in this instance as the period during which the Bulgarian
and Romanian steel industries continue to receive
restructuring aid from the state . Once restructuring has
been completed, the steel firms have been privatized
and a ban on state aid has been introduced in accord ­
ance with ECSC law, the markets should be completely
liberalized . So far the European Community has appar ­
ently not been willing to take up this proposal . Instead,
it is contemplating a ' safeguard clause ' which will
remain in force as long as Bulgaria 's and Romania 's
iron and steel industries receive restructuring aid from
the state . The purpose of this provision is to ensure that
Bulgaria and Romania respect the special sensitivity of
the Community 's steel market . The Committee sup ­
ports the Commission 's proposal because it satisfies
the Community 's multilateral obligations better than a
voluntary restraint clause . However, it is assumed that,
in the event of the agreed rules on competition being
violated and the markets being seriously disturbed,
the Commission will be free to introduce and enforce
suitable quota restrictions straightaway .

Romania themselves will once again have only lifted
their quota restrictions at the end of the ten-year tran ­
sitional period .

2.25 . The Committee considers the joint protocol
provisions for ECSC products to be particularly
important . The obligations here are similar to those
contained in the Treaties with Poland, Hungary and
the CSFR . The Committee 's main concern is the state
aid question . Because it is harmful to trade between the
Community and its associated partners, state aid is
incompatible with the orderly functioning of the agree ­
ments . The Committee calls on the Commission to
make full use of available machinery in the Association
Council in order to effectively protect competition
against distortions caused by state aid, be it granted
anywhere in the Community or in Bulgaria and Rom ­
ania .

2.26 . Trade in processed agricultural products which
do not come under Annex II to the EEC Treaty will be
dealt with in a third additional protocol . Not much
was known about these arrangements when this Opin ­
ion was drafted, but they will contain provisions on the
dismantling of customs duties and charges of equivalent
effect, plus provisions about quota restrictions . Con ­
cessions based on balance and reciprocity will be
granted for trade in agricultural products, and in par ­
ticular goods coming under Chapters 1 to 24 of the
Combined Nomenclature and the customs tariff of the

associated countries . However, these concessions will
apply only to products in which there has been regular
large-scale trade in recent years .

2.27 . Bulgaria and Romania have huge potential in

the violated Commission and the will markets be free being to introduce seriously and disturbed enforce, the field of agricultural production and this potential

will increase considerably once the reforms start to take

suitable quota restrictions straightaway . effect in agriculture, too . Both countries will make a

great effort to substantially boost their agricultural
exports to the Community, even in the case of those
products which come under EC agricultural market
regimes . The Committee agrees with the Commission

2.24 . In the coal sector Community customs duties that the Association Council should continually exam ­
are set to fall more rapidly than in the steel sector . The ine the possibilities for further concessions on all goods
phasing four years out after of the these agreements duties is in ' entry fact into to be force completed . Bulgar ­ depend on the basis on the of particular reciprocity sensitivity . These concessions of products should, the
ia and Romania will abolish their duties by the end of Community 's Common Agricultural Policy ( CAP ) pro ­
the transitional period . Quota restrictions on imports visions, the importance of agriculture for the associated
are in principle to be lifted by the Community within countries and the likely outcome of the GATT Uruguay
one year . There are, however, to be four-year dero ­ Round . For many years now the Community has had
gations for certain products and regions . Bulgaria and to contend with structural surpluses in agricultural

markets and, despite the step-by-step reform agreed
on in May 1992, it is doubtful whether these serious
difficulties can be eliminated for the moment . It would

therefore be disastrous to exacerbate the situation on
the Community 's agricultural market by excessive
imports of particularly sensitive products . At the time
of drawing up this Opinion there are differences of
H OJ No L 238, 21 . 8 . 1992, p. 26 . opinion between the contracting parties on import quo ­

2.24 . In the coal sector Community customs duties
are set to fall more rapidly than in the steel sector . The
phasing out of these duties is in fact to be completed
four years after the agreements ' entry into force . Bulgar ­
ia and Romania will abolish their duties by the end of
the transitional period . Quota restrictions on imports
are in principle to be lifted by the Community within
one year . There are, however, to be four-year dero ­
gations for certain products and regions . Bulgaria and

25 . 1 . 93 Official Journal of the European Communities No C 19 / 83

tas for beef and sheepmeat just as there are apparently
major problems in fixing preferential quotas for plums
and cherries, wine and tobacco .

