Minister Potočnik: Budgetary and Financial Issues in the Final Phase
Polona Prešeren/Government PR and Media Office
Following the release of progress reports on EU applicant countries and the Irish "yes," clearing the way to further EU enlargement, Slovenia News talked with Europe Minister Janez Potočnik about the final phase of negotiations and some difficult issues that still need to be tackled.
The Brussels summit has successfully ended and the final negotiations have started. What will be the toughest issue for Slovenia?
During the final phase of the negotiations, Slovenia has to find an acceptable solution to budgetary and financial issues. We agree with the proposal drafted by the European Commission, and endorsed by the European Council on 25 of October in Brussels, that none of the new Member States may, immediately after accession, find itself in a worse net budgetary position towards the EU Budget than in the last year before the accession. The EU proposal to solve any possible deterioration of a net budgetary position by lump sum payments to new Member States is an important step forward, but not completely acceptable for Slovenia. This negotiating position is still horizontal in nature and does not address specific problems of Slovenia. As a new Member State, Slovenia should be entitled to participate in EU agriculture programs in order to solve the problems of farmers. We also want to implement programs of structural and cohesion policy and therefore stimulate the progress of less developed regions.
What is expected from the December summit?
The European Union has committed itself to conclude accession negotiations with the ten applicant countries, Slovenia among them, at the European Council in Copenhagen on December 12-13. By this summit, we have to find a solution acceptable for all, the Member States on the one side and Slovenia on the other.
What do you think about the latest developments concerning the financial aspects of enlargement and their consequences for Slovenia?
Our general view about the financial package offered to Slovenia has always been that the package is too horizontal and does not adequately address Slovenian reality, and particularly, our distinctions vis-a-vis other candidate countries. The origin of this problem is hidden behind the so-called "illusion of Slovenia's high level of development". Despite its relatively high level of development compared to other applicant countries, upon entering the EU, Slovenia will be only 16th in the Union of 25 members. In accordance with Agenda 2000, all funds for current Member States and candidate countries have already been allocated for the first years after their entering the EU (2004-2006). Slovenian negotiators want to dispel this "development illusion". At the same time, Slovenia wants its specific features in particular fields to be taken into consideration.
What would you say makes Slovenian agriculture specific and entitled to a shorter transitional period?
There are several areas where Slovenian agriculture differs significantly from the agriculture in other countries currently negotiating with the EU. First, producer prices in Slovenia are higher than the EU average and they will decline after accession. Therefore, direct payments to Slovenia are, like the EU Member States, required so as to compensate for the decline of farmers' income. They do not exist to increase the level of their income, as is the case in some other candidate countries. This very fact has also been confirmed by the EU Commission's study published in spring this year. The second area of agriculture where Slovenia is in a different position is rural development. Our country has had quite a long tradition of rural development programmes. We have implemented various measures such as environmental-friendly production, implementation structures and substantial budgetary funds for rural development. Another specific of the Slovenian agricultural sector is the very small size of farms (approximately 5 hectares on average), 80% of which are in less favourable areas for production and the majority of farms are cultivated by part-time farmers with mixed income. In negotiations with the EU, we will have to find a solution that will address the specifics of our country as well as the concerns of the EU--especially the ones on budget limitations. The agreement between Slovenia and the EU in the area of agriculture would be acceptable if Slovenia was allowed to co-finance direct payments to farmers from its national budget. Slovenia also expects that the proposed financial package for rural development will be significantly increased. Moreover, quotas and reference quantities should be increased to levels that reflect at least the actual production levels in the country. In some cases, quotas and reference quantities should take into account potential development or production needs.
This is also reflected in public support. There does not seem to be serious opposition to EU accession in Slovenia except for farmers and their organizations. How do you plan to win them over?
We always seek to inform the public in an open and transparent manner. This approach has proven to be quite an efficient one. According to the Eurobarometer public opinion survey, Slovenia is the only candidate country showing a general positive ratio between informed and uninformed parts of the population. Moreover, Slovenians think in a long term prospective and not just in the framework of financial transfers. As far as the agriculture sector is concerned, the Minister of Agriculture, Forestry and Food stated that a communication and media campaign will be carried out in order to inform farmers about the consequences of the EU accession on the agriculture sector.
Candidate countries are thinking about referendums next year. What will be Slovenia's decision about this issue?
According to political commitment, Slovenia will take the final decision on the EU accession with a referendum. There are two possibilities about when to hold the referendum: either after the conclusion of the negotiations or after the signing of the Accession Treaty. In any case, the referendum will take place in first half of next year.
What is the current situation in regional policy? Has Slovenia consented to being regarded as a single region?
Far from it. Concerning regional policy, a mutually acceptable solution was reached at the EU accession conference in late July. According to this solution, Slovenia will be considered as a single area only in the 20042006 period, while discussions about regionalisation of the country at the NUTS 2 level will continue with the expectation that it be completed by the year 2006. In the 2004-2006 period Slovenia will be eligible for all existing structural and cohesion support. With this solution, our country has been given two to three more years to complete internal administrative regionalisation. This solution, together with the expected new regionalisation, is to be adopted by the end of this year and will serve as the basis for the future NUTS regional division.
In Eurobarometer polls, Slovenia always trails the list of most "popular" EU candidates, which provokes debates about Slovenia's low profile. What is your opinion about that?
In such research, respondents are not really questioned as to how much they want a certain candidate country to become an EU member. There is a sub-question to this, namely, ‘How well do you know the candidate country?' As a young country, Slovenia is one of the least known candidates. Therefore, the problem is more in Slovenia's low profile. Slovenian accession to the European Union is a perfect opportunity for Slovenia to change these perceptions and raise its profile. In the eyes of Brussels and Members States administration, Slovenia is one of the best-prepared candidate countries. The problem is that the image of Slovenia in the world is not very distinctive. Nevertheless, Slovenia is successfully moving upwards, which means that its perception is changing. However, this cannot be altered through ad hoc short-term actions. The solution lies in tolerant and consistent work in the long term.