Now the Twelve

It was 3:15 a.m. when the European Community's ten foreign ministers emerged bleary-eyed from a conference room atop Brussels' Charlemagne Building. They had just cleared the way for the young Iberian democracies, Spain and Portugal, to become the eleventh and twelfth members of the Community next Jan. 1. Beyond its economic impact, the event was fraught with political significance. It helped boost the stature of the two countries' governments and anchored them more firmly in the West European camp. Declared Spanish Foreign Minister Fernando Moran: "Now we can get rid of the inferiority complex in international affairs that Spaniards often have. We can hold our heads up now."

The enlargement decision came only hours before the Community's heads of government gathered in Brussels for their thrice-yearly summit. It was none too soon. One week earlier a five-day meeting of the group's foreign ministers had broken up without reaching an agreement. The stumbling blocks: last-minute objections by France concerning Spanish fishing rights in European waters and Spanish wine sales in French markets. Efforts to end the deadlock continued through the week. The breakthrough came in a final 16-hour bargaining session led by Italian Foreign Minister Giulio Andreotti. The agreement called for a transition period of seven to ten years, allowing the economically backward Iberian countries to adapt to the Community's policies promoting the free movement of workers, capital and manufactured goods.

Equally pressing were the terms for the two countries' financial contributions. Spain will receive a decreasing rebate of its value-added-tax contributions over six years, aimed at limiting the initial cost of membership. Portugal accepted a $900 million package of rebates and industrial loans, which it will use to help correct its balance of payments deficit and to modernize industry.

Integrating the newcomers into the fold will be no easy matter. Already plagued by serious budgetary troubles--last year's deficit was an estimated $2 billion--the Community will have to come up with an additional $1 billion annually to finance the membership of the new partners. The Community's creaking agricultural subsidy programs will have to deal with a 28% increase in the farming population, which will complicate an already critical problem of surpluses. Spain's government-subsidized steel industry will add to Western Europe's excess capacity.

On balance, however, everyone seemed to feel that the expansion to twelve would be worth the sacrifices. As French Foreign Minister Roland Dumas put it, "This is the result of the political will of all the members to have Spain and Portugal join the Community."