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 -- Estonia 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 European Parliament (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, Siim Kallas, 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. 25 2004 ESTONIAN MINISTRY OF FOREIGN AFFAIRS YEARBOOK 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. 26 2004 ESTONIA IN THE EUROPEAN UNION 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 Riigikogu (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. 27 2004 ESTONIAN MINISTRY OF FOREIGN AFFAIRS YEARBOOK 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.