A Tale of Two Europes

At midnight tonight ten nations from Eastern Europe and the Mediterranean will join the World’s biggest trading bloc. Ranging from the north of the Baltic states all the way to the very south of the Mediterranean will wake up tomorrow realising that they have the ability to freely travel from the border of Russia all the way to the west coast of Ireland and the Atlantic.

That they can now easily work in a variety of nations without work permits and an unprecedented amount of investment will be pledged towards their infrastructure and other parts of their society. They will now have voice to speak up for them at the table of the WTO and on the world stage. Safety it seems is definitely numbers, especially for the smaller states like Slovakia and Estonia.

There will be 74 Million new members to the Union, bringing the total population to a very grand 255 Million; the EU is now the most populous trading block in the world.

But how ready are these states for EU entry? Just what is the view of these new states in comparison to the regular EU nations on the vital issues of Agriculture, of Fishing, of foreign policy and of general politicking within the Union?

The Home Office in the UK predicts about 10,000 to 20,000 people a year from Eastern Europe will emigrate to the UK after the ten nations join the EU tomorrow. These will either come for the summer to work others to settle permanently to work in the UK’s large Public sector institutions of the National Heath Service and School system.

In the rest of Europe, nations such as France and Germany are snapping up the large amount of high quality, hard working and highly education youth from the East to revitalise their creative and new industries.

However there is quite disquiet among the British and Irish over immigration. So far that the British have tonight revoked Asylum status for all people whom had fled Eastern Europe due to discrimination. This means that these former Asylum Seekers lose their right to free housing and benefits.

Also in a panic, a flood of legislation has come through every western nation, revoking the new EU nation’s citizens from having the right to state benefits; thus forcing would be migrants to work means that they do not have the rights that the western nations do.

In the European Union, farming is regulated by the Common Agricultural Policy. This policy regulates just what the member nations produce through a system of subsidies. These subsidies change from year to year. One year they favour those who farm wheat and barley, other years they favour potato vineyards and Beef farming.

The traditional recipients from this free for all subsidy bonanza has always been the French. French farming has always been healthy from feeding on the plentiful subsidies provided by the European Union.

The CAP was negotiated around the 1970s where conditions were radically different. Now with the cries from third world and emerging economies to open up markets, the French are under pressure to give up their subsidies. It was expected that this money would go to the new entry states.

However even after the new nations join, Irish farmers get almost four times as much as their Polish counterparts. Polish farming is mostly poor and still relies on horse-powered transport and tiling to plough their fields. These farmers would dearly need some money to update to catch up with the rest of Europe.

Renegotiations on the CAP will be mandatory with the new EU Constitution. This has brought condemnation from French farmers while Polish farmers are left seething with no change to their subsidies.

Joining the EU will mean one major thing financially: The European Single Currency.

All the countries all signed up to the Euro as a condition for entry to the EU. All the nations have also signed up to the infamous ‘stability pact’.

Currently this is one of the main sticking points between the big two of Europe (that is France and Germany) and the EU Commission. This is because the stability pact was designed to keep inflation down across the multiple nations in the ‘Euro Zone’ and thus keep the Euro stable on the money markets.

However two things happened to change this. First of all was the almost instant roller coaster ride of the currency as soon as it entered circulation. The Euro zone nations have been in a kind of depression where growth is very low while inflation is just as low.

The stability pact thus was designed to let the European Central Bank make the choices rather than the individual countries within the Euro zone. If all the different nations decided to take different tracks on finance policy then you would have different outcomes and thus financial chaos.

But this is just what they did, France was first, followed by Germany who broke their Stability pact and not only increased borrowing but also spending overall. While the EU Commission is taking France and Germany to the EU Court to get them to fall into line, the situation does seem bleak for the rest of new EU Nations (and thus Euro Zone entrants).

The reason for that is while France, Germany and maybe even Italy can get away with overspending, the smaller and new Euro Zone nations will not.

Add into the equation that the new entry nations will get a fraction of EU funding per person than people in the west of the EU and the people of Eastern Europe will find the first decade or so of being in the EU very austere indeed.

However the growth of the new nations are raising eyebrows. Already entrepreneurs are finding opportunities (and making them) in the west of the EU. Poland has a growth rate at least twice that of the regular EU (at 4% of GDP). However it will take Poland at least 60 years to get to reach the level of living standards of the regular EU states.

This has been one of the more colourful moments of the negotiations. Poland have led the rise of ‘new’ Europe, more out of a way to scare more concessions from France and Germany at the negotiating table than anything else.

Many of the new entry nations want a bigger voice at the table of the EU. They want to have bigger voting rights more on par with the bigger nations rather than on par with the smaller ones.

They want a bigger EU budget to increase the funding going towards the new nations. Then came the titanic battle between ‘old’ and ‘new’ Europe over Iraq which ended in a bit of an anti climax once ‘new’ Europe realised that America actually wanted ‘new’ Europe to do something other than act as Donald Rumsfeld’s cheerleaders.

But the two most contentious issues between ‘old’ and ‘new’ Europe today are the EU Constitution and Turkey.

The EU Constitution was rejected not just by Spain but by the nations for which it was originally designed; ‘new’ Europe.

Now those ten new nations have joined, it is now much harder to agree on things. Compromise is much harder to find. Thus the answer to help smooth things along, it was decided that a new EU Constitution would remove some of the vetoes that each nation has on issues such as tax, social issues and defence.

However the UK has already said that those vetoes would be given up over their dead body. Also not only that but also other nations have taken offence to the small print. Mainly the religious nations of ‘new’ Europe have objected to the wording, which makes the EU a purely secular society.

This is quite a shock to the Eastern European nations who are still predominantly Christian. They (as well as Greece from ‘old’ Europe) are suspicious about the intentions to allow the next sticking point to enter the EU.

That sticking point is of course: Turkey. The Eastern Europeans object to the Islamic newcomer to what is a purely Christian club. But as long as Turkey continues on the road to reform, the Western European states will always push Turkey as a potential new member.

The ten new nations entering Europe face a huge opportunity to finally throw off the shackles of their Warsaw pact past and enter a new era of prosperity. However they also face serious challenges and negotiations ahead as they slip into their new-found role as members of the European Union.

The new members must learn to be patient when waiting for the promised prosperity. If anything the Eastern European economies will stagnate for a while along with the rest of the Euro zone countries. Also when living standards start to rise, the new European nations will find it harder and harder to make themselves attractive to companies seeking to cut costs and increase productivity.

But when they learn how to exploit their newfound opportunity, then they will start to make inroads into areas of traditional Old European superiority.