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Briefing No 12
NOTE ON POLAND'S POLITICAL AND ECONOMIC SITUATION AND ITS RELATIONS WITH THE EUROPEAN UNION WITH A VIEW TO ACCESSION

The opinions expressed in this document are not necessarily those held by the European Parliament as an institution.


III. RELATIONS WITH THE EUROPEAN UNION

Introduction

The basis for current political and economic relations between Poland and the European Union is the Europe Agreement, which was signed in December 1991 and came into force, after a transitional period of two years, on 1 February 1994. The Europe Agreement improves the conditions for effective economic and political reform and provides the institutional framework and legal basis for relations between Poland and the EU. It covers all areas of common interest: political dialogue, trade in industrial and agricultural products, the right of establishment and freedom of movement of workers, services and movement of capital, alignment of legislation, economic, cultural and financial cooperation, etc. Ultimately, the Agreement is aimed at bringing Poland closer to EU membership.

In order that cooperation may proceed in a continuous and regular manner, an institutional framework has been created providing for a discussion forum, an assessment body and also a decision-making body. The first of these, the decision-making body, is the Association Council, which meets once a year to examine the problems inherent in bringing Polish legislation into line with Community legislation. Members of parliament (12 from the European Parliament and 12 from the Sejm/Senate) meet twice a year in the Joint Parliamentary Committee.

A) THE COMMUNITY INSTITUTIONS' APPROACHES TO THE POLISH ACCESSION PROCESS

Poland has embarked upon a process of radical economic, social and administrative reform and decided to go beyond the new form of relations, as far-reaching and extensive as they are, for which the Association Agreement provided. Poland's application for membership of the European Union was submitted on 5 April 1994, thus opening a new page in history, in line with Poland's stated wish to form, along with France and Germany, the hard core of European integration (the Weimar Triangle).

a) The Commission's position

In keeping with the Treaty, Poland's membership application has been subjected to an assessment and decision-making procedure involving the Member States and all the Community institutions. The Commission, which has an important role in this procedure, delivered its opinion on Poland's application and the applications submitted by the other countries seeking accession in a key document published in July 1997 on the development of the European Union and the conditions governing the accession of new Member States. Agenda 2000, as the document is known, was followed by a special report on the each applicant country, focusing on its ability to meet the 1993 Copenhagen criteria. The Commission's report confirms that Poland displays the characteristics of a democracy with stable institutions guaranteeing the rule of law, respect for human rights and respect for, and the protection of, minorities. In the medium term full participation by Poland in the internal market will be possible, provided that extra efforts are made to meet the criteria of the acquis in the areas of agriculture, the environment and transport.

The Commission therefore recommended that accession negotiations be opened with Poland, and undertook to report regularly on the progress made. The most recent of these reports was published on 13 October 1999 and presented to the Helsinki European Council. It also takes account of information gathered by the European Parliament.

The Commission's assessment has been made in the light of political and economic criteria and other obligations associated with accession (EMU and CFSP objectives) and in particular the country's judicial and administrative capacity, sector-by-sector, to apply the acquis communautaire, the relevant short-term priorities being set in the Accession Partnership.

The Commission noted that the first Copenhagen criterion (political) had been met in its entirety, though it expressed concern about judicial structures and the limited development of the judiciary's administrative capacity. According to the Commission, the difficulty of making 'urgently required improvements in the provision of the due process of law permits a continuation of procedural and professional constraints which hamper the civil, political and economic development of Poland'. In general, the independence of the judiciary is respected, but the Commission considers that very substantial efforts must be made to fight corruption.

The existence of a functioning market economy has already been noted and confirmed on numerous occasions. However, economic restructuring (especially privatisation of big State-owned enterprises) and trade liberalisation must be continued, though it is also necessary to improve the current account and balance of trade deficits. It should be pointed out that SMEs are already well-developed, accounting for 45% of GDP and 60% of all employees. The Commission has emphasised the need for improvement in communications, energy and transport infrastructure: roads, which are vitally important for development and trade, are in a particularly bad condition.

