Europe: EU Enlargement after Copenhagen

Last December’s negotiations between the existing EU members and the candidate countries for enlargement drew to a close at the Copenhagen summit. The 10 countries invited to join in May 2004 are Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia. The newcomers tried to drive a hard bargain, postponing an agreement until the last minute and hammering away at the necessity to release more funds for the enlargement and farming in particular. Now that the smoke has cleared, the EU can boast that enlargement has worked out cheaper than originally envisaged. According to documents released by the European Commission, the financial net cost of expansion is 10.3 billion euro ($10.5 billion). While the EU’s current rulers may be pleased with themselves they really have no reason to rejoice as the political cost of the deal could be very high and its consequences could hit the EU a lot sooner then expected. The agreement reached in Copenhagen holds no real gains for working people, east or west.

Brutal truth

A majority, albeit a declining majority, of the population in the applicant countries still favour EU membership and hope that it will mean both an improvement in their lives, visa-free travel and a safeguarding and improvement of democratic rights. However the last minute negotiations in Copenhagen revealed a brutal reality to a growing number of people. The truth is the EU candidates represent a source of cheap labour and new markets for the big powers. Drawing these countries into the EU sphere of influence and away from Russia is an extremely more important aim for the dominant EU powers rather than all the high sounding rhetoric about re-uniting Europe for the first time since the Second World War and so on.

The candidate accession members, headed by Poland, held out to the last minute during negotiations in an attempt to get the best possible deal. Warnings from Denmark, which held the EU presidency at the time, that Warsaw risked missing out on accession if it bargained too hard, were ignored. Poland ploughed on regardless, with one senior official saying: "Only by taking a tough position with finance to the last minute can we satisfy the expectations of our citizens."

But what did the candidate states actually manage to win? The Polish team, led by the Prime Minister Leszek Miller, and spurred on by the Czech Republic and Hungary, secured a meagre 433 million euros extra on top of the 40.8 billion EU aid for the ten states for 2004-2006. The EU agreed to adjust its financing for Poland by transferring 1 billion euros from regional long term aid to immediate cash support for the government’s budget. Poland won other concessions, including the right to top up its direct payments to farmers. It failed to impress the EU sceptics on the home front however, especially the 27% of the population connected to agriculture. Many were angered by the mean spirited attitude of the richer countries towards their plight. When Anders Fogh Rasmussen, the Danish Prime Minister, emerged from negotiations declaring, "I feel like father Christmas handing out money", many Poles and other East Europeans felt this was the final insult.

Second class citizenship

General opposition to being considered second-class citizens in the new EU is mounting amongst the peoples of the candidate states. The much-heralded 40.8 billion euro worth of EU aid for the 10 newcomers only tells half the story. The new EU members will pay 15 billion euro in dues and a lot of the aid promised in the budget will never be actually spent (very often the criteria for granting aid is purposefully impossible to meet).

Opposition to the wide disparity between how much money the new and existing EU members will receive was already very strong prior to the Copenhagen talks. The details of the financial package for the purpose of infrastructure building, farm aid and other assistance discloses that the newcomers will only get a fraction of what many existing, and far richer, members receive. Poland will receive only E67 per person in aid from Brussels, Hungary will receive E49 per person, Slovenia E41 and the Czech Republic E29. These figures are for the first full year of membership in 2005. By contrast, some existing members today receive E437 per person (Greece), E418 per person (Ireland), E211 (Portugal) and E126 (Spain).

Although the total packet of aid the ten new members will receive is only the equivalent to about 0.05 per cent of the aggregate gross national product of today’s EU, the pressure from existing EU members, in particular Germany, to restrict the costs of the operation reflects the economic crisis hitting Europe and the growing contradictions between the EU members and between the member states and the European Commission.

Enlargement was conceived in a period of economic growth and political enthusiasm for the idea of a united capitalist Europe. Today there is notably much less enthusiasm. Germany and France have breached the stability pact, by running up deficits of more than 3 per cent of gross domestic product, with Italy just escaping a breach with the help of some creative accounting by the Berlusconi government.

The economic crisis puts new austerity programmes on the agenda in a period already marked by a mounting wave of class struggles in Europe’s biggest economies. The attacks on workers’ rights, wages and working conditions, together with the privatisations the EU presided over in the relative quiet period of the Nineties, are now met with fierce opposition in Italy, Spain and Portugal and growing opposition in Germany and France. This will add to the existing pressure on the pact, and although it is more likely that the terms of the pact will be adjusted before it is abandoned, the political blow of such a measure would undermine the authority of the European Commission even further and destabilise the EU.

