Estonia in the European Union

In the year 2004, we, Estonians, achieved what, for years, had been one of our most important foreign policy objectives -- became a full member of the European Union (EU). The development of the EU itself, in the course of the year, is signified, in addition to the enlargement of the alliance with the accession of ten states, by the Member States’ agreement concerning the Constitutional Treaty, by the (EP) elections and the new Parliament beginning its proceedings, by the new European Commission assuming its duties, and by the decisions made at the end of the year about the Union’s future enlargement.

Membership Status

Despite Estonia, as an Observer State, having been familiarized, step-by-step, with EU proceedings since 16 April 2003, full membership status (1 May 2004), brought with it not only all the rights of a full member, but also a new work tempo and new pressures. Estonian representatives assumed their duties in EU institutions, and Estonia began to fully participate in the EU Council, having received, in addition to the right to speak, the right to vote.

On 1 May, Estonia’s appointed commissioner, , assumed his duties in the European Commission. Kallas, like the commissioners of the other ten new Member States, started off as a member of the Commission without portfolio, working together with Economic and Monetary Affairs Commissioner Joaquin Almunia. On 22 November, after a three-week delay in the European Parliament’s voting, and after some adjustments were made to the list of commissioners, the new 25-member Commission assumed its duties under the presidency of the Portuguese social-democrat José Manuel Barroso. In the new Commission, Kallas serves as vice president, being in charge of administrative affairs, as well as auditing and anti-fraud activities.

The EP elections, which took place for the first time in Estonia on June 13, were a new and interesting experience for Estonians. They were especially significant since the EP is the only institution in the EU that is directly elected by the people. The carrying out of such elections helped to make the EU much more relevant for the whole Estonian nation.

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Since the EP has, due to several EU treaties, gained ever more influence, and since, thanks to the new Constitutional Treaty (CT), the EP’s jurisdiction will be increased even more, it is encouraging to note, that the Estonian people showed a preference, at the elections, mostly for experienced politicians. The Estonian members of the EP (MEPs) are Toomas Hendrik Ilves, Marianne Mikko, and Andres Tarand, who all belong to the EP’s socialist fraction, or the Socialist Group in the EP; Siiri Oviir and Toomas Savi, who belong to the liberal-democratic fraction, or the Group of the Alliance of Liberals and Democrats for Europe; and Tunne Kelam, who is part of the centre-right fraction, known as the Group of the European People’s Party (Christian Democrats) and European Democrats.

In addition to the aforementioned Estonian commissioner and MEPs, there are, of course the Estonians serving as judges: Uno Lõhmus in the Court of Justice, and Küllike Jürimäe in the Court of First Instance. The Estonian representative in the Court of Auditors is Kersti Kaljulaid. Estonia has also appointed seven members (and alternates), who represent Estonian local municipalities, to the Committee of the Regions. There is also an equal number of Estonian representatives in the European Economic and Social Committee, where both employers and workers, as well as various economic and social interests are represented.

Prior to accession, when Estonia did not yet have the right to vote in the EU Council, Estonia succeeded in finding a solution, within the framework of the so-called interim committees, to many of the questions that arose from the EU draft legislation in the spheres of justice and home affairs, the environment, energy, taxation, and external relations. Two such drafts, the regulation concerning the by-catch of cetaceans and the directive regulating human medications, are still being worked upon.

So, what actually changed in the course of a year? Not only the Foreign Ministry, but the whole Estonian machinery of state, had to recover from the primary start associated with accession, that was brought about by the changes in the workaday duties of almost all government officials. To be a Member State, it is necessary to have a wide scope for dealing with live issues, and to have the ability to take into consideration all interested parties, both in and out of the state. When looking for a solution, the decisive factor is often time, or rather, the lack of it, as well as the existence of the various procedures involved. Many of our internal national problems are, in the context of today’s world, actually, of a multilateral nature, and must therefore be approached appropriately.

Estonia’s positions must be expertly and actively explained. We must speak with a single voice on all levels of the EU decision-making process, and know how to form coalitions in negotiations. We must also deal with various questions, that at first may seem to be quite distant for us, but which, nevertheless, are relevant to the development process of Europe as a whole.

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For Estonia, as a small Member State, it is essential to specify its priorities in the EU’s wide spectrum of activities. Estonia has spelled out its own vision of itself as a successful EU Member State in the framework document Valitsuse Euroopa Liidu poliitika 2004 – 2006 (The Government’s European Union policy 2004 – 2006). The priorities listed in the doc- ument are based upon the EU’s general development trends. The Estonian Government establishes its short-term objectives accordingly, and monitors their realization after every half-year EU Council Presidency. The Estonian Government formulated concrete half-year objectives for the first time in the middle of 2004, in time for the Dutch EU Presidency.