2.28 . In view of this tense situation, the Committee
would reiterate a proposal made in its Opinion on
the Europe agreements with Poland, Hungary and the
CSFR, namely that much of the agricultural surplus
should be exported to other neighbouring Eastern Euro ­
pean countries for hard currency . There will be a heavy
demand for agricultural imports in these countries — in ­
cluding most certainly the Commonwealth of Indepen ­
dent States ( CIS ) — for some time yet . The Community
and the ' Group of 24 ' should provide funds specifically
for this purpose in their aid programmes for Bulgaria
and Romania . This aid, which should also help to
support economic reform in both countries, should be
granted over a period of several years .

2.29 . Just over two years ago the Committee pointed
out that the economic and social changes in Central
and Eastern European countries would also have a
significant impact on the Community 's agricultural
markets . Hence the Committee 's recommendation in
its Opinion at the time that the EC Commission should
immediately frame proposals which would help to
channel Eastern Europe 's agricultural and industrial
capacity ' into both traditional food production and
industrial and energy outlets for agricultural prod ­
ucts ' (*). The Committee believes that the Europe Agree ­
ments provide a suitable framework for successfully
transforming such proposals into reality in the associ ­
ated countries .

2.30 . Furthermore, the Committee still thinks it
would make sense to hold consultations with Bulgaria
and Romania in the Association Council on a set-aside
and extensification programme that would stabilize
agricultural production and improve the rural environ ­
ment . This programme should also receive financial
support from the Community within the limits of the
funds available . The set-aside should primarily be for
heavily contaminated land which has to be taken out
of agricultural production because food could not be
grown on it anywhere in any country .

2.31 . To help create a free-trade area, the Europe
Agreements contain a series of flanking measures which
apply to all trade in goods, except as otherwise provided
by the General Conditions or Additional Protocols

Preferential rules of origin are set out in an additional
protocol ; a further protocol lays down special arrange ­
ments for trade between the associated countries and
Spain and Portugal . The Committee welcomes the pack ­
age of measures which will help, above all during the
transitional period, to eliminate disturbances to trade in
goods between the Community and the two associated
countries .

2.32 . The Committee considers the proposed consul ­
tation procedure in established cases of dumping to be
particularly relevant . It assumes that the GATT anti ­
dumping and anti-subsidy codes will be fully observed .
At the same time the associated countries of Eastern
Europe should give an assurance at a suitable point in
the Agreements that they intend to comply uncon ­
ditionally with EC subsidy discipline, subject to the
agreed derogations . Treating the associated countries
from the outset as countries with functioning market
economies is — in spite of the lack of clarification — ac ­
ceptable on political grounds and constitutes a valuable
incentive for rapid progress with the economic reform
process . Objectively, it will not be at all easy for the
Commission in future years to make a fair compari ­
son — within the meaning of the EC anti-dumping Regu ­
lation — between the export price and ' normal value '.

2.33 . Free trade arrangements can only be enjoyed
if there is concrete proof of the origin of products

( proof of preference ). In its Opinion on the Europe
Agreements with Poland, Hungary and the CSFR, the
Committee supported their call for multilateral cumu ­
lation . The Commission did not accept this call, with
the result that the extremely restrictive rules of origin
laid down in the Interim Agreements have proved to
be a major obstacle to increased trade . This is an
enormous qualification of the European Community 's
concession of allowing the Visegrad countries duty-free
access to the markets of the twelve EC Member States
for nearly all industrial products from the entry into
force of the trade part of the Europe Agreements .

