The EU Owes Eastern Europe

Expanding the European Union wasn't just about giving us cheap labour. It was an altruistic desire to lift millions out of poverty

Since the spirit of the times seems to call for thinking the unthinkable, let's try out something really outlandish, more bizarre than Peter Mandelson rejoining the government, wackier than quantitative easing. How about making the case that the European Union is a great force for democracy?

Too much? OK, how about we get there by way of something less weird-sounding: lavatory paper can be more powerful than a nuclear bomb?

Let me explain. Loo roll was one of the great indignities of life in the former eastern bloc. It was flimsy and abrasive. Anyone who got their hands on some black market western tissue knew beyond doubt that communism was finished. It couldn't compete on the basics. It had, so to speak, bottomed out. That's soft power. The cold war was won as much by easterners comparing their drab lifestyle with that in the west as by the arms race.

When the Wall came down, former communist countries wanted two things: security and prosperity. That meant protection from Moscow and trade with the rest of Europe; membership of Nato and of the EU; nuclear deterrent and decent lavatory paper.

Of the two, EU membership turns out to have been better value by far. From Nato, eastern Europeans got diplomatic confrontation with Russia, a massive bill to upgrade their defences and arm-twisting by Donald Rumsfeld to join American wars. From the EU, they got billions of euros in aid, training for civil servants, freedom to travel and work around the Continent and a seat at the top table of an economic superpower. I'd take the bog roll over the bomb any day.

And that, ultimately, is the EU proposition. It is practical and boring, but surprisingly effective. It cleans up a lot of mess that no one wants to think about. It buries conflicts in committee.

Its guiding mission is to lock the tribes of Europe into such a knotty state of economic interdependence that they simply can't go to war with each other. In historical terms, that is a monumental triumph. Senseless butchery was the default setting in European diplomacy for hundreds of years. What worked for the western side of the Continent after the Second World War is working for eastern side after the cold war: nationalism has been bribed into submission by the common market.

It's a bit premature to call enlargement a complete success. For one thing, it opened up a whole new divide between the countries that made it into the EU and the ones that didn't. That gulf will widen as a result of the financial crisis, which has hit the whole region hard, but left non-EU members hanging much further out in the financial breeze.

A lot of the improvements in people's lives were funded by debt. Much of that was provided by western banks and denominated in euros. When the credit bubble burst, foreign banks naturally reduced their risk exposure and retreated to home markets. Meanwhile, as investors lose confidence in the stricken economies, their currencies plummet, making debts much harder to service. Big chunks of the money that the G20 recently promised to the IMF are going to end up bailing out eastern Europe, but EU integration brings additional protection. Latvia wouldn't have a banking system anymore if it hadn't become a financial sudsidiary of Sweden.

Still, there will be political repercussions. Over the next few years, governments across the Continent will have to slash spending to reduce their deficits. In well-established western democracies, that is painful enough, but in places where democracy and prosperity were sold as a two-for-one package, a sudden decline in the economy could undermine the whole post-communist political settlement. Governments have already collapsed in Hungary, the Czech Republic and Latvia. (Although stable coalitions were never a regional speciality.)

As big a problem as eastern EU members losing faith in democracy is western EU members losing faith in the east. Germany and France, historically the twin propellors of the EU, were always wary of enlargement. They suspected, correctly as it happens, that bringing former communist countries in was part of a British plot to slow down political integration. With the old Warsaw Pact on board, the union would become wider and shallower, a bit less of a federal superstate, a bit more of a ragged trade alliance.

Germany, with its long border with Poland, was also much more wary than Britain of labour migration. France, meanwhile, suspected the new members of "Anglo-Saxon" tendencies, in economics and politics. It saw them as being a little too keen on market liberalisation, since that is the path they had been forced to follow in the name of post-communist reform. Jacques Chirac neatly expressed Gallic scorn for parvenu "new" Europeans by observing, when many of them backed the Iraq war, that they had "missed an opportunity to shut up".

France and Germany wanted a more gradual enlargement. Britain's big bang approach prevailed. But now that the crisis has struck, the original hard core of the EU is looking eastwards with renewed suspicion. That is partly because the west is most worried about protecting its currency union. As the only country to run a surplus in recent years, Germany is going to have to bail out the entire eurozone. Thrifty Germans, already resentful of clearing up after the profligate Greeks and Irish, are hardly going to relish the prospect of more subsidies to ex-communists. It would feel like reunification all over again, which left a lot of rich West Germans feeling ripped off by their poor eastern relations.

France, meanwhile, has always nurtured the idea of a twin-track Europe: an inner core of true believers surrounded by hangers-on: sceptical Nordics, Brits and country cousin easterners. In February, Nicolas Sarkozy casually floated the idea that French car-makers wanting a bail-out could repatriate production from Slovakia and the Czech Republic. So much for the single market.

And what about Britain, one-time cheerleader for enlargement? This country did the people of central and eastern Europe a big favour by lobbying hard for their admission to the EU. It was an act of moral decency of which we could even be a little bit proud. We extended the hand of economic friendship to nations that had been crushed by decades of authoritarian misrule. So we'll speak up for our friends in the east again now, won't we?

Or is eastern Europe just somewhere for packs of lager-fuelled stag parties to disgorge their dumpling dinners on the cobbles of medieval capitals? Did enlargement only seem like a good idea to home buyers, all pumped up on Sarah Beeny, hiring gangs of Poles to do their loft extensions. The east is suddenly all far away again. We go on weekend breaks to Bognor, not Bucharest. And those friendly barmaids and industrious plumbers? Oh, are you still here? Sorry. It's British Jobs for British Workers now. Back you toddle to Whereveritania.

You can't expect British politicians to have a sensible policy on the European Union. Where would they even start? The story that Europe is something inflicted on Britain by others is too deeply ingrained. Even the Lib Dems, the only truly pro-European party, see that status as a bit of a liability.

Labour had an opportunity, with enlargement, to re-couch the whole debate in moral terms. They squandered it. The Tories, meanwhile, have spent the last decade doing everything they can to avoid a realistic conversation about Europe. They have been so obsessed by the idea of unelected, unaccountable bureaucrats chipping away at national sovereignty they didn't even notice the unelected, unaccountable global financiers hollowing out the national economy. In the world of globalised free market capitalism, Brussels, where key decisions are taken by heads of government, is one place were the nation state actually counts for something.

And Brussels is where the Tories will have to go if, after forming a government, they want to honour commitments that Britain made at the G20 summit to rebuild the global financial architecture. Within months of taking office, Tory ministers could find themselves negotiating pan-European financial services regulation. It is hard to imagine anything better designed to induce apoplexy on the party's Thatcherite wing. Whitehall mandarins are already getting twitchy about the uphill struggle they face teaching Conservatives what the EU actually does.

They could start by asking the Tories to consider why, if the EU is a conspiracy against national sovereignty, countries fresh from Soviet colonisation were so desperate to join? Those eastern bloc nations were pretty well placed to spot a tyrannical superstate. They didn't find one in Brussels.

In little more than a decade, 10 countries that had authoritarian governments and failing state-run economies - Estonia, Latvia, Lithuania, Poland, Hungary, Slovakia, Slovenia, the Czech Republic, Romania and Bulgaria - were incorporated by a democratic process into the biggest unified marketplace in the world. Tens of millions of people were helped out of poverty. Borders were flung open. Not a shot was fired. It was the greatest, slightly boring bureaucratic achievement of all time. How's that for thinking the unthinkable? Those heroic, freedom-loving bureaucrats from Brussels.

"¢ Andrew Rawnsley is away

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