Sunday

24th Jan 2021

Opinion

Bridging Europe's solidarity gap

  • EU enlargement day in Brussels in May 2004 - but is Europe still divided in two? (Photo: European Commission)

The Wall that represented the geographical and political division of Europe was taken down 20 years ago, bringing euphoric hopes of unity. Yet today there is a new division in Europe - a solidarity gap.

After the accessions of 2004 and 2007, the new EU member states believed that they were finally sitting in the same boat with their neighbors to the West.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

But right now, from the point of view of the new members, the EU states of long standing are comfortably aboard a luxury cruise ship heading for the horizon while they themselves bob behind on a leaky dinghy in troubled waters.

How the EU will succeed to bridge this solidarity gap perception will be crucial to its own survival.

The January gas crisis left hundreds of thousands of East Europeans without heating and forced many businesses to suspend operations – and many were right to say that those mainly to blame were the respective governments that had failed to take pre-emptive steps to ensure gas supplies.

The Russian-Ukrainian dispute became the opening act of the East-West drama that called into question the EU's credibility among its new members. The lack of long-term support on the part of the European Commission for the integration of Europe's gas transmission systems and the initial reluctance of key European leaders such as Sarkozy, Merkel or Berlusconi to enter the fray resulted in a 14-day stalemate for a number of recently-admitted EU members.

One immediate result was that previously high levels of support for the union fell by nearly 20% in Bulgaria during the weeks of the crisis. Last week, fresh news of Ukraine firm Naftagoz' inability to pay Gazprom has conjured the spectre of a new gas crisis, raising new fears in EU's East.

The recent call by German Chancellor Merkel to the European Commission for support for the Nord Stream project, which would diversify the gas route to Europe but would not ameloriate dependence on Russia, worsens concerns that there will be no common European policy vis-a-vis Moscow.

Europe cannot seem to accept the argument that the recent crisis has highlighted the uselessness of bilateral agreements with Russia.

Meanwhile, the protectionist statements by French President Nicolas Sarkozy amid the growing financial difficulties of the new member states became an alarming signal for the prospects for their economies. With their banks owned mostly by West European banking institutions and their financial balances highly dependent on foreign direct investment from the established industrial countries, the new member states face the risk of financial turmoil in the months to come.

The recipes for their transitions that the West preached and that were adopted by the domestic elites - that Central and Eastern Europe (CEE) economies should be opened to foreign investment and trade - seem to be at the heart of their current economic difficulties.

Moody's Investors Service warned in a report last week that Western owners of East European banks are coming under pressure to withdraw capital from countries already reeling from budget deficits and foreign borrowing.

For Central and Eastern Europe, which enjoyed breakneck growth spurred by a splurge of credit from these banks, the squeeze could not have come at a worse time. Already bruised by the global downturn, they are on the verge of a downward spiral as credit dries up. Average growth among countries in the region slid to 3.2 percent last year, from 5.4 percent in 2007. This year, it is forecast to contract further, economists say.

French, Italian and Spanish plans to support their car industries by pumping billions in exchange for "staying domestic" cause further concern in the eastern part of the EU. President Sarkozy's announcement that he would like PSA Peugeot Citroen and Renault SA to shift production from low-wage nations back to France in return for €7 billion in soft loans provoked fierce reaction by the Czech presidency of the EU Council. Growing unemployment, along with declining currencies that are making imports and foreign debt payments more expensive, are forcing governments to cut back on spending and public services, leading to a wave of increasingly violent protests across the region.

Last Friday, the coalition government in Latvia - where the economy contracted more than 10 percent on an annualised basis last month - became the second European government, after that of Iceland, to collapse.

The East Europeans will hold a mini-summit this Sunday, preparing for the EU summit in Brussels. The Hungarian and Polish governments will seek support for a "European Stabilization and Integration Program" that they hold would help them find a way out of the crisis. Along with short-term financial injections, the package will suggest faster financial integration of Europe.

