The proclamations of the European eight (including the three_The Belgian Curtain: Europe after Communism

The Belgian Curtain

Europe after Communism

1st EDITION

Sam Vaknin, Ph.D.

Editing and Design:

Lidija Rangelovska

A Narcissus Publications Imprint, Skopje 2003

First published by United Press International - UPI

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REPUBLIC OF MACEDONIA

C O N T E N T S

I. European Union and NATO - The Competing Alliances

II. The War in Iraq

III. How the West Lost the East

IV. Left and Right in a Divided Europe

V. Forward to the Past - Capitalism in Post-Communist Europe

VI. Transition in Context

VII. Eastern Advantages

VIII. Europe's Four Speeds

IX. Switching Empires

X. Europe's Agricultural Revolution

XI. Winning the European CAP

XII. History of Previous Currency Unions

XIII. The Concert of Europe, Interrupted

XIV. The Eastern Question Revisited

XV. Europe's New Jews

XVI. The Author

XVII. About "After the Rain"

EU and NATO - The Competing Alliances

By: Dr. Sam Vaknin

Also published by United Press International (UPI)

Saturday's vote in Ireland was the second time in 18 months that its

increasingly disillusioned citizenry had to decide the fate of the

European Union by endorsing or rejecting the crucial Treaty of Nice.

The treaty seeks to revamp the union's administration and the hitherto

sacred balance between small and big states prior to the accession of

10 central and east European countries. Enlargement has been the

centerpiece of European thinking ever since the meltdown of the eastern

bloc.

Shifting geopolitical and geo-strategic realities in the wake of the

September 11 atrocities have rendered this project all the more urgent.

NATO - an erstwhile anti-Soviet military alliance is search of purpose

- is gradually acquiring more political hues. Its remit has swelled to

take in peacekeeping, regime change, and nation-building.

Led by the USA, it has expanded aggressively into central and northern

Europe. It has institutionalized its relationships with the countries

of the Balkan through the "Partnership for Peace" and with Russia

through a recently established joint council. The Czech Republic,

Poland, and Hungary - the eternal EU candidates - have full scale

members of NATO for 3 years now.

The EU responded by feebly attempting to counter this worrisome

imbalance of influence with a Common Foreign and Security Policy and a

rapid deployment force. Still, NATO's chances of replacing the EU as

the main continental political alliance are much higher than the EU's

chances of substituting for NATO as the pre-eminent European military

pact. the EU is hobbled by minuscule and decreasing defense spending by

its mostly pacifistic members and by the backwardness of their armed

forces.

That NATO, under America's thumb, and the vaguely anti-American EU are

at cross-purposes emerged during the recent spat over the International

Criminal Court. Countries, such as Romania, were asked to choose

between NATO's position - immunity for American soldiers on

international peacekeeping missions - and the EU's (no such thing).

Finally - and typically - the EU backed down. But it was a close call

and it cast in sharp relief the tensions inside the Atlantic

partnership.

As far as the sole superpower is concerned, the strategic importance of

western Europe has waned together with the threat posed by a

dilapidated Russia. Both south Europe and its northern regions are

emerging as pivotal. Airbases in Bulgaria are more useful in the fight

against Iraq than airbases in Germany.

The affairs of Bosnia - with its al-Qaida's presence - are more

pressing than those of France. Turkey and its borders with central Asia

and the middle east is of far more concern to the USA than

disintegrating Belgium. Russia, a potentially newfound ally, is more

mission-critical than grumpy Germany.

Thus, enlargement would serve to enhance the dwindling strategic

relevance of the EU and heal some of the multiple rifts with the USA -

on trade, international affairs (e.g., Israel), defense policy, and

international law. But this is not the only benefit the EU would derive

from its embrace of the former lands of communism.

Faced with an inexorably ageing populace and an unsustainable system of

social welfare and retirement benefits, the EU is in dire need of young

immigrants. According to the United Nations Population Division, the EU

would need to import 1.6 million migrant workers annually to maintain

its current level of working age population. But it would need to

absorb almost 14 million new, working age, immigrants per year just to

preserve a stable ratio of workers to pensioners.

Eastern Europe - and especially central Europe - is the EU's natural

reservoir of migrant labor. It is ironic that xenophobic and

anti-immigration parties hold the balance of power in a continent so

dependent on immigration for the survival of its way of life and

institutions.

The internal, common, market of the EU has matured. Its growth rate has

leveled off and it has developed a mild case of deflation. In previous

centuries, Europe exported its excess labor and surplus capacity to its

colonies - an economic system known as "mercantilism".

The markets of central, southern, and eastern Europe - West Europe's

hinterland - are replete with abundant raw materials and dirt-cheap,

though well-educated, labor. As indigenous purchasing power increases,

the demand for consumer goods and services will expand.

