Order Code RS21344
Updated June 10, 2005
CRS Report for Congress
.Received through the CRS Web
European Union Enlargement
Kristin Archick
Specialist in European Affairs
Foreign Affairs, Defense, and Trade Division
Summary
On May 1, 2004, 10 states joined the European Union (EU), enlarging the Union
to 25 members. The EU views the enlargement process as a historic opportunity to
promote stability and prosperity in Europe. In addition to the 10 new members (Cyprus,
the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and
Slovenia), Bulgaria and Romania hope to accede to the EU in 2007. Turkey is expected
to begin accession negotiations in 2005 provided it fulfills certain conditions. The EU
has named Croatia as another candidate, and Macedonia has also applied for EU
membership. This report will be updated as necessary. For additional information, see
CRS Report RS21372, The European Union: Questions and Answers, and CRS Report
RL32071, Turkey: Update on Selected Issues.
Background on the European Union
After World War II, leaders in western Europe and the United States were anxious
to secure long-term peace and stability on the European continent and create a favorable
environment for economic growth and recovery. In 1952, six states — Belgium, the
Federal Republic of Germany, France, Italy, Luxembourg, and the Netherlands —
established the European Coal and Steel Community, a single market in these two
industrial sectors that was controlled by an independent supranational authority. In 1958,
the “Rome Treaties” established the European Economic Community, extending the
common market to all economic sectors, and the European Atomic Energy Community
to ensure the use of nuclear energy for peaceful purposes. In 1967, these three formations
collectively became known as the European Community (EC).
The EC first added new members in 1973, with the entry of the United Kingdom,
Ireland, and Denmark. Greece joined in 1981, followed by Spain and Portugal in 1986.
The Single European Act modified the EC Treaties in 1987 by increasing the powers of
the European Parliament and enabling the 1992 single market program to move forward.
At the beginning of 1993, the near completion of the single market brought about the
mostly free movement of goods, services, capital, and people within the EC.
Congressional Research Service ˜ The Library of Congress
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On November 1, 1993, the Treaty on
Institutions
European Union (Maastricht Treaty) went into
effect, establishing the European Union (EU),
The European Union is a treaty-based,
institutional framework that defines and
which encompasses the EC. The European
manages economic and political cooperation
Union consists of three pillars: an expanded and
among its 25 member states. It is governed by
strengthened EC, a common foreign and security
several institutions.
policy, and common internal security measures.
The
European Commission is
The Treaty contains provisions that have
essentially the EU’s executive and has the
resulted in the creation of an economic and
exclusive right of legislative initiative. It
ensures that the provisions of the Treaties are
monetary union (EMU), including a common
carried out properly. The 25 Commissioners
European currency.1 The European Union is
are appointed by agreement among the
intended as a significant step on the path toward
governments of the member states for five-year
terms. Each Commissioner holds a distinct
greater political and economic integration.
portfolio (e.g., agriculture).
The Council of the European Union
On January 1, 1995, Austria, Finland, and
(Council of Ministers) is comprised of
Sweden acceded to the EU, bringing
ministers from the national governments. As
membership to 15 states. In June 1997, EU
the main decision-making body, it enacts
legislation based on proposals put forward by
leaders met to review the Maastricht Treaty and
the Commission. Different ministers
consider the future course of European
participate depending on the subject under
integration. The resulting Amsterdam Treaty
consideration (e.g., economics ministers could
convene to discuss unemployment policy). The
increases the legislative power of the European
Presidency rotates among the member states for
Parliament, strengthens the EU’s foreign policy,
a period of six months.
develops a more coherent EU strategy to boost
The European Council brings together
employment, and integrates procedures for
the Heads of State or Government of the
managing internal security. In December 2000,
member states and the President of the
EU leaders concluded the Nice Treaty to pave
Commission at least twice a year. It acts
principally as a guide and driving force for EU
the way for further EU enlargement. It sets out
policy.
internal, institutional reforms to allow an
The European Parliament consists of
enlarged Union to function effectively.
