Lord Boswell of Aynho
This Motion invites the House to take note of the report of your Lordships’ European Union Committee, which I have the privilege of chairing, on the subject of the future of European Union enlargement. I am conscious that the comparatively late start to these proceedings may have led to some attenuation of the speakers list and, possibly, compression of the debate. Nevertheless, I am pleased that this debate is so timely, given the immediate accession of Croatia as the 28th member of the European Union; the first accession to the rotating presidency by Lithuania since its accession in 2004; and the imminence of the possibility of discussion about future accession and enlargement at the upcoming European Council later this week. This is a very timely occasion.
The European Union has a long history of enlargement. Our country was part of the first and what is still the largest wave of enlargement when we joined what was then known as the European Community at the same time as the Irish Republic and Denmark in 1973. Since then, there has been a steady stream of countries seeking to join the European Union. We are now about to embark on our seventh enlargement with Croatia. There are currently five candidate countries and three potential candidate countries, so the enlargement agenda shows no sign of halting.
Our report considered the process by which aspirant countries moved towards readiness for membership. In doing so, we revisited many of the questions asked in our previous 2006 report, The Further Enlargement of the EU: Threat or Opportunity?. With the benefit of the passage of time and the benefit of hindsight, we reflected on lessons learnt from the 2004 and 2007 enlargements.
I also express my gratitude to all the witnesses who gave evidence to the inquiry, particularly those from countries which have recently joined and those which are on track to join the Union now. It almost goes without saying that we drew immensely on the expertise of our staff in drawing up this report.
Enlargement is formally a reactive process. It is for individual countries to apply to become member states. However, the Union has always had an enlargement agenda, because enlargement is an integral lever for development and has been accepted as such both in the founding and successive treaties. The current agenda has two main drivers: the first, safeguarding stability and security within wider Europe; and the second, achieving economic prosperity and growth. I believe those two objectives to be intimately connected. Historically, enlargement has had a transformative power. I would evidence that by the political changes seen in recent years in what are now comparatively older member states such as Spain, Portugal and Greece. Furthermore, we should remember that the single market is of enormous benefit to all members—new ones and existing ones, too.
The euro area crisis and questions about the role and governance of the Union have led to enlargement slipping down the political agenda. It has been suggested that some countries, such as Germany and France, may have lost sight of its importance. The United Kingdom Government are to be commended for their commitment to enlargement, and we share the view of many of our witnesses that the momentum in this vital work must not be lost.
The Copenhagen criteria of the EU set out three key standards that a candidate country must meet to be eligible for membership: political, economic and the ability to take on the obligations of membership. Although these were devised in anticipation of central and eastern European enlargement, we were persuaded that they still represent the right starting points for any future enlargements. In acknowledging this, we were critical of the Union’s failure to apply the criteria rigorously in the cases of Romania and Bulgaria, which meant that on joining they were not at a point where they could meet the full obligations of membership. This, in turn, led to the creation of somewhat unsatisfactory post-accession instruments. The Copenhagen criteria are helpful and should not be weakened.
The road to accession for candidate countries is, rightly, not just the warm political one; it also involves significant legal, technical and administrative work. The first step of the official enlargement process is an application for membership. After granting official candidate status, the European Council must take a unanimous decision to open formal membership negotiations. A candidate country then conducts negotiations with Ministers and ambassadors of the Union Governments regarding the European Union’s body of secondary legislation—the so-called acquis communautaire. There are 35 chapters of the acquis, such as justice, freedom and security, judiciary and fundamental rights, and freedom of movement for workers. Necessary reforms must be implemented and demonstrated, and we support the rigorous approach to this that has recently been shown. The requirements made of countries have continued to grow and, while this is justified, the Union must take care to ensure that the burden of work it places on candidate countries is not insurmountable—criteria should be strictly necessary, taken in good faith, and should be consistently applied across the board.
I do not wish to dwell on events in any particular country, but I would say that experience shows that we have far greater influence over our near neighbours and candidate countries when it is clear that together, as a Union, we are serious about enlargement and serious about conditionality—that is, that real reforms are followed by concrete progress in the accession process and that there are also consequences when there is any regression. Yesterday, at a European conference in Dublin, we heard from Valentin Inzko, the high representative for Bosnia-Herzegovina, about the importance of developing in that country a political culture of tolerance and compromise. With his great experience, the high representative was very clear about the importance of that conditionality.
