Experience with EU integration: negotiation, preparation, membership

1. Experience with EU integration: negotiation, preparation, membership Kalman DEZSERI Ph.D. sen. research fellow Institute for World Economics Hungarian Academy of Sciences, Budapest Experience of Austria, Hungary and Bulgaria with Integration into the EU Tri-national Seminar on Topical Issues of the Enlargement Process of the EU Sofia, Nov. 7-9, 2004

2. The stages • negotiation, preparation (March, 1998 - Dec, 2002) • preparation (Jan, 2003 - Apr. 2004) • membership (from May, 2004 onwards) Sofia 7-9 Nov,2004

3. Temporary closing of chapters period presidency No. of closed chapters 2nd half 1998 Austria 3 (science and research, education, SME) 1st half 1999 Germany 5 (statistics, industry, telecom., fishery, consumer protection) 2nd half 1999 Finland 1 (EMU) 1st half 2000 Portugal 2 (CFSP, financial control) 2nd half 2000 France 3 (energy, foreign relations, social and employment policy) 1st half 2001 Sweden 8 (free movement of goods and services, corporate law, environment, customs union, free movement of persons and capital, taxation) 2nd half 2001 Belgium 2 (home and justice, transport) 1st half 2002 Spain - 2nd half 2002 Denmark 7 (culture and audiovisual policy,competition, agriculture, regional policy, budget, institution, others + modification of free movement of capital, taxation) Sofia 7-9 Nov,2004

4. Main features (2) • ( - ) tension because of the slow progress • ( + ) Enlargement Strategy Paper, Road Map (Nov, 2000) • ( + ) agreement and decision on institutional reforms (European Council Nizza, Dec, 2000) • ( + ) European Council, Laeken (Dec 2001): 10 candidates (Hungarian view: priority to preparedness and fixing the date. The slow progressing candidates should not block the fast progressing ones Sofia 7-9 Nov,2004

5. Derogations, transitional periods (1) • acceptable, negotiable, unacceptable (European Council Nizza, Dec, 2000) • Hungary revised her original requests for transition periods (using stricter criteria) and the original list of requests was reduced to the most necessary ones • consultation with the Commission clarified that problems and deficiencies could be settled without transitional periods • in the last phase of the negotiations the EU accepted all requests without changes Sofia 7-9 Nov,2004

6. Derogations, transitional periods (2) • important requests of Hungary (accepted by the EU): • agricultural land (7 + 3 years) • medicament (1768/92 Regulation) • transitional periods for prudential regulation of banks (EXIMbank, Hungarian Development Bank), (own fund of Saving Co-operatives), deposit insurance • corporate tax • urban waste water (drainage system) (until 2015) • tariff increase: vynilchlorid, aluminium (imports from Russia, Ukraine) Sofia 7-9 Nov,2004

7. Derogations, transitional periods (3) • cabotage on the basis of reciprocity (until 2006) • important requests of the EU • limits on the free movement of persons (2+3+2 years). Hungary: reciprocity at national level and safeguard provisions • CAP: direct payments Sofia 7-9 Nov,2004

8. Financial conditions • EU Commitment (2004-06) 5.1 bn € • disbursement 3.1 bn € + pre-accession assistance 0.6 bn € = 3.7 bn € • Hungary’s contribution 2.3 bn € • others: refund, reduced contribution to the EIB, guaranteed positive balance • construction of the Schengen border 148 mn € • agriculture: toping-up by 30 % from own budget Sofia 7-9 Nov,2004

9. Some lessons (1) • the most important chapters (agriculture, regional policy, budget) were negotiated at last and for the shortest time • differentiation or supporting catching up (political priority) Luxembourg group and Helsinki group • continuously changing and extending acquis • accession in return for accepting unequal rules • final negotiation: divide and conquer vs. importance of co-operation and co-ordination • increasing importance of safeguard measures Sofia 7-9 Nov,2004

10. Some lessons (2) • impact of enlargement on the institutional reforms ( + ) and impact o institutional reforms on enlargement (-) Sofia 7-9 Nov,2004

11. Preparation (Jan, 2003 - Apr. 2004) (1) • Continuous reparation: economic, social, legal, administrative system • preparation of the society (danger of social division) • new EU legislation: transposition, implementation appropriate administrative capacity is required • old EU legislation: according to accession treaty - will be ready (transposed, implemented) - will not be ready - delay even to our plan Sofia 7-9 Nov,2004

12. Preparation (Jan, 2003 - Apr. 2004) (2) • During the interim period: • role of the permanent representation in Brussels • mutual informing, consultation mechanism • active observer (10-40 meetings per day) • changes in: attitudes, work loads, timing, co-ordination • commitology • experts in Brussels and in Hungary Sofia 7-9 Nov,2004

13. Preparation (Jan, 2003 - Apr. 2004) (3) • Tasks: • writing the accession treaty • legal harmonisation • institutional development (most important area: agriculture, regional policy, internal and legal co-operation, environment, social affairs) • referendum (April 2003), EP election (May 2004) • National Development Plan • completion of tasks is monitored by the EU (Monitoring Reports) - safeguard measures Sofia 7-9 Nov,2004

14. Preparation (Jan, 2003 - Apr. 2004) (4) • IGC and Constitutional Treaty, community policy reforms (CAP, etc.), WTO negotiations, new financial perspective, implementation of Lisabon agenda • practising coalition building • creating the conditions for functioning as a member state Sofia 7-9 Nov,2004

15. As a member (from May, 2004 onwards) (1) • Institutional integration • domestic co-ordination system of EU affairs (aim: effective participation in EU decision making process) • co-ordination structure: a) enlarged permanent delegation in Brussels b) governmental co-ordination organisation and rules of administrative proceedings horizontal structure of EU affairs co-ordination: 31 to 45 expert groups (accession negotiation - EU functioning) Sofia 7-9 Nov,2004

16. As a member (from May, 2004 onwards) (2) • Vertical decision making and dispute settlement structure: government integration cabinet inter-ministerial co-ordination committee on European affairs expert groups, • law on the relations between parliament and government in the case of European affairs Sofia 7-9 Nov,2004

17. Time frames of accessions Sofia 7-9 Nov,2004

18. END Sofia 7-9 Nov,2004