Enlargement of the Union

Accession negotiations continued successfully in 2001 with twelve candidate states: Bulgaria, the Czech Republic, Cyprus, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Romania, Slovakia and Slovenia. In 2000 Austria had presented an Information Note on the free movement of persons which drew attention to the situation in the Austrian labour market that would arise out of geographical proximity to the candidate countries. This served as the basis for a discussion that, under the Swedish presidency, resulted in agreement on transitional arrangements for up to seven years. On this basis, negotiation of the chapter was provisionally concluded in the case of nine of the twelve candidate countries. Reviews after two or five years will ensure flexibility, or an earlier liberalisation if appropriate. Transitional arrangements were also agreed for the free movement of capital, some aspects of environmental protection, and certain branches of the service sector.

Substantial progress was made on energy, a chapter in which Austria laid the main emphasis on the safety of nuclear power stations. This became a theme of the negotiations for the first time as a result of Austria's initiative and on the basis of the conclusions of the European Council in Helsinki. On 29 November agreement was reached with the Czech Republic on the "Conclusions of the Melk Process and Follow-up" comprising certain safety questions, an information hot line, an early-warning system, an energy partnership and environmental compatibility testing. It was also agreed that these conclusions, and thereby the acceptance by the Czech Republic of the nuclear safety and environmental compatibility standards, would be written into the accession treaty for the Czech Republic, and thus become legally binding. Under these circumstances it was possible to provisionally conclude negotiations on the energy chapter with the Czech Republic. At the General Affairs Council on December 10 Foreign Minister Ferrero- Waldner made a statement on the content of the agreement and the resolution passed by the National Council (First House of the Austrian Parliament) on November 21. The energy chapter was also concluded with Slovakia, on condition that the two obsolescent reactor blocks at the Bohunice power station are closed down by the agreed dates in 2006 and 2008. The energy chapter remained open in the case of Lithuania and Bulgaria due to lack of agreement on the closure dates of the Ignalina and Kosloduj nuclear power stations.

The transport chapter could be concluded with Cyprus, Malta, Hungary, Latvia and Lithuania. Transitional arrangements were agreed for carriers from these countries, with the exception of Slovenia, in respect of cabotage services. In December the European Commission produced proposals for a transitional prolongation of the ecopoints system for heavy goods vehicles in transit through Austria that is laid down in Austria's accession treaty. This will form the basis for negotiations on arrangements for the period after the ending of the present system at the end of 2003 and before the entry into force of a new road pricing system. On this basis Austria, while pointing to the ongoing negotiations on a transit system, was able to agree to a provisional conclusion of the transport chapter.

The principle of differentiation allows each candidate country to be judged separately on the progress it has made towards meeting the criteria for entry to the Union. This has enabled several members of the so-called Helsinki Group (Bulgaria, Latvia, Lithuania, Malta, Romania and Slovakia), negotiations with which opened in February 2000, to catch up on the so-called Luxembourg Group (Cyprus, Czech Republic, Estonia, Hungary, Poland, Slovenia), which have been negotiating since 1998, but Bulgaria and Romania still require enhanced efforts to meet the conditions. The European Council in Laeken reiterated its intention to conclude negotiations by the end of 2002 with those candidates that are sufficiently far advanced, so that they can participate as members in the elections to the European Parliament in 2004. If the present tempo of negotiation and reform continues, ten states could be ready for entry by then.

Under the EU pre-entry strategy, a s um of €3,000m annually has been made available to the candidate countries under the increasingly decentralised PHARE programme as well as the new Instrument for Structural Pre-Accession (ISPA), for the transport and environment sectors, and the Special Acc ession Programme for Agriculture and Regional Development (SAPARD). The emphasis here is on institution building and creating a catalyst effect for infrastructural investment. There is also support for Austria's Cross- Border Cooperation programmes with the Czech Republic, Hungary, Slovakia and Slovenia. Austria now has 52 twinning partnerships with candidate countries, under which expert teams are sent for a year at a time to help with the adaptation of administrative structures to EU standards.

In July 2001 the European Commission issued a statement on the effects of enlargement on the border regions as well as an action plan which - not least at Austria's insistence - is to improve coordination between the INTERREG and PHARE structural policy instruments.