The Instrument for Pre-Accession Assistance seeks to provide financial support for aspirant countries’ reforms. We were disappointed to note the many instances of failure to convert funds from commitments to actual spending, and so we recommended that the next IPA should focus more on the strategic aims of the enlargement policy and the needs of candidate countries. Furthermore, a more rigorous approach must be taken to any backsliding over reform, with the Union being willing to slow or halt the enlargement process and turn off the funding tap. If I may express a personal view slightly beyond the remit of our report, I am increasingly attracted to the option of offering western Balkan countries in particular an opportunity to work together on what might be termed self-help projects to which an appropriate degree of challenge money could be made available by the Commission, with the countries themselves being the generators for this process.
The Union must learn some tough lessons regarding the resolution of issues between countries. The entry of Cyprus in 2004 without reconciliation or conclusion between its Greek and Turkish populations has led to a continuing entrenched dispute. That has diminished the Union’s leverage in encouraging both sides to reach a settlement. It is distressing and it is difficult to see the best way to handle disputes such as this. On the one hand, using Cyprus as an example again, resolving the dispute was rightly not a condition of joining the Union, otherwise Turkey would simply have gained a veto over its membership. On the other hand, without a resolution having been found, Turkey’s accession process has itself become more challenging. The Union must strive to find a way to keep disputes between countries from slowing down or halting the enlargement process altogether, while also encouraging practical solutions. There are a number of very substantial disputes that must be resolved before the accession of the current aspirant countries. I welcome the plan for normalisation of relations between Serbia and Kosovo, which has been agreed under the auspices of the High Representative and Member of this House, the noble Baroness, Lady Ashton of Upholland. This has opened the way for both Serbia and Kosovo to move forward along the road to eventual membership.
I have already touched on the political and economic advantages of enlargement. In spite of the economic crisis, the new member states from 2004 and 2007 have seen rapid economic growth after joining. Similarly, compliance with the requirements of accession means that political and, indeed, business landscapes are often changed for the better, with a healthier balance of power between domestic parties and an increased role for opposition parties being fairly common features in new member states.
The benefits of enlargement are also two-way between old and new member states: the Union is better equipped to deal with its neighbours, and existing member states see economic benefits from the expansion of the number of consumers in the single market. United Kingdom exports to central and eastern European countries almost trebled between 2001 and 2011, reaching close to £14 billion in 2011. I am sure other Members will want to speak in greater detail about the risks to certain policy areas represented by enlargement but I shall, for now, limit myself to suggesting that it should be possible to overcome such issues and they should not be seen to deter, let alone to act as a bar, to any future enlargement.
Debates about enlargement and the future of the Union more generally, often tend to focus on a perception that free movement of labour might prove a risk to domestic labour markets. We heard compelling evidence that this was not the case and that migrant workers had often filled gaps in the labour markets of older member states that were otherwise unfilled by nationals. However, it would be remiss not to acknowledge that there have been some negative impacts from the free movement of persons. For example, the relocation of businesses to exploit cheaper labour costs may have impacted on member states economically, and there is undoubtedly a risk of non-workers travelling to receive social security benefits. However, the free movement of workers is a treaty right and an important element of the European Union’s internal market. Member states need to communicate generally the many advantages to their populations and to work collectively to address any genuine concerns that remain within the existing policy frameworks and within those broad objectives.
Turning to the future of the enlargement process, it is right that the Union should have a rigorous process for the admission of candidate countries, not least to ensure that necessary reforms are introduced and entrenched. The eastern partnership countries must undertake significant reforms before they can be considered for candidacy, but equally their desire to be considered should not be forgotten in discussions about future enlargement. I hope that the eastern partnership summit to be held in Lithuania in November is helpful in this respect. We recognise that there is some reticence regarding future enlargement, and we recommend, frankly, that the Commission and national Governments together do a better job of explaining its benefits and warning of the costs of non-enlargement. It is not a cost-free exercise to remain with the status quo.
In conclusion, the Union has a long history of supporting enlargement. One could almost argue that it is within the DNA of the Union to promote enlargement. That is the process that we in the UK have long been associated with and from which we have benefited. Lessons must be learnt from recent experiences, but the current economic crisis and debates about the future role of the EU should not distract us from this important enlargement agenda. The future economic and political stability of Europe in many ways depends on it and it is an intimate part of that process. I beg to move.
Lord Wallace of Saltaire
I simply remind noble Lords that the advisory speaking time for this debate is eight minutes.
The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi)
My Lords, I thank the noble Lord, Lord Boswell, for introducing this important debate and for his and his committee’s role in bringing the important issue of EU enlargement under the spotlight in this inquiry. The report and this debate are timely. As many noble Lords mentioned, in just four days, Croatia will join the European Union as the 28th member state. It does so at a time of economic crisis amid debates about the future of the euro area and the Union itself, and as we seek to ensure that the enlargement process remains fit for purpose, having learnt the lessons from previous enlargements.