The successful protection of Estonia’s interests and formulation of appropriate policy positions, on the EU level, requires thorough and sophisticated preparatory work, which encompasses many government agencies and officials. During 2004, Estonia established its EU coordination system, in which the (state assembly or parliament), espe- cially its EU Affairs Committee, the various ministries, as well as the State Chancellery all have a definite role to play. One of the substantial functions of the Foreign Ministry’s EU Department is to ensure Estonia’s cohesion and consistency on the Committee of Permanent Representatives (COREPER) and the General Affairs and External Relations Council (GAERC) level, as well as to coordinate and concert the policy positions neces- sary for this. For these endeavours to be effectual, it is necessary to not only be at home in the realm of Estonian domestic politics, but to also be thoroughly familiar with the EU’s vital rhythm, as well as the political atmosphere and negotiating mechanics domi- nating in Brussels.

In 2004, the main subjects discussed by the foreign ministers of the EU Member States, at their monthly GAERC meetings, were: the further enlargement of the EU, the frame- work of the budget for the years 2007 – 2013, as well as the fight against terrorism and further cooperation in the sphere of justice and home affairs.

In 2004, for the first time, Estonia was able to fully participate in EU budgetary negotia- tions -- namely, those concerning the 2005 budget, as well as the seven-year (2007 – 2013) financial framework, which is the basis for the EU’s yearly budgets. The talks dealing with the EU’s financial framework are part of a long and extensive process. It is not just a matter of establishing the margin and structure of the receipts and expenses in the EU’s budget, but, also, of determining the EU’s objectives, as well as the priorities and commitments involved in the EU’s various activities. Estonia thinks that it is important to maintain the ambitious goal, established at an earlier date, of achieving, by June 2005, a political consensus concerning the EU’s financial perspectives without allowing the substance of the agreement to suffer.

The most noteworthy discussion directly concerning Estonia developed in the field of taxation, in connection with the standardizing of corporate income tax.

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Along with this, there also arose the question about what will become of the Estonian tax exemption for reinvested corporate profits after the transition period, which officially ends 31 December 2008.

The implementation of the Lisbon Strategy was, throughout 2004, the focus of much attention in the EU as a whole, as well as in Estonia. The EU began to prepare for the for- mulation of the Interim Report of the Lisbon Process for the spring of 2005. For the first time, Estonia presented to the Spring European Council its Position Paper, which con- centrated upon five themes: competitiveness, sustainable development, employment, economical development, and the preparations being made for the Lisbon Strategy 2005 Interim Report. Estonia’s proposals were also included in the joint letter by the prime ministers of six states (Estonia, Italy, Netherlands, Poland, Portugal, Spain), the Joint Contribution to the Spring European Council 2004. The Spring Council instructed the high-level working group directed by Wim Kok to draw up a report for the November Council about the progress being made and the main shortcomings in the attainment of the Lisbon Strategy’s goals. Estonia regards the Report as being timely, and agrees, that in the present phase of the Lisbon Process it is of primary importance that Member States fulfil their commitments. The Lisbon Strategy’s 2005 Interim Report must give an over- view of the EU 25 Member States’ achievements in the implementation of the Strategy, thereby enabling us to direct our endeavours, more than before, towards clearly defined domains of priority.

The adoption of the justice and home affairs plan of action for the next five years into the Hague Programme must be regarded as being significant. Just as the development of cooperation in the fight against terrorism, as well as the EU Drugs Strategy 2005 – 2012. The priorities established by this new EU strategy for combating drugs are of key impor- tance also for Estonia’s fight against narcotics, and our public health policy concerning the HIV-AIDS problems.

In the realm of the EU’s external relations, Estonia, when formulating its Action Plans, made special note of the EU’s Neighbourhood Policy and the EU’s relations with Partner States. Estonia was glad to see, that at the General Affairs and External Relations Council 17 – 18 June session, it was decided to include the South Caucasus states in the European Neighbourhood Policy process. Due to its geographical location, Estonia’s attention is directed mainly towards cooperation with the EU’s eastern neighbours, although we also appreciate the great importance of the development of the EU’s relations with its south- ern neighbours. It was essential, that the individual Action Plans with seven Partners (Ukraine, , Morocco, Tunisia, Jordan, Palestinian Authority, and Israel) were approved at the December European Council. Estonia has supported the development of democracy in Ukraine, and heartily agrees with the declaration, adopted at the same Council session, concerning Ukraine. Cooperation with both Ukraine and Georgia has continuously been an Estonian priority. In 2004, Georgia was one of the main recipient

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states of Estonia’s development assistance. Estonia is also actively contributing to the development of Ukraine as a democratic state. Primarily, this assistance is in the form of development cooperation projects, and participation in the formulating of the EU’s Neighbourhood Policy directed at Ukraine.