1-3 . These include standstill agreements, consultations
in the case of dumping, safeguard clauses, State mon ­ 2.34 . Although the Protocol on preferential rules of
opolies, non-discrimination and dispute settlement . origin appended to the Europe Agreements with Bulgar ­

ia and Romania is not yet available, references in related
documents suggest that the Commission has in mind
the same restrictive origin rules as in the other Europe
Agreements . For as long as diagonal cumulation among
all countries associated by means of the Europe Agree ­
ments cannot be applied to the further processing of
goods, processing can take place in no more than two
countries without loss of the existing originating status .
(!) OJ No C 124, 21 . 5 . 1990, p. 51 . Such restrictive rules are to be found neither in the EC ­

No C 19 / 84 Official Journal of the European Communities 25 . 1 . 93

EFT A free-trade agreement nor in the rules negotiated
for the purposes of the EEA Agreement . These new
rules of origin — which are expected to apply from

1 January 1993 — are in certain respects even more
liberal than the EC-EFT A rules of origin currently
in force, as set out in Protocol 3 to the free-trade
Agreement .

2.35 . The Committee finds it extremely difficult to
understand the reasoning behind the Commission 's pos ­
ition . The Commission must realize that only a uniform
system for the determination of origin can serve the
division of labour within Europe, into which the associ ­
ated countries of Eastern Europe are to be integrated .
The Committee therefore calls for the EC-EFT A rules
of origin currently in force, or better the future EEA
rules with an alternative percentage criterion, to be
inserted into all the Europe Agreements with the
countries of Central and Eastern Europe (' pan-Euro ­
pean ' cumulation ).

Free movement of workers, the right of establishment

and freedom to provide services

2.36 . In addition to free movement of goods, the
basic freedoms pursued by the European unification
process are above all freedom of movement for workers,
the right of establishment and freedom to provide ser ­
vices . These have paramount economic importance and
are of great symbolic value .

2.37 . For the contracting partners, free movement of
workers concerns primarily the integration of workers
legally employed on the territory of the other con ­
tracting party and their family members legally resident
there . At the same time social security systems for
these persons should be co-ordinated . Existing facilities
which the EC Member States provide under bilateral
agreements should where possible be improved and
extended . The Committee warmly welcomes the agree ­
ments but would still like to see agreements covering
workers from Eastern European countries who are
employed illegally in the Community .

2.38 . The Committee, which has discussed migration
from third countries in a number of Opinions ^), calls
for legally resident immigrants in the Community to be
given their full place in the ' Citizens ' Europe '. Steps
should be taken to ensure that Community rights and
obligations affecting residence, employment and
mobility also apply without restriction to this category .
At the same time, the Committee has called upon the
EC Member States and the Commission to bring about
Community-wide harmonization of legal provisions,
instruments and measures necessary for the social inte ­

( 1 ) OJ No C 343, 24 . 12 . 1984 ; OJ No C 188, 29 . 7 . 1985 ; OJ No

C 159, 17 . 6 . 1991 ; OJ No C 339, 31 . 12 . 1991 ; OJ No C 40,

17 . 2 . 1992 .

gration of immigrants without significant delay . In
addition, conditions should at last be laid down under
which immigrants from third countries can enjoy free ­
dom of movement within the Community on an equal
footing with Community citizens . The Committee
believes that this is the only way of removing discrimi ­
nation, ensuring a properly functioning Single Market
and achieving the aim of creating a unified Community
labour market .

2.39 . In the second stage of the transitional period,
if not earlier, the Association Council will try and find
further ways and means of improving the ' rights of
workers ' to move freely across borders, whilst taking
into consideration the economic and social conditions
prevailing in the associated states just as much as the
employment situation in the Community . The Com ­
mittee again regrets that the Commission has not even
referred in a protocol to the Community 's limited scope
for action on freedom of movement in the medium
term . The evidence suggests that the Community labour
market will have no significant need of additional lab ­
our from third countries for the time being since the
Community 's rate of unemployment is not likely to fall
to any appreciable extent in the next few years ; on the
other hand, concessions in existing agreements ( Turkey )
already limit immigration possibilities for job seekers .
Finally it should not be forgotten that the provisions
which have come in for criticism turn up again in
all agreements : they are to be found in the Europe
Agreement with Poland, Hungary and the CSFR, are
now being inserted into the agreements with Bulgaria
and Romania and — for reasons of equal treat ­
ment — will also have to be included in future Europe
Agreements . In view of the considerable job shedding
in Eastern European countries as a result of reform,
pressure on the Community labour market will increase
sharply in the medium term . Which job-seekers from
which partner states will then be given priority by the
Community ? Even a quota scheme offers no satisfac ­
tory solution here . Whoever ' lays down quotas for
individual groups or countries which lets in some and
turns away others deals with basically equal circum ­
stances in an unequal way . Equal treatment of equal
circumstances, however, is the foundation of a consti ­
tutional state and its guarantee of the rule of law '.