I welcome the cross-party support shown by this House towards EU enlargement. The Government believe that this support is justified. As the report under debate recognises, enlargement offers benefits to the UK, the EU and the candidate countries themselves. First, there are political benefits, as the power of enlargement drives reform. Secondly, there are economic benefits, as the benefits of political reform help create a larger and more prosperous single market. Thirdly, there is the benefit of security, as better-functioning states, integrated and at peace with their neighbours, reduce the space for organised crime and corruption, and help to spread peace and stability across the region. However, to ensure a credible enlargement policy, progress must be based on candidates meeting the proper standards—as set out in the Copenhagen criteria and the EU’s acquis—through firm, but fair, conditionality. The noble Baroness, Lady Hayter, highlighted some of these challenges. I can assure her of the Government’s commitment to these standards, and to the values of the Union.
Croatia’s accession demonstrates this clearly. Croatia will be the first western Balkan country that was involved in the conflicts of the 1990s to join the EU. That itself is evidence of the transformative power of the European Union. The end of six years of the toughest accession negotiations yet will be marked on 1 July; Croatia is joining the EU better prepared than any previous candidate. As Croatia’s Deputy Prime Minister has said, the reforms have,
“changed the country beyond all recognition”,
with Croatia the first country to negotiate under the new Chapter 23, which specifically addresses rule of law reforms. Our confidence that Croatia would be ready in full by 1 July was further enhanced by the introduction of pre-accession monitoring, when we agreed to close accession negotiations in June 2011.
The process of transformation will not stop when Croatia joins the EU. Membership provides the foundations for Croatia to continue to tackle domestic challenges; offers opportunities to harness the potential of the single market and to co-operate with member states in tackling cross-boundary challenges such as climate change and organised crime more effectively; and provides the tools to help Croatia return to sustainable, competitive growth through access to the world’s biggest single marketplace and to the EU’s structural and cohesion funds. Croatia’s success is important as a catalyst in the region, too. It provides the clearest example for its neighbours that political will and determination to push through reforms are absolutely necessary—but also that the EU also delivers its side of the bargain in return.
Embedding rule of law reforms in accession countries is fundamental to the success of enlargement. Rule of law reform has been central to Croatia’s progress, as the EU took on board the lessons learnt from the previous accession. The process continues to evolve. Under the “new approach”, Montenegro and all future candidate countries will address rule of law issues up front in their accession negotiations, which will maximise the time available for implementing and embedding reforms.
It is not just the political conditionality that is evolving. In the context of Europe’s economic challenges, the Council’s conclusions on the European Commission’s 2012 enlargement strategy flagged that enlargement must also deliver economic success, not least given the current requirement for new member states to join the euro area. This is also crucial to ensuring that EU membership remains a strong incentive for aspirant countries. The Government are committed to the principle that eventual membership is open to all European countries, so long as they meet the criteria as set out in the EU treaties. We share the view set out by the committee in its report that there are no viable alternatives to EU enlargement.
My noble friend Lord Teverson referred to other, looser associations for aspirant countries to have with the EU, such as the European Economic Area. However, I agree with him that the prospect of membership is often the only thing strong enough to overcome the powerful vested interests that too often stand against political and economic reforms. It is therefore vital that the EU both maintains momentum on the enlargement process and ensures that it delivers on its side of the bargain. We should not forget the opportunity costs of turning countries away from Europe.
The risk that candidates may tire of the struggle if rewards are not forthcoming is real, as the committee’s assessment notes. That is one reason why the UK has supported innovations in the enlargement approach, such as the new approach to rule of law issues. Ensuring that candidates can start to feel the benefits of their reforms early on can help reinforce the necessary political commitment. It is the responsibility of every member state to ensure that this momentum is sustained. Artificial pauses, which some call for to resist what they fear is an inexorable expansion, are misleading and damaging. They can damage the confidence of aspirants in the EU’s credibility and impact on the long-term benefits of EU enlargement. Such calls are also predicated on the misunderstanding that enlargement is inevitable: progress towards accession is based on candidates’ own merits, and is far from guaranteed. It is also important for the integrity and continued momentum of the enlargement process that bilateral issues are managed constructively and do not affect EU enlargement policy or any candidate’s accession negotiations. Ensuring the continued centrality of the spirit of good neighbourly relations is therefore vital. As long as the accession process remains adaptable to the conditions of each country, able to respond flexibly to new pressures and to learn from past mistakes, the process of negotiations should not be a barrier to individual countries’ progress.
