Enlarging Europe: Hard times for our friends in the east

The wind may be back in the sails of the euro, now virtually certain to be launched on schedule in January 1999. But, says Rupert Cornwell, surging Euro-optimism is obscuring deepening rifts over another issue at least as important - enlargement to the east.

In theory, the admission of the countries that were once the Soviet bloc into the prosperous club of the European Union would seem not only obvious and logical, but an inescapable moral obligation towards history's victims. Theory, alas, tends to crumble in the face of national selfishness and shortsightedness, and the might of entrenched special interest lobbies in the existing EU.

The problems ahead were already evident from the EU's Amsterdam summit in June, and its failure to agree the essential constitutional reforms such as more majority voting and a streamlined Commission, without which today's already unwieldy Europe of 15 would become an utterly unworkable Europe of 20 or more.

The enlargement debate is moving centre stage. Two months ago, the Commission issued its Agenda 2000 strategy document on enlargement, proposing that negotiations with five of the 10 European applicants - Poland, Hungary, the Czech Republic, Slovenia and Estonia - and Cyprus start at the appointed date of the end of this year. During its presidency in the first half of 1998, Britain will not only have to referee the euro endgame, but lay the groundwork of an expansion that should (in theory again) be wrapped up by the millennium.

But as the recent meeting of EU foreign ministers in Luxembourg suggested, the chances of reaching that goal are between remote and zero. Enlargement is entangled with the rest of Europe's unfinished business: the single currency and the desperately needed reform of its regional and agricultural policies which account for 90 per cent of spending from the EU's pounds 60bn budget. And there is the eternal problem - projected this time through the prism of the possible membership of Cyprus - of Turkey.

Enlargement has few unequivocal champions. There are the Nordic countries and Austria who believe that it is unfair and geopolitically dangerous to include five but exclude five others (Latvia, Lithuania, Slovakia, Romania and Bulgaria). Italy feels the same. So too does Britain, for motives ranging from a sense of historical justice to vestiges of the old Thatcherite calculation that a broader Europe perforce means a shallower, less federal Europe.

Not least though, Britain sees enlargement as a lever for forcing reform of Europe's system of regional aid, and its indefensible farm policy.

Germany urges a very limited enlargement, to the three new Nato entrants of Poland, Hungary and the Czech Republic, saying that as the main net contributor to the Brussels budget, it cannot afford any extra outlays when it is attempting to meet the Maastricht criteria for the single currency. Germany would save far more if it secured an overhaul of the CAP; but that would mean Helmut Kohl taking on the Bavarian farmers, his political allies, who prosper from the CAP.

Belgium and France mask their doubts by staking out the communautaire high ground, arguing that Europe must work better before it takes on new members. In other words, say Brussels and Paris, no enlargement before the institutional reforms that should have been decided at Amsterdam.

The most powerful objections, however, come fromSpain, Greece and Portugal, all of them poor, who fear that the handsome regional subsidies they receive would be diverted to the poorer east, should enlargement go ahead. Spain is, moreover, throwing in an extra complication, signalling it would block enlargement without a promise it will be in the first wave of adherents to the single currency in 15 months time.

Thus the new democracies of the east seem doomed to wait.