Fanfare for a larger Europe

What the new members bring to the club

IT IS easy to overlook the significance of a much-trailed event. The expansion of the European Union to take in ten new members, mostly from central Europe, has been looming for so long that, now that it is really happening, on May 1st, it seems almost banal. Yet this is a momentous event in Europe's history: the logical culmination of the tearing down of the Iron Curtain in 1989, making a long-divided continent properly whole again.

Plenty of celebrations mark the occasion. Yet the mood in existing member countries is strikingly glum. European leaders have done little to persuade their electorates of the case for enlarging the EU, so public opinion is mostly hostile. Indeed, far from welcoming the people of these mostly ex-communist countries into the club, the present members have been busy trying to keep them away.

Scare stories about millions of work-seeking migrants (or, contradictorily, work-shy benefit-scroungers) have led most governments to throw up barriers to the free flow of these new EU citizens for at least two years. The Union's paymasters want to hold down budget transfers to the new members, sternly telling them not to expect the generosity shown in the past to Spain or Ireland. And plenty of politicians have attacked supposedly “unfair” competition from the new countries, for example their dastardly habit of paying lower wages or collecting fewer taxes.

This churlishness spectacularly misses the two key benefits of this EU expansion. The first is that it helps countries that, through an accident of geography, suffered for years under the communist yoke. The main point of the exercise ought, indeed, to be to bring trade, jobs and higher living standards to these places, most of them a lot poorer than previous entrants to the European club. That cannot be done without affecting existing members, nor without some cost.

The second benefit is less obvious, but may prove still more important: it is what the new members bring to the club. The continent is undergoing one of its periodic bouts of sclerosis. Growth is sluggish, especially in the euro heartland. Unemployment is stubbornly high. Half-hearted attempts to reform rigid labour markets, generous pensions and bloated welfare systems have run into voters' hostility. Most EU companies are failing to compete effectively with their American or Asian equivalents. There is widespread disillusion with Europe's governments, and with the Union itself.

Some might even ask if the new countries are wise to be joining such a troubled club. Fortunately, their arrival should change it for the better. Their economies are relatively small, but all are growing much faster than existing members'. That means bigger and more dynamic markets for Europe's companies. And the lower wages, benefits and taxes of the new countries are also good, not bad, for Europe. As with all competition, they offer a powerful stimulus to existing members to renew efforts to cut costs, trim benefits and reform economies.

Most of the new entrants also bring with them healthy attitudes to the European project. Having worked so hard to escape the deadening grip of the old Soviet Union, few want to replace it with the irksome nannying of Brussels. In general they favour the nation-state, not the superstate; few are fans of the new EU constitution. They mostly believe in open markets, not state intervention. Indeed, their entry will do much to bolster the EU's liberal economic credentials.

There is of course a danger that the new members could instead ape the mistakes of the old. There are would-be interventionists and regulators in central Europe too. Companies could, as did some in the former East Germany to its cost, learn that it is easier to lobby for subsidies than to search out new markets. When the region's huge numbers of farmers eventually gain full access to the monstrous common agricultural policy, they could turn into a formidable lobby for it.

Yet the new EU countries are surely alive to these risks. They can see how Germany, France and Italy suffer from excessive taxes, intervention and regulation. If they are wise, they will fight the spread of further social and environmental rules from Brussels. They will resist siren calls for tax harmonisation. And they should put off any decision to join the euro as long as possible. In short, they are best-advised to pursue their national interests, not to subsume them beneath some imagined greater European good.

In doing this, they will also push the European Union away from being a monolithic entity and towards being more of a jumble of different groupings. The model the new countries favour is emphatically not that hardy Franco-German perennial, a hard-core Europe that leaves laggards with little option but to follow that pair's chosen integrationist projects and to remain illiberal where that pair oppose change. Instead, like the pragmatic British and other northern Europeans, they favour a more multi-speed and varied Europe.

Turkish delight

All of this, however, leaves one large fly in the ointment: the eastern Mediterranean. Last week, Greek-Cypriot voters angrily threw out the latest UN plan to unite their divided island. As a result, only the southern part of Cyprus is joining the club, and it is saddling the EU with an unwelcome and intractable border dispute.

A full solution to the Cyprus problem is hard to discern now. But it should encompass the opening of negotiations on Turkey's entry into the EU. Turkey did everything it could to deliver a united Cyprus. Turkish-Cypriots, previously against the UN plan, voted overwhelmingly in favour this time. No doubt Turkey's actual EU membership is still far off. But a decision in principle to admit a Muslim country that has both a large and growing population and a growing economy would cement the renewed dynamism that this weekend's eastward enlargement should import into the European Union.

If anything can save the Union from lapsing into tired obsolescence, it is its enlargement to the east and south-east. And that is the biggest reason of all for existing EU members to celebrate their club's expansion this May Day.

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