Goal of Unified Europe Falters Amid Downturn

Source: New York Times

"In 2004, the European Union celebrated the entry of 10 new members, including Hungary and seven other former Communist states of Eastern Europe, followed in 2007 by Romania and Bulgaria. This eastward Manifest Destiny seemed for years an inexorable and predictable process, with membership in the European Union followed by entry into the euro currency zone."

"Today, the aggressive lending for ambitious new projects has given way to a slow, painful unwinding. From Stockholm and Milan to Riga, Latvia and Sofia, businessmen on the front lines of integration had hoped that the European Union’s executive body in Brussels and the region’s central bank would put together a bold financial rescue and stimulus package to stabilize banks and cushion the severe slump in the East, especially in Hungary."

"Mr. Stepic (an Austrian banker) described spending months in crisis mode, talking to other major banks and European policymakers about remedies as the cash that had streamed into Eastern Europe was abruptly pulled out. He pointed to a study by the Institute of International Finance, estimating that for 2009 there would be a net outflow of private capital from emerging Europe — Central and Eastern Europe and Turkey — of $27 billion, compared with an influx of $241 billion in 2008 and $396 billion in 2007."

"“We are not fighting against bad will. They are simply unable and not prepared to change the normal pattern,” Mr. Stepic, the banker, said of European leaders earlier this summer. “The main thing is that we don’t make geopolitical mistakes, that something that we all have been fighting for, for 50 years, to create a united Europe, is now forgotten suddenly.”"

Read more: http://www.nytimes.com/2009/08/23/world/europe/23austria.html?_r=1&ref=world

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It seems like the tension in the EU caused by the global recession is not within the Euro-zone countries, but between those countries and the newer, poorer non-Euro countries. (Most of Eastern Europe is at the economic level of Mexico, with Romania and Bulgaria below Mexico's per capita income and Poland, Hungary and the Baltic states slightly about it.) Within the EU there is still free trade and open borders (though some of the newer EU members have restricted immigration rights for the first 2-7 years - until as late as 2014), the flow of loans and investments has reversed from into Eastern Europe (hugely) to out of the East (more modestly).

Interesting to see how the drive to unify Europe conflicts with tension caused by bringing people who were "foreigners" into a free trade and open immigration zone, particularly during tough economic times.

For one, the EU is a real federation of countries: Every country has its own nationalist tendencies, every country wants to get the best cut for itself. For now, the EU is just a tool to guarantee these personal advantages.

The problem is, that even in the "Old Europe"-countries people don't really feel united as europeans. Much less in the eastern europe countries, which are new to the EU.

If the European Parliament had real legislative powers, if there were a (kind of) pan-european government, recognizable figureheads, then people would start identifying themselves with the idea of a true united europe.

BUT, a powerful europe will only happen, if its member-nations are willing to cede political authority. And that won't happen unless the people themselves are confident with a powerful legislative EU. (Now that's vicious circle.)




And lest not forget there is an urgent need for an overhauled european membership-treaty (sort of constitution). As long as its not passed, the EU is not functioning properly.

they've down ok so far....