The noble Lord, Lord Foulkes, and my noble friend Lord Teverson referred specifically to the Prime Minister’s view. The Prime Minister’s vision for a better Europe is central to our conditions-based approach to enlargement. We take strength from the EU’s expanding membership, which is essential in bringing creativity and expertise to the EU. In fact, further enlargement increases this diversity and creativity, but further enlargement does not simply mean more Europe.
The noble Lords, Lord Foulkes, Lord Hannay, and Lord Kilclooney, and my noble friend Lord Teverson raised the issue of Turkey. The Government continue to support strongly Turkey’s accession. In December, the UK worked hard with other pro-Turkey member states to secure enlargement conclusions endorsed by the European Council, which reaffirmed the EU’s commitment to an active and credible accession process. The Turkish Government welcomed these. The enlargement conclusions we secured in December 2012 were forward-looking and gave the Irish presidency and EU institutions a strong mandate to make real progress in 2013. We welcomed recent improvements in relations between France and Turkey and France’s decision to lift its block on Chapter 22 on regional policy. We are pleased that, despite last-minute German concerns, a deal was reached on Chapter 22 allowing a technical opening. I note the concerns of the noble Lord, Lord Hannay, but, like him, I believe, and the Government believe, that progress on the accession process is the best way to support Turkish reform. Now more than ever the EU needs to engage with Turkey. The recent protests serve to highlight the strategic imperative of EU support to Turkey’s accession process as a driver of domestic reform.
The noble Lord, Lord Foulkes, also raised the issue of Serbia’s recognition of Kosovo. I agree with the conclusions of the report that bilateral disputes should not play a role in the accession process. The pull of the EU has already delivered considerable progress in the normalisation of Serbia’s relationship with Kosovo. Part of the April dialogue agreement was a clear commitment from Serbia not to block or encourage others to block progress on Kosovo’s EU path.
My noble friend Lord Boswell also raised the issue of the IPA. The Government share fully the committee’s view of the importance of a strategically targeted instrument for pre-accession assistance. We have pressed strongly for a more results focused instrument closely linked to the objectives of the enlargement strategy for the period 2014 to 2020.
My noble friend Lord Boswell and the noble Lord, Lord Foulkes, also questioned whether enlargement was losing its momentum. The strategic benefits of enlargement for both current and future members will be realised only if the process is an economic and political success. To achieve this is likely to need time, with each country only moving forward as and when it is ready, once it has addressed its specific challenges. Clear results over time will enable us to communicate and demonstrate the ongoing benefits to EU citizens. The EU needs to facilitate enlargement, but the rate of progress needs to be determined by the aspirant countries themselves.
The noble Earl, Lord Sandwich, asked about Kosovo and specifically about the EU’s rule of law mission in Kosovo. The Government believe that this has a vital role to play in enabling Kosovo to meet EU standards in the rule of law. The mission has had several successes, including customs standards, integrated border management and the return of the remains of nearly 300 individuals missing since the war. The UK currently seconds around 37 staff to the mission.
The noble Lord, Lord Hannay, spoke of the impact of bilateral disputes. He mentioned Cyprus as a clear reminder of the need to seek ways to avoid the importation of bilateral disputes into the enlargement process. On this, the Government share the committee’s views fully. We will continue to work with the Commission and other member states to encourage an open and transparent approach to resolving disputes and to explore mechanisms to protect the momentum of the enlargement process.
EU enlargement remains as relevant today as it ever has been, notwithstanding the changing economic and political landscape in Europe. It is a vital tool for Europe in promoting democracy, encouraging freedoms and increasing the potential of the single market to the benefit of aspirant countries and existing members. The Government’s vision of a reformed EU is therefore not just compatible with but mutually supportive of a robust and successful enlargement policy that delivers increased diversity and a larger single market, ensuring that countries are fully prepared to contribute positively to a more effective EU upon their membership.
The next step in the process of reuniting Europe lies in tackling the remaining challenges of the western Balkans and reinvigorating Turkey’s accession process. Rule of law, migration and other challenging issues can and must be addressed, through rigorous conditionality, to deliver the foundations for secure and successful future member states, maintaining the credibility of enlargement as a lever for reform and ensuring that the benefits it promises can be realised.
Therefore, once again, I welcome the committee’s report. It is a reminder that, although there are challenges to be addressed, we remain unwavering in our support for further EU enlargement, that to sustain the momentum the EU needs constructive approaches from its member states, and that the EU and its member states need to better communicate the benefits of enlargement to people across the EU and to aspirant countries.
This Government will remain an active champion of further conditions-based EU enlargement. I therefore warmly welcome the European Select Committee’s support for the enlargement agenda. The thoroughness of the committee’s examination of these issues will continue to provide a valued contribution to our policy formulation.