Milken Institute Events - Global Conference 2004 - Europe: What Path Will it Take?
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Global Conference 2004
Panel Detail:

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Tuesday, April 27, 2004
9:40 AM - 11:00 AM

Europe: What Path Will it Take?

Breakout Session

Erhard Busek, former vice chancellor of Austria, said the enlargement of the European Union is intended to erase the east-west division left by the Cold War.


Speakers:

Erhard Busek, Former Vice Chancellor of Austria, current Special Coordinator of the Stability Pact for South Eastern Europe

Hynek Kmonicek, Ambassador, Permanent Representative of the Czech Republic to the United Nations

François Loos, Minister for Foreign Trade, France


Moderator:

John Andrews, West Coast Editor and Bureau Chief, The Economist

Summary:

“Europe: What Path Will it Take?” analyzed the benefits of European enlargement such as reunification of European countries and stability, while providing insight on the difficult issues that accompany enlargement like agriculture, health care issues and financial transfers.

After successfully growing from six to 15 members, the European Union is accepting 10 more countries—Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, the Slovak Republic and Slovenia—to join the EU on May 1, 2004. Enlargement is seen as a historic opportunity by the panel members to correct history and unite Europe peacefully.

The introductory statement of Erhard Busek, former Vice Chancellor of Austria and current Special Coordinator of the Stability Pact for South Eastern Europe outlined the fact that the European Enlargement is intended to extend the type of peace, stability and prosperity enjoyed in the west to the east, and erase the east-west division left by the Cold War. Enlargement will consolidate the economic and political transition that has taken place in Central and Eastern Europe since 1989. Focusing on the debate of the establishment of a European Constitution, Busek acknowledged, “The European Union is a global payer but not a global player…The British government needs to learn to become European.”

Reflecting the economic diversity to some extent, Hynek Kmonicek, Ambassador and permanent representative of the Czech Republic to the United States, suggested that the 10 acceding countries are facing lower economic output than the EU15. GDP per capita is much lower than the EU in the 10 acceding countries.

What other countries can apply for membership? How far can the EU expand in the east and in the south? What should be its future geographical limits?

“The east border,” said Kmonicek, “is a question of Russia’s identity.” Pointing out that his country was occupied by Russia for more than 40 years, he commented that the Czech Republic has become an expert on Russia.

During a discussion on the possible membership of Turkey, Kmonicek commented on the large share of Turkey’s Moslem population and addressed socio-cultural differences. The European Union has not defined its limits in geographical terms, but every country that wants to become a must meet specific economic and political conditions, such as democracy, the rule of law and respect for human rights. Busek added, “We are prepared for Turkey if you take Mexico as the 51st state.”

What are the values that characterize the Europeans? “We feel that Europe is a civilization project. There is a European feeling in the population … We used to say ‘Keep America in, Russia out and Germany down,’” said Kmonicek.

Kmonicek also focused on the European-American relationship, arguing that “it is not profitable when Europe and America disagree.”

Francois Loos, French Minister for Foreign Trade analyzed the current relationship of the EU15 with Turkey with respect to its future membership. “Turkey is already Europe. We are in custom union for years. We don’t need Turkey to become a member of the European Union to have economic advantages.”

When asked about protectionism, Loos argued that from an economic point of view, enlargement will increase the single market. The enlarged EU will continue to be committed to the sustainable development of developing countries, to ensure continuity in cross-border relations and to enable those countries to benefit from the enlargement. Pointing to the U.S., Loos made clear, “we consider that a global market should not be disturbed by marketing loans.”

Questions from the audience centered on health care issues. One panel participant stressed that the mortality rates in Hungary are much higher than in the U.S. with people dying 10 years earlier than in the U.S. Busek confirmed that health care issues remained the responsibility of member states. According to Kmonicek, the Czech Republic needs less health care and needs to downsize hospitals.

Another question focused on the structural changes that need to take place in Poland and Hungary with agriculture representing a large share of GDP growth. According to Busek, “those countries need financial aid to move into different sectors in the economy, such as tourism.”

Another question dealt with environmental regulations and problems in the EU. While recognizing that most of the acceding countries needed funds from the west and more than 10 years to improve these environmental issues, Loos stressed that the EU is acknowledging the Kyoto Protocol and would like to see the U.S. participating in this protocol, as well.

In sum, the panel members agreed that the enlargement of the EU will lead to prosperity and stability, but it may also create new instabilities and political strains. The panel members identified the countries of the West Balkan region, including the states of ex-Yugoslavia, as potential countries for membership.

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