The most essential discussions for Estonia, in the external relations realm, during 2004, were those dealing with EU-Russian relations, including the talks that took place within the framework of the Four Spaces negotiations. Regarding the extending of the Partnership and Cooperation Agreement (PCA), Estonia’s position was, that the exten- sion must be automatic, and that the PCA must be applied to acceding states on an equal basis. There were also difficult discussions in the course of the preparations for EU-Russian summits -- Estonia believed, that it was very necessary to maintain the principle that the EU’s Russia policy be common and self-consistent, and be based upon common values. It was praiseworthy, that, at the Hague Summit, the EU and Russia reached an agreement concerning the initiation of human rights consultations dealing with questions of interest for both parties.

Among the other significant matters, in the external relations realm, discussed in 2004, mention should be made of Iraq and the Middle East as a whole; the enlargement of the Asia-Europe Meeting (ASEM); the EU’s efforts to stabilise the situation in Africa, both in Sudan and the Great Lakes region; the handing over of the NATO military mission in Bosnia and Herzegovina to the EU European Security and Defence Policy (ESDP) mis- sion (Operation Althea), as well as the extending of the police missions in Kosovo and Macedonia; and the launching of the mission in Georgia for the reinforcement of the rule of law.

The Intergovernmental Conference and the European Constitutional Treaty

After the 2003 December European Council, the Constitutional Treaty (CT) still had a fairly questionable future. But already at the 2004 March European Council it was obvi- ous that the Member States had a strong political desire to continue negotiations dealing with the CT. This made it possible to achieve a long-awaited consensus already at the Summit on 17 – 18 June. Thus, the draft CT was signed in Rome on 29 October.

Ireland, during its Presidency of the EU, continued talks, concerning the CT, based upon progress made in this field in the course of the Italian Presidency during the second half of 2003. The bilateral consultations that the Presidency held with the individual Member States during the first months of 2004 made it possible to determine the basic interests of the various states and their attitude towards continuing the negotiations. Estonia’s Prime Minister met with the Irish prime minister in Dublin on 16 February.

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These consultations with the Member States proved to be promising, and the March European Council, upon the Presidency’s proposal, decided to continue the talks. The result was, that for the putting together of the complete package, it was necessary to have three foreign ministers’ meetings, on 17 – 18 and 24 of May as well as 14 June, which were organised by the appropriate officials at a working session on 4 May.

Thanks to the intensive preparatory work that had been done, it was possible to deal, at the June Summit, primarily with the politically most sensitive institutional matters: the voting system, the composition of the European Commission, and the principles for the distribution of seats in the EP. Plus, there were some matters that had remained unset- tled at the last foreign ministers’ meeting (14 June), for which, a final consensus was also arrived at: the coordination of economic policy, enlargement of the euro zone, the declaration concerning the Stability and Growth Pact, the Commission’s role regarding excessive budget deficits, the financial framework, as well as the Preamble of the Charter of Fundamental Rights and the reference to the Charter’s Explanations.

The fact that the negotiations, between 25 Member States, concerning the EU’s new fundamental document, were concluded successfully, clearly shows, that an essential increase in the number of Member States does not hinder the smooth functioning of the EU. For Estonia, as a new Member State, it was important, that we, for the first time, with full rights and on an equal footing with the other Member States, participated in a discussion essential to the continued development of the EU. When the final intergov- ernmental agreement was concluded, Estonia was already an official EU member.

The CT, encompassing in a single document and systemising both the EU Treaty and the European Community Founding Treaty, is an important step forward in the dynamic development of the EU. In addition to all the aforementioned, the main changes that have been enacted are: regulating the sharing of competences between the EU and the Member States, making the Charter of Fundamental Rights legally binding, giving the Union the status of a legal personality, increasing the participation of Member States’ parliaments in the adopting of decisions at the EU level, simplification of the EU’s sys- tem of legal acts, creating the positions of permanent president of the Council and EU minister for foreign affairs, reforming the system regulating the Council Presidency, and the creation of an EU foreign service to support the activities of the minister for foreign affairs.

At the negotiations, the Estonian representatives based their positions upon decisions adopted by the Estonian Government and the directives of the Riigikogu EU Affairs Committee. There was good cooperation with the Estonian Civil Society’s European Future Contact Group.

