Newsletter from Europe Issue 5/2002
Bashir Khanbhai MEP
(Norfolk and Suffolk)





The launch of the Euro in January 2002 has overshadowed the process of European enlargement. What are the latest developments?

Thirteen potential new members have applied to join the EU. Accession criteria set by the EU are strict. There are 31 “Chapters” of accession negotiations covering taxation, competition policy, agriculture, industry, and so on. Applicant states need to transform their centralised command economies.  Their state-owned companies, with massive over-employment, must be privatised over a specified time frame and their primitive agriculture must be transformed to match that in the EU. These two changes will precipitate massive unemployment in countries where populations already have very low incomes.

Such changes are required of governments that are neither accountable nor transparent. Implementation of these changes will have to be monitored by civil servants who have lived with a culture of corruption! Although there is EU money available for initiating change in accession countries, progress to achieve “aquis communitaire” is different for each applicant state.

The Czech Republic, embracing modernisation and democracy, is perhaps the strongest new economy in Eastern Europe. It could easily join the EU in 2004 despite its high level of deficit spending.

Poland, with a large agricultural sector (20% of its population) could drain EU funds if the

Common Agricultural Policy (CAP) remains unreformed. Poland has coal, copper, zinc, iron, gypsum, lignite, some oil and gas. Its dominant industries are metalwork, coal, chemicals and textiles and there is a healthy private sector. It is eager to join and could well succeed.

Slovenia has a strong export economy based on machinery and electrical goods. Liberalisation in its agricultural trade has improved. Although it has a large overall trade deficit it has succeeded in meeting most of the EU criteria for membership and could join.

Hungary’s economic growth is impressive although it has suffered from high inflation and a large trade deficit with the EU. New economic measures to manage inflation and public debt have allowed Hungary to become a front line candidate for membership in 2004.

Malta and Estonia have made considerable progress and may be not so far behind the leading four countries. Cyprus’s application depends on reconciliation between the Greeks and Turks. Slovakia, Bulgaria, Romania, Lithuania and Latvia lag behind the others but are trying hard to comply.

The EU, especially the UK, will benefit from an EU enlargement. However, we must ensure that all new members contribute before they claim benefit as rights come with responsibility and commitment.    




Europe faces an unprecedented economic and social challenge in providing for its increasing number of older citizens. Pension provision will be unsustainable without an increase in contributions and/or a reduction of benefits unless EU Member States act decisively and urgently. There is no single European model of pension that can “fit all” as different systems reflect the political, cultural and economic diversity of Member States.

It is essential that all States recognise that contributions – for both state and private pensions - should be tax deductible and linked to an average EU inflation rate. Double taxation should be eliminated and pension rights made easily transferable to facilitate labour mobility – a key factor in maximising the use of skills for high labour productivity.

The competitiveness of companies, economic growth and employment in Europe are in danger if firms and workers have to cope with increasing labour costs due to a rising pension bill. Increased debt in individual countries resulting from the pension bill may result in higher interest rates throughout the Eurozone. Therefore, stability in the EU justifies some co-ordination of the national strategies for pension reform at EU level.



Small businesses are missing out on opportunities to source funding to maintain their cash flow. EU funding, the Work Life Balance Trust, Small Firms Training Loans, Business Link grants & loans and the Fast Forward Scheme are some of the sources of funding. The DTI’s Small Firm Loans Guarantee scheme is under-exploited. The DTI finances the Small Business/Europe office in Brussels to represent the views of UK small businesses.



Eurowards 2002 advances entrepreneurship at local, national and European level to boost economic growth and combat unemployment in the EU. The award is for outstanding ideas in: 'encouragement', 'seed', 'start up' and 'expansion'. Submitted plans must be original and financially viable. The eContent Fund for Start ups, a fund of £30m will invest in a scheme with regional or national funds supported by the European Commission. Applications must be submitted between 1st May and 31st August.

Contact: or visit


I have organised a Conference for SMEs on “How to access EU Funding” (10th July, 2002, 10.30-14.30). Three experts will address the conference and take questions. There are 75 places. Charge: £15 (hot buffet lunch with coffee included). Apply by email for details.

“European Funding and the UK”- A Guide to the Funding Process, ISBN 92 894 1180 5, is available free from:-

The European Commission, 8 Storey’s Gate, London SW1P 3AT, Fax 020.7973.1900



15 Apr Met UK Tobacco Industry Executives

16 Apr Met Southend County Councillors

20 Apr Election Campaign, Waveney

22 Apr Met Chief Executives of CBI & Boots

23 Apr Met EUW Branch Chairmen

26 Apr Parliament Visit in Tbilisi, Georgia

10 May Visit to Local Businesses in Kings Lynn







 Promoted & Printed by Conservative MEPs in the EPP-ED Group in the European Parliament, Brussels: Khanbhai, Sturdy, Beazley & Van Orden