Olli Rehn and Carl Bildt on EU absorption capacity, 2006, www.seetv-exchanges.com

EXTRACTS FROM THE POLICY BRIEFING BY COMMISSIONER OLLI REHN HELD ON THE 19 OF MAY IN BRUSSELS, ORGANISED BY THE EUROPEAN POLICY CENTER

00:00 On the enlargement process and the EU absorption capacity

Our consolidated enlargement agenda covers Southeast Europe: the EU has committed itself to completing the fifth enlargement with the accession of Bulgaria and Romania, conducting accession negotiations with Croatia and Turkey, and maintaining a European perspective to the other countries of the Western Balkans.

Can we absorb these countries into the EU? In my view, absorption capacity is determined by two major factors: the transformation of the applicants into worthy member-states, and the development of the Union’s policies and institutions.

Absorption capacity is about whether the EU can take in new members while continuing to function effectively. It is a functional concept, not a geographical one.

The Union has to ensure it can maintain its capacity to act and decide according to a fair balance within institutions; respect budgetary limits; and implement common policies that function well and achieve their objectives.

01:30 On the current institutional arrangements in the EU

The Nice Treaty provides institutional rules for up to 27 members, i.e. up to the accession of Bulgariaand Romania. Before the next enlargement after that, a new institutional arrangement should have been born. We expect the European Council in June to adopt a step by step approach, to be taken by the future Presidencies, which should pave the way for a new institutional settlement. This should be concluded by 2008-9, prior to the next enlargement. We don’t need it for the sake of enlargement; we need if for the sake of making the current EU to function better. As to the financing of the Union, a budget review, as agreed at the last European Council, will be conducted in 2008 or 2009. The Commission will return then with ideas for a comprehensive reform of the budget – and thus, by definition, of common policies – which will support competitiveness and solidarity through a new policy agenda. By revisiting the institutional settlement and budgetary arrangements and by suggesting a new policy agenda, altogether a sort of “Agenda 2009”or “Agenda 2014”if you like, we shall on the side, or as a significant spill-over, prepare the Union for next enlargements. It is a major challenge, certainly, but no rocket science – we’ve done it before.

03:44 On the need for EU to reinforce its absorption capacity

The EU needs to reinforce its “shock absorption capacity” by reforming its policies and institutions to deal with a changing world. But we must keep making progress on these matters in parallel with enlargement, not hold the Western Balkans and Turkeyhostage to our internal debates. The current enlargement countries are chugging along the track to the EU, not rushing towards accession like a Eurostar or a high-speed train. But it would only undermine our own conditionality and strategic interest if we gave them the impression that they are on the road to nowhere.

04:38 On the debate on absorption capacity

You may recall that the debate on the absorption capacity was relaunched , reactivated and reinforced last October in the context of the opening of the accession negotiations with Turkeyin the no so smoky rooms of Luxemburg between 2 and 4 of October. This cloud of absorption capacity raised above Turkeyand than easterly wind started to travel across the Bosphorus westwards and it stopped above Western Balkans. And it started to contaminate the debate in Western Balkans. Because we in Europe, in the current EU to be more precise, often underestimate the ability of the leaders and publics in the Western Balkans and other candidate countries to follow the EU debate. Therefore in fact I wanted to conclude this debate with a new consensus on enlargement already quite soon after October this year. Because I see every day that this ambiguity on the absorption capacity is eroding our conditionality and our capacity to act in the Western Balkans. Therefore, I’m in favour of having the debate, yes, finding a new consensus, but concluding the debate having common principles, common policy guidelines and than just doing it getting on with the work and starting to prepare WB countries for EU membership in the mid or long term.

06:46 On Serbia

As regards Serbia more particularly yes we are working in order to facilitate Serbian EU perspective, to make this EU perspective as concrete as tangible as possible as soon Serbia meets the necessary conditions, including full cooperation with ICTY. The EU intends to conclude the negotiations on SAA by the end of this year which is still possible if Serbiadoes not loose to much time before arresting and transfering Ratko Mladic to The Hague. And SAA is very important. It will bring benefits through free trade, better confidence for investors, more intensive political dialogue and also participation to community programs.

INTERVIEW WITH CARL BILDT at European Policy Center

07:53On the debate on the absorption capacity and its effects to the Balkans

I think that the Commissioner is right in different EU countries, not necessarily all of them after the referendum defeats in Franceand Netherlands, have mudeld the water somewhat. Some countries say that we shall slow down on enlargement, some not. That of course that has its effect on the Balkans. It is in some extent undercutting the argument of the European reformers in Serbia, Bosniaor Croatiaor wherever. So it is very important that we conclude This debate in the EU as soon as possible.

08:24On Montenegro and Kosovo independence seen through EU institutional point of view

Montenegro will have to take its own decision and Kosovo negotiations are still very much open in my opinion. But it you look at it strictly from the institutional aspect of the EU it doesn’t make things easier if you get a number of new smaller states. Because the institutional complexity of the entire arrangement increases. There might be other factors that are good in terms of new states being created, but in terms of institutional complexity of the enlargement process, it clearly increases with the increase of the number of applicant countries.

09:00On the Montenegro referendum

That is really for Montenegroto decide. There are pros and cons. Obviously, the present set up, the state union, is disfunctionnal one, it is not working. It works to the detriment of Serbiabecause Serbiacan’t move forward. At the same time Montenegrois a small state, and very much depends on open borders and interaction with the rest of the world and the rest of the region in which Serbiais very big part. So you have to balance this, to get sort of political structure that works in the region, the one way or another, and present one does not work, and the fact that you need to cooperate, to have open borders and pave the way for EU integration.

09: 43 On the message the debate on absorption capacity sends to the Balkans

The entire debate on the absorption capacity has created the impression and indeed given the message: you people in the Balkans, you get ready, but when you get ready it is not quite certain that we are going to be ready for you. And that is a different message that the one we had couple of years ago. In my opinion it is a negative one. We need to have a vigorous debate about that between the present member states in order to clear up the message. In order also to have a stronger voice in the Balkans and really make it clear that the door is open. I’m confident that the door will be open, but I’m not confident that for everyone it’s easy to open it in the present time.

10:20 Cutaways from the conference in Brussels

12:52 End of transmission