732 members. Since 1979, they have been
directly elected in each member state for five-
EU Enlargement
year terms. The Parliament cannot enact laws
like national parliaments, but has some “co-
decision” power with the Council of Ministers
The EU views enlargement as an historic
and can amend or reject the EU’s budget.
opportunity to promote stability and prosperity
The Court of Justice interprets EU law
throughout Europe, and further the integration of
and its rulings are binding; a Court of Auditors
the continent by peaceful means. The criteria
monitors the Union’s financial management. A
number of other advisory bodies represent
for EU membership require candidates to
economic, social, and regional interests.
achieve “stability of institutions guaranteeing
democracy, the rule of law, human rights and
respect for and protection of minorities; a functioning market economy, as well as the
capacity to cope with competitive pressure and market forces within the Union; the ability
to take on the obligations of membership, including adherence to the aims of political,
1 Eleven members — Austria, Belgium, Finland, France, Ireland, Italy, Germany, Luxembourg,
the Netherlands, Spain, and Portugal — adopted a single European currency, the euro, on
January 1, 1999; Greece joined in 2001. The 12 participating countries have a common central
bank and a common monetary policy. Banks and many businesses began using the euro as a unit
of account in 1999; euro notes and coins replaced national currencies on January 1, 2002.
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economic and monetary union.”2 The EU began accession negotiations in March 1998
with Cyprus, the Czech Republic, Estonia, Hungary, Poland, and Slovenia. In December
1999, at its summit in Helsinki, Finland, the EU decided to open negotiations with six
others: Bulgaria, Latvia, Lithuania, Malta, Romania, and Slovakia. Turkey was also
formally recognized as a candidate at Helsinki, but remained in a separate category for
several years as it sought to comply fully with the membership criteria (see below).
Accession talks begin with a screening process to see to what extent applicants meet
the EU’s 80,000 pages of rules and regulations (acquis), which is divided into 31 chapters
that range from free movement of goods to agriculture to competition. Then, detailed
negotiations at ministerial level take place to establish the terms under which applicants
will meet, implement, and enforce the rules in each chapter. The European Commission
proposes common negotiating positions for the EU on each chapter, which must be
approved unanimously by the Council of Ministers; during negotiations, applicants may
request transition periods for complying with certain EU rules. The Commission prepares
annual progress reports outlining achievements and shortcomings on each candidate. All
candidates receive financial assistance from the EU, mainly to assist in the accession
process. Once the Commission concludes negotiations on all 31 chapters with an
applicant, the agreements reached are incorporated in a draft accession treaty, which is
submitted to the Council for approval and to the European Parliament for assent. After
signature, the accession treaty must be ratified by each member state and the candidate
country. This ratification process can take two years.
At their June 2001 summit in Goethenburg, Sweden, EU members stated that the
“enlargement process is irreversible....the road map should make it possible to complete
negotiations by the end of 2002 for those candidates that are ready. The objective is that
they should participate in the European Parliament elections of 2004 as members.”
Specific countries likely to be ready for entry by 2004 were named at the EU’s December
2001 summit in Laeken, Belgium. There, the EU announced that 10 states — Cyprus, the
Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and
Slovenia — would likely be able to conclude accession talks by the end of 2002.
Accession negotiations in 2002 with the 10 candidates on the remaining chapters —
especially agriculture, regional assistance, and budgetary contributions — were
challenging because all raised money and burden-sharing issues. Member states were
divided on how much financial assistance candidates should receive, and on how to
finance it. Meanwhile, the 10 candidates were dismayed by EU proposals that called for
a 10-year transition period before they would be eligible for full EU farm subsidies and
lower rates of structural aid than existing members received. Led by Poland, the
candidates charged that they were being treated like “second-class citizens.” A deal was
finally reached, however, that sought to assuage the candidates with some additional
economic incentives, including more EU money to increase direct payments to farmers
and higher farm quotas in key areas such as milk and wheat. The EU formally concluded
accession talks with the 10 candidates at its December 2002 summit in Copenhagen.
The accession treaty was signed by the members and the 10 candidates on April 16,
2003. Although Brussels would have preferred a prior political solution to the conflict
2 Conclusions of the European Council, Copenhagen, June 1993.
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over Cyprus, it stated that this was not a “precondition” for the divided island’s accession.
Moreover, Athens had threatened to block any enlargement that excluded Cyprus. The
EU had hoped that a settlement between the Turkish Cypriot community in the north and
the Greek Cypriot government in the south would be reached in time for enlargement.
