Austria starts its first presidency with gradual EU enlargement as main theme

"Don't expect fireworks - we just want to be seen as the honest broker," was how Austria's Chancellor, Dr Viktor Klima, summed…

"Don't expect fireworks - we just want to be seen as the honest broker," was how Austria's Chancellor, Dr Viktor Klima, summed up what he stressed were low-key aspirations for the country's presidency, its first - in Vienna this week to a group of visiting Brussels-based journalists. Not a bad approach, if it is adhered to.

The Austrians had learnt from their predecessors, among them the Irish, how to run a presidency, he said, and how not to - a reference, few had any doubts, to Britain's euro-summit fiasco.

Although Vienna accepts that running a presidency successfully means sublimating a national agenda for the greater European one, the Austrians have decided to make enlargement one of their main themes and want to bring forward the formal start of accession negotiations for the first six acceding countries - Poland, Hungary, the Czech Republic, Slovenia, Estonia, and Cyprus - from the spring of next year to November.

The Commission is not enthusiastic about the idea, arguing that it will not by then have completed the preparatory "screening" - the detailed assessment by the Commission with the applicant of how its laws and administrative practice conform with EU current practice, the acquis commun autaire. But if Austria wants to begin talks on some peripheral issues no one will stand in its way.

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Yet according to a recent poll, 49 per cent of Austrians oppose enlargement while only 20 per cent are in favour - despite predictions that Austria will be one of the main economic beneficiaries of the process. So far some 60,000 new jobs have been created in the country as a result of the doubling of trade with its fast-growing neighbours.

Also, 15,000 Austrian joint ventures and subsidiaries have been established in Eastern Europe since the Iron Curtain came down.

Yet Austria is also the most vulnerable of EU member-states to the effects of a transition to full membership, particularly to the prospect of free movement of labour.

Austrian territory makes up more than a third of the EU's border with four of the applicant states. A recent survey found that some 150,000 people in the four aspire to work in Austria on a daily basis without even moving home. Some 200,000 say they would like to migrate to Austria.

Wages in the wealthiest of the four, Slovenia, are running at a third of the Austrian level, GDP per capita at 53 per cent, while unemployment is 10 percentage points above the Austrian 4.4 per cent.

Austria's well-organised workers fear an investment exodus and the influx of thousands of rivals willing to depress wages. Their caution is reflected in the attitudes of the Social Democrat-led government, despite its rhetoric about embracing all into the EU fold.

The secretary general of the Federation of Austrian Industrialists, Mr Lorenz Fritz, acknowledges the problem on free movement of labour. He says bluntly that accession will not take place "until the middle of the next decade", by which stage he believes the acceding countries, with EU help, will have substantially caught up.

When that happens, he argues, they may envy higher Austrian living standards but are unlikely to move from their own country. Not surprisingly, he appears less worried than trade union representatives about the effect on wages.

The Minister for Economic Affairs, Mr Johann Farnleitner, is blunt too about early accession - the acceding countries must comply with "100 per cent of the acquis", he says, insisting that the ball is in the applicants' court.

But putting the bar that high will certainly push the earliest new membership back to the end of the next EU budget period, 2000 to 2006, a time-frame confirmed by the Minister for Foreign Affairs, Mr Wolfgang Schussel.

With transitional arrangements on free movement almost inevitable, it could be 2010 before the first of the countries of Central and Eastern Europe are availing of the full benefits of membership.

There was a need for the applicants to understand that membership itself was not a panacea for them - Austria "became one of the richest countries in the world by spending 20 years in the waiting room for EU membership", Mr Farnleitner said.

Hence the apparent paradox that while Austria wishes to hasten the opening of negotiations it does not wish to hasten full membership.

The idea is to reassure applicants and bring them closer to the EU orbit, encouraging their transition from state-dominated economies with mutually-profitable trade, aid and expertise - Austria is now the second largest investor in much of the region and its balance of trade surplus with the CEECs has risen 20-fold to £16 billion since 1989 - but keeping their workers at arms length for the time being.

Anchoring the other countries of eastern Europe, whether applicants for membership or not, to a European perspective is also crucial, Mr Schussel argues.

He hopes to make the EU's future relationship with countries like Ukraine, Moldova and the Balkan states one of the main issues in the informal EU summit planned for October.

Patrick Smyth

Patrick Smyth

Patrick Smyth is former Europe editor of The Irish Times