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Coming Crisis not the Best Time to Join the EU

Igor Siljanoski - 10/21/2011

Now is the absolute worst time for some of the Balkan countries to seek entry into the European Union. The EU is in no mood for expansion and the reason is a major existential crisis looming on the horizon. What is the proof of the gloominess? Well, it is not hard proof as all of the rhetoric coming from the enlargement secretariat is filled with messages that the EU is open for expansion. It is the foul attitude of EU institutions, politicians, diplomats and bureaucrats toward countries that want to join the EU, notably the Western Balkan applicants.

The poster child for EU expansion this time around is Croatia, slated to join in the summer of 2013. Every effort is made to make this accession a success. The message is positive and placated for all to see. The EU is not tired, slow and ineffective but merely more cautious and more mature. The process is hardened but not the promise.

The real message however is sent to everyone else by stark faced diplomats and politicians uttering de facto ultimatums. For Serbia it is the Kosovo issue, for Macedonia it is the indecent proposal to change its name and seemingly identity as well. The Bosnia and Herzegovina’s ultimatum is to make a real country out of an impossible and improbable one. For Albania, the task seems to be to basically to reinvent what is perceived as archaic political culture and system. Only tiny Montenegro does not have a fundamental flaw that would bring its hopes to a screeching stop and look for this country to be the best next poster child.

Angela Merkel delineated this divide between acceptable and long shot aspirants in her recent visit to Croatia and Serbia. Her messages could not be more different for the two countries. Croatia received as warm a treatment as you can get from a German Chancellor and Serbia got a grumpy old rub with attitude, coldness and body language that said it all. Words were even more scathing. You indeed have to make a choice between recognizing Kosovo as a separate state and joining the EU. Serbs were hoping to hear that the extradition of key war criminals from the Bosnian and Croatian wars was their ticket to get their foot in the door with Kosovo hanging as something that will be resolved in the nick of time before the other foot was in the door. They did not expect to hear a firm raus as a response to such major breakthrough.

The sad story with Macedonia was breaking all dimensions of decency when the EU institutions started a habit of completely disregarding the need to placate their sensibilities about the existence of the Macedonian nation and language and stood in solidarity with Greece. It is hard to discern if this was done as an overall support given to Greece in the midst of a severe financial crisis or it was a turning point in the overall policy.

Either way, the reaction in Macedonia should be transformational. If there was a doubt that the EU would throw Macedonia under a bus for the sake of a member state, the latest EU progress report should totally remove this doubt. Perhaps the EU had it with the conflict and has made a call. Merkel and other key politicians don’t even plan on stepping a foot in the banished land. Maybe cruel to the enthusiastic EU applicant, it nonetheless erases hopes for accession talks anytime soon as the Greeks will only be emboldened by such a stance. Whether the Macedonian state caused this EU attitude or not is irrelevant to the process. It is one less problem for the EU to have on the plate at times of extreme crisis.

The language of the EU reports and appraisals changes to suit the EU agenda all the time. Montenegro became a viable EU candidate state on the wings of such language. It erased worries about corruption and organized crime and every other objective obstacle for EU accession. It is the same language that brought Bulgaria and Romania into the EU fold. Getting into the EU has now nothing to do with hard and defined criteria (as such does not exist or is vague). It is a political decision, mainly by France and Germany. Britain, as it may be the case is not a factor as it supports virtually every EU applicant and has for a long time. The British strategy is that it welcomes the widest possible union as long as it is limited in its depth. The British have long isolated their state form EU integration momentum by not taking part in the Euro and the Schengen agreement.

The problem that is causing these policies in Brussels may not be confined to the insolvency of Greece and the debt ratios in other Euro Zone countries. It is about the end of the European integration process itself. It seems to be halted and working in reverse where it truly maters, in the minds and the hearts of European citizens. What makes it even more troublesome is that the lure of the EU for the small countries standing outside the wall is deteriorating with increasing speed.

Whatever promise the EU and the Euro held in the populations of those not integrated in the EU or the Euro zone now seems unachievable and empty. If Greece, the thinking goes, with its three decades of serious EU attention and re-engineering is on the brink of an economic collapse what chances do other post socialist countries have for achieving anything better?