Twin referenda on a U.N. plan to reunify the island were held on April 24, 2004; 65% of
Turkish Cypriot voters approved the plan, but it was rejected by 76% of Greek Cypriot
voters. Without a settlement, EU laws and financial benefits apply only to the southern
Greek Cypriot part of the island, which is the internationally recognized state.
On May 1, 2004, the 10 states acceded to the EU, increasing the EU’s population to
roughly 450 million. The new members, however, still face several challenges. Reforms
in areas ranging from public administration to competition must be completed, and it will
be some time before the new states are ready to join the EU’s monetary union or to
participate fully in the Schengen area of free movement to which most EU members
belong. Citizens of new member states will have to wait up to seven years before they are
able to work in all current EU countries, many of which fear an influx of low-cost labor.
In June 2004, the EU named Croatia as a candidate. The EU asserted, however, that
Croatia still needed to make further progress on some of the political preconditions for
membership related to issues such as minority rights, judiciary reform, and the
apprehension of war criminals. In December 2004, the EU announced it would open
accession negotiations with Croatia in mid-March 2005, provided that Croatia
demonstrated “full cooperation” with the International Criminal Tribunal for the former
Yugoslavia (ICTY). The start of Croatia’s accession talks, however, has been delayed
because EU member states are not convinced that Croatia is cooperating fully with the
ICTY; Croatia claims that a prominent suspected war criminal demanded by the ICTY is
not in Croatia. Croatia had hoped to be able to join the EU as early as 2007, but this date
increasingly appears to be an overly ambitious goal. Also in December 2004, the EU
concluded accession talks with Bulgaria and Romania; both hope to join the EU in
January 2007, but their accession could be delayed for one year if they fail to implement
remaining political and economic reforms.
Turkey and the EU
The relationship between Turkey and the European project has been characterized
by a series of ups and downs. Turkey and the EC first concluded an association
agreement aimed at developing closer economic ties in 1963, but Turkey’s 1987
application for full EC membership was rejected. A customs union between the EU and
Turkey entered into force in 1995, but the 1997 Luxembourg summit failed to put Turkey
on a clear track to membership. The EU recognized Turkey formally as a candidate at the
1999 Helsinki summit but asserted that Turkey still needed to comply fully with the EU’s
political and economic criteria. The EU’s decision stemmed largely from improving
Greek-Turkish relations, and Berlin’s more positive attitude toward Ankara. Many
observers suggest that U.S. pressure also played a part. The United States had long
advocated an EU policy shift on Turkey, believing Turkey to be a vital, strategic ally that
should be anchored firmly to Europe. Washington urged Ankara to take the EU’s offer,
even though it did not set out a timetable for accession talks and guaranteed Greece that
Cyprus’ EU bid would not hinge on a settlement of that conflict.
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In February 2001, the EU formally adopted an “Accession Partnership” with Turkey,
which set out the priorities Turkey needed to address in order to adopt and implement EU
standards and legislation. The EU provides Turkey with about $150 million annually to
help develop the Turkish economy. Ankara had hoped the EU would set a firm date for
starting negotiations at the December 2002 Copenhagen Summit, but was disappointed.
Some EU members argued that although Turkey had taken some significant steps toward
improving human rights, it still did not fully meet the membership criteria. But in
October 2004, the European Commission recommended opening accession talks provided
that Turkey continued to make progress on democratic and human rights reforms.
After some contentious debates both among EU member states and with Turkish
leaders, the EU agreed at its December 2004 summit in Brussels, Belgium, to open
accession negotiations with Ankara in October 2005. This start date, however, is
conditional on Turkey bringing into force several pieces of reform legislation and on
Turkey fulfilling its pledge to extend its customs union to the EU’s 10 new members,
including Cyprus, thereby granting de facto but not official recognition to the Greek
Cypriot government. The EU asserts that the “shared objective of the negotiations is
accession,” but that it is an “open-ended process, the outcome of which cannot be
guaranteed beforehand.” Some EU member states and many EU citizens remain
extremely wary about Turkey’s possible accession given its size and Muslim heritage.
Accession negotiations with Turkey are expected to take at least a decade to complete.3
Possible Future Rounds of EU Enlargement
The EU maintains that the enlargement door remains open to any European country
that is able to meet the political and economic criteria for membership. Besides Croatia,
the western Balkan states (Albania, Macedonia, Bosnia, and Serbia) harbor EU aspirations
in the longer term, and the EU has acknowledged these countries as potential candidates.
