International shield

The ever-deepending Greek debt crisis appears to confirm the fundamental nature of the EU’s north-south divide. It’s an old story – Catholic versus Protestant, profligacy versus penny-pinching, latitude versus rectitude.

Of course, this is far too neat a geographical distinction – not least because it ignores the ‘New Europe’ of the east.

It’s an increasingly important angle that’s explored by the Economist:

“Greece’s recession has been brutal, thanks in part to the austerity imposed by its creditors. But its tales of hardship fall on deaf ears in countries like Slovakia, where GDP per head is 85% of Greece’s and pensioners live on far less. For months central and east European euro-zone members have urged officials to start formal planning for a ‘Grexit’… at a [recent] meeting of senior officials in Bratislava, they succeeded.”

For all of the undoubted hardship suffered by the Greek people, the fact that other EU member states have had it worse is often overlooked:

“These countries have memories of hardship at least the equal of Greece’s, and not just from the Communist era. Latvia’s GDP fell by 25% between 2008 and 2010, when the country opted for a brutal internal devaluation to restore competitiveness.”

Having come through the fire, these countries see no reason why Greece should be spared the ordeal:

“Slovakia and Latvia enjoy reasonable growth and declining budget deficits, turning them into advocates of the notion of growth-friendly austerity… Ask Germans about their tough approach to Greece and you are often told that the real hardliners are farther east.”

The key point is that having made the painful adjustment to EU membership, the New Europeans aren’t just economically stronger but politically stronger too:

“11 years after the European Union’s ‘big bang’ enlargement to the east, the increasing diplomatic confidence and competence of countries that, as a Slovakian minister puts it, are no longer simply ‘the object of EU policies’.”

From a British point of view, we tend to think that the rise of the east is a good thing – a welcome counterweight to the old Franco-German stitch-up. However, we shouldn’t count our chickens. For instance, it may be New Europe that proves the greatest stumbling block to current British objectives:

“…a club of easterners led by Poland will provide the stiffest opposition to one of the main goals of Britain’s EU renegotiation: to reduce welfare benefits for low-paid migrants.”

At the same time (and somewhat hypocritically) many of these countries are resisting EU-wide moves to take in more migrants from non-EU countries. Hungary even has a plan to build a four-metre high fence along its entire border with Serbia – perhaps the first link in a reverse Iron Curtain.

Hungary is the most blatant example of the newly assertive east. As Victor Orban, the Hungarian Prime Minister said last year: “I don’t think that our European Union membership precludes us from building an illiberal new state based on national foundations.”

In countries like Germany and the Netherlands, continued British membership of the EU is seen as an essential pro-market bulwark against the dirigiste tendencies of the French and the Mediterranean countries. But, these days, I wonder if it’s only the southerners that the northerners are worried about.

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