3 years on – taking stock of the Eastern enlargement

The anniversary of any major event is arguably the ideal moment to take stock of its impact and legacy, but this year is a particularly poignant time to look at the enlargement of the EU, as we now have new members and newer members. Bulgaria and Romania’s accession this January provides us with a means of comparison between these two countries and those that joined back in 2004.

A visit to Brussels today reveals a city vastly different from what it was a few years ago. The capital of Europe has metamorphosed into one of the world’s most cosmopolitan cities, bringing politicians, journalists, lobbyists and other professionals from the four corners of the continent (and beyond) together to “make Europe work.”

Yet we all know that Brussels is not Europe in microcosm. For all the EU’s achievements – the single market and currency, the four freedoms, consumer rights and of course enlargement – barriers, prejudices and misunderstandings still exist. “New Europe” is most certainly a bona fide member of the club, but the club hasn’t fully accepted it. Nowhere is this more clearly manifested than in certain old member states’ continued restrictions on the free movement of workers from new member states. Add to that President Sarkozy’s former criticisms of new EU members over their use of low corporate taxes to tempt employers to relocate jobs out of France and other Western European countries, and it becomes clear that both ‘halves’ of Europe have their grievances.

When it comes to economics, the picture is mixed. When they first joined, the new member states appeared to score highly on several fronts – liberal, accessible markets, prudent spending, dynamic growth and so forth. Disparities were inevitable however, and now we have the first CEE euro member, Slovenia, but also countries like Hungary which have incurred major budget deficits, although recent reports suggest the situation is starting to improve there.

These diverging economic trends have also impacted upon political sentiments. Nationalism has been on the rise in a number of key CEE countries – most notably in Poland and Hungary, and a combination of nationalism, history, and conflicts of interest have undoubtedly weakened the EU in conducting relations with neighbouring Russia since the 2004 enlargement.

Then there are the newest members of the club – Bulgaria and Romania. Their accession marked a poignant and proud moment in European history, and the social, political and economic benefits of the enlargement are clear for all to see. Compare the electric atmosphere on January 1st and the overall voter apathy in Bulgaria’s recent European elections however and some of the shine is taken off the whole story.

In spite of these issues and challenges, the EU’s newer members have contributed greatly to Europe’s overall development. It remains by far the most economically dynamic region in Europe (with a real GDP growth rate of 6% in 2006) and continues to attract significant investment from leading European and global businesses. New Europe now needs to push for full acceptance in the bloc – to dispel prejudices and build upon its successes to date. To this end, Slovenia’s Presidency of the EU in 2008 will prove vital. A well-run presidency will bury once and for all the perception that the EU is ultimately a club run by the big western players, and will act as a springboard to New Europe’s involvement in and contribution to the Union’s future.