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European Union Dinan
Have the EU enlargements of 2004 and 2007 created insurmountable problems for the EU on the whole?
The European Union was initially created with the short term aim of ending wars and hostility in Europe, and to provide the foundation for future European economical and political integration (Dinan 2004. Based on the Schuman plan, Germany, France, Italy, the Netherlands, Belgium and Luxembourg these six countries signed a treaty to run their heavy industries, coal and steel under a common management (The European Coal and Steel Community). According to Dinan (2004) the ECSC was an imaginative response to the challenge of Germany’s swift economic recovery at a time of tense East-West conflict. Dinan (2004:6) goes on to claim that ‘the coalescence of European and national interests of European and national interests made sharing sovereignty irresistible’ and this is what the lengthy stages of political and economic integration has been based upon. As of 1950, the European Coal and Steel Community first attempted possible integration between European countries both economically and politically as an attempt to secure everlasting peace in Europe and prevent the obliteration created by previous wars (http://europa.eu/abc/history). European integration took a large amount of political courage as countries had to sacrifice parts of their traditional nation state policy in the search of integration (Dinan 2004). France for example had to abandon decades of protectionism and rise above their deep distrust of Germany and accept economic modernisation. Dinan (2004:6) states this as ‘a dramatic revision of the countries long standing self image as a great power’. Germany on the other hand after being obliterated and ravaged by the war were offered hope and long term security via European integration.
Get help with your essay from our expert essay writers...According to Dinan (2004) the ECSC had minimal chance of automatically creating a deeper integration of Europe. Despite being politically significant Dinan brands the ECSC ‘economically insufficient’ and had its limits. The Treaty of Rome, 1958, created the European Economic Community (EEC); this created a series of initial economic objectives for the members of the EEC. These included attempts to phase out internal tariffs on goods (part of attempt to coordinate macroeconomic policy, create free factor mobility such as labour and capital, and to create common economic policies (Nugent 2004). Dinan (2004) is in agreement with this citing the desire for deepening integration during a period of escalating trade within Europe. Unfortunately these aims took time to come of fruition; the removal of internal tariffs did not come into existence until 1968. Free factor mobility aims were not met until 1992 due to national clashes and restrictions due to a lack of common currency. Whilst the first common policy (on agriculture) has also proved one of the most controversial and has led to common policies being a much debated subject and led many to the conclusion from the early years that free trade alone doesn’t necessarily mean or bring a single market. One of the treaties most important elements of the treaty was that member states could extend integration elsewhere as long as it was unanimously agreed on by the other members. The importance of this was that it allowed room for further economic integration and expansion (Dinan 2004).
The first of 5 enlargements took place on 1st January 1973, when the United Kingdom, Ireland and Denmark joined to create 9 member states. This was a delayed accession in relation to the entry of the UK. The UK had rejected joining in the past due to issues surrounding there sovereignty, and when they did apply to join in the early 1960’s they were rejected due to opposition from French president Charles De Gaulle. The UK eventually did join after French opposition to the UK died down due to both De Gaulle’s resignation and Germanys rapidly increasing economical power and potential (Dinan 2004). Britain’s desire to join the EU was essentially an economic motive, Unwin (1998) claims it was an inevitable transition as there was increasing international co-operation between the EEC between the 9 countries. Dinan (2004) and Nugent (2004) both imply that they were attracted to the EEC’s easy access to western markets. Dinan points out the alternatives, the commonwealth and EFTA are both vastly inferior in comparison to the EEC. More importantly that British accession coincided with US desire for transatlantic trade with a strong EEC. Ireland wanted to modernize society and transform their economy they saw membership as a way of doing this and give them a route to being more ‘worldly and wealthy’ (Dinan 2004:140). Dinan believes Denmark’s aspiration for EEC membership was also economical, they did believe they could afford to lose a large chunk of British trade and also wanted to take advantage of unrestricted access to the German markets.
The accession coincided with a worsening economic climate with international financial instability and the oil crisis which sent Europe’s economies haywire. This led the newly enlarged EEC to face the brunt of rising unemployment, minimal growth and mass inflation (Baldwin 2006) and led to increased economic divergence between the ECC countries (Dinan 2004). The members were divided and failed to agree on most ECC matters during this period from its stance on the war in the Middle East to energy policy negotiations. The recession led to increased British disillusionment towards the EEC and generally ‘seemed moribund, the butt of jokes about agricultural surpluses and excessive harmonization of industrial product standards’ (Dinan 2004:7). Dinan credits the ECC on other issues though, the ECC gained a higher political profile during the period and made major developments on regional policy, social policy and environmental policy as well has having a very successful customs union. The most striking agreement came through regional policy as the member states attempted to reduce the economic disparities between regions. The original 6 were generally similar throughout the country with the exception of Italy who had a big gap between the rich north and the poor south. Italy’s attempts to create some form of regional policy failed to convince the other 5 nations prior to the accession (Baldwin 2006), however with the UK and Ireland joining this changed this. The UK and Ireland both also had problems with large disparities thus drew more attention to regional policy (Dinan 2004). Even before the enlargement Italy, UK and Ireland formed an unofficial pact campaigning for a European Regional Development Fund. According to Dinan the UK took the lead in this and had particular political motives other than the obvious benefits of financial assistance. As it imported more agricultural goods than any other member and had a small farming sector Britain would be contributing more than it would be getting back in agricultural levies (very sensitive domestically). The British government were therefore trying to establish this fund to both aid the disadvantaged UK regions and to strengthen the case of ECC membership to the British public. The members looked favourably upon regional development and an initial deal was struck at Paris in 1992. 2 years later a fund of 1.3 billion units of account was agreed over 3 years. The deal gave the greatest share to Italy (40%), Britain (28%) and France (15%). Dinan believes in reality this was a pittance compared to the actual amount of money required to bridge the gap and this was due to delays and disputes over fund size, operation and Britain’s budgetary contribution. Dinan however does believe there were positives particularly relating to evidence that deepening integration was still possible even under stressful economic conditions.
