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. Last Updated: 07/27/2016

EU Sets Guidelines for Expansion East

BRUSSELS, Belgium -- European Union leaders reached a crucial agreement on financial terms for the bloc's eastward enlargement Friday, clearing the way for final negotiations with 10 mainly East European candidates to join in 2004.

"This represents a major step forward toward a historic decision on enlargement, which will be taken at the Copenhagen summit in December," Danish Prime Minister Anders Fogh Rasmussen told a news conference after chairing a two-day EU summit.

The applicants applauded the decision, made possible by a French-German compromise on the future of farm subsidies, and Rasmussen said he would brief the leaders of the candidate countries on the details in Copenhagen on Monday.

The deal was the second breakthrough in a week for the ambitious enlargement project after Ireland voted in a referendum last Saturday to approve the Nice Treaty, essential to preparing EU institutions for expansion to 25 members.

It also heralded the revival of the French-German axis that drove European integration for decades but has been largely absent in recent years.

The EU leaders formally endorsed Poland, Hungary, the Czech Republic, Slovakia, Slovenia, Lithuania, Latvia, Estonia, Cyprus and Malta as ready to join the bloc in 2004.

Polish Foreign Minister Wlodzimierz Cimoszewicz, however, warned that the last phase of negotiations "will not be easy, pleasant or satisfying for anyone."

Following Thursday's Franco-German agreement to curb EU farm spending, Rasmussen said the growth of agricultural outlays would be capped at 1 percent a year between 2007 and 2013 -- likely to be less than the rate of inflation. This would mean a real decrease in spending, he said.

French President Jacques Chirac, basking in victory after the farm deal in effect preserved the Common Agricultural Policy at high levels of spending for another decade, was quick to dismiss any attempt to reform EU farm subsidies before 2006.

He told reporters there was "no question of changing the CAP in 2003," despite European Commission proposals that would reduce direct payments and switch farm subsidies over time from production to rural development. The CAP swallows almost half the EU's 95 billion euro ($93 billion) annual budget.

German Chancellor Gerhard Schr?der described Friday's result as "a great day for Europe and therefore also a good day for Germany," saying it would lead to financial savings.

For much of the day, the French and Germans seemed to disagree about what exactly they had decided at their pre-summit talks Thursday.

Under the deal, farmers in the new member states will receive direct payments from the day they join, but will only reach the same level as existing member states after a decade.

They will also be guaranteed not to be worse off after joining than before, with compensation to be paid if necessary. The EU agreed to offer candidates 23 billion euros in regional aid for the first three years.