European Affairs

Fall 2004

 

European Integration
New Members See Enlargement as Hindering Further Integration
By Robin Shepherd

 

Lenin has gone out of fashion in Europe these days. But his piercing appraisal of the central question of power politics, "Who dominates whom?," could hardly be more pertinent as the European Union continues to grapple with the implications of its May 2004 enlargement. To say that things have changed in the relationship between Brussels and the eight new members from former communist Central and Eastern Europe is to state the obvious. For the best part of a decade and a half, after all, the power disparity defining that relationship was about as asymmetrical as one can imagine in the peaceful sphere of international relations. One side wanted to get in; the other held the keys to the door and could open or close it at will. Now, the carrot and the stick, dangled and wielded to such great effect in securing democratic, market transformation in the former communist states, are no more. The rules of the game have changed.

It is still too early to define with great certainty the long-term consequences of enlargement, either for the European Union or for the accession countries themselves. But, half a year into the biggest expansion in the European Union's history, clues have begun to emerge. There have also been some surprises. Even before enlargement, though with the certain knowledge that it would go ahead, Poland, with a population as big as the rest of the accession countries combined, showed it had muscle to flex. Together with Spain, Poland blocked the signing of the proposed new European constitution at the EU summit in December 2003. Six months later, with Spain ready to compromise, Poland had little choice but to back down, accepting the political impossibility of standing alone against the remaining 24 EU members. Even with Poland's retreat, however, it was clear that something had irreversibly changed in the way that the European Union manages its affairs. Poland had become a partner to be bargained with rather than a candidate to be lectured. Poland could be a useful ally or an awkward opponent. As a member of the club, Poland mattered. The agreement on the constitutional treaty, of course, was merely the first act in a drama yet to unfold. In Central and Eastern Europe, both Poland and the Czech Republic have signaled that they will hold referendums on the constitution, while most of the other countries will almost certainly vote (supportively) on the treaty in national parliaments. In theory at least, rejection by any single country would render the treaty invalid. So, will the Poles and the Czechs say Yes or No?

A poll conducted by the PBS polling agency just after EU leaders approved the treaty in June suggested that 47 percent of Poles would vote in favor, with a third opposed and 20 percent undecided. A Eurobarometer survey published by the European Commission in July put support for the general principle of a European constitution (though not necessarily the one proposed) at 71 percent in Poland and 65 percent in the Czech Republic. Brussels has taken encouragement from these figures. But it may be more than a year before the referendums are held, during which time opinions could obviously shift. Moreover, the rules established to validate the results of the referendums will be as important as the preferences expressed. Should either country impose a 50 percent turnout threshold, as was the case in Poland's referendum on joining the European Union in 2003, there could be real problems. In elections to the European Parliament in June 2004 only 28 percent of eligible voters cast their ballots in the Czech Republic, and fewer than 21 percent in Poland. Unless referendums are timed to coincide with domestic national elections—which they may be—it is difficult to see how a 50 percent turnout could be achieved. Turnout, of course, was the big story in the elections to the European Parliament themselves. In the new member countries as a whole, the turnout was a meager 26 percent, compared with a far from impressive 45.7 percent for the entire 25-nation Union. The conclusion widely drawn in the new member states is that enlargement has taken Europe further away from the shared political culture that is the prerequisite to closer and deeper integration. Enlargement has reaffirmed the belief that the primary sense of political identity in the European Union is more deeply rooted in the nation state than ever.

