Introduction

It is a pleasure to be invited here today and to address the European Economic Summit. I have come to share with you my thoughts on the current state of play in the accession process and to discuss the challenges and consequences of enlargement for the future of the Europe.

It is good to remember European history, but equally important to prepare for the future. Enlargement is a moral duty and a political necessity. By their application for membership, all candidate countries have expressed their wish to belong to the family of European democracies, the Union, sharing common values. For the EU, the political and strategic interest is to bring lasting stability to the region stretching from the Baltic to the Mediterranean and Black Sea. The instability in any part of Europe affects the whole continent, as we clearly saw for instance during the Balkan wars.

Enlargement is also an economic process. Accession will provide today's candidate countries with unrestricted access to the biggest common market in the world.

The addition of more than 100 million people, in rapidly growing and reforming economies, to an EU of already 370 million, will boost economic growth and create jobs in both old and new Member States. At the same time, they will be included in the social and economic cohesion policy, which sets out to achieve broadly comparable living standards across the entire EU.

The enlarged Union will also be a more influential actor in world affairs. The EU's role in foreign and security policy as well as in international trade policy will be strengthened. Already now we are the world's largest donor of development aid. The new Member States will be sharing this role of the Union as a global player.

State of the Enlargement Process

As the phrase "from Copenhagen to Copenhagen" indicates, we expect, after nine years now, to meet our objective of completing the accession negotiations with those candidates that are ready by the end of this year. This would allow them to join in 2004 so they can take part in European Parliament elections in as members. I doubt that anyone who participated in the Copenhagen European Council in 1993 thought that we would now be so close to enlarging the Union.

The Nice, Gothenburg and Laeken European Councils have drawn up important guidelines for the final steps of the process. What we have to do now is to keep the political momentum that has been created in order to solve the most difficult issues in the enlargement negotiations.

Negotiations are currently tackling sensitive issues, notably agriculture, the structural funds and the budget. We will show the same determination to find constructive answers that we have shown in the past.

Our aim is to make a success of enlargement on terms that are acceptable to all sides. There cannot and will not be such a thing as second-class membership!
The rules of the game have been clear ever since the Agenda 2000 decision was taken in Berlin in 1999. It is our view that Member states should continue to respect their existing commitments regarding enlargement, in particular Agenda 2000 and the financial perspective up to 2006, as agreed in Berlin in 1999.
In principle, the new Member States should take part in all fields of common policy, however in some cases only after agreed transition periods. After accession, the new Member States should not be financially worse off than before.

And finally: our proposals should in no circumstances prejudge the future shape of Community policy. The Commission's proposals in no way pre-empt the next Financial Perspective for the period after 2006. Moreover, further reforms cannot be made a pre-condition for enlargement.

After accession, the new Member States will pay full contributions to the EU budget, while the budgetary impact of some structural and agricultural policy measures will only make itself felt in the fairly long run. The Commission has therefore proposed to make provisions for a lump-sum rebate. Obviously the specifics can only be decided in the final stage of the negotiations.

We believe this package is politically and substantively balanced and a good basis for negotiation.

For the candidate countries that are not among the first accession countries, the Commission will also review the road map for these countries in the context of its 2002 strategy paper and, if necessary, will develop the pre-accession strategy further.

Progress achieved, work still to be done

On the whole the Commission considers that all the accession candidates have made substantial progress in meeting the Copenhagen criteria - both political and economic as well as in regard to the transposition of legislation and implementing the acquis.
The candidate countries have gone through a remarkable development, not only by aiming to fulfil the Copenhagen criteria, but also by changing their political and economical systems.

In general, the adoption of the acquis is advancing well and the countries are on course to meet the timetable. However, candidate countries have to continue progress regarding administrative and legal capacities in order to reach our common standards.
An efficient administration is not only necessary to transpose the Union's laws completely and in the necessary time frame. It also ensures that Community resources are used effectively, which is especially important where structural funds are concerned. Further improvements are necessary in nearly all the countries in regard to efficiency of administration, but I believe such improvements are feasible.

On Wednesday we reported on comprehensive Action Plans drawn up by the candidate countries and the Commission, which identify priority areas that need to be addressed and should help to accelerate progress in public administration.

Under the 2002 Phare programme, an additional institution building facility of € 250 mn has been made available for this purpose, bringing assistance for institution building under Phare to a total of € 1 bn.

The implementation of the Action Plans will be addressed in this year's Regular Reports. The Regular Reports will assess whether the candidate countries are equipped with an adequate administrative capacity to transpose, implement and enforce the acquis by the time of accession.

The future of Europe

Let me finally make a few remarks on the wider debate, which is beginning on the future of Europe. The smooth integration of the new Member States and the future functioning of the European Union depends on our success in strengthening the Union's institutions and policies. The successful introduction of the Euro is a major step forward and we must build on this, through the Convention and the 2004 Inter-Governmental Conference, to reinforce the broader process of European integration.
The candidate countries are fully involved in the work of the Convention on the future of the European Union. The Convention has started working on proposals to make the EU more efficient, transparent and democratic. It will consider the future policies of the Union, and also how to involve Europe's citizens more closely in designing and implementing these policies. It is my deep conviction that the next Intergovernmental Conference should take up the proposals of the Convention that are most likely to lead to a more efficient and democratic EU.

Conclusion

The road ahead is clear and the negotiations are progressing well.
In late October, the Brussels European Council under a Danish presidency will turn its attention to the Regular Reports for 2002 and the Commission's specific recommendations as to the countries with which negotiations should be concluded.
This will clear the way for final stage of negotiations to begin before the European Council meets again in Copenhagen in the middle of December this year.
There is still a lot of work still to be done and I count on Europe's business leaders to " seize the moment ". Every Euro invested in the candidate countries today is an investment in Europe's future - our own future, and that of our children and grandchildren.

Thank you.