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E.U. fine-tunes accession formalities

By Batuk Gathani

Brussels Oct. 23. Even as the European Union Foreign Ministers were fine-tuning `accession' formalities for 10 countries at their meeting last night, so far there is no formal agreement on "financial arrangements' for the European Union's proposed expansion process.

This will be discussed at the Brussels summit meeting which starts here on Thursday.

As it is, the Nice Treaty that provides legal basis for the European Union enlargement has at last been finalised by all the current 15 member-States, paving way for the 10 countries to join by 2004. But who will pay and how much for the enlargement process is a highly contentious and divisive issue. Denmark, holding the current six-monthly rotating presidency, hopes to finalise the long-term costs of financing enlargement without "causing any political chaos'' at the summit of the E.U. heads of the government in December.

According to the largest employers' association in Europe — the Union of Industrial and Employers Confederation of Europe (UNICE) — the European economic growth is `stuttering'.

Though the report is rated as " an unusually pessimistic'' outlook for the European economy, Germany's six leading economic institutions yesterday painted a gloomy outlook for next year. The German institutions warn that the recently proposed tax rises by the Chancellor, Gerhard Schroeder's new Government could prove counterproductive by harming recovery.

The German think-tanks have now halved their growth forecast to a mere 0.4 per cent in 2003 attributing it to "international uncertainties'' notably the poor health of the U.S. economy.

They also warn against rising unemployment and widening budget deficits and conclude that boosting economic growth is a top priority, whatever the difficult circumstances.

Such gloomy economic forecasts come just as the European Union enters the final and crucial stages of admitting the new members. Current business opinion polls throughout the E.U. also display a negative and worsening economic outlook after the so-called tentative flash of optimism earlier in the year.

Two-thirds of the European companies expect lower profits in the next six months. The only E.U. countries which report outstanding economic growth of three per cent per annum are the tiny ones like Greece, Ireland and Luxembourg. It is in this gloomy economic background that Mr. Schroeder was formerly voted in for a second four- year term this week.

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