"Polls show support for the general principle of a European constitution, though not necessarily the one proposed"

Seen from Central Europe, deeper integration still looks possible among a so-called hard core of mostly West European countries, but not throughout the European Union per se. This more than anything else is the most significant result of enlargement. As Europe has come together, it is achieving greater clarity (at least for those who are prepared to face up to it) about what it really is and the limits to what it can become. Concrete evidence to support this conclusion has already been provided by Franco-German efforts to revive the idea of a unified corporate tax rate across the European Union to prevent the new Central and Eastern European members from luring away investment through "unfair" tax competition. The proposal was taken by most new member governments as an affront to all that they have worked for in reforming their economies. The star performer in this respect has been Slovakia, where Finance Minister Ivan Miklos succinctly described the Franco-German proposal as "absurd." Slovakia unified its corporate, income and value added taxes at a flat rate of 19 percent in January 2004, a move that led Steve Forbes, a business magazine owner, former U.S. presidential candidate and long-time flat tax advocate, to describe Slovakia as an "investors' paradise." In September 2004, the World Bank named Slovakia the best reformer in the world in its 2003 survey of global business conditions.

"Central and Eastern Europeans see significant shortcomings in the economic performance of the West"

Praise of this sort stands in sharp contrast to what Central and Eastern Europeans inevitably see as significant shortcomings in the economic performance of the West.While the economy of the 12-nation euro zone grew at an annual rate of two percent in the second quarter of 2004, Poland achieved yearon- year growth of 6.1 percent. Slovakia grew by 5.4 percent, Hungary by 4 percent, the Czech Republic by 4.1 percent and Latvia by 7.7 percent. Although these figures must be seen in the context of the smaller economic base from which the new members are starting, it is still difficult for the newcomers to believe that the older members have much to teach them. It is even harder to imagine the Central and Eastern European countries adopting the kind of high-tax policies embraced by France and Germany, which could stifle their robust economic growth. Fundamental disputes on economic policy between East and West are likely to endure. Nevertheless, one widely expected cause of friction on economic policy between new and old EU members has so far failed to materialize. Poland's much discussed farmers—who represent 16 percent of the country's labor force and work on around 2.9 million farms—were initially angered by the European Union's decision to phase in their Common Agricultural Policy subsidies over several years, rather than give them their full due at once. But in one of the great surprises of the months following enlargement, such bitterness appears to be subsiding. A CBOS opinion poll in September 2004, for instance, put support for the European Union at an astonishing 67 percent among Polish farmers, compared with 50 percent at the start of the year. One obvious explanation is the feel good factor following forecasts of a record harvest by Polish Minister of Agriculture Wojciech Olejniczak. That may have more to do with good weather than with European Union membership. Nevertheless, EU membership has already brought some concrete benefits. Polish farmers were allocated subsidies worth €2 billion in October, which, while far short of the sums doled out to their French counterparts, were still welcomed as a tangible, positive conse-quence of EU entry. "Structural pension funds," partly financed by the European Union, have also begun to kick in. The system, effectively an early retirement package for those over 55, offers €640 million of EU money over the next two and a half years to eligible farmers willing to hand over their farms to the state. Initial reports suggest a positive response to the offer.

A big increase has also been reported in purchases of Polish farm products from abroad, especially from Germany, which has turned Poland into a net exporter of food. The government expects a large food trade surplus with the rest of the European Union this year, leading Mr. Olejniczak to talk of a "complete turnaround" in the atmosphere in the countryside. At official level, the relationship in Brussels between new and old member states has been shaped by the "twinning" arrangement under which the newcomers nominated officials to "shadow" members of the outgoing European Commission under President Romano Prodi for the last six months of its term. As a sign of their enthusiasm and the seriousness with which they take their new status in the EU, the new members have tended to nominate their most senior and respected officials for posts in Brussels. The Czech Republic, for example, named a former prime minister, Vladimir Spidla, as its representative on the Commission, and Hungary chose a former foreign minister, Liszl-Kovics. The most pressing problems for the new entrants in Brussels have been mundane rather than political. "There hasn't really been much obvious friction between the new members and the old on the political level, at least not yet," says Hana Lesenarova, Brussels Correspondent for the Czech Republic's leading newspaper Mlada Fronta Dnes. "Logistical" problems such as translating all the documents and memos have been much bigger problems. There have been efforts to limit the size and length of many documents to cope with things like translating from Czech into Finnish. There's the related problem of documents being translated from one language into English, for example, and then from English into another language. That has left a of potential for mistakes and misunderstandings.