Selling EU membership at home

In the weeks prior to the Copenhagen summit, economists and representatives of Western European banks and big business took a more relaxed view. "For us the enlargement has already happened", one source said.

This is true although not exactly in the way the EU likes to present it. The prospect of enlargement has had its effect on countries like Portugal and Greece, which feel the pressure of having to compete for funds, and which have had to watch a steady stream of foreign companies (producing clothing, footwear and textiles), moving out and relocating to Central and East European countries about to join the EU. These companies move their plants to find low paid, better qualified workers nearer to the big North European markets. Portugal, as the country with the lowest average wages and the biggest gap between rich and poor in the EU, will stand out as an example that the EU is incapable of delivering on its promises to enable the poorest countries to catch up with the EU average. It will not go unnoticed by workers and farmers in Warsaw, Prague and Budapest that policies based on low cost labour, ’generous’ subsidies and protection from non-EU competition, has not brought Portugal up to the level of richer EU states, despite decades of membership.

This will come on top of the anxiety already caused by the neo-liberal counter-reforms the economies in Eastern Europe have undergone in the process of the EU negotiations. Labour laws have been weakened, privatisations pushed forward and the grip of multinational companies and banks on the economies has become more than apparent. Poland, with its 38.2 million inhabitants, and the most important of the EU candidates, provides in many ways the example of what is happening throughout Central and Eastern Europe.

Polish government’s balancing act

The Miller coalition government of the ex-communists (Democratic Left Alliance) and the Peasant Party is fighting for its survival. Their lack of support entails performing a very difficult balancing act to continue in power. Last December Miller had to back down on a plan to close seven coal mines (axing 35,000 out of 142,000 jobs in the industry) as a step towards privatisation, after the miners voted overwhelmingly to go on strike to defend their jobs and benefits. On the other hand, last month the Prime Minister fired three ministers, the last minister being sacked after he had capitulated to striking trade unionists over the regional health funds in Silesia, southern Poland.

As unemployment rises towards 20%, the government’s approval ratings are steadily dropping, to a record low of 27% by January 2003.

The biggest problem for the Polish ruling class is the lack of a safe political alternative to the Miller government. The general election in 2001 blew away the right wing Solidarity Electoral Action and the liberal Freedom Union who had formed the previous government. They failed to win a single seat. This was the price to be paid for four years of neo-liberal ’reforms’ and the drive towards European Union membership. In their absence the political vacuum was taken up by, amongst others, the extreme right wing or populist parties, such as The league of Polish Families (that won 8%), the Law and Justice Party (10%) and Samoobrona or Self-Defence (10%)

Andrej Leppers, the founder of Self-Defence, has succeeded in extending his following from those badly affected by the fall of ’communism’ and the restoration of capitalism to those who will be hurt by EU membership. Leppers’s slogan, "Moscow stole from you; Warsaw is stealing from you; Brussels will steal from you", sump up a widespread feeling in Polish society and represents a challenge that neither the EU, nor the Polish government is able to answer.

Yes or No Referendums?

This year referendums on EU membership will be held in all the candidate countries, starting with Hungary where pro-EU sentiment is the strongest. The EU hopes a ’yes’ vote will encourage the Czech Republic, Slovenia and Poland to follow suit. It is uncertain however that winning a yes vote, in a period of economic problems and political convulsion, will be as easy as it may seem to them. The election defeat of Valdas Adamkus, the president of Lithuania, at the hands of the Eurosceptic populist challenger, Rolandas Paskas, in January, shook up the pro-EU commentators and could be the first in a number of unpleasant surprises.

Far from unifying Europe, the effects of the Euro and EU-enlargement will be to sharpen the dangers of the development of the right wing forces of populism and nationalism in opposition to the policies of the major EU powers. It will lead to more rigorous clashes of interests between the different EU powers.

Capitalism, European or American, is not able to provide a decent living standard to the workers of Eastern and Central Europe. Pro-market policies coerce the peoples of Europe in a union of exploitation. Only workers’ opposition with socialist policies can prevent this and lay the basis for a genuine co-operation between the peoples of Europe by breaking the power of capitalism. A socialist confederation of Europe would mean the end of capitalism, mass unemployment and poverty, and a massive rising of living standards for all.

A version of this article will appear in the forthcoming February 2003 issue of Socialism Today

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January 2003