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EU
ENLARGEMENT
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.
EU
PENSIONS
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.
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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.
EU
FUNDING FOR SMALL BUSINESSES
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.
Visit
http://www.sbs.gov.uk/SFLGS
“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
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
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