The EU’s Next Eastward Enlargement Will Be Complicated and Expensive

Farewell to the Consensus on Enlargement

With its Brussels decision, the EU abandoned consolidation, which it defined as restricting any promises of future accession to the six countries of the Western Balkans plus Turkey. The EU thus also exceeded the area for enlargement that it had set itself in the 1990s with the PHARE aid programme for the countries of Eastern Central and South-Eastern Europe. Of the post-Soviet states, only the three Baltic countries were included in the programme, as they were also, later, in the dual enlargement of NATO and the EU. One reason was that most Western governments had never officially recognised the annexation of Lithuania, Latvia and Estonia by Moscow in 1940–41, not even during the Cold War. Now, the EU’s commitment to the Trio resembles its commitment to the Western Balkans in its 2003 Thessaloniki political pledge. If we judge the EU at face value, it is heading for 37-plus members, which will “change the face of Europe forever” (German Chancellor Scholz).

However, the EU intends to adhere to the second component of the consensus on enlargement: strict conditionality. New members will thus still be subject to the political and economic Copenhagen crite­ria, as well as the obligation to adopt the EU’s primary and secondary legislation in its entirety upon accession. The EU-27 are also not willing to reconsider the fourth criterium, the EU’s capacity to absorb new members. In the Commission’s opinion on the accession applications, it succinctly addresses this point in a single sentence, stating that it will assess the impact of the accessions on EU policies later. Before the first eastward enlargement, the Commission had produced the comprehensive com­munication Agenda 2000 – for a stronger and wider Union in 1997. There is currently not enough time – and probably not the political leadership either – for such a multidimensional analysis. Official govern­ment statements about the European Coun­cil summit in June 2022 thus exhibited the usual differences, which are generated by the fundamental tension between enlargement and reforms (or the EU’s capacity to absorb). This ongoing discourse will also accompany the next phases of the enlargement process.

The third component of the 2006 enlargement process concerns communication vis-à-vis EU citizens and the candidate coun­tries. The war has led to most EU citizens supporting quicker admission for new mem­bers. Approval ratings for enlargement are still below the EU average of 58 percent in traditionally more sceptical countries, such as Austria (45 per cent), France (47 per cent), the Netherlands (46 per cent) and Germany (53 per cent), but in Denmark, for example, they recently exceeded it (62 per cent). However, any war-related impact on prosperity, combined with rising inflation, could once again create more scepticism among EU inhabitants. Support for EU mem­bership in the Trio countries is very high; in Ukraine it has reached record levels.

Eurobarometer polls show that the mood in the Western Balkans is still relatively positive when it comes to trust in the EU and the image of the EU, even though dis­appointment about the halting accession process has been spreading for some time. In many countries, it is especially governments and political elites who declare that the EU’s accession pledge is not reliable, and the EU itself not credible. This is al­ready casting a shadow over future negotia­tions with the Trio countries.

Accession Negotiations: Routines and Reforms

Whilst the 27 EU-governments were pro­pelled forwards by the June decision, they could show as early as the European Coun­cil meeting in December that they set the pace, timetable and modalities of the en­largement process. We should expect the EU to adapt the process somewhat due to certain specifics as well as war-related com­plications, but not to fundamentally change its methodology.

In its Brussels decision, the European Council recognises the European prospects of Ukraine, Moldova and Georgia, and views their future as being inside the EU. This mostly corresponds to the previous Thessa­loniki formula. Ukraine and Moldova have also been granted accession candidate status. The Council will decide on further moves as soon as Kyiv has taken the seven steps and Chișinău the nine steps listed by the Commission in its opinions. These concern above all specific requirements relating to the rule of law, the indepen­dence of the judiciary, the fight against corruption and the protection of minorities. These requirements are overwhelmingly part of the cluster “Fundamentals”, which contains those chapters of the acquis com­munautaire that are to be opened first and closed last during accession negotiations. The European Council has promised to grant Georgia candidate status as soon as it has implemented 12 conditions, so-called “priorities”. The reasons for this differen­tiation include Georgia’s halting reform efforts, political polarisation and ineffective government.

The Association Process and Support

The Association Agreements with the Trio countries are much more strongly directed towards integration into the EU’s internal market than the stabilisation and association agreements with the countries of the Western Balkans, which are essentially little more than classic free trade agreements. With Ukraine, Georgia and Moldova, the EU has concluded agreements on Deep and Comprehensive Free Trade Areas (AA/DCFTA), which include, as well as the dismantling of customs tariffs and non-tariff barriers, the gradual adoption of the Four Freedoms and sectoral regulations or cooperation. The latter concern the energy sector, macroeconomic cooperation, the environment, traffic, industrial and entre­preneurial policy, mining, fisheries, finan­cial service provision, science and technology. The Commission’s regular reports on implementation reveal that, alongside their difficulties as regards good administration and governance, the justice system and the strengthening of institutions, the countries have also only partially implemented their obligations. Commission President von der Leyen’s claims that Ukraine has already implemented 70 per cent of the acquis are greatly overestimated or ambiguous.

