Enlargement confined to the courtyard at the EU’s informal retreat in a Belgian castle

Bilzen-Hoeselt – There is a notable absence at Alden Biesen Castle, in the heart of the Belgian countryside. At the EU leaders’ informal retreat, focused on how to strengthen the competitiveness of the European economy, the impact of EU enlargement on the Single Market and the options for adjusting the EU’s decision-making rules in an enlarged Union seem to have been forgotten from the definition of the short- and medium-term strategy, relegated to the courtyard of the 16th-century palace.

It may have been unrealistic to expect EU enlargement to be high on the agenda. Yet the fact that the discussions give only marginal consideration to the competitiveness of a European Union with more members and new challenges sends a strong signal – that the Union is not yet able to think beyond its current borders and framework, whether in financial, regulatory or industrial terms.

This risks becoming yet another missed opportunity to undertake a comprehensive assessment of both the costs and the opportunities arising from a Union that would encompass almost the whole of Europe. Bringing this issue onto the agenda would hardly have been difficult, particularly in the presence of two figures who have explicitly highlighted this urgency in their respective reports commissioned by the EU institutions – former Italian Prime Ministers Mario Draghi and Enrico Letta.

Draghi’s report at the informal retreat

Former ECB President Draghi’s report on the future of European competitiveness, published in September 2024, emphasises that a new industrial strategy for Europe will not succeed “without parallel changes to the institutional setup and functioning of the EU.”

The limits of the EU’s decision-making process – in particular the veto power and the unanimity rule in policy areas including enlargement – are a recurrent concern when analysing the need for internal reforms to prepare the Union to welcome new members. Such rules “are based on a valid internal logic” – achieving consensus – but they appear “slow and cumbersome compared with developments taking place externally,” the report highlights.

“Europe’s decision-making rules have not substantially evolved as the EU has enlarged and as the global environment facing Europe has become more hostile and complex.” The limitations of this reluctance to reform the EU’s institutional framework are evident in the same decision-making process, characterised by “little coordination” across policy areas, multiple vetos that can “delay or dilute action,” and an average time of “19 months to agree new laws,” which often fail to deliver results “at the level and pace EU citizens expect.”

In this context, strengthening the EU requires Treaty changes, “but it is not a precondition” for progress, as “much can be done with targeted adjustments.” Until consensus on Treaty changes is reached, Draghi proposes building a renewed European partnership around three overarching objectives: “Refocusing the work of the EU, accelerating EU action and integration, and simplifying rules.”

Letta’s report followed

It is Letta’s report on the Single Market, published in April 2024, that devotes the greatest attention to the “advantages and responsibilities” of the Union in the context of EU enlargement. The issue is examined in depth in the discussion of how to project the Single Market beyond its borders, described in the document as “a key tool in the enlargement process.”

Past experience shows that the Single Market – and the benefits it generates – have been extended through successive waves of EU enlargement, “and this has been true for both old and new member states.” Presented as “the best instrument” for protecting European interests and prosperity, upholding the rule of law, and shielding EU citizens from external threats, the Single Market lies at the heart of the enlargement debate. The report argues that discussions should concentrate on the “methods and timing” of accession, given that the interaction with the Single Market raises inherently “complex questions.”

To address these challenges, Letta advocates a gradual accession process – also described as “a nuanced approach” – designed to extend the benefits of the Single Market to candidate countries while preserving economic stability both within and beyond the Union. At the same time, he stresses the need for the EU to remain “consistent,” rejecting any form of ‘cherry-picking’, and cautions against excessively rapid integration that could destabilise candidate economies, “potentially resulting in significant and disruptive adjustment costs.”

A gradual accession process would require a shift away from the logic that prevailed from the 2004 “Big Bang Enlargement” onwards, when the focus lay on identifying areas in which preparation for participation in the Single Market posed “the greatest, if not insurmountable,” challenges. By contrast, the strategy for the next wave of enlargement should prioritise areas “where early preparation is achievable,” enabling candidate countries to benefit from specific elements of the Single Market “well before full accession,” while maintaining the integrity of the Single Market under the supervision of Brussels-based negotiators and ensuring that current Member States do not lose their “most powerful bargaining tool.”

Under this approach, any country seeking pre-accession participation in the Single Market “must fully adhere” to the Copenhagen criteria – which determine eligibility for EU membership – demonstrating “clear and unwavering respect for the non-negotiable principles” of democracy, the rule of law, human rights, and the protection of minorities. “No ambiguity on this point can be admitted,” the Letta report emphasises, in reference to the “meaningful political elements” underpinning a gradual accession process.

Alongside socio-economic convergence and the establishment of appropriate financial support mechanisms, the concerns of current Member States could be addressed through an Enlargement Solidarity Facility, “based on a data-driven ex ante assessment of the costs of enlargement and its impact on the Single Market.” Given that certain sectors and Member States are likely to be more exposed than others, an “adequate” funding instrument would be required to offset imbalances and ensure a smooth accession process.

The challenge of absorption capacity also requires “innovative solutions” to ensure that candidate countries have the administrative and institutional capacity to make optimal use of EU funds during the gradual integration process. Moreover, “a robust system” of safeguard clauses, transition periods, and other tools already employed in previous enlargements “must be carefully designed to anticipate and mitigate the potential adverse effects” of Single Market integration. Such measures would also reassure the public in both old and new Member States, “preventing disruptive economic shocks.”