The Advantages of Lithuania’s Integration into the European Union

The integration into the European Union is one of the most crucial objectives of the Lithuania’s foreign policy. Beginning with 1989-1990, when the decision of the Baltic States to restore independence manifested itself, the largest Western states became interested in Lithuania, Latvia, and Estonia. One of the most important events of that period happened on December 14, 1990 when the leaders of the Baltic States governments for the first time appealed to tthe European Economic Community of that time asking to allocate them political, economical and cultural help directly and not through the ex-USSR. In 1991, after the events that took place in Lithuania on January 13, the EU strictly condemned the application of forces in the Baltic States, and on August 27, 1991, according to the suggestion of Ministers of Foreign Affairs of France and Germany, by common consent recognised the independence of the Baltic States. In 1992 Lithuania and the EEU signed the Trade, Commercial and Economical Co-operation Agreement and the declaration concerning political dialogue between Lithuania and the EU was taken. From the very beginning of official relations with Lithuania, the EU began to render assistance to Lithuania through tthe PHARE programme. On June 12, 1995 Lithuania, Latvia and Estonia signed the European (Association) Agreements with the EU, in which the objective of the Baltic States to become members of the EU was recognised.

It is impossible to see such an important step as Lithuania’s integration into the European Union in only one perspective. Undoubtedly, this historical fact would have brought both positive and negative results, which are often closely interrelated. Moreover, the integration into the European Union is a long process not confining itself only into signing and validity of the agreement. It includes changes happening both before and after conclusion of the agreement. Therefore it is necessary to talk about the results not only of the integration into tthe EU, but also of the preparation to the membership.

A few types of the positive consequences could be singled out:

1. Economical consequences;

2. Fiscal consequences;

3. Social consequences;

4. Political consequences;

5. Safety consequences;

Economical consequences

The European Unity is the most important united market in the world including about 400 millions of residents. It is necessary to notice that Lithuania is already trading with some EU countries (e.g., in 1998 Lithuania’s export and import into the EU made up 37.98% and 50.16% of all LLithuania’s export and import). By January 1, 1999 direct foreign investments into Lithuania’s economics had made up 1625.30 million USD, 61.23% of which had been the investments from the EU. The greatest part of the direct investments from the EU makes up the investments from Sweden (27.54%), Finland (17.43%) and Germany (13.32%).

Speaking about the economical consequences of the integration into the EU it is necessary to start with the characterisation of the internal market of the EU. This market has no inner borders, therefore merchandise, people, services and capital move freely there.

a. Free movement of merchandise is at the same time abolishment of customs and custom taxes. Moreover, it is common politics of foreign trade and taxes and extermination of non-tariff barriers.

b. The movement of services is the possibility to provide them within the whole area of the internal market.

c. Free movement of capital is the right to invest, buy property and securities; to use profits freely in any state taking part in the united market.

d. Free movement of people is unlimited freedom to live, establish one’s own business and work in any state belonging to the EU.

In order to accomplish all the above-mentioned in Lithuania it is necessary tto abolish the existing barriers that prevent the movement. The abolishment of the barriers would provide the opportunity for Lithuania to make use of the advantages of the united market. We could single out several consequences of the abolishment influencing Lithuanian economics:

• The total volume of trade as well as of production of export goods would rise sharply and this would permit to develop the advantages of the scale economics (i. e. the utmost price for manufactured merchandise would be lower). As a result, the total volume of export and merchandise prices inside the country would become lower.

• There would be fewer cases when the EU applies antidumping or other protectionist actions against the merchandise made in Lithuania. This factor would not only increase the export from Lithuania to other countries, but also would encourage the investments of foreign capital into Lithuanian economics.

• The appearance of new companies inside Lithuania, which would be encouraged by the membership in the EU, would enlarge competition and lead to more rational use and distribution of economic actions (work and capital).

• The appearance of new companies inside Lithuania must put an end to monopoly existing in some areas. Theoretically, it must display in the decrease oof prises for goods and services.

• Well-balanced system of import and export at a level of an individual would mean a big choice of cheaper high-quality goods.

• The membership in the European Union would greatly limit possibilities of Lithuanian government to interfere directly or indirectly into the work of economy and would provide more possibilities for Lithuanian enterprises and users.

• In any case, Lithuania is influenced by decisions of the EU, while Lithuania cannot have any influence on the EU. Only after having become a member, Lithuania would have a possibility to influence decisions and politics of the EU.

The main benefit, which Lithuania could derive from the integration into the EU, would be the appearance of new markets, demonopolization, rise of effectiveness, increase of supply of goods and services. Thus, users would derive the greatest benefit.

Fiscal benefit

Fiscal expenses are connected with the EU budget dues and distribution of its expenditure. To a certain country, i. e. to Lithuania, this means a sum difference between the EU budget dues and obtained profit.

After having become a member of the European Union Lithuania would have to pay into the EU budget 1% of VAT collected in the state, all the customs taxes

collected in Lithuania as well as 1.27% of GOP (Gross Output Plan).