One complication, whose consequences are still hard to gauge, is that in Ukraine, Moldova and Georgia the state does not con­trol its entire territory, and this is un­likely to change for the time being. While the EU does already have a member, name­ly Cyprus, with a separate de facto state, this example is markedly more relaxed given its island status, power constellation and security situation compared to the con­flict areas, each different, in Ukraine (at the very least Crimea and the Donbas), Georgia (Abkhazia and South Ossetia) and Moldova (Transnistria and Gagauzia). Pragmatic solu­tions have been found to implement the AA/DCFTA, but a partial implementation of the EU acquis following accession is likely to be noticeably more complicated. Above all, however, the conflicts give Russia per­ma­nent leverage for intervening in these future EU countries and exerting pressure – to which the whole Union will then have to react.

For years, the EU has supported Ukraine, Georgia and Moldova financially under the European Neighbourhood Policy, using the ENI instrument (now known as NDICI) (see Table). After Russia’s annexation of Crimea in 2014, the EU significantly increased funds; it has contributed to the macroeconomic shoring-up and reform of policy areas and been key in attempts to strengthen institutions in Ukraine while its sover­eignty is under threat. To coordinate the aid, the EU employed a special support group (SGUA), which no longer financed individual projects or programmes but sectoral reform packages and the building-up of institutions. This shift from the ENP to a policy of enlargement means that the candidate countries can expect to be allo­cated substantially higher resources. For example, the six countries of the Western Balkan with a total population of around 18 million can count on about 9.2bn euros (IPA III) in the period 2021–2027. In con­trast, the population of the Associated Trio is almost 52 million.

The war has led to extraordinarily vast sums of aid being disbursed for Ukraine as well as Moldova. Since the Russian attack in February 2022, the EU has assisted Ukraine with 12.82bn euros in financial aid, in­cluding 2bn euros via the EIB; 1.42bn in humanitarian aid; and 2.5bn euros in mili­tary help via the EPF. Moldova has received 52m euros in resilience and reconstruction aid; 53m euros of budgetary assistance; 150m euros in macro-financial assistance; 13m euros of humanitarian aid; 40m euros in military aid via the EPF; 15m euros in support for receiving refugees; 15m euros to assist border protection (EUBAM); and a loan of 150m euros via the EIB for integration into the Trans-European Transport Network.

It is a massive challenge for the EU to mobilise the large sums for reconstruction, coordinate them with other donors, and guarantee their appropriate and effective use. This was similarly true after 1989 – though in a spirit of optimism – when the EU took on the task of coordinating the international aid for the transformation of Eastern Central European countries into market economies. Starting with Poland and Ukraine, the PHARE programme con­sisted of almost 9bn euros (commitments) for 13 countries in its first phase from 1990 to 1998, including plurilateral and hori­zontal programmes.

International financial institutions and donor countries will have to agree on gov­ernance for Ukraine’s reconstruction aid; the EU will once again take on the coordi­nation. The Commission has already cre­ated a reconstruction platform for overseeing and adjusting investment needs, resour­ces and measures. Forty-two governments were represented at the Ukraine Recovery Conference, which was held in Lugano in early July, as well as the EBRD, Commission, OECD and Council of Europe. The same circle is likely to plan the reconstruction aid, based on the seven principles announced in Lugano. The intention is that Ukraine will steer international aid. During implementation, international partners will pay scrupulous attention to transparency, accountability and the rule of law; in other words, they will watch for large-scale cor­ruption, misappropriation of public funds and money laundering, which are known abuses from before the war. The decisive issue will be whether Ukraine’s elites will reposition themselves on these issues. At the conference, the government in Kyiv put reconstruction costs at around 720bn euros; these costs are rising with every day of further destruction brought about by the war. In Lugano, conference members did not specify what conditions they might tie to the allocation of funds. However, the EU ought to do so for its contributions. There is already controversy among the member states over the type of allocation (grants versus loans). It also needs to be decided whether reconstruction and preparation for accession should each have its own fund with different conditionalities or whether financing from one pot would be administratively and politically preferable.

New Formats, Intermediate Stages

With its proposal for a European Political Community (EPC), France has shifted the goal posts. The European Council could not refuse to engage with the proposal and sketched, via the Czech presidency, what a first meeting of this format could look like.

