Moving Targets, Blindness and European Integration: Analysing European Union reforms and their effect on future members

European Identity
“Just as any period in European history is incomprehensible without Lithuanian history, so it is impossible to perceive today’s Lithuania without a European context,” the publishers of Europa, a periodical of the Lithuanian grass-roots reform movement Sajudis, said in 1988. At that time, the possible forms of Lithuania’s participation in Europe, let alone Lithuania’s entry into the European Union (the European Community at that time), still looked vague. More than ten years on, Lithuania began EU accession talks. The statement about Lithuania’s place in Europe is now more meaningful and relevant than ever before. It can be interpreted as a drive to understand what is going on in the EU, what the organisation represents in itself, what it will be in the near future, and how Lithuania’s membership in the Union would help achieve the aims of the Lithuanian people.
The perception of Lithuania’s place in Europe is hardly possible without the perception of its place in the EU, which in turn implies the understanding of the EU’s underlying principles as well as the forms of its functioning. The understanding of the future “rules of the game” is as important for the preparation for EU membership as the economic, political and administrative reforms in the candidate country aimed at establishing a system operating in conformity with the principles recognised by EU states. Preparation for EU membership can in essence be described as the familiarisation of the country’s politicians and general public with the future environment of political and economic life. This familiarisation is a gradual and constant process that takes various forms, while ignorance often results in concerns being voiced and mistakes being made. Membership talks with the EU can be regarded as a form of intensive familiarisation since, apart from the parties to negotiations, this process also involves the general public. Meanwhile, not everything that comes up will be to everyone’s liking.
The “Moving Target”
The process of preparation for EU accession by aspiring countries is often compared to attempts to hit a moving target. This implies that the EU is undergoing constant changes itself, as new acts regulating economic activity are adopted and various aspects of political life are evolving. This does not mean, however, that the candidate countries do not know what they are aiming at. The political and economic principles – the democratic order, respect for human rights and freedoms, rule of law, a market economy and non-discriminatory domestic market – do not change. However, the specific forms of EU activities are changing, and the aspiring members have to take these changes into account. It is obvious that in order to use EU membership to its full potential it is essential to follow the processes taking place in the Union and to formulate one’s own opinion about them. So, what are the current developments in the EU, and what are their implications for candidate countries, including Lithuania?
EU Reforms
With certain reservations, the internal debates and reforms being planned in the EU can be divided into several categories: (1) EU institutional reform, (2) reforms of EU redistribution policies, e.g. in the area of agriculture, (3) the development of the Single European market, and (4) the EU’s new political and security role in Europe and in the world.
As earlier, the EU integration process is now being propelled by a number of factors and circumstances: the domestic political situation of the member states and the prevailing opinions of their leaders, the security situation in the region, the growing economic interdependency, as well as the initiatives of EU institutions and various economic interest groups. The reforms taking place in the EU are also greatly influenced by the planned enlargement process itself. The EU’s preparation for the admission of new members is no less important for the success of the integration project than the preparation of the candidate countries for membership. In particular, this applies to adequate preparation by EU institutions for a larger number of EU members.
EU Institutional Reform
The European Commission and member states are well aware of the importance of institutional reform. Debates started long ago on proposals to balance the efficiency of EU institutions – the European Commission, the European Council of Ministers, the European Parliament and others – with their accountability and democratic control. The main problem is that, if the current representation and voting procedures were to remain in place, the structure of EU institutions would become quite unwieldy, while they would themselves become extremely slow in responding to changes. There would not be enough business for all the members of the European Commission representing each state, the coordination of decisions that require a unanimous vote by the European Council of Ministers would be prolonged, there would be too many European Parliament members to be accommodated in one building, etc.
The greatest impetus leading towards practical agreement on institutional reform was given by the European Commission proposal to prepare for new members by the year 2002. The “Three Exceptions” proposals were drafted in the autumn of 1999, the EU Summit Council decided in December to hold an intergovernmental conference devoted to institutional reform, and the European Commission stated its position on institutional reform at the end of January 2000.
A radical reform of the existing system has been proposed with a clear view towards EU enlargement. Under the proposals, the number of members of the European Parliament would be limited to 700. Two options for restructuring the European Commission are defined: it would either consist of 20 rotating member positions or each country would have one representative. In the latter case, the organisational principles of the European Commission would have to be revised in essence as well.