As regards the third condition, namely the transposition and implementation of the acquis, the results are very mixed and backlogs are not inconsiderable. The Commission points out that Poland has achieved the short-term priorities set out in the Accession Partnership only to a limited extent; shortcomings exist in particular in the field of certification, data protection and standards (of which only 20% have been aligned). Capacities must be strengthened in the fields of intellectual property rights, agricultural and regional policies, social policy, customs, justice and home affairs. Barriers that exist in the broadcasting, telecommunications and insurance sectors must be removed. What is very urgent, however, is the need to create a transparent legal and institutional framework for State aid. The report also highlights human resources as a field where a new form of vocational training is needed to broaden employment prospects and bring them more into line with the economic environment.

Progress has been limited as far as industrial policy is concerned; there is no clear strategy for restructuring the steel industry and the automobile sector. Poland has not yet launched the transformation which is needed, in terms of policy, the acquis and structures, in the agriculture sector.

In conclusion, the Commission notes that Poland has not progressed significantly in aligning its legislation and in adapting and strengthening the required structures.

b) Parliament's position

The European Parliament has on numerous occasions expressed its opinion on the unfavourable conditions for enlargement, i.e. the unsuitability of the current institutional framework for dealing with an increase in the number of Member States. In its resolution of 4 December 1997 on Agenda 2000, Parliament noted that enlargement of the Union to include the countries seeking accession represented a further advance towards constructing a unified and free Europe. But there is first a fundamental need to avoid the risk of reducing the European Union to one huge common market owing to the absence of institutional reforms, which will need to be implemented as quickly as possible so as not to cause delays to accession, which Poland in particular is keen to avoid. The resolution also notes that Poland is by far the most important candidate for accession and that the enormous progress recorded since 1989 merits recognition.

An EP resolution (rapporteur: Mrs Hoff) on the Commission report on Poland’s progress towards accession was adopted on 15 April 1999.

A further resolution (rapporteur: Mr Gawronski) on the progress towards accession by Poland was adopted by the European Parliament on 4 October 2000. It stresses the importance of Poland's joining the EU as soon as possible and urges the Member States in particular to determine as soon as possible detailed negotiating positions enabling rapid progress to be made especially with the negotiations on the agricultural chapter. The European Parliament welcomes the progress made by Warsaw in implementing the acquis communautaire and calls on the Polish authorities to continue their work on improving the institutional conditions for effective implementation of regional development programmes.

In this context, it is worth pointing out the importance of the meetings between Members of the European Parliament and their colleagues from the Sejm and the Senate in the Joint Parliamentary Committee; the most recent meeting was held in Warsaw on 5/6 June 2000. It addressed the progress made with preparations and meeting the priority objectives that have been set and the problem of the information strategy to be established in the Member States. Community representatives have stressed the need not only to align Polish legislation with the entire acquis but also ensure that it is actually implemented, which could appear costly in many cases. Polish MPs continued to call for the pace of negotiations to be stepped up and for the date of accession, which depends on the reforms undertaken by the two sides, to be set. Polish representatives linked the timing issue to the issue of public support for EU membership, which was waning.

c) The Council's position

The decisions taken by the Council of Minister and the European Council, and the guidelines they issue, play a key role in the enlargement process, for institutional reasons and for specific reasons related to each applicant country and its state of readiness. The Council decided on 12-13 December 1997 in Luxembourg that the accession process would be launched on 30 March 1998 with a meeting of EU Foreign Ministers and the 11 applicant countries. It mandated the Commission to carry out the screening process and conduct the negotiations and to present to it regularly an assessment report on progress towards accession, taking account of short- and medium-term priorities set by the Council in the Accession Partnership. The most recent update of this decision, published on 6 December 1999, constitutes for Poland an essential legal component of the enhanced pre-accession strategy.

