No Further E.U. Enlargement After Croatia
On July 1 Croatia became the 28th country to join the European Union, and on current form there will be no further enlargement for many years to come. A look at the glaring dysfunctions in Croatia’s accession, compared to the double standards Brussels imposes on Serbia and Ukraine, is indicative of the peculiar mitteleuropäisch view of what constitutes “Europe” which still dominates the political and media elite thinking in Berlin and Vienna.
After the disappointing experience with Bulgaria and Romania, which joined the EU in 2007 but continue to be plagued by unstable governments and all-pervasive corruption, many experts have expressed doubts about Croatia’s readiness for membership. On its entry a month ago it became the third-poorest nation in the EU, with unemployment hovering around 20 percent. Of those who work, one-third are employed in the public sector. If it joins the eurozone in three years, Croatia would also become a prime candidate for an eventual bailout.
According to Transparency International, Croatia is ranked below Rwanda, Namibia, Jordan or Cuba in its 1012 graft index. Former prime minister Ivo Sanader, who played a key role in negotiating the EU membership, was sentenced to ten years in jail last year for accepting multi-million bribes from foreign companies. Last March the European Commission expressed concern over Croatia’s low level of legal penalties in corruption cases and its effectiveness in battling human trafficking and organized crime. “Widespread political and economic corruption persist, and its courts often show an overly lax attitude toward due process,” The New York Times editorialist warned on June 28. “The fact is that the Union may well be about to repeat the mistakes of the last round of accessions,” he warned, thus jeopardizing Croatia’s own future, diminishing membership prospects for other Balkan states, and stalling further enlargement for the next decade or more.
It is no secret in Brussels that Germany wanted Croatia in for its own geopolitical reasons, however, and that was the end of the debate. There is also an economic interest. Since their products have become significantly more competitive with the elimination of the 20 percent tariff on EU goods, German manufacturers and merchants in particular stand to profit from Croatia’s entry. They cherish the prospect of over four million potential new customers who are traditionally fond of German brands.
Many Croatians remain deeply skeptical about the benefits of joining the Union. In last year’s referendum on EU membership, only 43 percent of eligible voters cast their ballots and exactly two-thirds voted in favor of the union—a mere 28 percent of Croatia’s electorate. Recent polls show that only 39 percent welcomed the accession. State-funded celebration in Zagreb notwithstanding, Croatian accession was marked by all-pervasive gloom among its people as well as across the EU. Some Croats fear that tough competition from the north will drive many struggling companies out of business. Even Greece, Bulgaria and Romania are in better financial shape than Croatia, according to World Bank statistics.
For a country facing serious demographic decline, the most serious likely consequence of EU membership will be an exodus of educated young people when work restrictions expire in two years from now. Among Croatia’s under-25s unemployment rate exceeds 50 percent. A massive brain drain has already happened to Poland after it joined the EU in 2004, and to Bulgaria and Romania after 2007.
Croatian Euroskeptics say that just getting ready for EU entry has crippled their country in the same manner as Brussels’ neoliberal ideology has damaged the “Club Med.” Croatia cannot join the eurozone immediately, but it is maintaining a fixed euro-kuna exchange rate to qualify for membership in three years’ time. This denies it an opportunity to devalue and make its exports and tourist industry more competitive. On current form, Croatia’s tourist infrastructure can hardly compete with that of Italy, Spain, or Greece.
“Croatian governments have followed obediently the EU’s austerity advice, even before the accession.” Srecko Horvat and Igor Stiks wrote in an op-ed for the Guardian. The country’s foreign debt now exceeds $60 billion, more than $13,000 for each of Croatia’s 4.4 million people. It now has virtually no industry and relies heavily on tourism, which accounts for 20 percent of GNP. All this, Horvat and Stiks say, means that “Croatia has not actually joined only the EU; in reality, it has become a fully fledged member of the EU periphery.” One of the EU’s longest external land borders at 800 miles, they add, will necessarily cut Croatia off from its immediate and natural surroundings and bring further isolation from its neighbors.
By entering the EU Croatia has lost its membership in the Central European Free Trade Agreement (CEFTA), which now consists of Albania, Bosnia and Herzegovina, Macedonia, Moldova, Montenegro and Serbia. The loss of customs privileges and trade benefits in those markets will cost the country at least 220 million dollars a year in lost exports, according to the Croatian Chamber of Commerce. Other analysts say that some 4,000 people will become unemployed as a result of Croatia losing CEFTA membership, with no compensating benefits in the highly competitive EU markets.