Another important proposal is to limit the number of decisions subject to unanimous approval. As a rule, decisions in the Council of Ministers would be adopted under the rule of a simple double majority. This rule would not apply to five areas in which the consent of each member state would be required. This means that the member states would retain the power of veto over any unacceptable decisions related to taxation, social policy, the role of EU institutions, exceptions from the regulations contained in the EU agreement, etc. Nevertheless, the proposed rules would signify an unprecedented repudiation of the power of veto.
EU institutional reform will directly influence the participation of Lithuanian representatives in these institutions and the representation of the Lithuanian people in the decision-making process. In other words, this will have a strong bearing on the implementation of the principles of sovereignty and democratic representation. Therefore, it is important to initiate a public debate in Lithuania on the planned changes and their consequences in order to shape the position of the country’s leaders and the general public. This is an important prerequisite of efficient participation in EU institutions.
Reform of EU Redistribution Policy
The funds that are distributed on the EU level are very small in comparison with the national budgets of member states. The EU budget accounts for just under 2 percent of the total GDP of the member states. However, the importance of the redistributed funds for their recipients is very high, mainly because of their concentration. As it is, about half of the EU budget goes to the agricultural sector. It is obvious that the current levels of support will be impossible to sustain after new members are admitted. Due to EU enlargement and other factors (waste of resources, overproduction, pressure from the United States and other countries exporting agricultural products), agricultural reforms were envisaged in the EU’s Agenda 2000 signed in 1997. These reforms have been slack so far due to strong opposition from EU farmers. However, they are inevitable in the future.
Negotiations by aspiring members on budget allocations and support from the EU resemble the zero-sum game or attempts to divide the pie which has been sliced already. In other words, in order to give funds to new members without increasing the total sum of money, a corresponding sum of money would have to be taken away from the present members. It is true that the investment of these funds can have positive side effects thanks to increased production and consumption in the recipient countries and, consequently, increased import from other member states. However, the countries that lose these funds have practically nothing to gain.
So far, EU financial resources are an important topic in Lithuania’s public debate. It has been pointed out that the funds Lithuania will be receiving could exceed several times the country’s own contributions. Lithuania’s agriculture is being reformed to bring it in line with the existing rules of the EU common agricultural policy. However, too little attention has been paid to the likely future EU reforms in this area, the benefit of the redistribution funds to the Lithuanian economy and the nature of talks on budget allocations.
The Development of the Single Market
Unlike the redistribution policy, the new entrants’ access to the EU single market is beneficial to both sides, i.e. the present and future member states. The very idea of the single market is based on the mutual benefits of free exchange. Participation in it, although dictating the need to adjust, is beneficial to both parties to the talks, and to the small, open economy of Lithuania in particular. Except for the resources needed for adjustment (time), negotiations in this area are of a different nature from talks on the allocation of fixed resources. The benefits Lithuania would reap from participation in the single market could be the starting point in evaluating further EU development in this area.
In the future, Lithuania’s membership in the Monetary Union is bound to be one of the most important issues in this area. Discussions should be started now as to the most suitable time for Lithuania to join the Union (this is likely to happen no earlier than two years after accession of the EU) and the effects of this membership on the country’s fiscal policy.
Security Issues
One of the latest topics in EU debates is the role of the Union in ensuring security and shaping a common defence identity. The debate was fuelled by the Balkan conflict, with its echoes heard at the Helsinki summit. EU states are still divided over the EU role in ensuring security in Europe in the future. However, Lithuania should start modelling the likely scenarios and relationship between EU membership and NATO membership now. Membership in the EU increases the security of both present and future members (e.g. it would further reduce the likelihood of possible misunderstandings between Lithuania and its neighbours who are aspiring to join the EU as well). There has yet to be an exhaustive public debate over what course would best suit Lithuania with respect to further EU and NATO development and the division of functions between them.
What is Integration Anyway?
About 30 years ago, US political scientist Donald J. Puchala compared integration studies to an elephant being touched by blind people in an attempt to understand and explain to others how it looks. As they touched different parts of the elephant’s body, each one of them had a different image of them. This academic analogy can be applied to the practical aspects of European integration as well. So far, Vilnius and Brussels remain worlds apart in their perception of the integration process. With the distance getting shorter and visibility better, different people pick out and scrutinise different things about the EU: some are concerned, for example, about repudiation of sovereignty, while others count on increased welfare or security. The more people there are who see the entire picture, the easier it will be for people throughout Europe to communicate with one another.
This article was published in the Lietuvos Rytas daily of February 2000, Issue No. 36.