20 Years Ago 18: European Union

The events of 1989 fundamentally changed the nature of the organization now known as the European Union (EU). And the EU has in turn affected how some of those countries have evolved in the meantime.

In this post, I described the history of the EU and predecessor organizations, and how their membership expanded. Two waves of expansion were tied to the end of the Cold War. Austria, Finland and Sweden, who had been neutral in the Cold War, no longer had anything to be neutral about, so they felt more free to join. And former Soviet bloc countries joined later.

That gave birth to the "broadening" vs. "deepening" debate in Europe.

The fall of the Berlin Wall came two years after the group that was then called the European Community began to implement the Single European Act. That accelerated the process of removing barriers to free trade among the member states. The idea was to go beyond simply the lowering of tariffs, and address issues such as the free movement of labor across the members' borders. That constituted the "deepening" track.

Dissenters, notably in Britain, feared that that path would eventually lead to elimination of the independence of the member states.

But once a consensus started building for inclusion of the neutrals and the ex-Communist countries, i.e., "broadening" the organization, it became clear that "deepening" would be much more difficult.

Further deepening moves have taken place, the most significant of which is the creation of the Euro currency, which is used in much, but not all, of the EU's territory. But anyone's hopes, or fears as the case may be, of a United States of Europe, were put on hold. Two major impediments to deepening:

The larger the number of member states, the more difficult it is to reach consensus on issues. On the biggest questions, the EU still requires unanimous agreement. When there were six countries of continental western Europe, that was much easier than the current situation, with 27 members, spread from the British Isles to Eastern Europe. I recently wrote here and here about how that affected the related questions of ratification of a new EU constitution and elections to new offices created by that constitution. National governments moved to maintain their preeminence, by electing relatively minor players to those positions.

Differences in the economic conditions of member states make further deepening problematic. The EU subsidises its farmers at least as much as the US, with equally little economic justification. And, more broadly, it provides aid to poorer regions within its territory.

Agriculture was much less efficient in Marxist-Leninist economies, whose farmers lacked both incentives and opportunities to modernize. If the EU's subsidy program, the Common Agricultural Policy (CAP), had remained unchanged, the cost to the richer member states would have been enormous. So the CAP was scaled back, and the new ex-Communist members of the EU would not be as closely integrated economically with the long-time member states as previous visions of European integration would have called for.

But aid to poorer regions continues. And that is widely seen as encouraging the trend toward splitting up multinational states, that I described in this and other posts. If a relatively poor region that had traditionally been connected to a larger state could get money directly from Brussels, it could afford to be less concerned about the economic consequences of secession. That was true of Slovakia as compared to the Czech Republic. And it is probably one factor behind the independence movement in Scotland, that is spearheaded by the largest party in the Scottish Parliament, the Scottish National Party. So, the EU is both cause and effect of the changes in Europe during the last two decades.