EU applicants still haggling as deadline nears

THE MATHS looked simple, but last night it was becoming clear that four into twelve may not go. Enlarging the European Union to embrace Austria, Finland, Sweden and Norway could prove impossible.

The negotiations assume all four will join simultaneously but it looks increasingly likely they may have to be unyoked - with Norway and Austria most likely to be put on hold. A week of talks has resolved many outstanding technical points. There has been a breakthrough on regional funding, with agreement on the creation of a new category of subsidy recipients (those farming in the frozen north), but there has been little progress on the divisive issues of fish, agricultural subsidies and budgetary responsibility. Norway remains particularly hardline - especially over fish exports.

Theodore Pangalos, the Greek European Affairs Minister, tried to concentrate minds - threatening that any of the four failing to meet tonight's deadline risked missing the enlargement train altogether. 'February 28 is the political limit,' he warned. But it is tacitly conceded that the talks will run on to next Monday's meeting of EU foreign ministers. 'February will be a very long month,' predicted one negotiator.

Beyond that date, however, they cannot be extended. The European parliament must approve accession before it is dissolved in May to prepare for June's elections so the applicant countries can proceed with national referendums necessary for entry on 1 January.

Fish was the principal stumbling block in 1972 when Norway last rejected membership to the European club. With the fishing industry in crisis, the issue is even more politically sensitive today. Such are the problems within the EU itself that a common approach was only decided on Saturday. It was rejected out of hand by Norway, which wants the right to sell its fish anywhere in the EU and cannot countenance a Spanish demand to catch 14,000 tonnes of Norwegian fish.

Agriculture is nearly as difficult. The four applicants will, as EU members, have to reduce subsidies for their farmers in line with the Common Agricultural Policy (CAP). In Sweden, price supports are already broadly equivalent, but in the other countries this adjustment will be a shock they would prefer to adjust to over a longer period with a system of border levies to iron out price differences.

A compromise is likely to involve the EU offsetting its insistence that the subsidies be lowered in one move with a one-off payment and earlier access to funds. The total cost of such help would amount to about pounds 1.12bn next year - only slightly less than the applicants' pounds 1.26bn estimated annual net budget contribution.

Austria still has a problem concerning the transit of EU lorries through its territory - all the more burning as a result of the Swiss ban. Ideally, Vienna wants to open its borders to all traffic only after a 12- year transition period - the time it reckons it will take to have developed the infrastructure for rail freight. The EU is fighting hard to shorten this period.

The complexity of the negotiations has taken the EU by surprise. The four have, after all, already signed a comprehensive free trade agreement creating the European Economic Area. With this as a legal base for full accession, adding the political gloss looked to be a reasonably easy task.

'I think the problems are as much philosophical as political,' said one negotiator. 'It is really a question - especially in Norway's case - of whether these countries want to see a slice of the action or stay in uncomplicated isolation.' This is, of course, not Norway's view. For Oslo it is a question of putting together a package it can sell to the public.

Although public opinion has warmed to EU membership in the four countries aspiring to membership, the referendum outcome is finely balanced. For the Twelve, the institutional problems of admitting extra members - the possible weakening of the blocking minority vote in decision-making - are potentially explosive.

As the talks rolled on, the applicants were forming and re-forming alliances with a Machiavellian ease that suggested they will be real players in the Euro-game should they decide to participate. Yesterday afternoon officials joined journalists to watch Sweden play Canada in the Olympic ice hockey final. The Finns, believing their interests have been unfairly lumped with Sweden in these negotiations, were supporting Canada. 'I see they have quickly picked up the Euro-principle that my enemy's enemy is my friend - they'll make great Union members,' joked one EU diplomat. Sweden won on a shoot-out.

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