Apart from Slovenia and Slovakia, the Eastern European EU members are not part of the Eurozone. The predicted "hard landing" of their economies may imperil the currency boards in Lithuania, Estonia and Bulgaria and will make it more expensive to rescue them than the countries that have already introduced the euro. Including all of them in the ERM II mechanism, which would allow many of the EU's eastern members to adopt the euro in the next two to three years, could be a reasonable political measure to bridge the solidarity gap between East and West.

But as Philip Stephens said in a recent commentary in the Financial Times, some of the old members "would like to undo the enlargement." And as perceptions matter most in politics, the solidarity gap has become a political fact in the EU today.

It will be up to the old member states to send the right signal: not only that solidarity means more that re-distributing structural and cohesion funds, but that the pains of transition were still the right path to take - for we all want to sit in the same boat. And that the political influence of Russia in Europe - the one East Europeans have been trying to diminish by accessing the euro-Atlantic club and now comes back through the gas pipes - should not be a major factor in European politics.

Vessela Tcherneva is senior policy fellow and head of the European Council on Foreign Relations Sofia office

Disclaimer

The views expressed in this opinion piece are the author's, not those of EUobserver.

A digital euro - could it happen?

"Banknotes are still to stay," European Central Bank president Christine Lagarde said at a recent conference, "but I think we will have a digital euro."

The new dimension of 'ever-closer union'

The greatest mistake the EU institutions can possibly make at this juncture, is to turn the Conference on the Future of Europe into yet another round in the outdated feud between the federalists and the inter-governmentalists.

Tackling frozen conflicts in the EU's own neighbourhood

Romania has drawn the signal that the time has come to resume the EU-level dialogue on protracted conflicts and their crippling effects on the region's security and development perspectives, writes the country's foreign minister, Bogdan Aurescu.

EU name change masks new restrictions in development sector

This week the European Commission's Directorate for Cooperation and Development changes its name to the Directorate-General for International Partnerships - in a symbol of how early-industrialised countries seem to be losing influence to the benefit of some emerging countries.

News in Brief

  1. Hungary buys Russia's Sputnik V vaccine
  2. Netherlands imposes curfew to halt new corona variant
  3. Green NGO fails to stop Europe's biggest gas burner
  4. Swedish minister reminds Europe of Russia's war
  5. Spain: Jesuit order apologises for decades of sexual abuse
  6. NGOs urge Borrell to address Egypt rights 'crisis'
  7. EU conflict-area education aid favours boys
  8. EU told to avoid hydrogen in building renovations

Column

BioNTech: Stop talking about their 'migration background'

I understand that the German-Turkish community - often subjected to condescension in Germany - celebrated the story. Uğur Şahin and Özlem Türecki represent scientific excellence and business success at the highest level.

Italy's return to statism spells trouble for the eurozone

There are profound questions about whether the windfall of cash from the EU coronavirus recovery fund will truly help Italy recover or whether it will cause more problems than it solves, for Rome and the rest of the eurozone.

Stakeholders' Highlights

  1. UNESDAEU Code of Conduct can showcase PPPs delivering healthier more sustainable society
  2. CESIKlaus Heeger and Romain Wolff re-elected Secretary General and President of independent trade unions in Europe (CESI)
  3. Nordic Council of MinistersWomen benefit in the digitalised labour market
  4. Nordic Council of MinistersReport: The prevalence of men who use internet forums characterised by misogyny
  5. Nordic Council of MinistersJoin the Nordic climate debate on 17 November!
  6. UNESDAMaking healthier diets the easy choice

Latest News

  1. EU leaders keep open borders, despite new corona variant risk
  2. EU and Cuba appeal for Biden to open up
  3. Portugal's EU presidency marks return of corporate sponsors
  4. MEPs chide Portugal and Council in EU prosecutor dispute
  5. EU warns UK to be 'very careful' in diplomatic status row
  6. A digital euro - could it happen?
  7. US returns to climate deal and WHO, as EU 'rejoices'
  8. Big tech: From Trump's best friend to censorship machine?

Join EUobserver

Support quality EU news

Join us