Thus, the enlargement candidates can act both as a sink for Europe's

production and the root of its competitive advantage.

Moreover, the sheer weight of their agricultural sectors and the

backwardness of their infrastructure can force a reluctant EU to reform

its inanely bloated farm and regional aid subsidies, notably the Common

Agricultural Policy. That the EU cannot afford to treat the candidates

to dollops of subventioary largesse as it does the likes of France,

Spain, Portugal, and Greece is indisputable. But even a much-debated

phase-in period of 10 years would burden the EU's budget - and the

patience of its member states and denizens - to an acrimonious breaking

point.

The countries of central and eastern Europe are new consumption and

investment markets. With a total of 300 million people (Russia

counted), they equal the EU's population - though not its much larger

purchasing clout. They are likely to while the next few decades on a

steep growth curve, catching up with the West. Their proximity to the

EU makes them ideal customers for its goods and services. They could

provide the impetus for a renewed golden age of European economic

expansion.

Central and eastern Europe also provide a natural land nexus between

west Europe and Asia and the Middle East. As China and India grow in

economic and geopolitical importance, an enlarged Europe will find

itself in the profitable role of an intermediary between east and west.

The wide-ranging benefits to the EU of enlargement are clear,

therefore. What do the candidate states stand to gain from their

accession? The answer is: surprisingly little.

All of them already enjoy, to varying degrees, unfettered, largely

duty-free, access to the EU. To belong, a few - like Estonia - would

have to dismantle a much admired edifice of economic liberalism.

Most of them would have to erect barriers to trade and the free

movement of labor and capital where none existed. All of them would be

forced to encumber their fragile economies with tens of thousands of

pages of prohibitively costly labor, intellectual property rights,

financial, and environmental regulation. None stands to enjoy the same

benefits as do the more veteran members - notably in agricultural and

regional development funds.

Joining the EU would deliver rude economic and political shocks to the

candidate countries. A brutal and rather sudden introduction of

competition in hitherto much-sheltered sectors of the economy, giving

up recently hard-won sovereignty, shouldering the debilitating cost of

the implementation of reams of guideline, statutes, laws, decrees, and

directives, and being largely powerless to influence policy outcomes.

Faced with such a predicament, some countries may even reconsider.

THE WAR IN IRAQ

The Euro-Atlantic Divide

By: Dr. Sam Vaknin

Also published by United Press International (UPI)

The countries of central and east Europe - especially those slated to

join the European Union (EU) in May next year - are between the

American rock and the European hard place. The Czech republic, Hungary

and Poland, already NATO members, have joined Spain, Britain and other

EU veterans in signing the "letter of eight" in support of US policy in

the Gulf. NATO and EU aspirants - including most of the nations of the

Balkans - followed suit in a joint statement of the Vilnius Group.

The denizens of the region wonder what is meant by "democracy" when

their own governments so blithely ignore public opinion, resolutely set

against the looming conflict. The heads of these newly independent

polities counter by saying that leaders are meant to mold common

perceptions, not merely follow them expediently. The mob opposed the

war against Hitler, they remind us, somewhat non-germanely.

But the political elite of Europe is, indeed, divided.

France is trying to reassert its waning authority over an increasingly

unruly and unmanageably expanding European Union. Yet, the new members

do not share its distaste for American hegemony.

On the contrary, they regard it as a guarantee of their own security.

They still fear the Russians, France's and Germany's new found allies

in the "Axis of Peace" (also known as the Axis of Weasels).

The Czechs, for instance, recall how France (and Britain) sacrificed

them to Nazi Germany in 1938 in the name of realpolitik and the

preservation of peace. They think that America is a far more reliable

sponsor of their long-term safety and prosperity than the fractured

European "Union".

Their dislike of what they regard as America's lightweight leadership

and overt - and suspect - belligerence notwithstanding, the central and

east Europeans are grateful to the United States for its unflinching -

and spectacularly successful - confrontation with communism.

France and Germany - entangled in entente and Ostpolitik, respectively

- cozied up to the Kremlin, partly driven by their Euro-communist

parties. So did Italy. While the Europeans were busy kowtowing to a

repressive USSR and castigating the USA for its warmongering, America

has liberated the Soviet satellites and bankrolled their painful and

protracted transition.

Historical debts aside, America is a suzerain and, as such, it is

irresistible. Succumbing to the will of a Big Power is the rule in east

and central Europe. The nations of the region have mentally substituted

the United States for the Soviet Union as far as geopolitics are

concerned. Brussels took the place of Moscow with regards to economic

issues. The Czechs, Poles, Hungarians, assorted Balkanians, even the

Balts - have merely switched empires.

There are other reasons for these countries' pro-Americanism. The

nations of central, east and southeast (Balkans) Europe have sizable

and economically crucial diasporas in the united States. They admire

and consume American technology and pop culture. Trade with the USA and

foreign direct investment are still small but both are growing fast.