[ H. Afheldt, Europa vor dem Ansturm der Armen ( Eur ­
ope before the onglaught of the poor ), Suddeutscbe
Zeitung No 234 of 10 October 1992 .] In the Com ­
mittee 's view it is high time to ponder in depth the
complex and many-layered issue of freedom of move ­
ment for workers between the European Community
and associated partner states and work out durable
solutions, within the framework of a coherent immi ­
gration policy, which do not arouse great expectations

today only to dash them by tomorrow at the latest .

2.40 . As regards the right of establishment, the Mem ­
ber States believe that as soon as the Europe Agreements

25 . 1 . 93 Official Journal of the European Communities No C 19 / 85

come into force, businesses and nationals in the associ ­ visions, generally into line with Community rules dur ­
ated states should be subject to the same conditions as ing the Agreements ' transitional phase .
the EC 's own enterprises and citizens . Bulgaria and
Romania will do this right away, except in certain
sectors where there will be equal treatment by the
end of the ten-year transitional period at the latest .
Derogations will be possible in individual industries
in Bulgaria and Romania in order to deal with the
constraints of structural adjustment or other serious
difficulties, including major social problems . However, Capital movements, competition and approximation
these measures must terminate two years after the end of laws
of the first stage . Protective measures will also be poss ­
ible in cases where businesses in a given industry or
sector of the economy are forced to accept a ' dramatic '
loss of their domestic market shares . 2.44 . As the Committee said in its Opinion on the

Capital movements, competition and approximation

of laws

2.41 . The Committee broadly endorses these
Arrangements . The right of establishment will facilitate
the transition to a market system and help to create a
modern, competitive economy in the associated states .
The Committee also appreciates the need for temporary
protective measures in exceptional situations . At the
same time, ' dramatic ' reductions in domestic market
shares can hardly justify protectionism . Such a policy
will not boost the competitiveness of domestic indus ­
tries and will only put off the necessary structural
adjustments to a possibly more difficult future, when
they may cause even more pain . In addition, the Com ­
mittee still thinks that this passage should be discussed
once more with the contracting parties and worded in
more concrete terms ; in particular the ' relevant ' market
variables and the notion of market shares should be
defined clearly .

2.44 . As the Committee said in its Opinion on the
Europe Agreements with the Visegrad states, the advan ­
tages of a liberalized goods and services sector from the
standpoint of location and specialization can only be
fully exploited if the free movement of capital across
frontiers is guaranteed . The free movement of capital
will create favourable conditions for monetary cooper ­
ation and reinforce stabilization efforts . The Committee
supports all agreements which are designed to increase
the free movement of capital between the Community
and its partners in Eastern Europe . It is pleased that
the contracting parties have undertaken to guarantee,
from the entry into force of the Agreements, free move ­
ment of capital in connection with direct investments,
their liquidation and the repatriation of any profits . In
addition, the conditions for the gradual application of
Community laws on free capital movements will be
created during the first five-year period of the Agree ­
ments ; at the end of this period the Association Council
will consider the possibilities of adopting the relevant
Community provisions in full .

2.45 . The provisions in the new draft Europe Agree ­
ments on competition, public procurement and state
aid are similar to those to be found in the Europe

2.42 . The Committee approves the phased and Agreements, already concluded with Poland, Hungary
reciprocal liberalization of services . In view of the and the CSFR . The new provisions nevertheless include
increasing worldwide significance of services markets, a safeguard clause in the event of balance-of-payments
the importance of liberalization in this area can hardly difficulties . The Committee supports in principle these
be overestimated . The Committee is pleased that both Arrangements . Competition is a central pillar of the
contracting parties wish to incorporate the results of Common Market : without competition there can be no
the GATT Uruguay Round — which aims to establish a guarantee that the advantages of the Single Market will
multilateral framework of principles and rules govern ­ be advantageously exploited ; without competition the
ing service transactions — into the Europe Agreements process of pan-European integration would be seriously
at the appropriate time . flawed . From the very outset Bulgaria and Romania