Greece joined January 1981 for what was seen as political reasons; it is felt Greece’s accession was politically motivated due to development of a fragile democracy, It had been eligible to join since its military regime was overthrown and democracy restored in 1974 (Yannopoulos 1986). Dinan (2004) disagrees slightly with his belief that Greece wanted to join for all-round stability as economically they were poor with a GDP 25% of the EEC average. Karamanlis saw the EEC as a route to economic modernisation, political stability and long-term success. Sampedro and Payno (1983) push through the importance of Turkey in this decision. Karamanlis wanted increased security in fear of hostilities with Turkey. 1986 saw both Portugal and Spain join to create a membership of 12 states. It took 8 years of negotiations before this occurred as it became increasingly obvious that the route to membership was a long hard and tiresome one. All 3 were poor and weak economically, but they had brought the advantages of a new route to the Mediterranean and strengthened economic and political relationships with Latin America (Dinan 2004). As much enthusiasm as there was at the time for the integration of Portugal, Spain and Greece it was going to be challenging to fully integrate into the EEC. It was the first time the EEC had been subjected to the economic challenges of rehabilitating economies so much worse than there own (Baldwin and Wyplosz 2006).
Although there was not another enlargement until 1995, major historical changes occurred over the 9 year period. The Single European Act was created in an attempt to deepen market integration, and included attempts to create a single market by 1992, strengthen cohesion policy, and legitimise cooperation on foreign policy and to strengthen research and development (Dinan 2004). The Maastricht treaty (1992) was created to push through the new EU in further attempts to integrate deeper and also encourage further cooperation surrounding common policy. Developments such as these led to members of EFTA (European Free Trade Area) to think of leaving to join the EU, with the fear of being barred from a single market being their main concern. ‘The economic impetus for EC accession became so strong that neutral Austria applied to join in July 1989, despite the Soviet Unions disapproval’ (Dinan 2004:223). When discussing accession in the short term Dinan claims that the EC were not entertaining the thought of widening the union, at least not until it had fully absorbed the accession of Greece, Spain and Portugal and implemented the single market programme. As a result this led to attempts to stave off interest by creating a European Economic Area with EFTA thus allowing them to have the benefits of a single market without becoming full members. According to Baldwin and Wyplosz (2006) this was interpreted differently by the EFTA countries that saw this as just a stepping stone to full membership. This was combined with the collapse of the Soviet Union, increased the desire of EFTA countries to enjoy the economic benefits of EU membership and led to the pressing issue of eastern enlargement.
‘The European Union was born into a radically different world than had existed throughout the life of the European Community. A new international system, dominated by the United States emerged out of the Cold War’ (Dinan 2004:265). The issue and pressure of eastern enlargement came to the fore. Rodriguez-Pose (2002:140) asserts during the cold war to the ‘east of the iron curtain economic and political integration with the countries of western Europe was simply not an option’. Both the EU and the central, eastern European countries saw this as a way of increasing security from within. Dinan also points out despite the benefits of defence through eastern enlargement; they were left ‘petrified’ by the amount of underdeveloped countries enlargement would entail and feared the political centre of the EU would shift eastwards. The situations of the applicant countries varied hugely from economically well developed and politically stable, and other countries that were in adverse situations or had just been created in the aftermath of the Cold War. Dinan reaffirms that the EU were not interested in the early enlargement these countries craved due to both internal developments and their fears of the consequences of enlargement, particularly those of self interest. France feared losing their influence over EU matters, feeling the previous enlargements and German unification had dwarfed them.
The idealistic policy of the European Economic Area had failed to achieve its aim of deterring the EFTA countries from applying for EU membership. They saw the EU as a stamp of political approval and a path to prosperity and wanted in (Dinan 2004). Inevitably further enlargement was going to occur and did in 1995 when Austria, Sweden and Finland joined. This was the easiest enlargement for the EU to absorb They joined the EU economically strong and politically stable and were small demographically after all the reason they hadn’t joined earlier was that all these countries were restrained due to their neutrality during the Cold War (Baldwin and Wyplosz 2006). The accession of these countries was inevitable and brought the EU to 15 member states. The 1995 enlargement was the 4th but it was the 5th enlargement which was and remains the biggest issue surrounding EU enlargement.
The 2004 and 2007 enlargements created the EU 27 and the costs and benefits of this was a highly debated topic at the time of the enlargement and these arguments still remain. In this section I intend to view the problems associated with the accession of the EU12 and whether these problems can be absorbed by the EU or whether it is a case that the enlargement of the benefits of eastern enlargement outstrips the inevitable costs. There are many different interpretations of the 2004 and 2007 enlargements with the majority of writers in this feeling it was the right move and is a win-win situation, although some admit social costs in particular relating to migration movements and issues over cohesion policy and structural funds may need re-evaluating. The sudden change of ‘geopolitical panorama’ in the east
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