Europe without the Union

Below I am publishing the original text in English by Boris Begović (which he kindly provided) to which I posted a comment yesterday. I will also posted a response to my comment by Boris Begović, both of which will be published in NIN in the coming weeks and I am glad to open my blog to this debate and welcome also further contributions.

 

Boris Begović

Europe without the Union

Serbia should abandon the path to EU accession, that is has taken, for several reasons. (1) After the accession of Croatia, enlargement of the EU is postponed indefinitely, or at least for a long time. New membership should not be expected until, let’s say, 2023. (2) The question is how the EU will look like in ten years, having in mind increasing political crisis that is happening in the EU, resulted from efforts to resolve the issue of sovereign debt of its member states and structural adjustment of the Eurozone. It is most probable that, in ten years’ time, a completely different community can be expected, for example, a community of concentric circles where the outskirts would be much less integrated than the central countries. The future of British status in EU integrations will have a significant influence to the future structure of the community. (3) These two reasons indicate that EU membership at this point is a „moving target“. Serbia simply does not know what to „aim at“. (4) Our insisting on EU membership, through existing channels for accession creates extraordinary possibilities for EU member states to create political conditions for Serbia and its Government, which has little or nothing to do with the Copenhagen criteria; instead it is mostly formulated through insisting on good neighborly relations, which means, more or less, implicitly or explicitly, the acknowledgement of Kosovo independence.

Instead, Serbia should ask for membership in the European Economic Area (EEA), an institution solution based on full economic integration which is not follow by political integration. It includes four basic freedoms that currently exist in the EU: free movement of goods, services, capital and persons. Basis for EEA membership is access to a unique market, based on a customs union and other institutional solutions that enable full freedom in movement of goods, services and capital. EEA member state takes over the obligation to harmonize its regulations in the area of movement of goods, services and capital with the EU regulations, without having the possibility to influence them. Due to that, this type of arrangement in Norway, which is the largest member state of EEA (only), is called „fax democracy“. Free movement of persons is enabled through accession to the Schengen Agreement, which is not mandatory when joining EEA.

This type of arrangement would provide Serbia with full integration to the European economic area and strong competitive pressures on a unique market, which would create incentives for economic efficiency of companies and institutional certainty regarding free movement of goods essential for export oriented business ventures, which are necessary for Serbian economic growth. In such circumstances, where no one is privileged, business circles would have incentives to strongly influence domestic Government to implement institutional reforms in order to improve business environment in the country thus increasing competitiveness of domestic economy. That kind of influence would be strong and sustainable – which is better than conditions coming from Brussels, that are directed towards the resolution of their own problems, such as the project „Independent Kosovo“, and not ours, such as bad business environment.

Through this type of arrangement, in comparison to full membership (under present conditions), Serbia would lose: (1) donations from the EU Budget and (2) the possibility to influence politics that is being created in Brussels which needs to be applied in Serbia. The first loss is not so big. New EU member states currently get though (net) transfers around 1.1% and 1.8% of their GDP (except in the Baltic States). This is very, very small amount. And it is not even certain that this will exist in the new budget. The second loss practically does not exist. The existence of any possibility for Serbia to influence politics in Brussels is close to zero. The number of people that would represent Serbia in Brussels is not to be confused with their negligible influence, which would not depend on them personally. However, if somewhere in the future it is estimated that this level of integration is not sufficient and full integration is needed, the accomplished economic integration will not represent an obstacle – on the contrary.

In the area of diplomacy, through this proposal Serbia would start having active relationship with its European partners, and not just fulfill their ideas. I believe that some stakeholders in Europe would not like it, but they could do no other thing than to respect this shift.

It just needs to happen!

