Proceedings
The first day of the AMCHAM - ICEG EC conference on the sector-specific effects of EU accession was opened by a short welcome speech of Mr. Peter A. Hegedus, President of AmCham Hungary. He highlighted the importance of assessment of the impacts the enlargement will have on the economies of the Visegrad countries and the surveying of the current state of these economies.
The first keynote speaker was Mr. Istvan Csillag, the Minister of Economy and Transportation, Hungary. He talked about the enlargement as a long and time-consuming process, especially from the candidate countries' points of view. The preparation for the accession is a complex procedure and in Hungary's case this process - although still incomplete - accelerated a lot in the last one year.
The next speaker was Mr. Kálmán Mizsei, Assistant Secretary General of UNDP. In his speech he talked about the importance of co-operation among the Visegrad countries and among all candidate countries. He emphasized that in an enlarged European Union the new entrant countries will have both the possibility and the responsibility to participate in decision-making. They have to assist in forming the Union to be more efficient from a political and more competitive from an economic point of view.
Mr. Mizsei has also pointed out that in certain areas the accession countries are a long way behind to what would be acceptable from a prepared candidate. In the CEE region many countries have serious gaps and defaults in social cohesion, minority and poverty issues. Many further steps has to be taken in order to achieve an acceptable standard of living even in the lagging regions of the candidate states.
Mr. Miroslaw Somol, Deputy Minister of Industry and Trade of the Czech Republic talked about the priorities of the Czech Republic in the preparation of the accession. He stressed on the importance of three areas: participation in the Lisbon process, supporting small and medium-sized enterprises and utilization of means from EU Structural Funds. The priorities are the following: co-ordination of macro-economic policies, education, employment policy, information society and the support of SMEs.
SMEs play a very important role in the Czech Republic. In 2001 nearly 60% of all employees were employed by an SME, their share in export was about 35% and in import 47%. Therefore there is further need to assist SMEs in preparation for the accession.
The global objective of the Czech Republics Operational Program is to increase competitiveness in industry and entrepreneurial services. This objective can be specified as developing the Czech economy and achieving a level comparable to the EU, increasing efficiency and at the same time augment employment and social cohesion.
After the coffee break Mr. Juchelka, President of the Board of the National Property Fund from the Czech Republic took the floor and talked about the ownership structure and privatization aspects of Czech accession to EU. His main point was that since the integration of the Czech economy to EU and law harmonization begun immediately after the fall of the communist regime, basically the Czech economy has already passed the most important phases of preparation for EU membership. Some final steps are needed to be taken but most of the work is already done. He said that "by January 2003 the harmonization of the Czech law advanced to the 80% level of full harmonization and the remaining 20% is partially harmonized". Also, regarding the economy, the Czech Republic has about 70% of its external trade with EU and about 90% of annual FDI is coming from EU. Mr. Juchelka sees that the structure of ownership is a key determinant of successful accession, especially in the case of a small country like the Czech Republic. When describing the current state of the Czech economy, he mentioned three types of privatization, one is mass/commercial privatization, the second is selling the strategic and infrastructure companies, and the third is the privatization of socially desirable services. The first one is already completed in the Czech Republic, the second is still going on and the third one has already started (privatization of health care). Mr. Juchelka emphasized that no serious negative impact is expected on Czech companies when the accession takes place, since most companies and sectors are already prepared and work in a competitive environment. "The Czech Republic is well prepared to join the EU" - ended his speech Mr. Juchelka.
At the end of Thursday' s plenary session Ms. Judit Habuda, Assistant State Secretary was presenting on behalf of the Office for the National Development Plan and European Funds (NDP), Hungary. As the NDP Office sees it, the main objective of Hungary in the long term is to achieve the improvement of the quality of life. The overall objective of the NDP is reducing the income gap between Hungary and the EU average. This can be broken down to three specific objectives, increasing competitiveness, improving the use of human resources and creating better environment together with more balanced regional development. In accordance with these, the NDP consists of five Operational Programs aiming at upgrading economic competitiveness, agriculture and rural development, environment protection and infrastructure, development of human resources and finally, regional development. Ms. Habuda highlighted the importance of partnership, meaning by this that both the financial resources for partnership have to be ready by the time the programs start, and also the public awareness has to be raised in order to reach all potential applicants.
