The Challenges of Eastward Enlargement of the EU. Political and Economic Transitions in Eastern Europe

It’s been several years since the first countries of Central and Eastern European began their transition to market economies. This transformation was a special challenge since there has been no clear and detailed map to guide the way. In this short article  I would like to point the most general macroeconomic problems of the successfully reforming countries as well as the challenges of their political transition.

Tamas Reti in his article ‘East Central European Economic Transitions and the West’[1] defines major tasks these economies has to face at the onset of the transition:

– going through a process of macroeconomic stabilization ( external and domestic )

– implementing economic liberalization measures

– introducing major institutional changes ( mainly, the decrease of state involvement in the economy, beginning with property changes, and the emergence of a new private sector )

It was clear that the legacy of the Soviet-style economic system, which produced both hidden and open inflation, monetary overhang, excess demand, fiscal deficit, a foreign debt crisis – had failed.[2] The first free parliamentary elections gave an impetus for new governments to select appropriate reform strategies for their nations’ conditions. The result of these changes, became transformation of a ‘shortage economy’ into a ‘demand-constrained economy’.

However, this was beginning of the recession that has been compared to the Great Depression of the 1930s in the US. As Tomas Reti points out, the reason for the recession were the collapse of the COMECON trade, which resulted in a switch to dollar-trade and the end of bilateral state trading. [3]

Another important factors can also be named:

– the squeeze on real wages and credit supply, which affected both consumer demand and the business climate;
– the absence of government assistance to state firms led to a decline in output.

Along with these, in the framework of monetary stabilization, a tight monetary policy reduced government expenditures, and a restraint on wages had a direct negative impact on the level of production.[4]

Western trade and opening up became a major source for economic growth. From 1988 to 1990 the political systemic changes occurred in Central and Eastern Europe, and the European Community began promoting political and economic reforms. Cooperation agreements were established between the EC and the former USSR Poland, Bulgaria, Czechoslovakia, Hungary and Romania.

The General System of Preferences was provided, which eliminated a number of quantitative restrictions and reduced barriers to textiles and steel products. [5] At the end of 1994, following the splitting of Czechoslovakia, Bulgaria, Czech Republic, Hungary, Poland, Romania, and Slovakia had Association Agreements with the EC, which consolidated the removal of trade obstacles, except agriculture.

http://one-europe.info/should-the-eu-suspend-its-enlargement

Speaking about the Eastern enlargement, the asymmetry in economic potential between the old and new member countries of the EU has made it the biggest challenge. Along with this , the Union was unprepared to open its doors to countries which are unable to prove the efficiency of their democratic systems. So the answer was the Copenhagen criteria, the rules of which set general requirements for establishing effective democratic institutions, respect for human and minority rights, and appropriate mechanisms for guaranteeing a market economy.[6]

Of course, the domestic conditions in the current candidate countries are less favourable than they were in the post-communist countries in 2004. Without a doubt, exists a negative impact on the legislative capacity of the Council of Ministers due to the dramatic increase in the number of MS in recent years. As Ulrich Sedelmeier in his article ‘Europe after the Eastern Enlargement of the European Union: 2004-2014’[7] states that

the increase in numbers and increasing heterogeneity of MS preferences threatened to thwart effective decision-making not only in areas that explicitly required unanimous agreement but also Council’s longstanding practice for consensus decisions.

Additionally to the challenges of enlargement for decision-making in the Council, there were also concerns that the need to accommodate representatives of the new members in other EU institutions, notably for the Commission and the Parliament, enlargement could lead to indigestion.

Another area in which a negative impact of the 2004 enlargement might have caused greater reluctance is the new member’s compliance with EU law. The acquis communautaire, were the main reason for skepticism about the desirability of eastern enlargement. And at the same time, were raised concerns about the durability of compliance after accession. Another sense of negative attitudes towards further enlargement is through immigration, mainly labour immigration from poorer eastern MS.

The enlargement of the EU posed and will pose severe budgetary, administrative, and operational challenges for the Union. As considerable as the challenges of enlargement for the EU are, the challenges of accession for the new members especially for those countries, which were governed by Communist parties with predominantly-collectivized economies.

David R. Cameron defines those challenges[8] as:

1)administering the acquis;
2)deepening and extending the reform and transformation of the economy;
3)reducing high levels of unemployment and large government, trade, and current account deficits;
4)financing accession in the face of the EU’s budgetary constraints and financial provisions; and
5)coping with all of those challenges.


