Meet the neighbours

The European Union has been expanding by leaps and bounds. Robert Cottrell asks what happens if it stops

“WE MUST not let daylight in upon the magic,” said Walter Bagehot, a former editor of this newspaper, contending that the authority of the British crown resided more in the mystique of the institution than in what we might now call hard power. Awe-struck politicians and public opinion in Bagehot's 19th-century Britain behaved as though the monarch was above criticism, the incarnation of wisdom and virtue. But for that to go on working, Bagehot said, the precise mechanics and limitations of the office, and of its incumbents, should remain obscure.

The European Union used to profit from a similar indulgence. It enjoyed a mystique founded on its claim to be a new and more perfect type of political order, capable of guaranteeing a lasting European peace. The complexity of its laws and institutions helped, by blurring popular understanding of what the Union did, and thus allowing both admirers and critics to make exaggerated claims about its powers.

Now the daylight is streaming in on Europe, and the magic has gone. Last year's enlargement of the Union, from 15 to 25 countries, has played a big part in this change, as has the recent constitutional debate. Almost nobody now imagines that all 25 countries are heading for political union in the way that the founding six once talked of doing. It is by no means outlandish, as it would have seemed ten years ago, to suggest that the Union may go the way of the United Nations, or even the Western European Union, to become an organisation with much less political and legal authority, or none at all. This would be manageable for existing members, so long as the single market and the euro continued in business by other means. It would, on the other hand, be seen as a catastrophe by nearby countries counting on Union accession to rescue them from their other neighbours or from themselves. An end to enlargement, of which some EU politicians now talk, would be just as bad.

Keep looking east

This survey looks to the east, where the limits to Europe are most changeable. The question of where to situate those limits has returned in force since the fall of the Berlin Wall. Last year's enlargement fixed the Union's eastern borders at the distant edges of the Baltic states, and of Poland, Slovakia and Hungary. Now, of 15 contiguous countries lying to the east and south-east of those new borders, at least 11 more hope to become EU members, most of them within the next ten years or so, subject to various ifs and buts.

Romania and Bulgaria have already signed their accession treaties and expect to join in 2007 and 2008, though the treaties have yet to be ratified by all EU parliaments. Turkey has a date to start accession talks in October, though that process, if it does begin then, may drag on for a decade or more. Croatia hopes to begin detailed talks once it can persuade the EU that it is co-operating fully with the UN's war-crimes tribunal in The Hague. The other countries of the western Balkans - Albania, Bosnia, Macedonia, Serbia and Montenegro - have been promised EU membership in principle, but without a timetable.

Ukraine wants to join, but may be ten years away from starting talks. Moldova and Georgia would love to follow. At the back of these countries looms Russia. It has no desire to join the Union as an ordinary member, but it fears loss of influence in eastern Europe, and it has long tried to construct a countervailing block of ex-Soviet countries, with itself at the centre.

This survey will look beyond the recent post-constitutional doom and gloom about Europe's future, to argue in favour of continued enlargement of the Union as the best way to manage relations with neighbouring countries, save for Russia. But it will base that argument on the proposition that enlargement is turning the Union into a more loose-knit and pragmatic undertaking into which new members can more easily be fitted - if necessary by denying them some of the rights and privileges which older members enjoy. It presumes that the French-led rejection of the EU constitution, once the dust has settled, will encourage movement towards a looser Union, even if that is not what French voters intended. The French “no” said, in effect, that even France, long the champion of ever closer union, wanted to be less in thrall to the thing it has created.

The history of the Union can almost be written in terms of its struggle to find alternatives to membership which it could offer to keep its neighbours happy but excluded. Each time the Union has failed brilliantly, agreeing to an enlargement and making it work. That is a thought to encourage Turkey, Albania or Ukraine, none of which will be inside the Union for years yet, but none of which can decently be excluded for ever, or while the Union lasts, whatever Europe's current mood.

The EU's latest non-membership strategy for nearby countries, launched two years ago, goes by the name of the “European Neighbourhood Policy”. Under this policy, the Union offers the countries of North Africa, the Mediterranean, the southern Caucasus and eastern Europe graduated access to the single market, plus financial and technical aid, in exchange for reforms bringing them closer to the Union's political and economic models. But these things are presented as a substitute for membership, not as a precursor to it. Countries can aim for a partnership with the Union so close that it brings them “everything but the institutions”, said Romano Prodi in 2002, when he was president of the European Commission.

That makes the European Neighbourhood Policy something bigger, but not necessarily better, than the “Barcelona Process”, a programme the EU launched in 1995 to offer the countries of the southern Mediterranean market access, plus cash and technical aid, in exchange for economic and political reforms, but with no prospect of membership. The EU will have spent almost €9 billion in the region by the end of 2006, with very little to show in return. “The economic performance of the region has stagnated...political reform has also been almost non-existent. Societal trends, for example tendencies in favour of radical Islam, are deeply worrying,” according to a recent study by Michael Emerson and Gergana Noutcheva of the Centre for European Policy Studies in Brussels.

The carrot of choice

If the European Neighbourhood Policy offers the countries of eastern Europe and the southern Caucasus much the same incentives that the Barcelona Process offered the countries of the southern Mediterranean, it is in danger of producing much the same results. “So far, it is easier to find reasons for scepticism than optimism” about the European Neighbourhood Policy, say Ben Slay and Susanne Milcher, economists with the United Nations Development Programme in Bratislava. The Union spreads its values most effectively through peer-pressure for change, linked to hopes of accession. Without such hopes, governments lose motivation. Aid, even market access, is no substitute.

