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In the nick of time A special report on EU enlargement May 31st 2008 Illustration by Peter Schrank Republication, copying or redistribution by any means is expressly prohibited without the prior written permission of The Economist The Economist May 31st 2008 A special report on EU enlargement 1 In the nick of time Also in this section The dark side of globalisation Jobs come, but they soon go again. Page 3 The logic of the Logan Success on four wheels. Page 5 No love lost The two halves of Aphrodite’s island remain at loggerheads. Page 6 Largesse while it lasts Lots of EU money is owing to Poland and the rest. It must be spent fast. Page 7 Toxic legacy What communism left behind. Page 9 Bury your hatchets If the recent entry of 12 new EU members had been delayed much ðor grind your axes? Page 10 longer, it might never have happened, argues David Rennie. That would have been an historic error Trust me N ITALY’S recent general election, voters 2004 with the admission of ten new mem• The theory and the practice of the rule of law. Iin the north of the country were greeted bers, from Estonia in the north to Cyprus in EU Page 12 by posters showing a Native American the south. In under three years the grew chief in feathered headdress (pictured from 380m people in 15 countries to half a above). The caption read: They su ered billion in 27. Give and take immigration, now they live on reserva• This report will argue that enlargement Enlargement enriches old as well as new tions. The posters were the work of the has been a force for good. Freedom of members. Page 13 Northern League, a regionalist grouping movement is a founding principle of the that blames immigrants and globalisation European Union and one of its greatest for many of Italy’s ills. The party struck a strengths. Successive waves of enlarge• chord: it almost doubled its share of the ment have injected new life into societies vote. Silvio Berlusconi, the overall winner, and labour markets across old Europe that chimed in, declaring that Italy should close were in danger of sinking into elegant, ar• its borders and open camps so police could thritic decline. track down jobless foreigners. Freedom to trade has also brought huge Acknowledgments Italians knew whom he was talking benets. The most recent enlargement In addition to those named in the report, the author would like to thank the following for their time and about: an estimated half a million Roma• added a dozen mostly fast•growing, un• advice: Jonathan Faull, Heather Grabbe, Kristin nians living in Italy, many of them gypsies usually open economies to the single mar• Schreiber, Tamas Szucs, Thibault Kleiner and Friso (Roma), who are blamed for a spate of vio• ket, providing a big boost to anaemic EU Roscam•Abbing (European Commission); Janusz Onyszkiewicz (member, European Parliament); lent crimes. Romania, along with Bulgaria, growth rates. Dan Hamilton, an American Magdalena Vasaryova (member, Slovak parliament); joined the European Union at the begin• academic, calls Europe’s eastern fringes Alessandro Zazzeron (Calearo Slovakia); Donald Storrie ning of last year, giving its citizens the right the China next door. (European Restructuring Monitor); Martin Simecka (Respekt, Prague); Jeremy Druker (Transitions Online); to travel freely all over their new club. The accession process that began more Nadia Vassileva (Manpower, Bulgaria); Ben Nimmo (DPA); Many duly went west. Mr Berlusconi’s od• than a decade ago provided an historic in• Irina Novakova; Valentina Pop; and others who asked to dly precise promise to round up jobless for• centive for reforms. Yet the expansion of remain anonymous. eigners was no accident. One of the few le• the club has been jarring for citizens of ol• gal grounds for expelling foreigners from der member countries (for example, Italy) A list of sources is at another EU nation is to show they have no who have discovered that their national www.economist.com/specialreports means of support. To show that they have governments are no longer in full control a criminal record is not enough: EU citizens of their borders. An audio interview with the author is at may be deported only if they gravely Many people in older EU member www.economist.com/audiovideo threaten public order. countries believe that enlargement has The arrival of Bulgaria and Romania triggered a wholesale exodus of jobs from More articles about enlargement are at completed what Eurocrats call the fth west to lower•paid east. According to a www.economist.com/enlargement enlargement of the union, begun in May 2006 Eurobarometer poll, three•quarters 1 2 A special report on EU enlargement The Economist May 31st 2008 would have been undermined. For