Last but not least, EU membership creates a major problem for thousands of Croats who make their living from fishing along the country’s Adriatic coast. They will face competition from much larger and better equipped fishing vessels from other EU countries—above all Italy—which are now free to operate in Croatian waters. In addition, they will have to invest heavily into new, EU-compliant trawl nets and safety equipment. Most of their gear is not in accordance with the EU’s Common Fishing Policy (CFP), whose regulations were modeled mostly on fishing in the Atlantic Ocean. Local fishers complain that successive Croatian governments did not even try to protect their interests and that they face bankruptcy.
For better or worse, Croatia is in the EU while other aspirants, like Serbia to the east, will stay out for many years to come—or, in the case of Ukraine, are not yet even in discussions for membership. Enlargement fatigue is all-pervasive among old and new Union members alike. The fact that it is particularly strong in Germany is what really matters. (Several smaller countries share the sentiment, notably Austria and Benelux.) German preferences largely explain the unequal treatment by Brussels of other countries in the former Yugoslavia and in Europe’s “eastern neighborhood.” What is sauce for the Croatian goose is no sauce for the Serbian or Ukrainian gander. Unlike in earlier rounds of accession, the EU no longer offers a specific timetable for achieving the promise of membership made at the summit in Thessaloniki ten years ago. Rather, the process remains open-ended and indeterminate. EU Commissioner for Enlargement Štefan Füle claims that enlargement will continue, but officials in Brussels privately concede that this is not the case.
Last April Serbia had to sign a humiliating, EU-brokered deal with Kosovo’s secessionist government in order to obtain a “conditional” date for the opening of accession negotiations next January. Effectively giving up one-seventh of one’s sovereign territory for the sake of the elusive “Date” was both a crime and a mistake, but even that does not promise the government in Belgrade that it will be any closer to full EU membership a decade from now than it is today. Turkey has been a candidate since 1999, and yet it will never be allowed to join the EU. Skopje-Macedonia (FYROM) has had a candidate status for the past eight years, with the final goalpost nowhere in sight.
Even after Serbia’s capitulation last April, German lawmakers came up with a list of seven additional demands which Belgrade would need to complete in order to be given a date for the commencement of accession negotiations. They wanted the Serbian authorities “to find and prosecute the demonstrators who attacked the German embassy in Belgrade in February 2008” (a day after Berlin recognized Kosovo’s independence), which is well-nigh impossible because the German government has refused to give the Serbs any surveillance camera footage. More egregiously, the Bundestag demanded that the Serbs accept, and not deny, that “genocide” was committed in Srebrenica; to apply pressure on northern Kosovo Serbs to “actively cooperate” with EULEX and Kfor; and to display “visible readiness for legally binding normalization of relations” with Kosovo.
Brussels’ lack of straight dealing is equally glaring in the case of Ukraine, which is not even being offered the prospect of EU membership anytime soon. Kiev has been struggling since 2007 to obtain the more limited Association Agreement with the EU. At the 15th Ukraine-EU Summit in December 2011, the EU leaders and President Yanukovych announced that they had reached “a common understanding on the text of the Association Agreement,” and in March 2012 the chief negotiators of the European Union and Ukraine initialed the text of the Agreement. Stefan Füle announced at that time that the Agreement could be finally signed after the Ukrainian general election in October 2012. It did not happen. Additional demands and conditions keep emerging instead.
Topping the list is the case of Yulia Tymoshenko, a former prime minister, who is serving a seven-year jail sentence for corruption and is facing murder charges for the 1996 killing of a political opponent. Even though the case against the richest woman in Ukraine seems strong, Brussels has taken the position that it was politically motivated. The EU has also criticized Ukrainian authorities for failing to conduct last October’s parliamentary elections “in line with international democratic standards.” With Germany again the lead skeptical voice on the EU side, the question of whether the Association Agreement will be signed at the Vilnius summit this November remains uncertain. If it is not signed, it will not be for lack of trying from the Ukrainian side.
Unequal treatment of different countries by the EU’s old core—and above all by Germany—reflects some old prejudices and cultural preferences which will not go away. Of course, no German politician will ever admit that his or her judgment is impacted by the fact that the Croats were German allies in both world wars, while the Serbs or Ukrainians were not.