Germany not for hasty E.U. expansion

BRUSSELS, JUNE 16. Leaders of the 15 European Union nations have promised that the expansion of the organisation under the Nice treaty, which establishes the framework for a 27-country union, will not be delayed by the ``Irish hiccup'', though there were differing perceptions1 over the timetable for expansion. Germany and France, the two leading economic powers of the E.U., expressed reservations over setting a timetable. But Sweden, which hosted the weekend summit, sought to resolve the impasse which is more technical than based on any policy differences.

The 12 former communist East and Central European countries are already in the process of negotiating for full membership of the E.U. On Saturday, when they met leaders of the 15 member states, they sought reassurance that their applications would be processed on time. Their concern has been triggered by last week's Irish referendum against the Nice treaty, which they fear would hold up the enlargement process. The Irish Government is visibly embarrassed by this ``hiccup'' and has sought time from other member states to put matters right in a second referendum.

The German Foreign Minister, Mr. Joscka Fischer, is quoted as having said that the enlargement was ``irreversible'' and this sentiment is likely to be reflected in the final summit statement. The member states will have a fresh opportunity to debate the proposed parameters and criteria for enlargement They will individually hold a ``structured debate'' to prepare for inter-Governmental conference on reform of the E.U., which will be held in 2004. In several candidate countries public frustration is mounting over the E.U.'s ``foot-dragging'' over procedural matters.

The summit has been partly overshadowed by the ugly spectre of violence. On Friday night, more than 450 protesters were arrested and the conference centre area was declared unsafe by the local police. The European officials talked with groups of peaceful demonstrators but the Swedish Prime Minister, Mr. Goran Persson, said there were ``criminal groups'' with ``blatant disrespect for democracy''.

Mr. Fischer, who was also a active protester during his younger days in the mid-seventies said he understood concerns of the protesters but could not condone violence. Mr. Fisher debated with peaceful demonstrators but refused to talk with violent groups. The Swedish establishment is deeply embarrassed by the outbreak of such violence and on Friday night, an elaborate restaurant dinner for Government leaders was abruptly cancelled for security reasons. The protesters demonstrated against the E.U.'s seemingly lack of progress on environmental policy, globalisation and other issues.

The Indian economic observers are watching the unfolding trade and economic scenario in the E.U. with special interest and wider expectations of trading in a huge lucrative market of some 500 prosperous consumers by 2010. There is also some anxiety as the E.U. steps up efforts to protect its industries by more ``anti- dumping'' tariffs in the wake of the alleged ``unfair competition'' from Asian exporters.

The Indian exports to the E.U. are currently at the extremely modest level, accounting for less than 0.75 per cent of the total E.U. trade. But, from the Indian viewpoint the E.U. is emerging as the country's largest trading partner after the U.S. and accounts for about 30 per cent of its exports and imports. In recent years, India has slightly improved its trading profile with the E.U. However, both in E.U. and global terms, India's performance is rated as extremely modest by any criterion. In global terms for example, India accounts for 0.7 per cent of the world exports and 0.8 per cent of the world's imports and hovers at 23rd/24th rank.

India is rated as a very modest entrant to the E.U. market and it remains to be seen what percentage of the total E.U. market Indian business can capture in future. India desperately a needs range of sophisticated manufactured goods and competitive services to sell in the E.U., to earn a respectable share of what is the world's largest and prosperous consumers market. In the next two decades, the E.U. will rapidly expand as the former communist states of the Eastern Europe will become full E.U. members and begin to prosper. They will also articulate their economic performance to meet the standards of the E.U.'s economic and fiscal indicators.