should therefore align their national competition laws
as closely as possible on those of the European Com ­
munity . The Committee also wonders whether the
adoption of implementing provisions on competition
rules will really require three years after the entry into
2.43 . Special provisions are planned for cross-fron ­ force of the Agreements .
tier transport services : in international maritime traffic
the prevailing principle will be unrestricted market
access . Rights and duties under the UN Code of Con ­
duct for Liner Conferences will remain unchanged . In 2.46 . We would underline the contracting parties '
air and land transport mutual market access will be conviction that the opening up of public procurement
regulated in transport agreements worked out between on the basis of non-discrimination and reciprocity, par ­
the partner states after the Europe Agreements come ticular in a GATT context, is an objective well worth
into force . At the same time Bulgaria and Romania pursuing . The liberalization of public procurement in
want to bring their air and land transport legislation, all areas is a centrepiece of the Single Market pro ­
including administrative, technical and other pro ­ gramme and has great importance from an industrial

2.42 . The Committee approves the phased and
reciprocal liberalization of services . In view of the
increasing worldwide significance of services markets,
the importance of liberalization in this area can hardly
be overestimated . The Committee is pleased that both
contracting parties wish to incorporate the results of
the GATT Uruguay Round — which aims to establish a
multilateral framework of principles and rules govern ­
ing service transactions — into the Europe Agreements
at the appropriate time .

2.46 . We would underline the contracting parties '
conviction that the opening up of public procurement
on the basis of non-discrimination and reciprocity, par ­
ticular in a GATT context, is an objective well worth
pursuing . The liberalization of public procurement in
all areas is a centrepiece of the Single Market pro ­
gramme and has great importance from an industrial

No C 19 / 86 Official Journal of the European Communities 25 . 1 . 93

policy point of view . The European economy — as the
EC Commission and Committee have pointed out on
several occasions — will not move closer together unless
the tendency to favour ' national champions ' when
awarding public contracts is abandoned once and for
all .

2.47 . The Committee expressly welcomes the
Arrangement whereby all state aid granted in Bulgaria
and Romania during the first stage of the transitional
period is to be scrutinized in terms of Article 92(3 ) ( a )
of the EEC Treaty . It would also have been useful if
the new Europe Agreements had stipulated the need to
review national aid in accordance with Article 93 of
the EEC Treaty . The Committee believes that the
requirement to produce an annual report on the total
volume and distribution of the aid given does not go
far enough . As has already been made clear elsewhere,
the Association Council should, in the case of Bulgaria
and Romania, be in a position where it can effectively
bring into play all EC aid monitoring instruments .

2.48 . The contracting parties recognize that align ­
ment of the laws of Bulgaria and Romania on those
of the Community is an important condition for the
economic and social integration of both countries into
the European Community . As the Section for Industry
pointed out in its Opinion on European industrial pol ­
icy ( J ), what firms on both sides need more than any ­
thing else is a ' reliable climate for action and more
scope for reorganizing themselves in order to strengthen
their competitiveness, find a flexible response to the
growing pressures from international firms based out ­
side the Community, and create and permanently safe ­
guard jobs '.

2.49 . The Committee agrees wholeheartedly with the
EC Commission that legislative harmonization is a col ­
ossal task involving a great variety of provisions which
can only be adjusted gradually . These include customs
law, company law, banking law, company accounts
and taxes, intellectual property, protection of workers
at the workplace, financial services, rules on compe ­
tition, protection of the health and life of humans,
animals and plants, consumer protection, indirect tax ­
ation, technical rules and standards, nuclear law and
regulation, transport and the environment . Both Bulgar ­
ia and Romania have already given an assurance that
their legislative provisions will be gradually aligned on
those of the Community .

2.50 . The Committee regrets once more the failure
of the draft Agreements to fix priorities . Although the
two-stage plan applies equally to the approximation of
legislation, there is no actual indication as to which
provisions are to be approximated during the first stage

and which will need the full ten-year transitional period
before they can be aligned on Community legislation .
For example, on ecological and competition grounds,
the Committee regards it as essential for Bulgaria and
Romania to transpose Community legislation on the
environment, competition and subsidies during the first
transitional stage . Similarly, legislative and administrat ­
ive provisions on nuclear technologies should be
approximated rapidly and the safety provisions laid
down in the Euratom Treaty adopted without delay .
Finally, action is imperative in the field of worker
protection at the workplace and in connection with
certain consumer protection directives ( e.g. on product
liability ). Now the Community has entered into an
agreement to provide Bulgaria and Romania with tech ­
nical assistance in approximating legislation, it should
be possible to set priorities and push through much of
the legislation during the first stage .

