Thursday

9th Apr 2020

Mixed feelings one year after enlargement

  • 1 May 2004, 10 new countries became members of the EU (Photo: European Commission)

Ten member states on Sunday (1 May) marked one year of belonging to the European Union; a milestone that is being greeted with something less than enthusiasm in some older members of the club.

European Commission President José Manuel Barroso said the anniversary "is a happy event for all Europeans" and called it a reunification of not only nations and peoples but also of cultures".

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He added that the distinction between old and new member states "no longer makes sense."

However, last year's biggest EU enlargement ever to include eight poor countries from eastern Europe as well as the Mediterranean islands of Malta and Cyprus has still to see all of the politically and economically ruffles smoothed out.

Patience

This was acknowledged in part by Mr Barroso who said that Europeans are still getting to know each other and that it will take time and patience.

In economic terms, becoming members of the EU, appears to have contributed strongly to growth and foreign investment in the new member states as well as trade among all 25.

In Poland, the largest of the new member states, food exports to its neighbour Germany are three times their level before enlargement.

Austria is now the biggest foreign investor in Slovenia and the third biggest in Hungary, Slovakia and the Czech Republic.

The Baltic member states, Latvia, Lithuania and Estonia, have the strong predicted growth rates for this year.

The European Commission predicts their economies will grow 7.2%, 6.4% and 6% respectively.

The new member states have also strongly benefitted from EU direct aid. In Poland, farmers who complained loudly and suspiciously about the EU before membership have become rather quiet as the cash flows in from Brussels.

Looking to the east

However, although they are doing economically well out of membership, the generally small size of their economies means that they have not been able to boost the Union as whole.

Politically, the new member states have also made themselves felt - particularly in the EU's policies towards Russia. They tend to take a far stronger position on Europe's vast neighbour to the east and have been responsible for the EU toughening up it stance towards Moscow.

They also assume a natural political responsibility for events on their doorstep. It was noticeable that during the Orange Revolution in Ukraine, it was the Polish and Lithuanian leaders who were on the spot and it was those countries that helped shape the EU's response.

France and Germany

But there are two countries where feelings about enlargement have been, at the very least, ambivalent - France and Germany.

These large economies, suffering from low economic growth and in Germany's case record-high unemployment, have spurred feelings of blame in their citizens towards the new members of the European Union.

Although there has been no 'influx' of migrants from the new member states to the countries that have no labour restrictions (Ireland, Sweden and the UK) as several tabloid news papers had predicted, there has still been feelings of resentment in some quarters.

Germany and France particularly resent the low corporate tax rates in east European countries - the rates were lowered just before joining.

This prompted recriminations by German Chancellor Gerhard Schröder but then a slashing of Germany's own corporate tax from 25 to 19 per cent, in order to compete with the new member states.

On top of this, when large companies such as Siemens threatened to move eastwards, employees agreed to freeze wages.

In both Germany and France, tough restructuring is going on in order to make themselves more competitive - but it has led to resentment among their citizens.

They blame their uncertain futures and job situations on new member states leading to eurobarometer polls showing a drop in support for further enlargement.

In France, the feeling is also nuanced by a general perception of Paris losing its stature and belonging to a club over which it no longer has any control.

Social Europe

The nature of the debate is captured by the furore surrounding an EU proposal to open the market in services.

In March, 1000s of people took to the streets in Brussels to demonstrate in favour of a Europe's Social Model.

They feel it will be undermined by cheap service labour from the east – made possible by such a services directive.

French President Jacques Chirac took up the rallying stance for Europe's social model at a meeting of EU leaders on the same day.

Elements of the discussion can also be found over the issue of whether to take protective measures against the large increase in Chinese textiles on Europe's markets.

This has divided people into the pro and anti-protectionist camp as Europe's 25 member states struggle as a whole to compete in a globalised world.

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