 

This text was published in NIN, December 13, 2012


The President of Center for Liberal-Democratic Studies and Professor at the Faculty of Law, University of Belgrade

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5 Responses to Europe without the Union

  1. Alison Smith says:

    An interesting article. Thanks for posting. It’s impossible to argue with the assessment that, rightly or wrongly, there is no appetite in the EU for expansion beyond Croatia in the short to medium term. And some in the Serbian government will be relieved to pay less attention to external ‘nagging’ re Kosovo and related issues. It’s long been a danger of the current crisis that EU accession would start to look a) impossible and b) less appealing, thus reducing the EU’s influence in its near abroad. But who knows how this EEA idea will develop. Voices in Britain and Serbia express an interest, but will is it really so simple? I await your response to this article with interest.

  2. Aage Dagrun says:

    There is no EEA provision which mandates that a country has to be an EU or EFTA member in order to join EEA. Direct EEA membership is possible, and has already been discussed regarding Andorra, San Marino, Faroe Islands, Isle of Man, Morocco, Turkey and Israel.

    See:
    http://www.eu-norway.org/Global/SiteFolders/webeu/NOU2012_2_Chapter%2013.pdf

  3. Florian Bieber says:

    Dear Aage Dagrun,
    thanks for sharing the report. However, the report reiterate my point. In the conclusion, it notes “EEA membership entails either EFTA or EU membership. Until now, the EFTA states have not wanted to enlarge EFTA.”. Discussions over membership in the EEA and EFTA of microstates and others have not led to results exactly for this reason: A country currently cannot join the EEA without EFTA or EU membership and EFTA is not eager to enlarge and EU has high standards. As I noted in my text, the EU also has a final say on EEA membership.

  4. Aage Dagrun says:

    Dear Florian,

    It is true that the original EEA agreement was conceived as a way of economically integrating the two European blocks (EU and EFTA) in 1994. However, the reality of it now is that it is not a bilateral agreement between the EU and EFTA – with the Swiss rejection of the EEA agreement, it is really an agreement between the EU members and the three individual countries which are EFTA members (75% of that club).

    There is nothing in the EEA agreement (it is online for all to read) which prevents its expansion in the form of a third party joining it (either an individual country, or a block of countries). There is no clause in it stating that a joining party must be an EU or EFTA member either. There is no non-EU/EFTA member of the EEA at the moment (true), but this does not mean that such direct EEA membership is not possible.

    I don’t think that Begovic is theoretically wrong in his assumption that Serbia could become an EEA member without EU or EFTA membership. Whether or not this is realistic is another matter. Direct EEA membership for Turkey (without EU or EFTA membership) has been raised as a topic of economic conferences in Norway and Turkey for a decade now, as a method of fully integrating Turkey into Europe’s economic space without the EU (or EFTA) membership. Not surprisingly, it is the Turks who are mostly opposed to it, because they feel such scenario would cheat them out of a chance to influence legislation governing EEA. These discussions are most likely where Begovic got the idea for Serbia.

    Compared to Tukey, Serbia is a minor player indeed. If EU would allow Serbia to gain direct EEA membership is a very good question. However, one should keep in mind that EEA is an economic (not a political) club, much more resembling what EEC used to be a few decades ago than what is EU now. EEA is all about trade, not politics, and at the end of the day it could be an elegant solution for countries such as Turkey or Serbia that are experiencing bleak EU membership perspectives.

    Aage.

  5. Florian Bieber says:

    Dear Aage,
    thanks for the note: The key is that the EEA provides for no mechanism to join it without joining EFTA or EU, second the treaty identifies the contracting parties to be EFTA member states, EU and EU memberstates (or the EC to be precise). The treaty regularly mentions only EC and EFTA states (Art. 43), not any other category of states.
    In brief, of course if EFTA and the EU would like to change the nature of EEA this would be possible. However, the key is the willingness of these two organisations to allow for this change. It is thus not possible and this was my original point, for a third country to abandon EU membership and to join EEA without the consent and in fact active support of the EU (and EFTA for that matter).
    Thus, this would be an option in case the EU enlagement would be abandoned altogether, but it would not be possible as a way to circumvent EU conditionality (unless the EU would be willing to lower conditions for EEA membership).

    Best,
    Florian Bieber

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