[1] Tamas Reti “East Central European Economic Transtition and the West”., Macalester International Vol.2

[2] Ibid page 54

[3] Ibid

[4] Ibid

[5] Stefania Fabrizio, Daniel Leigh and Ashoka Mody., “The Second Transition: Eastern Europe in Perspective”., Economic Papers 366, 2009.,European Commission Economic and Financial Affairs., Brussels

[6] Jacek Wieclawski “The Eastern Enlargement of the European Union: fears, challenges and reality”. Global Studies Journal., Issue 15, 2010

[7] Ulrich Sedelmeier “Europe after the Eastern Enlargement of the European Union: 2004-2014”., Heinrich Boll Stiftung topics., 2014 http://eu.boell.org/sites/default/files/uploads/2014/06/eastern_enlargement.pdf

[8] David R. Cameron “ The Challenges of EU Accession for Post-Communist Europe”., Center for European Studies, Working Paper Series #60., Department of Political Science Yale University http://aei.pitt.edu/9273/1/Cameron.pdf

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The Role of General Principles Within a Legal System of the EU. Example of France and Germany

The concept of general principles of law today is very important to deepen the process of European integration, the formation and development of EU law in general. Important role in its development and consolidation plays the Court of the EU. Its consistent practice led to the formation of the concept of EU law and the recognition of its general principles. According to L. M. Entin, EU law in terms of spatial application has a regional character. [1] It applies to the relatively closed group of states belonging to the same general geographic region.

Principles of EU law include: the principles governing the validity of norms and sources of EU law, their relationship with the national law of the Member States and general and special principles of law. [2] General principles of law are relevant in number of ways:

first of all they serve as an aid to interpretation;
secondly, may be invoked by States and individuals to challenge

Community action or acts of institutions; thirdly, whether in the form of a legal or an administrative act, may also call for challenging action by a Member State. [3]

One of the basic tenets of European Community law is the protection of fundamental rights. Fundamental human rights were prior to Internationale Handelsgesellschaft and ECJ made fundamental rights an integral part of the general principles of law. This right refers to a broad concept including access to justice, the principles of fair trial and due process of law. [4] The approach of the ECJ was to seek constitutional inspiration of Member State, including the international norms and so the community had its own agenda and human rights protection.

The Charter of Fundamental Rights which was formally proclaimed in Nice in December 2000 by the European Parliament, Council and Commission contains 54 articles grouped in seven chapters: dignity, freedoms, equality, solidarity, citizens’ rights, justice and general provisions. [5]

Articles I-V of the Charter reflects to human dignity which upholds the rights to life, integrity of the person and prohibits slavery and torture;
Articles VI-XIX upholds the rights to liberty, respect for private and family life, to freedom of thought, conscience of religion, the right to expression, education, work, property and asylum;
Articles XX-XXVI provides principles of equality and non-discrimination, respect for cultural, religious and linguistic diversity and grants specific protection to the rights of children and persons with disabilities;
Articles XXVII-XXXVIII includes the protection for the rights of workers, recognizes the entitlement to social security, the right to health care access and the principles of consumer and environmental protection;
Article of Citizens’ rights ensures the rights of citizens of the Union to vote, to be a candidate in election to the European Parliament and in municipal elections, the right to petition, good administration, to diplomatic protection, freedom of movement and of residence and access to documents;
and the last Article of Justice lists the rights of defence, the principles of legality and proportionality of criminal offences and an fail trial. [6]
Article II of TEU states that respect for fundamental human rights is one of the foundational values of the EU.

As well as the principle of fundamental rights, the principle of proportionality affected EU law in the Internationale Handelsgesellschaft case in 1970. It has become one of the fundamental principles of the jurisprudence that was developed by the European Court of Justice and states that a public authority may not impose obligations on a citizen except if they are strictly necessary in the public interest to attain the purpose of the measure.[7]

The principle of proportionality applies to situations in which competence has already been established and seeks to protect stakeholders against administrative or legal burdens. Its applicable in respect of the Four Freedoms such as the free movement of goods, services, persons and capital. If we consider EU level then the principle of proportionality is applied in different ways, as when it comes to policy making, this principle is applied with some prudence.

