Estonia, Poland, the Czech Republic, Hungary and Slovenia will begin accession negotiations with the European Union in spring 1998. All see membership as a historic opportunity to create security and stability. Of the five, Hungary, Poland and the Czech Republic have also been accepted into NATO. EU membership is widely seen as an anchor for the reform process. While the formal institutions of democracy and the market economy are in place, all five need to improve the effectiveness of public administration and their judicial systems.
Estonia is the smallest of the five, with a population of 1.5 million, 35 per cent of whom belong to ethnic minorities. The Russian-speaking minority is the largest (28 per cent) and most are non-citizens. Their naturalisation and full integration into Estonian politics and society remain sensitive issues.
Since its independence in 1991, Estonia has developed democratic institutions, and power has changed hands in successive parliamentary elections.
Of the three Baltic states, Estonia's economy is the strongest and the country attracts much foreign investment. Per capita GDP is about 23 per cent of the EU average and economic growth of over 6 per cent is expected in 1997. The centre-right coalition is committed to tackling inflation (which stood at 23 per cent in 1996) and a high trade deficit, and it weathered turbulence on the currency markets in early December. In terms of foreign policy, Estonia enjoys close relations with Finland and seeks NATO membership.
Poland, situated between Germany and the Ukraine, is the largest of the five EU candidates, with a population of 38.5 million and a land area of over 312,000 kms. The home of Solidarity, it has developed stable democratic institutions and, despite frequent changes of government in the 1990s, pursued a rigorous programme of economic reform - experienced at the time as shock therapy.
Since 1992, growth has been positive and reached 7 per cent in 1995. The medium-term outlook is good. However, per capita GDP is some 31 per cent of the EU average and its agricultural sector, which employs 27 per cent of the labour force, faces a tremendous task of modernisation.
The Czech Republic became independent in 1991 following a peaceful "velvet divorce" with Slovakia. Since then, it has enjoyed stable government and high levels of economic growth. Spared the communist legacy of debts and heavy industry, it adopted a liberal economic policy, under the tutelage of the longest-serving prime minister in the region, Vaclav Klaus.
This ushered in rapid privatisation and attracted much foreign investment. However, a banking crisis in mid-1996, followed by the collapse of the koruna, evidenced failure to regulate the financial sector. Economic downturn in 1997, coupled with tensions in coalition and a series of financial scandals forced Mr Klaus to resign in November.
Early parliamentary elections are now expected and Vaclav Havel, back in the political limelight despite weak health, is expected to begin a second term as president in 1998. Although the economy has lost some of its gleam, the medium-term prospects for this country of 10.3 million with per capita GDP at 55 per cent of the EU average are good. Relations with its neighbours are strong, although EU and NATO membership could create further distancing from Slovakia.
Hungary's current borders were established by the Trianon Treaty of 1920, which reduced its population by about a third (currently 10.2 million) and left large Hungarian minorities in neighbouring states. Since 1989, their treatment has been a source of tension, but bilateral treaties negotiated in recent years have done much to alleviate this. Within Hungary, as in the Czech Republic, the rights of the Roma minority (4-5 per cent of the population) are not fully protected. In economic terms, a policy of gradual reform has yielded positive growth since 1994 (although at lower levels than its neighbours) and attracted over ECU10 billion in foreign investment.
Like its neighbours, Hungary has a large informal economy. A tradition of gradual reforms permits an optimistic assessment of its future, provided public finances are controlled. Per capita GDP stands at 37 per cent of the EU average. In political terms, power was transferred in parliamentary elections in 1994. The reform communists of the Hungarian Socialist Party won a majority of seats but opted for coalition government and, following an initial slowdown of reforms, carried through a tough austerity programme.
Slovenia gained its independence of Yugoslavia in 1991 after a brief 10-day war. Since then, this country of two million people, bordering Italy, Austria, Hungary and Croatia, has developed stable democratic institutions. It was the wealthiest of the former Yugoslav Republics and per capita GDP now stands at 59 per cent of the EU average, the highest in the region. Public finances are in balance; it has a skilled workforce and relatively good infrastructure.
In 1997, a constitutional change was required to extend foreign ownership of property as a result of moves to develop relations with the EU. Although there was much opposition to this move, there is now a broad political consensus on EU and NATO membership.
Slovenia has good relations with its neighbours, including Croatia, with whom the issue of direct access to the sea remains to be settled. A period of political uncertainty followed inconclusive parliamentary elections in December 1996 and ended with the return of Janez Drnovsek as head of a new coalition government.