B) LEGAL AND FINANCIAL FRAMEWORK FOR THE ENHANCED PRE-ACCESSION STRATEGY

Following the publication of Agenda 2000, the Council decided, with Parliament's agreement on the basis of Article 308 (ex. Article 235) of the Treaty, to establish a consolidated framework setting out the priority objectives to be achieved by the applicant countries and the financial resources to be used for that purpose under specified conditions. In keeping with the Union's objectives, the Accession Partnership with Poland constitutes the main axis of the new enhanced pre-accession strategy involving new financial arrangements; ISPA (Instrument for Structural Policies for Pre-Accession) and SAPARD (Special Accession Programme for Agriculture and Rural Development). As for the applicant countries, each of them has been invited to submit a national programme for the adoption of the acquis (NPAA), laying down a timetable for priority measures, and which is revised and updated annually.

a) Accession partnership

The Partnership is thus a Council decision of paramount importance, since its implementation forms the basis for the assessment made by the Commission in its regular reports. The Council drew up an updated version of the short- and medium-term objectives and priorities for the Polish government on 6 December 1999 (following publication of the Commission's assessment).

The short-term objectives include the need to continue with:

To conclude, there is still much to be done with regard to adoption and application of the acquis relating to the internal market and in important sectors such as agriculture, fisheries and the environment.

With regard to the medium-term priorities, progress will have to be made in the following areas:

Many of the problems set out in this Accession Partnership document are included in the Polish government's National Programme for the Adoption of the Acquis (NPAA), drawn up by the Office of the Committee for European Integration, the body responsible for the coordination of measures relating to accession. However, the Commission has noted that this programme, whilst providing a good overview of the measures already implemented, lacks specific detail as regards the progress towards accession, its budgetary impact and the actual institutional framework.

b) Financial aid

Under the PHARE Programme Poland has obtained ECU 2 024 million for the period 1990 to 1999. The programme’s funds are not granted unless the projects so identified match up with the priority measures and the technical and institutional conditions laid down by the Commission are met. As a result, in May 1998 the Commission rejected an application from Poland for ECU 34 million in aid on the grounds that the project was poorly prepared and inadequate supporting evidence was provided. This led to a great outcry in Poland.

Poland was granted EUR 213.5 m for 1999, 20% earmarked for institution building (EUR 43.33m) and 80% for investments (EUR 170.067m). A separate funding proposal is to cover the TEMPUS II programmes (EUR 5 m) and Poland’s participation in the Leonardo and Mattheus programmes. A total of EUR 230.5m is to be devoted to Poland under the Phare 1999 programme. A separate financial proposal will be drawn up for European financial aid for ?cross-border cooperation’.

Since 1998, the Commission has put in place a new instrument, institutional twinning. It is financed by Phare and encourages adoption of the acquis communautaire by providing pre-accession advisers from the Member States’ administrations. These advisers prepare and implement what is required (e.g. training) for adoption of the acquis. The 16 twinning schemes proposed for 1999 represent more than EUR 35.183 m.

The enhanced pre-accession strategy adopted by the Council provided for the introduction, as from 2000, of new financial resources intended for specific sectors. The SAPARD programme should help foster the restructuring of agriculture and the pursuit of sustainable rural development. Financial aid worth EUR 168 m is likely to take the form of direct investment or advisory services.

The second of the programmes introduced is ISPA, which is designed to ensure economic and social cohesion, and in particular to promote the development of transport and environmental initiatives. It is worth EUR 370 m.

The total amount of financial assistance for Poland in the years leading up to accession is thus set to increase appreciably (more or less fourfold). To ensure that such large sums of money are not wasted, they will be made available subject to the principle of conditionality and monitoring by the European Court of Auditors.