Economic cooperation

2.51 . The European Community and its two associ ­
ated partners wish to strengthen and deepen economic
cooperation, putting it on a wide basis . Cooperation
should go well beyond the limits laid down by trade
and cooperation agreements . It should also promote
social development in the associated countries, whilst
particular attention should be paid to measures which
further cooperation between the countries of Central
and Eastern Europe in the interests of harmoniously
developing the whole region . The aim of joint activities
is finally to support economic development in Bulgaria
and Romania and make it easier for these two countries
to become an integral part of the international division
of labour .

2.52 . The draft Europe Agreements with Bulgaria
and Romania, like those concluded with the Visegrad
states, mention a large number of different areas where
both parties intend to intensify cooperation and acceler ­
ate development : industrial cooperation, the promotion
and protection of investment, industrial standards and
conformity assessment, cooperation in science and tech ­
nology, vocational training, agriculture and the agro ­
industrial sector, energy and nuclear safety, the environ ­
ment, transport, telecommunications, banking and
insurance, monetary policy, money laundering, regional
development, social cooperation, tourism, small and
medium-sized enterprises, customs, statistics, drugs and
public administration . All areas of cooperation are fur ­
ther divided into concrete fields of action .

2.53 . The sheer variety of the areas of cooperation
is impressive and deserves to be endorsed . Nevertheless,
the Committee harbours serious doubts ( as already in
the case of the Visegrad states ) as to whether common
( i ) OJ No C 40, 17 . 2 . 1992, p. 31 . projects can be executed in all these areas within a

25 . 1 . 93 Official Journal of the European Communities No C 19 / 87

reasonable period of time . Neither the manpower nor
the financial resources of Community institutions
would seem to be sufficient to ensure satisfactory cover ­
age of the whole range of activities . Nor should it be
forgotten that there are now five Eastern European
partner states with which wide-ranging cooperation has
been agreed . The Committee feels that it would have
been much more sensible to have concentrated initially
on just one or two key areas where urgent action is
needed . The Committee is particularly interested in
' high-cost ' priorities with a cross-border dimension
where the Community and its associated partners, or
also actual firms of EC Member States, need to act as
locomotives . Here the Committee principally has in
mind policy areas such as infrastructure, education and
training, and nuclear energy .

also resolutely carry out its own studies under the Phare
programme so that the findings can be evaluated as
soon as possible with a view to the retrofitting of
nuclear power plants in Eastern Europe .

2.57 . The Committee would underline the assurance
given by the contracting partners to develop and
strengthen cooperation in the field of the environment .
The Committee emphatically supports the declared
intention of fully taking into account the environmental
impact of all economic measures from the very outset .
As the Committee has already made clear in a number
of different Opinions, environmental policy should be
preventive and cooperative in kind and should be care ­

training, and nuclear energy . fully coordinated with other policies such as regional

policy or research and development policy . As a pan ­
European issue, environmental policy should be seen as
a cross-frontier challenge which cannot be tackled by
individual countries acting in isolation .
2.54 . In the field of basic public infrastructure, the
establishment and development of an infrastructure
network geared to actual needs is an important pre ­ 2.58 . Areas of top priority in environmental cooper ­
requisite of successful structural reorganization . This ation include water management and the protection of
will require an investment policy capable of meeting water quality, especially in cases where waterways cross
higher quality requirements and the demands of a com ­ frontiers . This is why a protocol should be appended
petitive, market-oriented economy . Such an approach to the Europe Agreement with Bulgaria containing con ­
implies that infrastructure investment in Bulgaria and crete provisions designed to protect and ensure the
Romania today should be seen and evaluated in a water quality of international waterways ( Danube, Nes ­
European-wide context . tos Strimon Evros and the Black Sea ). The Committee

2.55 . The second priority for joint action by the
contracting parties should be education and training
since workers ' training will play a key role in the
economic reform and renewal process . The principal
shortcoming is the lack of appropriate knowledge and
experience regarding the operation of market-oriented
systems and the use of modern production, information
and communication techniques . There are also short ­
comings of a non-technical nature since autonomy,
initiative and creativity were not required in a centrally ­
planned economy .

