European Council on Foreign Relations

Reinventing ‘New Europe’

My colleague Dimitar Bechev recently wrote this blog post about the slow but inevitable end of 'new Europe'. Diverging economic trajectories and political interests of newer EU members in Central and Eastern Europe, he writes, will slowly lead to a disintegration of this bloc into smaller groupings. The trend is visible already: Poland has reached out to Germany and tried to forge closer co-operation with Berlin on a number of issues including Russia; the Baltic states are trying to re-brand themselves as members of the 'Nordic' camp. These realignments have caused some friction in the region – for example, Poland's focus on Germany has prompted discreet reminders from other Visegrad grouping countries - the Czech Republic, Hungary and Slovakia - that Warsaw should not forget about its closest allies in the region.

The disintegration of 'New Europe' may well be inevitable in the long-term. But there are at least two reasons why it should not happen too soon. The first has to do with the EU's response to the economic crisis. The new treaty agreed in January 2012 establishes a 'euro-core' led by France and Germany, with little involvement of the European Commission and without the UK. This core had adopted its own rules on fiscal discipline, with implementation mechanisms. Most decisions regarding economic policy remain with the full EU27 but the odds are that many will be ‘pre-discussed’ by the core before they are put to the rest of the EU. This does not bode well for Central European members of the eurozone, current and future. The Franco-German push for 'enhanced economic convergence' will probably include harmonisation of taxes and a degree of social policy coordination that would undo the competitive advantages of most Central European member states. With Britain having opted out from the EU-core and the Commission side-lined, these states will have few other allies in the core to ensure that the solutions to the economic crisis do not stifle their own sources of growth. The challenge for the 'newer Europeans' is to find a common approach among themselves and then reach out to possible allies such as the Netherlands.

The question is whether different capitals in the region can agree on this common strategy. Thus far, the Poles or Slovaks prefer direct talks with Berlin rather than forging a regional approach; the Czechs have opted out of the discussion for at least a year, and Viktor Orban's government seems to be spending much of its time responding to international concerns about country's democracy. However, if these states don't want to see their objections to tax harmonisation ignored, they will have to act jointly soon at the EU level.

The other issue that continues to bind the region is the EU's Eastern Partnership, which has run into difficulties. These mainly come from the EaP countries themselves: except for Moldova and sometimes Georgia, the region has been delivering little good news. Democracy is on the slide across the region. An 'association agreement' between the EU and the largest EaP country, Ukraine, has been agreed but not signed because the country's former prime minister, Yuliya Tymoshenko, remains in jail on grounds the EU considers politically motivated. As the euro crisis continues, the EU's attention (including funding) to the region is unlikely to increase; quite the opposite. But unlike Spain, France or Belgium, the 'newer Europeans' can ill afford to ignore the negative trends in their own backyard. Poor eastern regions of Poland, Slovakia, southern regions of Latvia or Lithuania or border regions in Romania will continue to need an infusion of EU cohesion funds unless the states on the other side of those borders – Ukraine, Belarus or Moldova – undertake deep economic and political reforms.

Security and illegal migration also remain a problem. 'Newer Europeans' are doing their best to keep the EU's attention on the region: the International Visegrad Fund funded by the Czech Republic, Hungary, Poland and Slovakia has a special budget line for development projects in the EaP region. When, only last week, the Slovak and Polish MFA officials and experts held a day-long consultation, much of the lively discussion was devoted to brainstorming on how to make progress on Eastern partnership.

What we see in Central Europe is indeed the end of the old, pro-American and Russia-sceptic 'New Europe'. But that does not mean complete disintegration of this bloc – and neither should it. The current economic crisis and problems in the immediate neighbourhood have replaced Russia and the US as the bond that binds Central European states together. How strong this bond remains in the next couple of years will affect their future fortunes much more than their previous position on the Iraq war or Russia.

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