Opportunities and Challenges for an Enlarged EU

Opportunities and Challenges for an Enlarged EU

The EU celebrates 50 years in 2007. When the Treaty of Rome on the European Economic Community (EEC) was signed in the spring of 1957, hardly any of the six founding states – France, Italy, West Germany and the Be-Ne-Lux countries – saw itself a fiftieth anniversary with nearly 500 million inhabitants. Nor that the EU would eventually include states from the then dictatorships of Southern Europe and communist Eastern Europe.

  • Where is the development of the EU going?
  • What are the effects of the recent expansions?
  • How are the political and economic developments in the new member states?

2: The expansion process

With Romania and Bulgaria as new member states from 1 January 2007, the EU now consists of 27 states. All are measured and found worthy of membership based on the EU’s democratic, market economy and rule of law criteria (the Copenhagen criteria ). Nevertheless, there are many differences between the member countries – both the level of political-economic development, geopolitical orientation and historical-cultural roots. After many enlargements, the union has become more heterogeneous (diverse) and diverse. For each new member state, the EU is filled with new people, ideas, needs and wishes. Since its inception, the EU has been phased out with a total of 21 states.

  • In 1972: Great Britain, Ireland (Ireland) and Denmark
  • In 1981: Greece _In 1986: Spain and Portugal
  • In 1990, East Germany – the GDR – became a member of a united Germany
  • In 1995: Sweden, Finland and Austria
  • In 2004: Estonia, Lithuania, Latvia, Poland, the Czech Republic, Slovakia, Slovenia, Hungary, Malta and the Greek part of Cyprus
  • In 2007: Bulgaria and Romania

Back on the waiting list are Turkey and Croatia, as well as five other states in the Western Balkans. The first two have already started membership negotiations. Albania, Bosnia-Herzegovina, Macedonia, Montenegro and Serbia are projected future memberships. However, this may take longer than expected. During the EU summit in December 2006, EU heads of state and government agreed to slow down the pace of enlargement . No date was set for new extensions. And the EU tightened the requirements for its own “absorption capacity” – ability to digest – and for reforms in future member states. In addition, the EU froze important parts of the membership negotiations with Turkey, which have been ongoing since the autumn of 2005. The new, tougher tone is not least due to the experiences the EU has gained with the major enlargement in 2004.

3: Vision and reality

The accession of ten new members on 1 May 2004 made the visions of a new and united Europe from the days around the fall of the Berlin Wall a reality. Eastern enlargement was seen as a “historical and political opportunity” to ensure peace, stability and prosperity in a Europe that for long periods has been marked by deep conflicts, divisions or war. Nearly three years later, the EU is characterized by a lack of will to reform and a desire to expand . Many of the newcomers, for their part, have taken a long step to the right and sent their workers into a pan-European labor market – much to the frustration of several old EU members. What happened?

Two and a half years is a vanishingly short period of time to assess whether the EU’s perhaps boldest project has actually succeeded in creating political stability, increased prosperity and security in a united Europe. The enlarged EU is still in a transitional phase. This is due both to the fact that the EU countries have not yet decided on reforms of their internal governance system and to the fact that newcomers’ membership is still limited by a number of transitional arrangements. These were intended to reduce the unfortunate consequences of enlargement. Nevertheless, we see that differences in the level of economic development and political experience create distance between old and new member states.

4: Economic miracle?

After decades of state-run planned economy, the Eastern and Central European countries in 1990 had a burning desire to quickly reach the same standard of living and prosperity as Western Europeans. Their method of promoting economic growth has been aggressive market reforms . Through a combination of low corporate taxation, low wages and a labor market stripped of the rights that strong unions secure for workers in the West, they have sought to attract foreign investment.

To put it simply, their economic model has been the low-cost countries China and India, rather than the high-cost countries Germany and France. The result of this strategy has given Eastern and Central Europeans far higher growth than the euro countries in the old EU. Since 2004, the new members have had an average annual GDP growth of 5–6% – more than twice as high as the old EU countries.