Though the EU is the new and aspiring members' biggest trading partner

and foreign investor - it has, to borrow from Henry Kissinger, no

"single phone number". While France is enmeshed in its Byzantine

machinations, Spain and Britain are trying to obstruct the ominous

re-emergence of French-German dominance.

By catering to popular aversion of America's policies, Germany's

beleaguered Chancellor, Gerhard Schroeder, is attempting to score

points domestically even as the German economy is imploding.

The euro-Atlantic structures never looked worse. The European Union is

both disunited and losing its European character. NATO has long been a

dysfunctional alliance in search of a purpose. For a while, Balkan

skirmishes provided it with a new lease on life. But now the

Euro-Atlantic alliance has become the Euro-Atlantic divide.

The only clear, consistent and cohesive voice is America's. The new

members of NATO are trying to demonstrate their allegiance - nay,

obsequiousness - to the sole identifiable leader of the free world.

France's bid at European helmsmanship failed because both it and Russia

are biased in favor of the current regime in Iraq. French and Russian

firms have signed more than 1700 commercial contracts with Saddam's

murderous clique while their British and American competitors were

excluded by the policies of their governments.

When sanctions against Iraq are lifted - and providing Saddam or his

hand-picked successor are still in place - Russian energy behemoths are

poised to explore and extract billions of barrels of oil worth dozens

of billions of dollars. Iraq owes Russia $9 billion which Russia wants

repaid.

But the United States would be mistaken to indulge in Schadenfreude or

to gleefully assume that it has finally succeeded in isolating the

insolent French and the somnolent Germans. Public opinion - even where

it carries little weight, like in Britain, or in the Balkans - cannot

be ignored forever.

Furthermore, all the countries of Europe share real concerns about the

stability of the Middle East. A divided Iraq stands to unsettle

neighbours near and far. Turkey has a large Kurdish minority as does

Iran. Conservative regimes in the Gulf fear Iraq's newfound and

American-administered democracy. In the wake of an American attack on

Iraq, Islamic fundamentalism and militancy will surely surge and lead

to a wave of terror. Europe has vested historical, economic and

geopolitical interests in the region, unlike America.

Persistent, unmitigated support for the USA in spite of French-German

exhortations will jeopardize the new and aspiring members' position in

an enlarged EU. Accession is irreversible but they can find themselves

isolated and marginalized in decision making processes and dynamics

long after the Iraqi dust has settled. EU officials already gave public

warnings to this effect.

It is grave error to assume that France and Germany have lost their

pivotal role in the EU. Britain and Spain are second rank members -

Britain by Europhobic choice and Spain because it is too small to

really matter. Russia - a smooth operator - chose to side with France

and Germany, at least temporarily. The new and aspiring members would

have done well to follow suit.

Instead, they have misconstrued the signs of the gathering storm: the

emerging European rapid deployment force and common foreign policy; the

rapprochement between France and Germany at the expense of the

pro-American but far less influential Britain, Italy and Spain; the

constitutional crisis setting European federalists against traditional

nationalists; the growing rupture between "Old Europe" and the American

"hyperpower".

The new and aspiring members of NATO and the EU now face a moment of

truth and are being forced to reveal their hand. Are they pro-American,

or pro-German (read: pro federalist Europe)? Where and with whom do

they see a common, prosperous future? What is the extent of their

commitment to the European Union, its values and its agenda?

The proclamations of the European eight (including the three central

European candidates) and the Vilnius Ten must have greatly disappointed

Germany - the unwavering sponsor of EU enlargement. Any further

flagrant siding with the United States against the inner core of the EU

would merely compound those errors of judgment. The EU can punish the

revenant nations of the communist bloc with the same dedication and

effectiveness with which it has hitherto rewarded them.

THE WAR IN IRAQ

Bulgaria - The Quiet American

By: Dr. Sam Vaknin

Also published by United Press International (UPI)

Last week, Bulgaria, currently sitting on the Security Council, was one

of ten east and southeast European countries - known as the Vilnius

Group - to issue a strongly worded statement in support of the United

States' attempt to disarm Iraq by military means. This followed a

similar, though much milder, earlier statement by eight other European

nations, including Hungary, the Czech Republic and Poland, the EU's

prospective members in central Europe.

The Vilnius Ten - including Albania, Bulgaria, Croatia, Estonia,

Latvia, Lithuania, Macedonia, Romania, Slovakia and Slovenia - called

the evidence presented to the Security Council by Colin Powell, the US

Secretary of State - "compelling". Iraq posed a "clear and present

danger" - they concluded.

Bulgaria and Romania pledged free access to their air spaces and

territorial waters. The first US military plane has landed today in the

Safarovo airport in the Black Sea city of Burgas in Bulgaria. Other

members are poised to provide medical staff, anti-mine units and

chemical protection gear.