Many EU officials, analysts and economists now predict that the EU must move toward more integration of current EU members, not less. In other words, to stave the collapse of the Euro, the EU has to come closer to a fiscal union. Have the masters of Europe gotten the concept all wrong? Should the fiscal and political union be the precondition for a monetary union? Economists worth their salt would argue that even if this is not a precondition for a monetary union, fiscal and political affairs must be resolved in favour of a common financial zone. The instruments may vary, from having a transfer union with guarantees of payment of anyone’s debts by all to a common treasury and fiscal policy. Even a complicated system would be preferable to the chaos of the EU fiscal house.

There were heavyweight economists in 1999 who warned of this crisis and the premature end of the monetary union if it was done in a fiscal and political vacuum. Today, the same economists give some room for redemption and salvation of the currency if there is a political will to bring in a fiscal union or a Eurobond like solution. If fiscal closeness is difficult to implement, the transfer mechanism may be impossible to accept. With no further integration, fiscal or otherwise, the EU is likely to lose the Euro and regress from its current achievements. If the Euro fails, bets on the success of the EU itself are not favourable to its existence a decade out.

The crisis with Greece crystallized the true approach of the EU toward its peripheral members and aspirant countries. There is still a core of the union of which Germany and France is the absolute kernel. This brings uncomfortable realization that they used the Euro while it was in their interest and would have no problems discarding the Euro as soon as they find a suitable firewall for their banks and their economies. When these two countries get cold feet the altar is utterly cold and empty, the marriage unconsumed and the future for the union is rather bleak. Luckily, integration so far took a heavy toll on opting for disunity. It is no longer an easy option.

The hope of millions of Europeans living in the peripheral EU states depends on the likelihood that France and Germany in particular would warm up to the ever closer union mantra they have grown fond of over many years and change their mind on further integration. It is not even about a sustained attitude but rather about a mood. Despite their statements, the two countries increasingly seem to favour getting out rather than continuing on the path of EU integration. Being on the fence is also a terrible situation that is clearly noticed in global financial markets.

Negative momentum is a terrible thing when it comes to unity. Yugoslavia is a good example of a troubled unity based on a slogan. The ever closer union now resembles brotherhood and unity, and the 27 countries of the EU strikingly resemble the six republics that parted ways. The most outlandish reply to a light interview question about the future of the Balkans in the EU came from a musician in the 1990’s who stated that either the EU is our future or our fate becomes the EU’s future. Should we brace for the latter?

There are two differences, however, between the EU and the former Balkan power. Yugoslavia had a strong federal government and institutions that disintegrated, allowing the federal structure to fall apart. The EU never developed a strong central government or institutions that would make policy and decisions to surpass those of the national governments. The result is the same, a weak union.

The second, and admittedly a controversial difference is that for geopolitical reasons of the great powers at the time Yugoslavia was pushed over the proverbial cliff. There is no indication that anyone desires to push the EU over a cliff, especially its offspring in America and elsewhere or its economic stakeholders in the East. One interesting scenario is that it would be someone else, other than other EU countries that will bail out the troubled EU countries in the end. It is most likely to happen if the kernel of Europe simply holds hands on a rock surrounded by lava. It is not that the crisis will not be resolved this way but how long will it take for the home to be livable again. It is the ashes in a volcanic eruption that do most of the irreversible damage to property.

Looking at a prospect of a cold night on the grass lawn outside of the EU castle, this is a time to build a better tent and wait until the fog is lifted and the fortress is aired out.

It seems that for these reasons, the EU is experiencing an uncharacteristic diplomatic deficit. The language of the EU representatives in the applicant countries is exposing an unwelcomed EU hypocrisy. The diplomats and the EU supporters will increasingly be isolated and ineffective as no one wants to join a grumpy union that never helped anyone before lining their own interests first. Greece is a prime example of what can go wrong and a warning to would be EU states.

If there is a reason for sadness for countries such as Macedonia, Serbia, Montenegro, Bosnia and Albania it is that they are are back where they begun, before the dreams of a Slav or Balkan federation and all of the brutal wars and turbulence of the 20th century. The gates of Europe are being erected at a very old frontier. Once ruled by the Ottomans the people in these countries, for a short while, gained some dear friends on the other side of the frontier and thought of themselves as true Europeans. The hope is that if and when EU is healthy again, the smiles on the diplomats will return and the promise of Europe will once again be cozy. At the moment that tent outside the wall will have to do. To want to enter the EU fortress under the current circumstances is, quite frankly, not rational.