4 - 10 October 2001

EU pledges to find solution for Malta on free movement of capital chapter

by Ivan Brincat

The European Union has pledged to make an effort to find an acceptable solution for Malta and Poland regarding the free movement of capital chapter.
Enlargement commissioner Gunther Verheugen earlier this week adopted a mid-term review of the implementation of the enlargement strategy which examines the progress made in the accession negotiations for the chapters covered by the roadmap in 2001.
It highlights the areas where agreements should be found with certain candidate countries on the basis of common positions already defined.
The European Commission states that the outstanding issues relate to requests for transitional arrangements regarding the investment in real estate.
In effect, Malta has asked the European Union for a special arrangement regarding the purchase of a second property by foreigners due to its size and density.
This is the first time that the European Commission has clearly stated officially that efforts have to be made in order to find an acceptable solution with Malta.
Another area in which the EU wants to make progress is the free movement of persons chapter. In this regard, Malta has no problems since the chapter has been provisionally closed after the EU accep-ted Malta’s requests.
The European Commission said the road map, endorsed by the European Council of Nice in December 2000 has proved
successful.
It has given the negotiations a new momentum by allowing substantial progress on several, often difficult issues including the environment, free movement of persons and free movement of capital.
For the nine chapters foreseen in the roadmap for the first half of 2001, common positions have been defined allowing to provisionally close the chapter with the candidate countries in most cases. Negotiations are still ongoing with some candidate countries on certain chapters such as free movement of capital and environment (this is the case for Malta).
For some of the nine other chapters foreseen in the roadmap for the second half of 2001, work is relatively advanced while common positions still need to be defined for the remaining chapters.
The European Commission has drawn the attention of the European Council to the fact that the following areas require particular consideration.
Areas where the EU will define a definitive position in the course of this semester (till December) include transport, taxation, agriculture, notably veterinary and phytosanitary matters, justice and home affairs and energy.
With regards to taxation, the EU has a number of requests from several candidate countries to temporarily maintain VAT zero-rates for certain products (also the case with Malta) or lower-excise duties for cigarettes.
In considering whether such requests should be accepted, the member states should take into account the need to safeguard the functioning of the internal market as well as the political, economic and social implications for the candidate countries, the European Commission said.
The European Commission will now start to give special attention to the implementation of the acquis.
It said it will review the progress of the candidate countries in its forthcoming regular reports, which will examine with particular
attention the countries’ administrative capacity to implement the acquis.
“The Commission will give a favourable opinion to the accession of a candidate country only if it is convinced that the country is properly prepared and meet all the accession conditions.”
It said that each country will continue to be judged on its own merits so that the Union should consequently be prepared for the possibility of an accession in 2004 of all countries meeting the necessary conditions. The EU will also develop a strategy for those countries that will not join by that time.