Such overt obsequiousness did not go unrewarded.

Days after the common statement, the IMF - considered by some to be a

long arm of America's foreign policy - clinched a standby arrangement

with Macedonia, the first in two turbulent years. On the same day,

Bulgaria received glowing - and counterfactual - reviews from yet

another IMF mission, clearing the way for the release of a tranche of

$36 million out of a loan of $330 million.

Partly in response, six members of parliament from the ruling Simeon II

national Movement joined with four independents to form the National

Ideal for Unity. According to Novinite.com, a Bulgarian news Web site,

they asserted that "the new political morale was seriously harmed" and

"accused the government of inefficient economic program of the

government that led to the bad economic situation in the country."

Following the joint Vilnius Group declaration, Albania, Croatia,

Bulgaria and Macedonia received private and public assurances that

their NATO applications now stand a better chance. Bulgaria started the

second round of negotiations with the military alliance yesterday and

expects to become full member next year. The head of the US Committee

on NATO Enlargement Bruce Jackson stated: "I'm sure that Bulgaria has

helped itself very much this week."

Yet, the recent rift in NATO (over Turkish use of the Alliance's

defense assets) pitted Germany, France and Belgium against the rest of

the organization and opposite other EU member states. It casts in doubt

the wisdom of the Vilnius Group's American gambit. The countries of

central and east Europe may admire the United States and its superpower

clout - but, far more vitally, they depend on Europe, economically as

well as politically.

Even put together, these polities are barely inconsequential. They are

presumptuous to assume the role of intermediaries between a

disenchanted Franco-German Entente Cordiale and a glowering America.

Nor can they serve as "US Ambassadors" in the European corridors of

power.

The European Union absorbs two thirds of their exports and three

quarters of their immigrants. Europe accounts for nine tenths of

foreign direct investment in the region and four fifths of aid. For the

likes of the Czech Republic and Croatia to support the United states

against Germany is nothing short of economic suicide.

Moreover, the United States is a demanding master. It tends to

micromanage and meddle in everything, from election outcomes to

inter-ethnic relations. James Purdew, America's ambassador to Sofia and

a veteran Balkan power broker, spent the last few weeks exerting

pressure on the Bulgarian government, in tandem with the aforementioned

Bruce Jackson, to oust the country's Prosecutor General and reinstate

the (socialist) head of the National Investigation Services.

Bulgaria is already by far the most heavily enmeshed in US military

operations in Asia. It served as a launch pad for US planes during the

Afghanistan campaign in 2001-2. It stands to be affected directly by

the looming war.

Bulgaria is on the route of illicit immigration from Iraq, Palestine

and Iran, via Turkey, to Greece and therefrom to the EU. Last Friday

alone, it detained 43 Iraqi refugees caught cruising Sofia in two

Turkish trucks on the way to the Greek border.

The Ministry of Interior admitted that it expects a "massive flow of

(crossing) refugees" if an armed conflict were to erupt.

The Minister of Finance, Milen Velchev, intends to present to the

Council of Ministers detailed damage scenarios based on a hike in the

price of oil to $40 per barrel and a 3-4 months long confrontation. He

admitted to the Bulgarian National Radio that inflation is likely to

increase by at least 1-1.5 percentage points.

The daily cost of a single 150-member biological and chemical defense

unit stationed in the Gulf would amount to $15,000, or c. $500,000 per

month, said the Bulgarian news agency, BTA. The Minister of Defense,

Nikolai Svinarov, told the Cabinet that he expects "maximum (American)

funding and logistical support" for the Bulgarian troops. The United

States intends to base c. 400 soldiers-technicians and 18 planes on the

country's soil and will pay for making use of the infrastructure, as

they have done during operation "Enduring Freedom" (the war in

Afghanistan).

Bulgaria stands to benefit in other ways. The country's Deputy Foreign

Minister, Lyubomir Ivanov, confirmed in another radio interview that

the Americans pledged that Iraqi debts to Bulgaria will be fully paid.

This can amount to dozens of millions of US dollars in fresh money.

Is this Bulgaria's price? Unlikely. Bulgaria, like the other countries

of the region, regards America as the first among equals in NATO. The

EU is perceived in east Europe as a toothless, though rich, club,

corrupted by its own economic interests and inexorably driven by its

bloated bureaucracy.

The EU and its goodwill and stake in the region are taken for granted -

while America has to be constantly appeased and mollified.

Still, the members of the Vilnius Groups have misconstrued the signs of

the gathering storm: the emerging European rapid deployment force and

common foreign policy; the rapprochement between France and Germany at

the expense of the pro-American but far less influential Britain, Italy

and Spain; the constitutional crisis setting European federalists

against traditional nationalists; the growing rupture between "Old

Europe" and the American "hyperpower".