EU accession will cost work, time and money

RIGA - Both praised and criticized for what it will bring, EU membership is still fervently sought by Eastern European countries. While these countries are working for accession next year, Sweden will be sitting in the driver's seat of EU presidency.

"Every country will be evaluated separately. There will be new strict demands, and it is possible that Latvia will be required to change internal administrational institutions," Sweden's prime minister, Goran Persson, said at a press conference during his visit to Riga June 27.

He said Sweden had always supported EU enlargement and paid particular attention to development of the Baltic Sea region. "One should stop dividing Europe into the East and the West," Persson said.

Latvian Under-Secretary of State Andris Kesteris recently visited Brussels for further negotiations on Latvia's behalf. The European Commission is ruling that Latvia needs further administrative reforms.

"The strongest concern was the PHARE program - how we learn to use money received from EU. We have approached these things very seriously, and EU has acknowledged that," Kesteris said.

Raita Karnite, president of European Movement Latvia, said Latvia's problem lies in its rural policy.

"The problem with the local municipalities is that they are very small. We need territorial reforms to create larger municipalities. They need more political power and more power to influence the state government," Karnite said. "The level of competitiveness is too low in small regions and municipalities. They have to merge or cooperate in order to be competitive. There are about 600 municipalities in Latvia which is a very high number for such a small country. Then we have 26 regions which also are too small."

Ineta Kivle, spokeswoman for the European Union Information Center in Latvia, agreed that there are differences between cities and regions in Latvia.

"At this time it is a very great difference. If it wasn't that big I think it would be much better," Kivle said. "I think Latvia needs reforms in all levels of society - in NGOs [non-governmental organizations] as well as governmental organizations. My opinion is that the government needs to have a clear opinion on how to solve these reforms."

The EU debate in Latvia exists only on a political level where a majority of the politicians are willing to vote for Latvia's accession. In society the debate is very quiet.

"The Latvian people need information about EU and they ask for it, still there are not too many asking. The information is not enough. We will later organize seminars which will be held in Russian," Kivle said. "I, of course, think EU needs to be debated in society. People have different opinions and need to talk about it."

For Latvia to join EU, there will have to be changes in policies and legislation.

"The most far-reaching change will be in regional policy, agriculture and probably environment issues also," Kesteris said.

Karnite said changes in Latvia might not even be for the Latvians living today.

"We will need a very long time to change our attitude toward business and life itself. We need more confidence and honesty. I think this will be something for the next generation," Karnite said.

Another reform asked by EU is one of Latvia's hot potatoes - the language law.

"The language law is a special case. I am Latvian, and I have my own thoughts on this. Still we need to preserve the Latvian language. It is a dying language," Karnite said. "The changes made in the language law were not very significant. It just says that all public meetings must be held in Latvian. The difference between the Latvian language law and language laws of other EU countries is very small."

Karnite said Latvians and Russians in Latvia are in the same boat and need to row in the same direction.

Kesteris and Karnite both agree Latvia needs to join EU although it lies well in future.

"Latvia should definitely, without a doubt, join EU. First of all, we have our main trade partners there. Now it is Germany. Second, I hope we will be more politically secure and third, for globalization. Globalization demands countries to cooperate more and we need to be a part of it. EU is also a part of globalization and I hope it takes this into consideration," Karnite said.

"I am pretty sure it will depend on political decisions if or when Latvia joins EU. Some say it will be in three years, and some say it could be in five years. Still, to reach EU standards according to the growth will take much longer."

Kesteris predicts Latvia will finish its negotiations with EU in February 2003.

"It will then take some more time, but there is no saying exactly how long. The main thing is a boost for our development. We could continue our development, and in 30 years we could probably be like today's Germany. Still we need to decide how we want our future to be," Kesteris said.

Persson noted Latvia's progress on the way to EU in recent years but would not make any predictions as to the time Latvia may be admitted as a full member of the organization.

There will be not only gains from accession, but also costs. EU asks a small annual fee of 1.4 percent of the total VAT. Latvia will also have to pay a fee proportional to its annual GDP where 1.27 percent is maximum. There is a certain percentage payment on agriculture trading required. This means that if Latvia were a member in 1999 when the GDP was 3.66 billion lats ($6.1 billion), the fee could have been 46.5 million lats, counting on 1.27 percent on the GDP, and then adding 1.4 percent of the estimate collection of VAT this year, 346 million lats, the total price tag could be 51.3 million lats, and that is not counting the agriculture trading.

"Latvia will not be a net provider. That's for sure. Not until we have a higher level of income," Kesteris said. "We have to do everything possible not to lose anything on joining EU."