Estonia has reason to be satisfied with the results of the Intergovernmental Conference (IGC). Our major interests at these negotiations were reflected in the compromises

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that were achieved: maintaining the principle of a single vote in matters of taxation; preserving the characteristics of the social insurance systems of the various Member States; giving each Member State at least six seats in the European Parliament; finding a sensible compromise solution for the voting structure in the Council; and establishing, that in the European Commission, the principle of “one state, one commissioner” will be adhered to until 2014.

The CT will become effective on 1 November 2006, presuming of course, that all Member States will have ratified the Treaty by that time, and have handed their proof of ratifica- tion over to the depositary, the Government of the Republic of Italy. In Estonia, this rati- fication is done by the Riigikogu. The Government approved the Treaty on 21 October 2004. Before the final decision is made, the matter has to be thoroughly debated by society as a whole, a process in which politicians, non-governmental organisations, as well as all citizens have an important role to play.

Further enlargement of the EU

Since May of 2004, the EU consists of 25 Member States. Thus ended the EU’s biggest enlargement of all time, which began in 1997, and encompassed 10 states. But the Union’s systematic enlargement process is continuing, with the year 2004 having been very essential for four Candidate States: Bulgaria, Romania, Croatia, and .

Estonia is pleased, that thanks to the progress made by both Bulgaria and Romania, the European Council was able to declare in December, that the accession negotiations with these two Candidate States are closed, and that the Accession Treaty will be signed with them in April 2005. Thus, it can be assumed, that if appropriate efforts are continued, these two states will become full members of the EU on 1 January 2007, after ratification of the Accession Treaty by the Member States.

The year 2004 was also an essential turning-point for Croatia. Estonia supports the European Council decision to grant Croatia Candidate State status, and to open acces- sion negotiations with that state on 17 April 2005. Estonia also agrees with the position, that to successfully integrate into the EU, Croatia must fully cooperate with the United Nations’ International Criminal Tribune for the former Yugoslavia (ICTY).

In the year 2004, Turkey, the state, which has waited for an invitation to start EU acces- sion negotiations the longest, achieved its preliminary objective. Turkey had submitted its application for joining the European Economic Community (ECC) as far back as 1959, and for joining the EU, already in 1987. Turkey was finally granted Candidate State status in 1999, at the Helsinki European Council, where it was also stipulated, that the acces- sion criteria for Turkey are the same, as have applied to other Candidate States.

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On 6 October 2004, the European Commission issued its evaluation and recommen- dation concerning Turkey. Since these proved to be generally positive, the December European Council decided to launch accession negotiations with Turkey on 3 October 2005, if, by that time, Turkey has fulfilled all necessary requirements. For instance, the accession negotiations can be launched only if essential reform legislation has become effective, by that time, in Turkey.

On 7 October, taking into consideration the European Commission’s positive report and recommendations, the Estonian Government decided to generally support the starting of EU accession talks with Turkey. Estonia finds, that within the scope of enlargement, every Candidate State should be evaluated according to its individual achievements. And if the Commission finds that the Candidate State has sufficiently fulfilled the speci- fied criteria, then, accession talks must be opened. Estonia’s position is based upon the conviction, that the Union’s further enlargement will increase security and stability in Europe.

Although Turkey’s potential EU accession has created much controversy, and is the big- gest challenge that has so far confronted the enlargement process, if all goes well, both the EU and Turkey will ultimately benefit. Keeping in mind Turkey’s geographical loca- tion, as well as its economic, security, and military potential, it seems very likely, that Turkey’s accession to the EU will help to reinforce regional and international stability.

Public Opinion

On 14 September 2003, 67% of Estonians voted for Estonia to join the EU. If, in May 2004, the number of EU membership supporters had dwindled to 61%, then, by October, a record number, 72% of Estonians, was for the EU. This confirms, that Estonians, despite their sceptical nature, are not disappointed in the EU. Quite the contrary -- they see that Estonia’s future is definitely tied to a united Europe. In this respect, the opinions of eth- nic and non-ethnic Estonians differ minimally, with the ethnic Estonian support for the EU usually being a couple of percentage points bigger.

In Conclusion

The year 2004 brought with it an increased workload for Estonian government officials at all levels. At the same time, Estonians gained their bearings in Brussels’s corridors of power. Estonia is fulfilling its role as a small EU Member State as best it can. Even in situations in which we have had to deal with unforeseen stumbling blocks, as in March, when, due to a blizzard, the foreign minister was unable to participate in the Brussels EU Council session. The year long interim period brought forth several of our strong points, but also hinted at some of our weaknesses, towards which we will be able to direct our attention during the following year.

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