TCS Daily

Getting Medieval

By Jens Kyed - November 3, 2003 12:00 AM

It all seemed like a done deal. After half a year of tough negotiations an agreement on the enlargement of the European Economic Area, a free-trade zone that includes all EU countries plus Norway, Iceland and Liechtenstein, had finally been reached at the end of July. Only a final signature from all the parties was needed to ship the agreement off for final ratification in the national parliaments. This would have secured a parallel enlargement of the EU and the EEA on May 1, 2004.


But that was before EU ministers and their counterparts from the EEA and the European Free Trade Area met to sign the agreement in Luxembourg in the middle of October. There, the re-emergence of an historic row between Liechtenstein and the Czech and Slovak Republics brought everything to an abrupt halt. Liechtenstein did not want to sign the deal.

The problems date back to when the nation-states of Europe did not even exist. Several centuries ago the ruling family of Liechtenstein owned huge chunks of land in what is now the Czech Republic and Slovakia, both of which are about to accede to the European Union. Wars, political changes and upheavals as well as changing borders resulted in more and more of this land being confiscated. Its former proprietors, the royal family of Liechtenstein, has only partially been compensated for the expropriations of land that have taken place over the last century in particular.


But the problems are not solely based on the issue of land -- difficult as that can be. Until this day the Czech and Slovak Republics question the legitimacy of Liechtenstein as a sovereign state -- partly out of fear of huge claims of compensation from the royal house of Liechtenstein for what it perceives as partially illegal land-grabs. This conflict that now threatens the whole future of the EEA-agreement.


Prince Hans-Adam II of Liechtenstein (whose subjects recently voted to give him back some of their democratic powers) said he does not see it as his main responsibility to save the EEA agreement at any prize. He considers it very likely that Norway -- the largest EEA/EFTA state -- will apply for EU membership within the next five years. Iceland, the other EEA/EFTA state, has also recently started sniffing around a future EU membership. In other words, so the logic seems to go in Vaduz, why save a ship that in any case seems to be on the verge of sinking.


The situation is now a stalemate. Liechtenstein demands to be recognized as a sovereign state by the Czech and Slovak Republics before it in turn will sign the agreement that allows a parallel enlargement of the EU and the EEA. Thus far the two acceding countries refuse the demands of the small alpine state. Diplomats are working hard to reach a settlement, but what if they can't? Politicians in Norway and Iceland are shivering at the idea that the EEA agreement actually could end up being torpedoed by this old conflict.


If the row is not settled quickly, the prince's prediction may well come true faster than he ever expected. Norway has a government that builds its relations with the EU on the foundations of the EEA agreement. It does not want any other relationship with the EU, as that would automatically dissolve the cabinet. Headed by Prime Minister Kjell Magne Bondevik, the current coalition government is formed around a suicide clause, which states that "if the issue of EU membership is raised on the agenda, the cabinet will lay down its work."


Perhaps not surprisingly, EU membership has not been discussed much recently in Norway. However, should the EEA agreement fall, EU-membership would most likely be the only alternative for the majority in the Norwegian Storting (parliament). To fall back on a free-trade agreement from 1972 is not really an option for most of the MPs in Oslo. And, a swift move for Norwegian EU membership following the scrapping of EEA would most certainly force Iceland to follow suit.


In such a situation it is not at all impossible that the EU enlargement of 10 suddenly will become the enlargement of 12 on May 1, 2004. As Norway (which has twice previously turned down EU membership) and Iceland through the EEA agreement already have implemented approximately 80 percent or more of the EU rules -- the so called Aquis Communitaire -- sources in the European Commission have previously indicated that negotiating membership for these two countries would be a matter of months rather than years. There is little doubt that the fall of the EEA agreement would lead to such a will in order to save prestige and some of the results from the hard work that lies behind the draft for an enlarged EEA agreement. Only one thing is sure: thanks to little Liechtenstein the coming weeks could turn out to be far more exciting than what many in Brussels or in Oslo and Reykjavik would have liked them to be.


Jens Kyed is a Norwegian writer based in Brussels.

TCS Daily Archives