For example, if a measure that may harm an individual because it limits her/his property rights but leads to the result that is envisaged by a certain policy, then can be acceptable of its to the benefit of the society as a whole.[8] The general sense of the principle is that ‘any action by the Community shall not go beyond what is necessary to achieve the objectives the Treaty’.[9] According to Enzo Cannizzaro, proportionality plays a prominent and important role ‘in limiting the power of taking countermeasures in response to internationally wrongful acts’.[10]

Initially, the principle of subsidiarity has not played any significant role in the history of European integration. Formal incorporation of the principle of subsidiarity in the Community has been realized with the adoption of the Maastricht Treaty in 1992. Incorporation of the principles of the founding agreement was facilitated by two main factors.

Firstly, after the adoption of EEA, Community acquired new areas of competences and its role has been strengthened by the decision ruled by a qualified majority. But still participating countries were concerned that too much power transferred from the national level to the European, so that the Community may become ‘re-centralised’ organization with excessive powers.[11]

Therefore, the member states sought to introduce defined criterion establishing the list of powers that can be performed by the Community. Secondly, on the eve of preparation of the new treaty, has intensified debate between proponents of federalism and intergovernmentalism about the future of the EU.

Thus, the main objectives of the principles of subsidiarity were: the satisfaction of the centrifugal tendencies of the participating countries by establishing clear lines separating powers between the Community, on the one hand, and the participating countries, on the other; and secondly, reconciliation of supporters of two different approaches to the integration. [12]

This principle is set as one of the fundamental principles of the EU, which allows to extend the activities of the Union, if circumstances require so, and conversely to limit them, if its no longer justified. Following Amsterdam treaty didn’t specify the rules of application of the principles but the main thing was that its subsidiarity principle is limited to the distribution of powers between the Member States and institutions of the Union.

And issues concerning the application of the principle within the boundaries of the participating countries are left to their discretion. As the principle of subsidiarity applies to all the EU institutions, the Lisbon Treaty has strengthened the role of both the national parliaments and the Court of Justice in monitoring with this principle. [13]

From its beginning the instigator of this concept was the European Parliament in adopting the draft TEU, proposing that in the case where the Union competence was concurrent with that of the Member States, the Member States could act as long as the Union had not legislated.

Also it stressed the ability of Community to carry out only those tasks which could be undertaken more effectively in common than by individual States. [14] This principle is not only about the devolution of power from the EC level downward but also from national governments down to the local and regional level. So that it has the potential to reconnect people with their power.

Another principle of legal certainty has been applied in more specific terms as the principle of legitimate expectations and the principle of non-retroactivity. [15] This principle is a part of Community Law and should be respected by Community Institutions and Member States. An essence of it is in protection of citizens against a threat that comes from the law and insecurity created by law’.[16]

According to Damian Chalmers in his book ‘European Union Law’, the principle of legal certainty has at least two dimensions. The first one is a prohibition against retroactivity, which means that a measure must not take effect prior to its publication. The second dimension is that of clarity. It enables EU law’s subjects to know their rights and obligations. [17]

The principle of equality before the law is another general principle within a legal system of the EU. As example, Basic Law for the Federal Republic of Germany guarantees, all individuals shall be equal before the law, so men and women shall have equal rights. The general principle of equality also considers that no one may enjoy preferences because of their sex, race, language, religion or political beliefs. [18]

Therefore it can be understood that persons in similar situations are not to be treated differently unless the difference in treatment is justified objectively. In this case the question of discrimination can be seen as example, as it exist only within a framework where its possible to compare. Article 12 of EC Treaty prohibits any kind of discrimination on the grounds of nationality, sex and provides for equal pay for equal work.

A general principle of law is a significant concept for French administrative and German public law. But the legal systems and the approach to the general principles of law are different. In case of France only until the early 70-ies the only institution, which relied upon general principles, was the Conseil d’Etat. Such principles as the protection of individual rights and liberties, equality before the law, non-retroactivity, judicial protection and etc have been recognized as general principles of law in France but such principles as the principle of proportionality are debated.[19]

Along with main fundamental rights, the Conseil has included also the right of privacy, the freedom of commerce and enterprise. The feature of French public law is that it has developed two concepts of principles: general principles of administrative law and fundamental principles recognized by the laws of the Republic. [20] The EU law has influence and its twofold.

Firstly, the general principles of European law must be applied to national courts and secondly, new principles via community law may influence the discourse of both legislators and the courts regarding their domestic issues. General principles of law also recognized in German public law. The role of principles has clarified by Bundesverfassungsgericht in constitutional law and laid down in the Art.

Constitutional principles serve promotive and controlling function, where promotive means guidance in legislative and executive decision-making and controlling function is when the courts are interpreting and applying the law in general. [21] The concept of general principles of law is regarded as significant German contributions to legal cultures of the European Union. And the principle of proportionality and Vertrauensschutz or the protection of legitimate expectations has inspired the ECJs jurisprudence.