CONCLUSION

Poland's accession process, which began officially on 30 March 1998 is a reality which has great implications for the Member States and the applicant countries. Major reforms have to be implemented on both sides. As stressed by the European Parliament on numerous occasions, the enlargement process, with all the good political will of the Member States' governments, cannot succeed without internal institutional reforms. The fact that the aims stated at the Turin Intergovernmental Conference have not been achieved is taken badly by the Polish government and the Sejm, which always call on the Community institutions at the regular meetings that are held to set a date for accession as quickly as possible. The Polish government has set itself the date of 1 January 2003. During the last few months representatives of the Polish Government have accused the European Union on several occasions of slowing up enlargement. Much progress still needs to be made, especially as Poland often fails to meets its obligations or respect the priorities that have been set, and only 11 of the 31 chapters of the negotiations have been completed. In the agricultural sector, a particular difficulty was presented by the Polish Government's raising of customs duties on certain agricultural produce (at the end of 1999). After a year and a half of difficult negotiations, on 26 September 2000 the European Commission and Poland reached an agreement mutually to liberalise their trade in farm products. The deal sets out the liberalisation of a substantial part of bilateral trade, thereby including mutually satisfactory solutions for all the products on which Poland had increased import tariffs last year. The political will of the Polish to overcome the problems posed by preparations for accession is still strong and there is consensus on this subject amongst all the political parties represented in parliament, as evidenced by the decision by the Polish Government in June 2000 to launch an information campaign on Poland's accession to the European Union from June 2000 to December 2002 with a budget of EUR 20 million. The campaign will consist of study visits, seminars, conferences and advertisements in the national media of the Member States. It will focus on the countries and sectors which, in the view of the Polish Government, do not really support Poland's accession. The Polish Ambassador to Brussels has quoted Germany and Austria as being amongst these countries.

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Annexe 1

President of the RepublicAleksander KWASNIEWSKI

Composition of the Polish government

Prime MinisterJerzy BUZEK (AWS)
Deputy PM and Finance MinisterLeszek BALCEROWICZ (UW)
Deputy PM and Employment MinisterLongin KOMOLOWSKI (AWS)
Home Affairs MinisterMarek BIERNACKI (AWS)
Foreign Affairs MinisterBronislaw GEREMEK (UW)
Defence MinisterJanusz ONYSZKIEWICZ
Budget MinisterEmil WASACZ (AWS)
Economic Affairs MinisterJanusz STEINHOFF (AWS)
Justice MinisterHanna SUCHOCKA (UW)
Education MinisterMiroslaw HANDKE (AWS)
Culture MinisterKazimierz UJAZDOWSKI(UW)
Agriculture MinisterArtur BALAZS (AWS)
Health MinisterFranciszka CEGIELSKA (AWS)
Transport MinisterTadeusz SYRYJCZYK (UW)
Environment MinisterAntoni TOKARCZUK (AWS)
Communications MinisterTomasz SZYSZKO (AWS)
Scientific Research MinisterAndrzej WISZNIEWSKI (AWS)
Ministers without portfolioJerzy KROPIWNICKI (Centre for Strategic Studies)
Janusz PALUBICKI (Special Unit Coordinator)

Annex 2

Results of the general election (21 September 1997)

(Number of seats in the Sejm)

 19931997
Electoral Action Solidarity (AWS)0201
Democratic Left Alliance (SLD)171164
Democratic Union - Freedom Union (UD/UW)7460
Polish Peasant Party (PSL)13127
Movement for the Reconstruction of Poland (ROP)06
Labour Union (UP)410
Confederation for an independent Poland (KPN)210
Non-Party Reform Bloc (BBWR)160
Others (German minority)42
Independents20
Total460460

Senate

The hundred seats in the Senate are distributed as follows:

AWS51
SLD28
UW8
ROP5
PSL3
Independents5

Annex 3

PRINCIPAL STATISTICAL DATA FOR 1999

Sources:- Economist Intelligence Unit — Country Report Poland. 03.02.2000

Statistical Annex on Enlargement. Briefing n·22. rev. 8 du 13.04.2000

Jens Dalsgaard. Parliamentary Documentation Centre

Basic data

Area:312 000 km2

Population:38.6 million

GDP: EUR 140.7 bn

GDP per capita:EUR 3600

GDP growth in 1999: 4.1%

Structure of production —

Inflation: 7 %

Unemployment: 11.9 %

Participation rate by sector:

External trade

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© Enlargement: 2000-10-24