The EU’s success story in Central Europe

A decade ago, the European Union incorporated 10 new members in one fell swoop — the Baltics, the Central Europeans, Cyprus and Malta. At the time, more than a few doubting Thomases questioned the EU’s wisdom. Critics wondered whether enlarging the exclusive, compact club of 15 states to one of 25 diverse countries almost spanning the continent would render the EU ungovernable. The Germans feared that rampant labor migration and cheap competition would undermine their economy. Populist politicians in Central Europe warned that membership would subsume their national identities and enable deep-pocketed Westerners to buy up their prized companies. Even proponents of the union admitted that such an ambitious expansion was a gamble.

Today it is clear that EU membership has paid off handsomely for these countries and Europe as a whole. Even with the euro crisis still looming, the 2004 expansion has been an astounding success — a victory of soft power, open borders and solidarity over parochial nationalism. By way of contrast, the acute turmoil in Ukraine underscores how far the Class of 2004 has come: Ten years ago, much of Central Europe and Ukraine weren’t so different. They now look light-years apart, with peace and growing prosperity for the 2004 EU members and civil war, energy insecurity, oligarchs and bankrupt economies in those unfortunate countries now stranded between the EU and Russia.

As preparations are made for the EU elections on May 25 and anxieties about Ukraine and the euro continue, the EU’s accomplishments in Central Europe should give skeptics across the continent pause.

Central Europe was among the world’s fastest-growing economies before the 2008 global financial crisis hit. From 2004 to 2008, four of the largest newcomers — Poland, Hungary, Slovakia and the Czech Republic — grew at an average rate of more than 5 percent a year, perceptibly increasing the living standards of their 73 million citizens. Central Europe also experienced a boom in foreign investment during that time: $40 billion per year on average. 

The euro crisis hit the newcomers, slowing both growth and foreign direct investment. In 2009, Slovenia and the three Baltic countries — Lithuania, Latvia and Estonia — appeared at risk of going the route of Southern Europe. But in a stark contrast, the Baltics and Slovenia managed to bounce back in just a few years. Financial analysts say the region is back on track again and is positioned to post better growth numbers than most of its Western peers.

Slovakia registered remarkable growth — hitting 11 percent in 2007 — after struggling mightily under rightist leadership and an economy in tatters during the post–Cold War years. There were detractors who objected to Bratislava’s membership at the time, rightly pointing out that it did not meet all the EU’s admission criteria. But this small nation of 5.5 million people has become a European hub for the automobile and machinery industry. It is the only Visegrád state — an informal grouping of four Central European nations — to adopt the euro. The Slovaks recognize that membership in the EU is one of the sources of their relative prosperity. This is why it is one of the few EU member states that don’t have a full-fledged anti-EU party in its parliament.

Among the Central Europeans, Poland was the certainly the dark horse. In 2004 the nation of 40 million people was an economic basket case, with a per capita income of just 43 percent of the EU average. Today Poland’s mean income stands at 67 percent of the EU average. The country’s gross domestic product grew by 49 percent since 2004, while joblessness was cut by half, from 20 percent. As a result, the majority of Poles have shed any antipathy toward the EU they might have harbored, with 78 percent saying they benefited from the union.

There is also much to celebrate politically about EU’s eastward expansion. The Class of 2004 and Romania, Bulgaria and Croatia, which joined the EU in the last decade, are now safely in the democratic fold.

Most young Europeans take the EU’s peace project for granted, having experienced nothing but peace in their lifetimes. But as the worsening crisis in Ukraine makes clear, Europe is still prone to war and autocracy. Russian President Vladimir Putin’s destabilization of Ukraine offers reason for the EU’s 500 million inhabitants to pause. Having had their statehood annulled three times by their German and Russian neighbors, the Poles understand this better than anyone. The Balkan states, which until recently fought territorial wars, are now lining up for EU membership. In addition to better living standards, they assume that membership would bring about the kind of stability and democratic transition that makes the return of war a permanent anachronism.

There is still a lot to improve on in the union’s Eastern and Central European frontiers. Cyprus is still divided between Greek and Turkish sides. Income disparity has lessened, but its existence remains anathema to the goal of an integrated Europe. The plight of the Roma, or Gypsies — racial discrimination, sky-high unemployment, chronic poverty and victimization at the hands of extremists — continues to haunt Central European countries. The full effect of the EU’s much ballyhooed decade of Roma inclusion, a 10-year commitment by European governments to stamp out discrimination and close the gap between Roma the rest of their societies by 2015, has yet to be evaluated. But there are few signs that it is remedying Roma poverty and exclusion.

In addition, the EU still has to decide on how to deal with backsliders after they have joined the union. Central Europe has a few prominent cases. For example, EU membership and reprimanding from Brussels has not stopped Prime Minister Victor Orbán from turning Hungary’s onetime budding democracy into an increasingly authoritarian state. He appears as impervious to the EU’s wrist slapping as Putin. In the interim, that seems to be all Brussels can muster to contain democratic backsliding.

Similarly, corruption has proved difficult to snuff out in Romania and Bulgaria. Still, in light of the Ukraine crisis, the EU is better off having Bucharest and Sofia in the union than outside it. These countries are tucked safely under the EU’s wing, out of Russia’s line of fire. Had membership been postponed, Romania and Bulgaria might be facing the same instability seen in Ukraine, Belarus and Moldova, further complicating Europe’s democratic dilemma.

In the upcoming elections, anti-EU parties in France, the Netherlands and Britain are expected to do very well at the polls. There are like-minded parties across most of Central Europe. It would be a dark irony indeed if Central Europeans, who have gained so much from EU membership, lead an anti-EU backlash at such a precarious moment for Europe.