Many Western European companies that before the expansion planned to establish themselves in low-cost countries outside the EU area, have now established subsidiaries in eastern EU countries. At the same time, the new members will transfer significant funds from the EU’s common fund to their agriculture and their poorest regions. For most countries, subsidies from Brussels have been a key, motivating factor for applying for membership. According to the EU’s long-term budget for the period 2007–2013, Poland, which is by far the largest recipient of EU funds, will receive close to NOK 560 billion in support during the period and the newcomer Romania NOK 250 billion.

5: Double prosperity gap

Despite strong economic growth in Eastern Europe and large transfers from the EU coffers, it will take a long time – several decades – to close the prosperity gap between East and West in the EU. This year’s newcomers – Romania and Bulgaria – have a GDP per capita of about a quarter of the EU25 average. The standard of living in the rest of Central Europe is still far behind that in the West, and suffers from a lack of reforms in the public sector and the tax and welfare system, among others. Unemployment is both structural (due to inadequate adjustment) and high. Poland and Slovakia have official unemployment figures of almost 20%, while the other countries are around 10%. And the hidden unemployment is extensive. Since 2004, therefore, many Eastern Europeans have traveled west in search of work.

While most old EU countries introduced restrictions of up to seven years for free labor immigration from the east, the United Kingdom, Ireland and Sweden opened their borders completely. The British counted 13,000 immigrants, but have received as many as 500,000 Eastern European workers since May 2004. Although economic experts claim that they have only filled vacancies in the construction industry and the service industry, the unexpectedly large labor immigration has caused even the liberal British to sharply limit labor immigration from Romania and Bulgaria. Another 12 out of 15 old EU countries have done so, as well as Hungary as the only one in the east. Euro co-operation is also currently closed to Eastern and Central Europeans, with one exception; Slovenia, which introduced the euro on 1 January 2007 after the country as the only newcomer had met the strict economic requirements of the single currency (see margin).

More worrying is that the populations of Eastern and Central Europe are experiencing ever-increasing internal inequality. Most countries are marked by deep differences between those who have so far benefited from the restructuring – mainly young people with a good education, living in fast-growing cities, and those who fall outside, especially residents in peripheral areas, where unemployment in many small towns reaches 30-40% . The differences are confirmed by the EU’s latest report on competitiveness within the Union. This shows that the only three Central European regions that are more competitive than the EU average are around the big cities of Prague, Bratislava and Budapest. This economic imbalance between metropolitan area and province holds a significant potential for social and political unrest.

6: Political unrest in the east

In the last couple of years, voters in many Eastern and Central European countries – especially in poor suburbs – have voted populist, strongly nationalist and EU-skeptical parties into positions of power. These parties are happy to promise fewer and slower economic reforms and increased social justice. The situation in Poland is significant.

In the autumn of 2005, voters in the economically backward areas of eastern Poland gave the arch-conservative, anti-liberal and strongly nationalist Law and Justice Party (PIS) victory in both the parliamentary and presidential elections. This led the Kaczynski twins to the presidency and prime minister post of the EU’s largest Central European country. The brothers’ pronounced skepticism of the secular, liberal order that many Europeans associate with modernity creates great frustration among more liberal, pro-European Poles.

Skepticism is directed at gays, feminists and abortion advocates, as well as anything that tastes of foreign influence. So far, Poland has joined forces with the EU, Germany and Russia, among other things by proposing the reintroduction of the death penalty and by comparing a German-Russian energy cooperation with the Molotov-Ribbentrop agreement that divided Poland in 1939! That a more self-conscious, nationalist Polish leadership is firing on Germany and Russia, which for centuries has marked the fate of the intermediate countries, is hardly surprising. Nevertheless, new tones between partners in an EU were created to create peace and reconciliation between old enemies in Europe.

7: Corruption and lies

Probably crucial for the Kaczynski twins’ election victory in Poland was an issue that has brought even more right-wing parties into government offices elsewhere in the region, namely the promise to fight organized crime and the widespread corruption that has plagued politics and business in the East and Central Europe since the fall of communism. There has been no shortage of political parties or politicians – new or old – who have been involved in corruption and scandals.

