Príloha 1

Statement by Mr. Eduard Kukan,
Minister of Foreign Affairs of the Slovak Republic

Seventh meeting of the Accession Conference at Ministerial level

Brussels, 1 October 2002

Statement by Mr. Eduard Kukan 
at the Seventh meeting of the Accession Conference at Ministerial level,
Brussels, 1 October 2002

Mr. President, Dear Colleagues, Ladies and Gentlemen,

It is my pleasure to be here today to assess and confirm the results achieved in the accession negotiations of my country since our last ministerial meeting in June. 

As you are fully aware we have had recently parliamentary elections. The result was a clear vote for continuity and for an early integration into the EU and NATO. Therefore it is our responsibility to form the new Slovak Government as soon as possible in order to materialize the Slovak potential and progress we have made during the last four years.

Taking stock of the recent development in the negotiating agenda, I can state that we have again moved further down the road to our accession. In this respect I would like to highlight namely the progress achieved in the chapter Competition. We strongly believe that constructive approach will prevail in the forthcoming months in order to conclude accession talks timely by the Copenhagen European Council. In the meantime several key issues have to be addressed and crucial decisions taken. Already in one weeks` time the Commission will publish its Regular Reports. Based on the progress achieved we expect in general a positive evaluation confirming our potential to finalize the accession negotiations within the agreed timetable. Of course the most decisive step on the way to Copenhagen is the forthcoming October summit in Brussels which we expect will address all the items lacking in the financial package and will also present to the candidates a balanced offer reflecting fair distribution between rights and obligations of our membership. In this regard we appreciate the Presidency initiative to hold the so called mini-summit in Copenhagen giving us the opportunity of first hand both-ways reporting.

Another crucial issue directly related to enlargement is the forthcoming referendum on the Nice Treaty in Ireland. We fully respect the right of Irish people to make their own decision on the Treaty and we believe that the result of 19th of October will enable the Union  to complete the internal preparations for the admission of new members.

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Mr. President, Ladies and Gentlemen,

I confirm the provisional closure of chapter: Regional Policy and Coordination of Structural Instruments with the pending reservation concerning concrete allocations from the Structural/Cohesion Funds and Community Initiatives to be discussed in light of the methodology related to the calculation of net budgetary balances of the new Member States.

Allow me a short comment concerning Agriculture where our goal remains to achieve such a combination of respective factors – production quotas, direct payments, rural development, budget compensations that will secure the competitiveness of our agricultural sector and a tolerable impact on the consumer and the country’s economy. It is an obvious obligation towards our citizens which has to be followed and respected.
I would like to recall our former position that the proposed transitional period of 10 years prejudges the next financial perspective after 2006, which is not acceptable. 

Concerning quotas we appreciate the Commission’s endeavor to find compromise solution on bilateral level. However the proposals, which have been put on the table so far, are behind our expectations. The level of quotas should be based on the reference periods that realistically reflect historical patterns of production and grant sufficient income level for farmers. Our requests are not aimed at jeopardizing farmers in the current Member States but on creating fair conditions for agricultural production after entering the EU. I am confident that similarly to other sensitive issues we will find the solution, which satisfy all parties involved.

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Mr. President, 

Let me also comment on the remaining chapters. Concerning chapter Competition policy I am pleased to note that after more than 2 years since the opening of this particular chapter the final DCP is now being discussed in the Council. Slovakia has made considerable progress in the competition policy area in recent years. All legislation in the field of anti-trust policy as well as state aid is fully in line with the acquis. Enforcement record of responsible institutions - the Anti-monopoly Office and the State Aid Office – is satisfactory. Staffing, training and enforcement capabilities of these institutions are being systematically enhanced. Legislation concerning fiscal aid schemes was amended and all new aid measures have to be in line with the State aid rules and our obligations under the Europe Agreement. In line with the EU Common Position from November last year we have managed to convert 8 incompatible fiscal benefit schemes into compatible state aid arrangements. In addition, in collaboration with the Commission and beneficiaries, we have held intensive negotiations on conversion of tax benefit schemes of only two companies in sensitive sectors - automotive and steel industry. 

Let me accent some elements underpinning the solution of these two, indeed, exceptional cases. Automotive and steel sectors are of crucial importance for the Slovak economy as they represent about 1/4 of the Slovak export and hugely contribute to stabilisation of our labour market. In the case of steel sector I want to stress that the company involved is viable Slovak enterprise with foreign ownership that has already undergone restructuring and privatisation process. Tax benefits to the company were granted as a part of privatisation deal, a purpose of which was to offset the commitment to maintain employment in an economically depressed region of Eastern Slovakia with high unemployment rate.

I can assure you that Slovakia is aware about the necessity to comply with tough state aid rules, especially in the sensitive sectors. There are tough conditions included in the Commission’s proposal that our steel company will have to comply with - limit its sales as well as production up to the five years after accession. Nevertheless, we are prepared to accept proposal as its stands in order to move ahead at this stage of negotiations. Having said this, I would like to ask the Member States to adopt the Common Position along the lines with the draft of the Commission as soon as possible. 

Mr. President, Ladies and Gentlemen,
As regards the financial framework we fully support the Commission approach of offsetting any deterioration of the net budgetary position of the new Member States in comparison with their situation in the year before the accession as beneficiaries of the pre-accession funds. This goal must be, however, achieved by using clear and transparent calculations and procedures, and not by approaches, which go beyond the scope of the current acquis, in order to increase the payments to the new Member States in the first year after the accession. The recent revision made by the Commission proves how difficult it is to estimate the pattern of disbursement to the new Members States. 

Moreover, experience and results of the current Member States concerning actual payments of the commitments from structural actions in the first year of current financial perspective show they were at zero level. The current methodological proposal entitles all the risks and uncertainties to be borne by candidates. On the other hand we are supposed to transfer well-defined full budgetary contributions to the EU budget. As a result of this Slovakia can find itself in a worse budgetary position than in 2003 and if this occurs the transitional budgetary mechanism does not provide for any correction based on actual net balance. Therefore, I want to underline very clearly, that any attempts artificially leading to an increase of payments to the new Member States in the first year after the accession, which would go beyond realistic spending, is not the way we shall follow. 

Having said this, allow me some concrete additional comments concerning the methodology related to the calculation of net budgetary balances. Although the revised schedule of payments seems more realistic than the one discussed in April, the estimated transfers – and thus the net position of the new Member States – lead to serious questions on our side. We strongly disagree with the Commission proposal to increase advance payments under the Structural funds from 7 to 16 % of the total commitments over the period 2004–2006. Slovakia wishes to strictly follow the existing acquis, which allows for a 7 % level of payments of the contribution from the Funds over the programming period that may be subdivided over two budgetary years. 

There are also some other unresolved methodological issues which we expect to be clarified  with the Commission and Member States.

Mr. President, Dear Colleagues,

Time has come to take the final steps and materialize the Enlargement project. It is a huge challenge which requires substantial effort, solidarity and willingness from all the parties concerned. Together we have so far well advanced with good results. The opportunity to close the famous Copenhagen circle is literally round the corner. We have 3 decisive months ahead of us and I wish all of us the courage, wisdom and positive attitude needed to make the final stage work.
Having in mind my previous words, it is of utmost importance that the forthcoming European Council in Brussels will agree on EU position concerning financial aspects of enlargement thus fulfilling the precondition for successful conclusion of the negotiations at the Copenhagen summit. 

Thank you for your attention.

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