the existing member countries, three big reasons would have made enlar• gement far more dicult if it had come any later than it did. These can be summarised as migration, money and Moscow. The m­words First, migration. Immigration from the east to the EU accelerated with the 2004 enlar• gement, though it had been going on for years before that. As the Italian example shows, if any one of the 12 new members, especially Romania and Bulgaria, were still queuing to enter the EU, there would now be a heated debate about immigra• tion, and the EU keystones of free move• ment of people, capital, goods and services might soon be under attack. Second, money. During the long years of entry negotiations, many European economies were doing pretty well. Now, with the world looking bleaker, the older members might be feeling a lot less gener• ous. Back in 2002, 66% of the French sup• ported the coming EU enlargement. By early 2006, France’s then prime minister, Dominique de Villepin, was blaming en• 2 of EU citizens think that enlargement Slovakia and the Czech Republic have largement for the French rejection of the speeds the transfer of jobs to countries shown prejudice against the Roma too. But EU constitution in a referendum the previ• with cheaper labour. Yet according to the then prejudice, bad government, corrup• ous summer. France did not say no to Eu• European Restructuring Monitor, an o• tion and organised crime are not the exclu• rope, Mr de Villepin told an EU meeting in cial survey, only 8% of EU jobs lost to res• sive preserve of the new members. Some Salzburg; rather, Europe did not ade• tructuring between 2003 and 2006 in• existing members have been setting a bad quately prepare the ground for the enlarge• volved o shoring. example for them. ment of 2004. Globalisation started long before enlar• Nor was the fth enlargement a simple The European Commission ordered an gement, but enlargement has crystallised matter of countries governed by former opinion poll in France immediately after public fears about it, often setting one cor• dissidents accepting the democratic em• the no vote in 2005 which identied ner of Europe against another. Nokia brace of the West. Plenty of ex•communi• three main reasons why French voters re• bosses were heavily criticised earlier this sts smoothly relabelled themselves and jected the constitution: it would shift jobs year when they announced the closure of hung on to power across the block. Brus• out of France; the document was overly a mobile•telephone factory in the German sels is full of talk about backsliding to de• liberal and pro•market; and the economy city of Bochum and the transfer of the scribe the way that politicians in the new was ailing. (A similar poll carried out after work to Cluj in Romania. A German minis• member countries forgot, or actively un• Dutch voters said no in their own referen• ter demanded assurances that EU funds dermined, reforms that the EU demanded dum, days later, found that only 7% of re• would not be used to subsidise the move. during accession negotiations. Corruption spondents were worried mainly about the In truth, EU rms have been investing and organised crime blight many of the loss of jobs overseas. The most common heavily in central and eastern Europe since newcomers. Parliaments and ministerial explanations were a lack of information soon after the Berlin Wall came down, and suites shelter too many bad men. and concerns about national sovereignty.) Italy was home to about 350,000 Roma• All this has led some to suggest that en• Money worries would play a bigger nian migrants before Romania joined the largement happened too soon, and that part if the latest round of EU enlargement union. Yet public fears about Polish plum• many of these problems could have been were still being debated now. Poorer coun• bers and other bogeymen are real enough. avoided by waiting until the accession tries have been admitted before. When Even though German exporters have our• countries were better prepared. This report Greece joined in 1981, its GDP per person ished by selling to the new member states, will argue the opposite: that enlargement stood at 58% of the then European Com• 63% of Germans, according to Eurobaro• came in the nick of time. Inside the candi• munity average (at purchasing•power par• meter, think that enlargement is making date countries the rst victims of further ity). When Spain and Portugal came in ve Europe as a whole less prosperous. delay would have been reformers who for years later, their income was around 70% Some of the newcomers have not years had been pushing painful changes as and 56% of the EU average respectively. But helped their cause since joining.

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