The EU hopes that the possibility of membership will help accelerate reform and promote
greater stability in these countries. Macedonia submitted its membership application in
2004, and hopes to be named officially as a candidate by 2006. Ukraine’s new pro-reform
government, elected in December 2004, has also expressed long-term EU aspirations.
Although the EU has not officially defined its geographic boundaries, many experts
believe that enlargement is reaching its limits, and that the EU is unlikely to include
countries such as Russia for the foreseeable future. Consequently, in the spring of 2003,
the EU launched a new “European Neighborhood Policy” (EPN) which aims to develop
deeper relations with a “ring of friends,” or countries in close proximity to an enlarged
Union. This initiative covers Russia, Ukraine, Moldova, Belarus, as well as the southern
Mediterranean countries (including Israel and the Palestinian Authority); it offers these
countries a stake in the EU’s internal market and participation in selected EU activities
in return for a demonstrated commitment to EU values and implemented reforms. The
EU already has cooperation or association agreements with some of these neighboring
countries. In June 2004, the EU decided to include the three southern Caucasus states of
Armenia, Azerbaijan, and Georgia in the EPN.
3 “Still A Lot To Do Before EU Entry, Says Turkey’s PM,” Financial Times, December 19, 2004;
for the EU’s terms for Turkey, see the European Council, Presidency Conclusions, December 16-
17, 2004 [http://ue.eu.int/ueDocs/cms_Data/docs/pressData/en/ec/83201.pdf].
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The EU’s Institutional Reform
In June 2004, EU leaders concluded work on a constitutional treaty that contains
changes to the EU’s governing institutions and decision-making processes. Commonly
referred to as the “constitution,” this new treaty aims to enable a larger EU to operate
effectively and prevent gridlock, enhance the EU’s democratic legitimacy, and boost the
EU’s visibility on the world stage. It grew out of the 2002-2003 Convention on the Future
of Europe and previous EU efforts at institutional reform in the December 2000 Treaty
of Nice. In order to come into effect, the constitution must be ratified by all members
through either parliamentary approval or public referenda. Ten states have completed
ratification, but the constitution’s future has been thrown into doubt following its
rejection by French and Dutch voters in May and June 2005. In both countries, arguments
against the constitution ranged from complaints that it could undermine traditional social
protections to voter dissatisfaction with their national governments, the EU bureaucracy,
and Turkey’s prospective EU membership. It is now unclear whether other EU member
states will proceed with their ratification plans or whether the EU will seek to renegotiate
parts of the constitution. Regardless, it is unlikely that the constitution will enter into
force by its 2006 target date. Some predict that the EU may be facing a period of
stagnation, at least in the short term, as members grapple with internal reforms and the
EU’s future shape and identity. They also suggest that the rejection of the constitution
could impede the membership aspirations of Turkey and possibly the Balkans, given that
considerable opposition is tied to concerns about further EU enlargement.4
U.S. Perspectives
Successive U.S. Administrations have supported the EU’s enlargement, believing
that it will serve U.S. interests by spreading stability and the benefits of the single market
beyond the EU’s current borders. Members of Congress generally share this view; over
the years, the only criticism has been that the EU was moving too slowly. U.S. businesses
believe they will gain access to a larger, more integrated European market, and see
enlargement as forcing further reform of the EU’s Common Agricultural Policy, a
perennial source of U.S.-EU trade conflict. Some analysts posit that enlargement may
also decrease overall U.S.-EU tensions because many new members are more pro-
American. The Bush Administration has welcomed EU enlargement, noting that it helps
strengthen the “enduring partnership” between the United States and Europe.
Others argue that EU enlargement could have some negative implications for U.S.
interests. Even with EU institutional reforms, decision-making will likely remain
cumbersome and the EU may be an increasingly frustrating partner. Some suggest that
political instability in a number of acceding central and eastern European countries may
further complicate EU negotiations if frequently changing governments shift policy
positions. Others worry that a larger, more confident EU — with an economic output
roughly equivalent to that of the United States and growing political clout — may
increasingly rival U.S. power and prestige.5
4 For more information, see CRS Report RS21618, The European Union’s Constitution.
5 Also see CRS Report RS21875, EU Enlargement: Economic Implications for the United States.