w 109 long-run economic aspects of the european union's eastern ...

THE RELEVANCE OF A CORE INTERNAL MARKET ACQUISThus, the distinction between having Council and EP representatives without votesand intensive co-operation without actually having seats in the Council and the EPmay not nearly be radical enough to satisfy the applicant countries. But if it is, itwould mean that partial membership should include some degree of voting power,probably related to the scope of the acquis adopted.The icing on the cake is no doubt the eligibility for the Structural and CohesionFunds. Thus far, the Union has strictly maintained the strategy that such hugetransfers move between Union members. In the case of Central Europe this has ledto the perverse result that the greater the difficulties and the lower the per capitaincome of the country concerned, the lower the funds it would receive. The SERproposal can be interpreted as an attempt to break through this dysfunctionalapproach which causes a lot of resentment. Partial membership would permit thefull benefits of the funds to go to all candidate countries – provided they fulfil thecriteria of figure 4.1 – which should help to overcome bottlenecks in infrastructure,environment, technology and to finance re-training precisely for those whoare behind. In turn, it can be expected to facilitate catch-up growth as well as theadoption of the more costly elements of the IM acquis, including testing and certification.Unfortunately, the (net) paying EU Member States are likely to defend theview that full eligibility of the second-tier for transfers would reduce incentives foradopting and enforcing the IM acquis as quickly as possible. Hence, it would becounterproductive. That this argument is rather opportunistic, should surprise noone who has studied the highly politicised and dysfunctional budgetary politics ofthe Union, or rather its Member States (see chapter seven). That the Netherlandsshould be expected to join this opportunistic choir cannot be surprising either,after the 1999 precedent of giving priority to juste retour to The Hague (in a yearof national budget surplus!) over the long-standing Dutch policy preference toreform the CAP. The latter aim was dropped, even though the same Dutch governmentavowedly continues to regard such reform ‘critical’ for the enlargementprocess.79Altogether, the SER proposal is welcome because it represents a constructive andoriginal attempt to address the widespread fears of a distorted functioning orerosion of the IM upon early accession by the CEECs. However, closer analysisreveals serious drawbacks of this alternative. Some of these have less to do withthe notion of a core acquis than with the idea of partial membership: amendmentof the treaty (with ratification), the complicated institutional and judicial arrangementsand the full eligibility for transfers. There are also severe disadvantages inthe practical implementation of this core acquis proposal. The combination ofagricultural free trade areas with second-tier countries and an industrial customsunion (or bilateral customs unions) would be extremely complicated and wouldperpetuate for perhaps a total of fifteen years a patchwork of product and countryspecific transition periods for market access. In addition, it would complicatearrangements for CAP floor and intervention prices, EU export subsidies and the socalled‘compensations’ 9 . If one were to ignore this somehow and focus solely on a