This survey therefore recommends reversing the headline aims of the European Neighbourhood Policy, at least where the Union's neighbours to the east are concerned. It suggests offering membership in name to any country that can meet Europe's basic criteria (of functioning democratic institutions, a market economy, and the capacity to implement EU law), but membership with restricted rights. If one decisive objection to Turkish membership, for example, is that Turkey's big population will give it too large a voting weight in the EU's Council of Ministers, then better all round if Turkey is allowed to join the Union but with its voting rights restricted, perhaps giving it no vote on “constitutional” issues, and no veto at all.

This approach would mean that EU membership, certainly for new members, would count for less. But if this survey is right to see a more fragmented Union emerging, with more limited political ambitions, then membership is starting to count for less anyway.

The idea that the Union is needed to stop its founding members from going to war with one another has long faded. Stripped of its early Utopian rhetoric, the Union can be seen as the sum of its functions and nothing more. Some of those functions are good (such as the single market, and the Schengen agreement to open internal borders). Some are bad (such as the common agricultural policy). All are open to debate. It is external security threats, and relative economic stagnation, that worry European countries now, and countries differ about how best to tackle them. Flexibility is needed.

Conventional wisdom in Brussels has come round to the idea that not every country needs to take part in every Union project. This is already being put into practice, but as the exception rather than the rule. Only 12 of the EU's 15 pre-2004 members have joined the euro zone, for example, and only 13 of the 15 have implemented the Schengen convention abolishing internal borders.

This is the trend that used to be called, disparagingly, “Europe a la carte”, meaning the freedom for countries to pick and choose between the projects they wanted to join and the commitments they wanted to make within the Union. Once countries were allowed to diverge in some things, the argument went, they would diverge in all things, and the Union would break up altogether.

In some ways, the Union is indeed growing weaker. The supranational institutions are losing ground against nations and governments. Just look at Germany's and France's revolt this year against the stability and growth pact, which was supposed to be a foundation of Europe's monetary union; or at France's overturning of the services directive, which would have doubled the scope of the single market; or at the debacle over the constitution.

But “Europe a la carte” may yet mean a happier and more effective Union, if it means that more things get done. Not all EU countries want to harmonise their corporate taxes, or share a public prosecutor, or pool their votes in the International Monetary Fund, but that is no reason why sub-groups of them should not agree to do so. Any trade-off between the “widening” and the “deepening” of Europe is proving less simple than advocates of either course have usually claimed. A widening Europe is a more uneven Europe, deep in some places and shallow in others.

What matters externally is that Europe's political and economic values should go on penetrating and changing the countries round about. It may sound arrogant to talk of the Union as offering the only viable model for European states, but so far the alternatives are not encouraging. Ukraine and Georgia have revolted against a post-Soviet model of crony capitalism and rigged democracy. Moldova is half-way to following, and Belarus may do so one day. European liberalism offers Turkey the best hope of preserving its delicate balance between moderate Islamic society and secular state. For the Balkans, Europe appears to be the only possible escape from post-war poverty and isolation.

The main organised challenge to the European model comes from Russia, which covers or dominates the rest of the extended continent. Russia is still in a process of self-discovery, but seems to show a continuing strong bias towards authoritarianism, so far of a mild and partial kind. It is enough to worry most western countries but not yet to repel them. EU countries disagree about how best to manage relations with Russia, because of their different interests and different experiences there. The main common strand in their relations is an imprudent but increasing reliance on Russian energy.

The United States is also deeply interested in the countries to the east of the EU, bringing its own priorities and policies to bear. America has most to fear from an anti-democratic Russia allied with an anti-democratic China. It needs either a strong democratic Russia, or a weak Russia regardless of government. In either case, prising away the countries around Russia's borders, and building friendly democracies there, is a step in the right direction. That is what George Bush has been doing this year - reassuring the Baltics, praising Ukraine, encouraging Georgia's new pro-western government, and inciting the Belarussians to get rid of their dictator, Alexander Lukashenka.

This puts pressure on Europe to take sides. Either it offers these new and future post-Soviet democracies the prospect of membership in some form, which is what they and America would wish. Or it says to them that they do not belong to the West, but to some vague domain between the EU and Russia - where, in effect, Russia could dominate them.

Given the deficiencies of Russia's political and economic institutions, there is a strong case for Europe to reach out more boldly to Ukraine, and Moldova, and Georgia, just as it should to the western Balkans and Turkey. But it is important to recognise the resistance to further enlargement that has grown within the Union countries, and the reasons for it. Further enlargement of the Union in its present form would mean open borders with the Balkans, Chinese-level wages in some labour markets, and Turkey as the greatest power at summits in Brussels. There would be much to be said for each of these things, but not nearly enough to win over public and political opinion.

Ever wider union

The issue for the EU is no longer how to export stability and prosperity to the countries around it. It has learnt how to do that through enlargement. The issue is how to continue enlarging, how to persuade public opinion within the Union that stability and prosperity can be exported without importing instability and poverty in exchange. That is doubly difficult when public scepticism cuts so deep. A majority of voters in France, and perhaps in other countries too, seems to doubt that the Union is a force for stability and prosperity even across its present membership. This is dangerous disenchantment.

To meet the neighbours, and to consider further what continued enlargement, or the lack of it, might mean to them, this survey will begin with those countries that joined the EU last year, and those on the point of joining in a couple of years' time, Bulgaria and Romania. It will then adventure into the wider and wilder Europe beyond, moving through the Balkans and eastern Europe before coming to rest on Turkey's Black Sea shores. It will see Russia as a country set apart from the rest of Europe by history and geography, but it will look to a Russian monarch, Catherine the Great, for the pithiest summary of Europe's place in the world. “I have no way to defend my borders”, she once said, “except to extend them.”

Article forms part of a survey 'Meet the neighbours. A survey of the EU's eastern borders'.