The EU's reform challenge
An enlarged EU will be more populous, more Eastern, and - if Ukraine joins - with more military power, agricultural land and heavy industry. But enlargement also poses difficult questions in terms of the EU’s internal functioning. Increasing the number of members will increase the variety of national interests, add more potential veto players, and change decision-making dynamics. The prospect of enlargement also raises questions over the functioning of the EP and the Commission. There will also be difficult financial issues, as under the current system the candidates would be eligible for large sums, which would require some existing members to pay more into the EU budget and others to receive less from it.
At the informal summit in Granada in September, EU leaders agreed that both the EU and future members needed to be ready for enlargement, and that the EU needed to “lay the necessary internal groundwork and reforms”. Some countries, like France and Germany, have explicitly said that the EU cannot enlarge before it reforms, shifting from unanimity to QMV on foreign policy and tax. But there is no shared understanding between EU countries on what reforms are necessary, or substantial public debate about them.
A long and difficult discussion lies ahead. It is easier to imagine compromises on some issues than others. In terms of reforming the EP, the most feasible option is to keep the overall number of seats as is and to redistribute them between current and new members, keeping some unused for future members. When it comes to the composition of the Commission, the easiest route will be to keep one Commissioner per Member State but to differentiate between Commissioners by introducing different tiers - something that is arguably already happening with the current system.
In terms of the EU’s finances, the picture is still hazy with a range of estimates for the budgetary implications of the accession of new members. It is clear the EU needs more resources, but it is unrealistic to expect existing contributors to pay much more, or existing recipients to agree to much less. The question can probably be addressed through a mix of slightly raised contributions, capping payments and introducing long transition periods for new members. Additionally, the challenge may seem more manageable by the time many candidate countries are ready to join the EU: in 10-15 years some existing net recipients will have become net payers due to strong economic growth, while the differential in GDP between candidate countries and current members could also shrink. Nevertheless, the discussion on budgetary issues is likely to prove politically difficult, as it will pit Member States against each other.
The proposed changes to the voting rules will be much harder. Changing the rules requires all Member States agree, and it is telling that the German-led ‘friends of QMV’ group only includes nine countries. There is widespread scepticism in many Eastern Member States and elsewhere, for example in Cyprus and Greece, about giving up the foreign policy veto. At the same time, countries like Ireland, Luxembourg and the Netherlands are opposed to giving up the veto on taxation issues. That means scrapping vetoes altogether will probably be impossible.
However, some reforms are non-negotiable and needed to ensure the EU’s functioning. As the report by the Franco-German ‘Group of Twelve’ argues, the EU needs stronger mechanisms to sustain the rule of law - independently of enlargement. But it is difficult to imagine reluctant states agreeing to sharpen Article 7 TEU. Introducing a greater degree of conditionality in payments from the EU budget to problematic members is only a partial solution if a targeted country can use its veto to hold the EU hostage on other issues - as Hungary has been doing with aid to Ukraine. A possible solution may be to resort to a system of opt-outs and safeguard clauses, and to shift from unanimity to a more diluted form of QMV, with a lower threshold for a blocking minority.
EU leaders will have to grapple with these difficult questions and there is no guarantee that they will be able to reach agreement, particularly on strengthening rule of law mechanisms. That creates a risk that momentum for enlargement will fade and that the candidates will lose energy to undertake reforms. That makes it imperative for the EU to further flesh out ‘phased’ enlargement. Including candidate countries in consultation and decisionshaping will be essential, and being pictured with other European leaders will be valuable to leaders from candidate countries. It is unclear how much appetite there will be among EU members to give candidates meaningful financial benefits before accession, as even gaining these after accession is controversial. However, the EU has little choice but to flesh out phased enlargement.
This article was published as part of TEPSA: European Council experts' debrief, What does future EU enlargement require to be a success? The full publication was co-funded by the European Union.