Payments from the EU budget are distributed as help provided for less economically developed regions. The level of economical development is determined according to GOP of individual regions. Thus help is provided for the regions whose GOP is lower than 75% of the EU average. (In 1997 Lithuanian GOP was only 27% of the EU average).

Various calculations of how much Lithuania would get from the European Union budget alter. HHowever, we could forecast that payments to Lithuania would be several times higher than the dues.

Social consequences

Most likely, these consequences are the most difficult to be judged in one perspective. As it is peculiar to social phenomena, they are difficult to forecast and can develop in one or another direction depending on different factors.

Firstly, it is necessary to concentrate on the fact that when Lithuania becomes a member of the EU the statutes of the Union will come into force wwith respect to the residents of membership countries. All the residents of membership countries are at the same time the residents of the EU. Every citizen of the EU has:

• The right to move freely and live on the territory of tthe EU membership countries;

• The right to vote and be proposed as a candidate during local or European elections in the resided country;

• The right to be protected by diplomatic and consular institutions of every membership country;

• The right to petition the European Parliament;

It could be added that the membership in the European Union is closely related to stability of the institutions that vouch for democracy, superiority of laws, protection of human rights and respect for national minorities. A lot of small but very important PHARE programmes that are directed towards strengthening of democratic institutions and development of civil society exist already now.

Talking about social consequences, we could suppose and forecast:

1. Migration consequences – when Lithuania becomes a member of tthe EU its citizens will be able to travel freely all the membership countries of the EU. This does not mean that the volume of migration would rise. It is possible that emigration would even become lower because of bigger employment possibilities and economical growth in Lithuania.

2. The problem of nationalism and cosmopolitanism. In this case, the opinions of social scientists clash. Some of them think that the integration would cause the growth of nationalism. However, the others think that tthe integration into the European Union, on the contrary, would mean developing cosmopolitanism, which would weaken nationalism and xenophobia.

3. According to economists and social scientists, the growth of economy will create the necessary prerequisites for development of middle classes, which will reduce the gap between the lowest and highest profit groups and will add to the growth of social and economical stability of the state.

Political consequences

Several points should be singled out:

1. The participation in the institutions of the European Union will give Lithuania the opportunity to influence the decisions inside the European Union. To tell the truth, it is unlikely that Lithuania will have its own commissar, however it will get several seats in the European Parliament as well as a certain quota of bureaucrats of the EU institutions. Thus, despite little influence of an isolated country, positions concerning certain actual questions of Middle European countries will coincide and in this way their collective power will increase. Most probably, when the regionalization tendencies in the European Union become stronger the bloc of Baltic and Middle-European countries will be formed which will have its own specific problems and will be able to direct certain decisions of the Council in a necessary ddirection while voting there.

2. The integration into the EU, i. e. into its Common foreign and safety policy, would greatly increase Lithuania’s foreign policy potential and would help to balance the influence of neighbouring countries in the region. The participation in the Common foreign and safety policy will require from Lithuania to strengthen and modernise institutional mechanism of Lithuanian foreign policy and its bureaucracy structures, it will widen the possibilities to exchange information. Moreover, we must not forget that an eastern Lithuanian frontier will become an outer frontier of the EU, therefore the strategic importance of Lithuania will become greater to the European Union.

Safety consequences

Membership in the EU is usually connected with safety guarantees. Therefore, safety is often explained as one of the most important membership motives. It should be noted that membership in the European Union does not give any formal safety guarantees, however the very fact of membership may operate as a certain protection from outer aggression. Furthermore, the membership also strengthens the inner safety, for the growth of economy reduces social contradictions of the society, increases social stability, which strengthens democracy and state’s inner safety.

Rapid economy growth would allow spending more on not only social needs, bbut also on country’s safety system, which would increase Lithuania’s opportunities to join NATO.

Moreover, the participation in home and legal affairs of the EU will increase the possibility to fight against such international problems as illegal migration, organised crime and terrorism.

In conclusion, it should be noted that the process of the EU development is the greatest throughout the history of both the European Community and the European Unity. High demands are made of joining countries, however at the same time membership countries help those who are going to join the EU. At the moment, the integration of Lithuania into the EU is the most important priority of Lithuanian foreign policy.

LITERATURE

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2. Borchartas K.D. Europos integracija: Europos Sajungos susidarymas ir pletimasis. – Liuksemburgas: Europos Bendriju Oficialiu leidiniu Biuras, 1995

3. Fidmuc J. Strenght and Advantages of Easternn Europe – EU’s Net gains from Accession. International Institute for Applied System Analysis, Laxenburg, Austria, April 1997

4. http://www.urm.lt/lt/eu/home.htm (oficialus Lietuvos uzsienio ministerijos tinklalapis)

5. Lietuvos integracija i Europos Sajunga: bukles, perspektyvu ir pasekmiu studija / Tarptautine konferencija, Vilnius, 1995 m. gruodzio 15-16 d.d. / EISC ir kt. – K., 1997

6. Lithuania’s

integration into the European Union: On the eve of the accession negotiations. – Ministry of Foreign Affairs of Lithuania, European Integration Department, August 1997

7. Zeimantas V.V. Zvilgsnis i XXI a. Lietuva // Verslo zinios, – 1998, balandzio 8 d.