EU may set enlargement date for April or May 2004

EU foreign ministers are likely to propose next week that the bloc's eastward expansion take place on April 1 or May 1, 2004, instead of in January that year as earlier assumed, diplomats said yesterday.

The new date would aim to give parliaments in the 15 current member states of the European Union more time to ratify the accession treaty, which is expected to be signed in April, 2003 with 10 mostly former communist countries, the diplomats said.

"April or May (2004) are realistic dates for enlargement," an EU diplomat close to enlargement negotiations told Reuters.

The 10 countries set to join the EU in 2004 are Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia.

EU Enlargement Commissioner Guenter Verheugen said in Warsaw the enlargement date would fall before June, 2004, when new EU nations are due to take part in elections to the European Parliament.

"Accession must take place between January 1 and June 1," he told a news conference after meeting Polish Prime Minister Leszek Miller, adding he was "100 per cent confident" it would go ahead.

Verheugen said it was not clear yet how much time parliaments would need to ratify the accession treaty, a 6,000-page document he described as the largest and most complex international agreement in history.

The diplomats said that apart from proposing a new enlargement date at their meeting in Brussels on Monday, the foreign ministers would also discuss ways of bridging deep divisions between the EU and candidates over a financial package for enlargement.

The debate will pave the way for the European Commission, the EU's executive, and the bloc's current president, Denmark, to propose a compromise that should enable the completion of accession talks at a Copenhagen summit in mid-December.

The compromise could be presented within days of the foreign ministers' meeting on Monday, the diplomats said.

The new date for enlargement is expected to play an important role in the package because the delay could actually help ease the financial terms of the candidates' accession.

It would lower the membership dues for the 10 candidate states, estimated at about five billion euros, in their first year of membership without substantially reducing the aid they expect to get.

Verheugen said that even if they joined later, the new members would receive the full annual amount of aid for poor regions and infrastructure, the largest chunk of EU assistance, but direct subsidies for farmers would be capped.

Under EU law, member states pay their dues every month in 12 equal instalments. As an example, Poland could save 800 million euros in 2004 if it joined on May 1 instead of on January 1.

Some candidate countries have warned they may face fiscal problems in 2004 because of the costs of EU accession.

This is because EU aid, which Brussels says could total 25 billion euros in the first three years after accession, might not fully materialise, for example due to bureaucratic hurdles, while payments to the EU budget kick in from the start.

Another reason for potential fiscal problems is that under EU rules certain cases of spending have first to be borne by national budgets and are reimbursed by the EU only in the following year.

One EU diplomat said the compromise proposal for the financial package was unlikely to offer concessions to the candidates on direct subsidy payments for farmers.

The candidates have criticised as mean the EU's proposal to phase in the payments over a decade to their farmers from an initial level of 25 per cent of the amount those in current member states get.

The compromise could partly meet the candidates' demands for higher farm production quotas and so-called "reference yields" for cereals - the assumed crop yield per hectare determined on the basis of historic data. The direct payment amounts are calculated from these.