Based on this, the EPC is intended as a platform for political coordination among all countries of the continent with which the EU has close relations, currently ex­cluding Russia and Belarus. Its purpose would be political dialogue and cooperation on security, stability and prosperity – in an inclusive “Europe Group”, which would exchange on common challenges and stipu­lations for any action. While President Macron’s initial proposal was vague, it did suggest more specific connections to the accession processes. One interpretation of the original proposal is that the EU would thus create an intermediate stage on the road to membership. The EU-27 discussed the EPC at length in the European Council, mainly to come to an understanding about its limits. It is not intended as a replacement for EU enlargement, and it must not limit the EU’s autonomy in decision-mak­ing in any way. The latter is reminiscent of the demarcation by the European Court of Justice for the European Economic Area (EEA) and its entities. The recent shifting of the goal posts provides many opportunities for both the “Enlargement Team” and the “Deepening Team” among member states and authorities to drive forward their agenda. Here, too, there are obvious pre­cedents – such as the European Confederation proposed by President Mitterrand in 1991, which was then still influenced by the Charter of Paris for a New Europe in­cluding potentially the USSR (or rather Russia). Like Macron today, Mitterrand be­lieved that the next enlargement was still decades away.

In 1998, the EU created a European Con­ference to which it invited all countries hoping to join the Union. The forum’s overt political inclusiveness was meant to attenu­ate the performance-orientated selectiveness of the accession process. However, because it promised participant states little additional expediency – like the “structured dialogue” on sectoral policies – the European Conference remained a one-off. The participants concentrated wholly on the negotiation processes and made rela­tive­ly swift progress there. It should be assumed that the Trio will be similarly single-minded. The Commission President and several heads of government have already strongly focused their rhetoric on a geopolitical and moral argumentation, which could amount to a rapid emergency enlargement. Obviously, this would result in the internalisation of all risks and out­lined sets of problems into the EU.

However, the scenario for the Trio could be quite different from the case of the East­ern Central Europeans in the 1990s. One difference is the interest of the three coun­tries and the EU in closely coordinating their foreign and security policies and in closing ranks against their adversary, Russia. An additional new factor is that the coun­tries – and Ukraine most of all – need security guarantees that the EU alone can­not give, and NATO does not want to give. The EU should therefore consider whether it wants to develop a foreign and security profile for the EPC in the antechamber of NATO and the EU. From this perspective, it would be meaningful to include the United Kingdom as well as Turkey. A possibility more directly tied to the association process would be for the EU and the Trio together to form a European Political and Economic Area (EPEA) modelled on the EEA. The EPEA could be a provisional or permanent orga­nisation and would confer privileged status on the Trio. That status would remain be­low membership. However, the graduated adoption of the internal market acquis; the inclusion of policies that accompany the internal market; transfers from the EU bud­get; and the opening-up of EU programmes would give it a more comprehensive and more explicitly political profile than the EEA. The advantages would be that: time could be gained for both sides to prepare for the accession/admission; more possibilities would be created for interest-led flex­ible regulations than the non-negotiable conditions for membership currently allow; and frustration levels could be kept low. The EPC intends to offer protection and resilience. For this, it requires an operational substructure, which the EPEA could offer. An EPEA or other intermediate stage would be a safety net in all scenarios. After all, admission into the EU is only concluded when all member states have ratified the accession treaty. Accession comes neither under the CFSP rules nor the Passerelle clause. Article 49 TEU stipulates unanimity for accession since the admission of any new members concerns the entire EU con­stitution.

Outlook: The EU’s Reform Leverage and Absorption Capacity

The EU must address two key issues if it is to pursue an enlargement policy that is responsible towards its own citizens. What leverage for reform does it have vis-à-vis the candidate countries, and what is its own absorption capacity? As far as the influence on reforms is concerned, the balance sheet of the past few years for the Western Bal­kan countries is negative, despite their membership perspective. The EU did re­main united during the polycrisis and fol­lowing the Russian attack on Ukraine. But fundamental convictions in the 27 member states on integration, the economic per­formance and political preferences and margins are drifting further apart, and this is already putting a strain on the common body of regulations – see the Stability and Growth Pact, NextGenerationEU.

If the EU expands continentally and ad­mits many small countries with a weak democratic constitution and uncertain borders, it risks at the very least losing its ability to function because it is a state-dependent system. This ability rests on legitimate law-making by EU bodies, the law-abiding conduct of democratic member states in the multi-level system, and shared political goals. With its Janus-like supra­national and intergovernmental form of government, the EU is a unique political project. Its next enlargement could become its predetermined breaking point. Then, if not before, it will require a new constitutional order. An EU with concentric circles or overlapping areas of varying depths of integration is likely to be even more com­plex and experimental.