2.56 . The third major objective is to increase nuclear
power-plant safety . In particular, the first generation
of Soviet-designed pressurized water reactors ( VVER
440 / 230 ) presents serious safety problems . A call to
take them out of service was made a long time ago .
Four of these reactor units are located in Kosloduj

( Bulgaria ); two of them were shut down by the Bulgari ­
an Government in 1991 . Several incidents in recent
months nevertheless show that considerable safety risks
are still being taken in Kosloduj . Measures to improve
the safety levels of reactors must therefore be taken
immediately . The Committee is pleased that the G-24
states have in the meantime approved the multilateral
action programme of the Munich summit for improving
the safety of nuclear power plants in Eastern Europe,
and have shown their willingness to implement the
programme without delay . The EC Commission should

2.58 . Areas of top priority in environmental cooper ­
ation include water management and the protection of
water quality, especially in cases where waterways cross
frontiers . This is why a protocol should be appended
to the Europe Agreement with Bulgaria containing con ­
crete provisions designed to protect and ensure the
water quality of international waterways ( Danube, Nes ­
tos, Strimon, Evros and the Black Sea ). The Committee
considers that priority should be given to developing a
system for monitoring and controlling the quality and
quantity of cross-frontier waterways and that the rel ­
evant provisions should be written into the additional
protocol with Bulgaria . The system should include
appropriate measures :

— to lower the pollution levels of cross-frontier water ­

ways ;

— to provide early warnings of floods and dangerous

levels of pollution ;

— to tackle soil erosion caused by varying rates of

water flow ;

— to promote the rational and fair utilization of water

resources ;

— to protect flora and fauna in the deltas of cross ­

frontier waterways, as well as in neighbouring areas .

To finance the necessary measures, the contracting
partners should propose acceptable solutions within the
framework of financial cooperation .

Financial cooperation

2.59 . The challenge of structural adjustment in Bul ­
garia and Romania and the task of creating a competi ­

No C 19 / 88 Official Journal of the European Communities 25 . 1 . 93

tive economy cannot be successfully tackled without
effective outside assistance . All new democracies in
Central and Eastern Europe require funds in hard cur ­
rency ; their need for financial support has grown stead ­
ily since the beginning of the economic reform move ­

ment .

2.60 . The temporary financial aid granted by the
Community consists of a combination of loans and
non-repayable grants . The draft Agreements stipulate
that the Phare programme is to continue until the
end of 1992, operating within the context of financial
cooperation . Thereafter, Community grants and loans
from the European Investment Bank ( EIB ) are to be
provided on a multi-annual basis within the framework
of Phare or under a new financing mechanism .

2.61 . The Committee endorses the EC 's approach
and agrees that Community aid can only be reasonably
contemplated on the basis of a plan extending over a
number of years . Initially, at least, this period should
last no more than three to five years and should form
an integral part of the first stage of the transitional
period provided for under the Europe Agreements . In
the case of macroeconomic loans from the EIB, aid
will be determined in the light of needs, priorities, the
absorption capacity of the economy, the ability to
repay, and the progress made by Bulgaria and Romania
towards a market economy system .

2.62 . Funds will inevitably have to be closely coordi ­
nated . This means that it will be necessary to coordinate
Community funding, including bilateral assistance,
with financial aid given to Bulgaria and Romania by
other countries of the Organization for Economic Co ­
operation and Development ( OECD ) or by inter ­
national financial institutions ( International Monetary
Fund, World Bank and the European Bank for Recon ­
struction and Redevelopment ). All funding and spend ­
ing should be continuously monitored and should be
coordinated within the Association Committee ; both
sides should also monitor the situation to ensure that
the funds are used efficiently . The Association Council
should also be regularly informed of the findings .