There are many benefits in regards to the general principles of law, as all the different member states are always on guard to keep a balance of power. On the other hand, member states have accepted the supremacy of the EJC. But if general principles are made for the people of the EU then giving more supremacy to the EJC seems as a good perspective.

 


 

[1] Право европейского союза. Новый этап эволювии 2009, 2017 годы. Л.М. Энтин. М.: Изд.во “Аксиом”, 2009. Стр. 27 http://www.eurocollege.ru/fileserver/books/esi-library5.pdf

[2] Принципы права Европейского союза. Дронь Т.Н., студ. Филиала РГСУ.г. Минск. Науч. Рук. Проф. Пастухов М.И.д.р юр. Наук. Стр.82 http://elib.bsu.by/bitstream/123456789/47172/1/dron_2012_sbornik8_tom1.pdf

[3] EU law. Josephine Steiner, Lorna Woods, Christian Twigg-Flesner. Oxford university press. 9th edition. 2006 page 115

[4] The role of the Principle of effective judicial protection in the Eu and its impact on national jurisdictions. Ph.d in EU law Linda Maria Ravo. University of Trieste. Page 102. http://www.openstarts.units.it/dspace/bitstream/10077/8192/1/ravo.pdf

[5] Charter on findamental rights of EU. 2010. Official Journal of the EU. http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2010:083:0389:0403:EN:PDF

[6]Charter on findamental rights of EU. 2010. Official Journal of the EU. http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2010:083:0389:0403:EN:PDF

[7]Principle of proportionality. http://detention-in-europe.org/index.php?option=com_content&view=article&id=174&Itemid=216

[8] The principle of proportionality. Van Benthem & Keulen. http://www.echamp.eu/news/newsletter/newsletter-archive/2009/aprilmay/the-principle-of-proportionality.html

[9] Treaty on European Community. 1957. Article 5. http://lawvolumes.dwp.gov.uk/docs/a9-1001.pdf

[10]The role of proportionality in the law of international countermeasures. Enzo Cannizzaro. 2001. Vol. 12 No.5, page 889. http://ejil.oxfordjournals.org/content/12/5/889.full.pdf p

[11]Subsidiarity and Soverignty in the European Union. Paul D. Marquardt. Fordham International Law journal. Volume 18, Issue 2. 1994. Article 7. Page 625 http://ir.lawnet.fordham.edu/cgi/viewcontent.cgi?article=1414&context=ilj

[12]Динамика развития принципа субсидиарности в Европейском союзе. Гомцян С.В. Вестник Международных организаций. 2007. #6(14) стр 58 http://ecsocman.hse.ru/data/2011/05/06/1268030679/dinamika_razvitia.pdf

[13] The principle of subsidiarity. Fact Sheets on the European Union. 2014. Page 2. http://www.europarl.europa.eu/ftu/pdf/en/FTU_1.2.2.pdf

[14] ibid page 3

[15] EU law. Josephine Steiner, Lorna Woods, Christian Twigg-Flesner. Oxford university press. 9th edition. 2006 page 130

[16]The principle of legal certainty basis for the rule of law, landmark case-law. Ion Predescu, Marieta Safta. Page 3 http://www.ccr.ro/ccrold/publications/buletin/8/predescuen.pdf

[17] European Union law: texr and materials. Damian Chalmers, Gareth Davies, Giorgio Monti. Chanmbridge University Press, 2014. Page 441 http://books.google.ge/books?id=GjuNAwAAQBAJ&pg=PA441&lpg=PA441&dq=the+principle+of+legitimate+expectations+eu+law&source=bl&ots=q0ITf3QgrQ&sig=Z0UqGgb2SIN6n-1zNQ-pQYNEUi0&hl=ru&sa=X&ei=KQAPVPfCA8jvPJDWgbgH&redir_esc=y#v=onepage&q=the%20principle%20of%20legitimate%20expectations%20eu%20law&f=false

[18] Basic Law for the Federal Republic of Germany. http://www.gesetze-im-internet.de/englisch_gg/englisch_gg.html

[19] General principles as sources of law in the major contemporary legal systems. Dobrinka Taskovska. Iustianus primus law review. Vol. 1:1 page 3 http://www.law-review.mk/pdf/01/Dobrinka%20Taskovska.pdf

[20] ibid

[21] ibid page 4