That many former communists survived as business leaders and politicians after the regime change is no surprise. In most communist countries, it was precisely the old leadership that had the necessary network, education, political and economic capital when the political and economic system was to be re-carved. And many ex-communists enriched themselves after the privatization of the state property of the socialist countries after 1990.

In Romania, six parliamentarians, sixteen generals, a former deputy prime minister, five judges and a number of police officers and mayors were charged or charged with corruption in 2006 alone. .

The unrest began after Prime Minister Ferenc Gyurcsani admitted to lying about and beautifying the country’s economic development to win the parliamentary elections in the spring of 2006. large budget deficits. Thus the greed and opportunism of the current socialist leaders cast long shadows over the heroes of the past during the 50th anniversary of the brave Hungarian uprising in October 1956.

With so much unrest and incomplete reform work in the Central European member states, it is understandable that the EU during the summit in December sharply tightened the requirements for future members. Turkey and the countries of the Western Balkans will have to do far more, among other things, to fight corruption and organized crime than the ten Eastern and Central European countries that are already members. It will hardly increase their enthusiasm for the EU. In Turkey, support for EU membership has actually fallen from 66% to 33% during the year the country has negotiated with the EU. Many Turks express that they do not feel wanted in the EU. And they’re probably right.

8: Enlargement-oriented Western Europeans

According to WATCHTUTORIALS, there was no warm welcome Romanians and Bulgarians were greeted with January 1st. According to the Eurobarometer (EU polling institute), only 45% of the EU25’s 450 million inhabitants now support new enlargements and only 31% and 28% respectively. France and Germany. The least voted for enlargement are Austria and Luxembourg with only 27% support. There are many reasons for the growing skepticism for expansion.

A major challenge for the “old” EU – EU15 – is that the Union’s enlargements in time coincide with the globalization of the world economy. In the battle for new establishments and investments, many old EU countries are losing jobs both to Southeast Asia and to the new EU members. This “double globalization” seems particularly strong in traditional industrialized countries such as France and Germany, where tax, duty and wage levels are still very high. At the same time, cheap Eastern European labor is seeking the West.

Frustration over European leaders’ lack of strategy to counter the negative effects of double globalization contributed to the proposal for a new EU Constitutional Treaty not being adopted in 2005.

Both the French and the Dutch voted against in the referendum and cited the EU’s enlargement plans – especially membership of the populous and poor Turkey – as a main reason for voting no to the constitution. As many as 46% of French no-voters stated fears that new expansions would lead to higher unemployment .

Although there is no obvious link between the reform proposals in the Constitutional Treaty, enlargements and unemployment in France, people still saw an “explanation” in the low-paid, willing “Polish plumber” who became the symbol of all opponents of enlargement.

In any case, the perception of enlargement as a threat to one’s own jobs, wage levels and welfare benefits has contributed to creating a more negative attitude towards enlargement among the citizens of the EU15. Therefore, the enlarged EU (EU27) today must do without the reforms in the governing body that the draft constitution provided for. The background for the constitution was precisely the need to reform the EU’s old institutions and decision-making methods with an expansion just around the corner.

9: EU’s lack of absorption capacity

As mentioned, the EU in 2007 with 27 member states is far more heterogeneous than before. The enlargement has increased the number of participants around all negotiating tables and brought more politicians with their own, national priorities, interests and needs into the EU. This complicates an already cumbersome decision-making process and challenges the EU’s existing structures and internal governance system.

If the EU of 27 – or more countries – is to be able to make effective decisions and find the necessary compromises – also with a view to becoming a viable global player – the members must agree on a reform of the EU decision-making bodies. If not, the EU could be paralyzed and have problems adopting political solutions that people perceive as relevant in everyday life. It will deprive the union of support in the population. The result could easily be a collapse in integration and strengthened support for populist and / or xenophobic parties also in the West. That is why the EU’s Heads of State and Government refer to the EU’s lack of absorption capacity.

If EU enlargement is to achieve the goal of creating political stability, increased prosperity and security in a united Europe, its member states and citizens will probably need a longer period of consolidation, both geographically and politically. Fifty years after the creation of the EU, there is much to suggest that the biggest challenges lie ahead – not behind the 27 member states.

Opportunities and Challenges for an Enlarged EU