Institutional, general and final provisions

2.63 . Within the framework of the political dialogue,
the Committee has called upon the contracting parties
to set up at some time in the future a Consultative
Association Committee in addition to the Association
Council and the Parliamentary Association Committee .
It therefore follows that the institutional provisions set
out under Title IX of the draft Europe Agreements will
have to be amended in two places . First of all a third
paragraph needs to be added to Article 108 ( Bulgaria )/
Article 111 ( Romania ) dealing with the setting up of

special committees or working groups by the Associ ­
ation Council . The new paragraph would read as fol ­
lows :

Article 108 ( 3 )/ Article 111(3 )

' During the first transitional stage ( Article 7 ) of the
Agreement the Economic and Social Committee of
the European Community shall organize, under the
aegis of the Association Council, dialogue and coop ­
eration between the economic and social interest
groups of the European Community and those of
Bulgaria / Romania . Regular meetings shall be held
for that purpose .'

An additional Article setting out the duties and compo ­
sition of the Consultative Association Committee also

needs to be included under Title IX . In the view of the

Economic and Social Committee this Article should

read as follows :

Article ...

A Consultative Association Committee of econ ­
omic and social interest groups of the European
Community and of Bulgaria / Romania shall be set
up at the beginning of the second transitional stage
of the Agreement ( Article 7 ). It shall comprise an
equal number of members of the Economic and
Social Committee of the European Community and
of representatives of economic and social organiza ­
tions in Bulgaria / Romania .

The Consultative Association Committee shall fur ­
ther develop dialogue and cooperation between the
economic and social interest groups of the European
Community and those of Bulgaria / Romania .

Within the framework of this cooperation, funda ­
mental questions regarding the participation of
Bulgaria / Romania in the process of European inte ­
gration, the establishment of a new political and
economic order in Bulgaria / Romania, and other
aspects of cooperation within the Europe Agree ­
ment, shall be discussed .

The Consultative Association Committee shall have
its own Rules of Procedure and shall express its
views in the form of reports and opinions .'

2.64 . The latest EC Commission information sug ­
gests that the contracting partners might be receptive
to the Committee 's proposals on the involvement of
social interest groups in the political dialogue . In a joint
declaration Romania and the European Community
have agreed that ' the Association Council is to examine,
in the light of Article 111 of the Agreement, the setting
up of a consultative mechanism consisting of members
of the Economic and Social Committee of the European
Communities and their counterparts in Romania '.
Incorporating a similar passage in the Europe Agree ­
ment with Bulgaria cannot be ruled out . The Committee
welcomes the joint declaration and considers it to be a
first step in the right direction . The Committee at
the same time assumes that similar declarations can
subsequently be agreed and included in the Europe

25 . 1 . 93 Official Journal of the European Communities No C 19 / 89

Agreements with Poland, Hungary and the CSFR
respectively .
2.65 . The Europe Agreements have to be ratified by
the Parliaments of the states concerned . This means
that there will be some delay before their entry into
force . However, to ensure that trade relations continue
to develop further without interruption, the European
Community and the Visegrad states have concluded
Interim Agreements on trade and trade-related matters .
Similar interim agreements will also be concluded with
Bulgaria and Romania and could enter into force as
early as the spring of 1993 . The Committee considers
that this approach is right and necessary . Nevertheless,
the EC Commission should take steps in future — and
also put pressure on the EC Member States — to ensure
that trade between the Community and the associated
states is not unnecessarily hindered by technical hitches
as has been the case with the Interim Agreements with
the Visegrad states . We would illustrate these short ­
comings with three examples :

Done at Brussels, 25 November 1992 .

— The Interim Agreements with Poland, Hungary and

the CSFR came into de facto force on 1 March 1992
but the relevant legal provisions were only published
in the Official Journal of the European Communi ­
ties on 30 April 1992 . During this interval most
imports could only be cleared after the deposit of a

guarantee .

— When the trade sections of the Europe Agreements

came into force, the rates at which customs duties
were to be reduced were known but not the basis

on which this was to be done . Even the embassies
of the Visegrad states were unable to come up with
watertight answers .

— The situation was made worse by the fact that the

knowledge of the customs officers responsible for
handling the goods was sometimes very poor since
there had been too little time to train them properly .

The Chairman

of the Economic and Social Committee

Susanne TIEMANN