The CBI at Harrogate: Eastern Europe / Owen talks of challenge in widening EU membership: Michael Harrison and Mary Fagan round up developments at yesterday's conference

LORD OWEN, the peace envoy in former Yugoslavia, warned yesterday that Europe was storing up trouble for itself if it did not speed up efforts to bring the economies of Eastern Europe into the European Union.

In a speech that held out little hope for an end to the conflict in Bosnia-Herzegovina, Lord Owen praised the EU for its support for his peace initiative but chided the European partners for their approach to other former Eastern bloc countries. The EU, he said, had been guilty of 'abysmal failure' in spreading democracy to these newly emerging economies, preferring to take the easy route to enlargement by agreeing to admit Austria, Finland, Sweden and Norway.

Addressing a breakfast gathering of businessmen, Lord Owen accused Europe of being laggardly in granting EU membership to Poland, Hungary and the Czech and Slovak republics. 'The challenge lies to the east,' he said. In order to secure political stability in Eastern European states, it was essential to help them transform their economies through membership of the EU.

In a bleak assessment of the prospects for an end to the fighting in Bosnia, Lord Owen said he feared a 'tragedy of monumental proportions' if the civil war went on through the winter. Disaster had been averted a year ago only by one of the mildest winters in Bosnia for many years and the initial gusto of the United Nations relief effort.

But the more the UN had been drawn into the conflict, the more its moral authority had been eroded and the harder the humanitarian effort had become. However, Lord Owen said that Europe should not feel ashamed at its endeavours to bring peace. The EU had been the most 'consistent, courageous and united supporter' of the peace initiative.

But he criticised Europe for being too ambitious and too hasty to present a united front over former Yugoslavia. The EU had made a fatal error in granting recognition to Croatia and then Bosnia-Herzegovina at the behest, mainly, of Germany. It would have been feasible for only Germany to have recognised them.

The compulsion among EU members always to reach the same decisions had a parallel in monetary and economic policy; the goal of a single currency presented as great a challenge as a single foreign policy.