Prodi wants full-member benefits for EU neighbours

The European Union wants to give its new neighbours after enlargement all the benefits of membership except a presence in decision-making institutions, EU Commission President Romano Prodi said.

"With these countries we intend sharing everything except our institutions, basing our relations on a community of values and interests," he told a conference.

The executive Commission has been drafting a "new neighbourhood" policy as a basis for relations with countries the bloc will border after taking in 10 new states on May 1.

But so far it has been vague on what form this will take. The policy will cover a swathe of Mediterranean countries and former Soviet states like Russia, Belarus, Ukraine and Moldova.

Mr Prodi said the EU could not carry on expanding, but aimed to give its neighbours all benefits of membership other than a role in bodies like the European parliament or the Commission itself.

"The ultimate, long-term aim is to extend to these countries the four freedoms on which the Union is based, so giving tangible form to our commitment not to erect new barriers across Europe." The four freedoms are the free movement of goods, services, people and capital.

If the proposal came to fruition, it would mean a citizen of, say, Russia or Morocco would have the same rights as a German or a Briton to move to an EU country without a visa, transfer money there, buy a house and take up a job.

Pressed on the point, Mr Prodi was adamant: "I mean everything but institutions."

He was speaking as EU relations with Russia, by far the most economically and politically important of the EU's neighbours, are strained over enlargement. Eight of the 10 countries joining in May are former Soviet bloc states.

Moscow has failed to extend a Partnership and Cooperation Agreement (PCA), covering all aspects of relations with the EU, fearing it will lose out economically as the PCA would overwrite existing bilateral treaties with acceding trade partners.

There are also tensions over Chechnya, the Russian enclave of Kaliningrad, which will be locked inside EU territory after enlargement, Russian troops in Georgia and Moldova, and the status of Russian speakers in Baltic states joining the EU.

Russian opposition politician Grigory Yavlinsky told the same conference the EU had to integrate with all ex-Soviet states in Europe over the next 20 to 30 years to remain economically competitive with North America and South East Asia.

He added that the Union had to work out a strategy towards Russia, often deeply suspicious of its eastern expansion.

"What do we need? A transparent, clear, value-based, friendly policy towards Russia, very open, very concrete, very tough, very clear."