On Friday, the 21st of March, the first keynote speaker was Mr. István Major, Assistant State Secretary, Ministry of Foreign Affairs of Hungary. Mr. Major limited his lecture to the economic policy effects of the so-called "Visegrád cooperation", and CEFTA.
In the first part of his presentation he emphasized that the story of CEFTA is a real success story, which, during its 10 years of existence, exceeded all expectations. This Association played and still plays a very important role in the economies of "V4", and the other Central-European countries as well (Slovenia, Romania and Bulgaria joined later, and there are many candidates to join, e.g. Yugoslavia, Croatia and Macedonia).
In the second part he talked about the possible fields of later co-operation with the V4 countries. He exposed that these countries should have a very special solidarity towards each other, they should organize themselves to a very strong lobby group, because we have many common interests. Finally, Mr. Major said that the forthcoming years after accessing the EU would be an experimental period, when all 10 new members will be invited into decision-making. About EMU-accession he noted that he would not sacrifice the growth rate on the altar of early accession to the EMU.
The second speaker was Ms. Brigita Schmögnerová, Executive Secretary of the UN Economic Commission for Europe (former Minister of Finance of Slovakia). Ms. Schmögnerová talked about the importance of catching-up process of the Visegrád countries, the possibility of speeding-up economic growth in the EU after the Eastern enlargement, but she also mentioned the threats of "reform fatigue", economic "slowdown" and the hardly unavoidable high fiscal deficits. About EMU accession she said that minimizing exchange rate risks and lowering capital flows volatility is in prospect at costs of fiscal deficit, inflation pressure and increase of prices round 1-7%.
In his lecture Mr. Roger Grawe, Country Director for Central Europe and the Baltic States, World Bank, talked about the Successful EU-accession. He said that accession countries face a dual problem: they need to improve budget balance and cut back tax revenues. The solution is to accelerate convergence by strengthening factor markets, the rule of law and accountability and reducing expenditures. Mr. Grawe focused his presentation on the latter problem.
Mr. Grawe said that a general downward trend of expenditure policies is envisaged in OECD - especially in EU countries. Also, most accession countries envisage expenditure reductions by 2004. He supposed to reduce aggregate expenditure, and to reduce subsidies and transfers. The key steps of the latter are the following: large-scale privatization and imposition of hard budget constraints; targeted support to restructuring; rationalize social spending (education, health, pensions); and accelerate energy sector reform. In the end of his presentation he talked about the convergence policy of banking sector, where the key challenge is to accelerate financial deepening.
After the coffee break Mr. Robert Warsmann (EBRD) talked about the implications of accession for existing and future member countries. He mentioned the possible benefits of enlargement for existing EU countries, the prospects of additional capital and portfolio inflows, then he pointed out the benefits of candidate countries (political stability and economic prosperity). He also told about the costs of accession and highlighted the points where internal reforms are needed.
In the end of his presentation Mr. Warsmann spoke about the main risks of EU accession (e.g. inadequate internal EU-reform, protectionism in existing member countries, incomplete transition in candidate countries especially in the field of governance and public administration), and the hopes to come true by enlargement.
Mr. Jorge Braga de Macedo, President of the Development Centre, OECD, told about the surprises that were likely to happen in the future by accessing the EU. He talked about the choice of the "best" exchange rate regime, and the "impossible trinity" of monetary policy independence, financial integration and exchange rate stability. He also talked about the problem of balancing disinflation and competitiveness which all V4 countries face.
As the last keynote speaker of the conference, Mr. Cezary Beczkiewicz, Commercial Counsellor in Economic and Commercial Section, Embassy of Poland in Budapest, spoke about chances and challenges Poland has to deal with when accessing to EU. He has collected 13 fields of advantages of Polish accession, such as education, access to the structural funds, job market, etc., and also underlined the disadvantages when not accessing. At the end of his presentation he mentioned the approaching referendum and the Governments preparations in the interest of the positive outcome