Are the East Europeans crazy?

By: Wolfgang Munchau

It took the Bulgarian government nine days after entering the EU on January 1 to announce a delay in the adoption of the euro for at least five years – in default of their accession treaty obligation. Hungary has run up such massive deficits – again in defiance of its treaty obligations - that there is no chance of an entry into the euro area for another decade. Poland has become so hostile to the EU under the Kaczynski twins that euro membership is now on indefinite suspension. The Czech government has also delayed euro entry, but more importantly it has become aggressively hostile to the European constitution. President Vaclav Klaus is no longer isolated on this issue with his country, as the government fully supports his stance, and when Angela Merkel visited him last week, he told her to stuff it.

 

There is nothing new about political disagreements in the EU, but I can see a big fault line opening up – a fault line much larger than the one between the UK and the rest of the EU, which has dominated the narrative of European integration for the best part of 50 years. If Merkel’s attempt to relaunch the Constitution fails – the Czechs themselves could make that a nontrivial probability – then there is a big risk of the EU fragmenting along this fault line. There are various possibilities how this fragmentation would occur, both geographically and procedurally, but it already looks apparent that its geography will not be too dissimilar from the line of the iron curtain. Germany will be inside, and Poland, Czech Republic, Hungary, and most certainly Bulgaria will be on the outside.

 

What east European politicians tend to misjudge is that their profound anti-Europeanism is not shared by the euro area in quite the same way. While this is not an age of exuberant integrationism anywhere, the Czech and Polish are taking euroscepticism to such an extreme that is profoundly alienating in the rest of the EU.

 

Probably the biggest misunderstanding by the East Europeans is that they treat the EU as a static place. They appear to think that they have reached all their political goals simply through accession. What they do not see is that the EU they have joined has been subject to profound change throughout its history, a process that is likely to continue.

 

My own personal assessment is that the need for further integration is particularly strong within the euro area for the simple reason that the euro area faces symmetric challenges that its member states stand a better chance to solve together than on their own. At present, national politics often stands in the way of the euro area pursuing its best interests. While that is to be expected for a new and untested monetary union, it is not a stable condition.

 

I have not the slightest doubt that the euro area will eventually solve its collective action problem. Now image the situation, if non-euro area member countries were to block the constitution. Yes, I am aware that the two No Votes have come from euro area members, but this is almost certainly going to change in a second round. I would expect Merkel to find a way to solve the French and the Dutch problem. If the political process started by the German EU presidency fails, I bet it will this time not fail due to French or Dutch opposition, but due to British, Polish or Czech opposition. The political consequences of such a failure will be different than the first time round. For as long as the Constitution is rejected by euro area members, the EU is in a state of political confusion. But once it is rejected by non-euro area members, the confusion will lift and the EU will fragment.

 

This leads me to the conclusion that the only alternative to a Constitution for the EU is a Constitution for the eurozone. I cannot fathom any explanation, other than ignorance or madness, why the Czechs and the Poles should want to bring about such a situation.

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