"Small countries have more influence in the European Parliament than anywhere else"

In the European Parliament, some deputies from the new member countries have adapted to life in the European Union with relish. In an interview in the Baltic Times in late October, Toomas Hendrik Ilves, a former Estonian foreign minister now a member of the European Parliament, dismissed suggestions the new members, especially the smaller ones, were being treated as ignorant newcomers. "It was pleasant to be received as a full member," Mr. Ilves said. "Despite all the moaning and complaining and the nihilistic self-loathing from small countries that, 'Oh, we can't make our voice heard at all,' it's not true. In fact, small countries have more influence in the European Parliament than anywhere else up to now," he added. "On top of that, there are exceptionally good people from among the new member states." In foreign affairs, the prospects for a meaningful EU common policy, at least on the big issues, remain as bleak as ever, in the view of most Central and Eastern European analysts. The war in Iraq continues to create divisions between "Old" and "New" Europe, to use Donald Rumsfeld's notorious distinction. But the issue has tended to bubble beneath the surface without noticeably exacerbating problems that already existed before enlargement.

To be sure, the Central and Eastern Europeans have not forgotten the stinging rebuke they received from French President Jacques Chirac when they dared to disagree with him and support the United States on Iraq - before they had joined the European Union. All eight of the new EU members from Central and Eastern Europe, it will be recalled, signed letters of support for the U.S. position before the outbreak of war. Apart from Poland, which has sent 2,400 troops to Iraq, actual participation in the conflict has been mainly symbolic. Hungary has 300 troops in the war zone, while the other new members have 150 or fewer. Nevertheless, despite a small but rising casualty count, widespread public opposition and a continuing debate about how long their forces should remain in Iraq, the new member states had shown few signs of reversing their policies of supporting Washington. It is too soon to say whether this stoutly Atlanticist line will be sustained on other looming issues, such as Iran's nuclear program, mainly because the position of all parties involved remains fluid. In one largely unforeseen development since enlargement, some new member governments are starting to use their leverage as EU insiders to deal with problems with their non-EU neighbors.

The most recent flashpoint has been the Serbian province of Vojvodina, home to around 300,000 ethnic Hungarians. The Hungarian authorities have become embroiled in an increasingly vituperative dispute with Serbia over alleged "atrocities" perpetrated by Serbian nationalists against ethnic Hungarians, reportedly including the desecration of tombstones, a proliferation of anti-Hungarian graffiti, burning of the Hungarian flag and a police attack on a mayor representing the Hungarian minority. To the consternation of the Serbian authorities, Hungary has raised the matter in the European Union, thus enabling Budapest to wield a diplomatic stick it did not possess before it became an EU member. Other such disputes have broken out between new EU member Slovenia and non-member Croatia, and between Cyprus, which has just joined, and Turkey which is still seeking EU entry. EU foreign policy making since enlargement has thus had to cope not merely with the quantitative problem of coordinating policy in a Union with ten more members, but also with the qualitative problem of having imported some of the new members' historic foreign policy disputes. Finally, as the Union's borders have shifted eastward, the absence of a viable EU policy toward Ukraine, Belarus and Moldova is keenly felt in many of the new member states. It would be fitting indeed if the new EU members from Central and Eastern Europe could persuade Brussels to offer these countries the prospects of integration into the family of European nations from which they themselves have so singularly benefited.

Robin Shepherd is an adjunct fellow with the Center for Strategic and International Studies based in Bratislava. Formerly the Moscow Bureau Chief of The Times of London, he writes a regular column for UPI as well as occasional columns for a variety of publications including The Washington Post, the The Wall Street Journal Europe and the Chicago Tribune. His book, Czechoslovakia: The Velvet Revolution and Beyond was published by Macmillan/St. Martins Press in 2000.