COVER STORY
End of the Affair?
As Irish voters decide whether the E.U. will embark on its biggest-ever expansion, many in the membership queue say they don't want to join

Big Bang: What will change when the new members arrive?

Poland: The case against joining in Middle Europe

Eurocracy: Myth and reality

The Irish Question: What if they said no?

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Cashing IN 
Out With The Old and in With the Euro
1/14/2002
Generation Europe 
Just who are we anyway?
4/2/2001
The First Shall Be Last:
Slovenia is beginning to ask how worthwhile E.U. membership actually is
09/20/2002
What Ireland's 'No' means: The Nice Treaty rejection may signal more challenges for European integration 6/18/2001

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Posted Sunday, Oct.13, 2002; 16.04 BST

Romanian President Ion Iliescu may be right when he says that "nowhere does the word Europe vibrate more strongly and with more emotion than in the countries of the east," but the vibrations are becoming dissonant. Polls show that the nations most enthusiastic about the E.U. are farthest from admission (support for membership in Bulgaria and Romania, which won't get in until 2007 at the earliest, tops 70%). Those closest to joining are increasingly dubious (in only four of the 10 candidate countries do more than half the population think accession is a good thing). And those already inside the E.U. like it least (across the Union, less than 50% of people surveyed think membership is beneficial). Why does everyone seem so sick and tired of the E.U. — even before getting in?

In the so-called aspirant countries, some fear that E.U. entry will be a step back rather than a great leap forward. Since independence from the Soviet Union, Estonia's leaders have made the country a laboratory of the free market. In the early 1990s, Estonia slashed nearly all state subsidies, privatized virtually all state assets and unilaterally dropped all trade tariffs. As a result, the country's GDP is growing at more than 5% and it is tied for fourth (with Ireland, among others, ironically enough) in the Heritage Foundation's index of economic freedom. Perversely, in order to join the E.U., Estonia will be required to become more protectionist — reimposing several thousand tariffs it had previously abolished. Employers grouse about workplace regulations, from paid vacations to health and safety standards, designed for countries whose GDP per head is three times greater than theirs.

Even though their refurbished roads bear signs saying brought to you by the E.U., only 33% of Estonians and Latvians think joining is a good thing. That's less than in any other candidate country. Many regard the Union as quasi-socialist and culturally homogenizing — a hit song from Latvia starts "Europe will not understand us." None of that translates into political opposition; Estonia's main parties are still pushing for entry. But they promote membership not as a blessing but as protection against getting swallowed up by a revanchist Russia, or as an obligatory move for a tiny country with a population of less than 1.5 million.

Igor Gräzin, a prominent euroskeptic law professor, strikes a chord with his puckish comparison between the E.U. and the U.S.S.R. "The parallels are perfect," he says. "The only difference is that the Soviets rewarded you if you overproduced, the E.U. if you underproduce."

The Estonian Director of the Office of European Integration, Henrik Hololei, understands why some people object. "It's interesting that this trend is growing particularly active and sizable in those potential member countries that are developing quicker than others," he says. "People there realize more clearly that the E.U. does not give answers to all the questions. Most people can live with this. Some cannot."


"I don't believe the fairy tales about a community of loving European states. It's a power struggle, where each country tries to maximize its gains."
— VACLAV KLAUS, former Czech prime minister

Slovenia is another country with good reason to wonder whether the E.U. is all it's cracked up to be. The Slovene economy is already a favorite of Western investors, with modernized laws and 4% growth. It's doing so well that its per capita GDP of $16,000 is already 69% of the E.U. average — which sounds great but could turn out to be a problem. When per capita GDP hits 75%, expected in 2004, Slovenia will be disqualified from access to the structural subsidies that would otherwise flow from E.U. membership. So far the government hasn't been able to negotiate a deal to avoid the bizarre and politically disastrous outcome of being penalized for economic growth.

A debate has sprung up in Slovenia about whether the government should take the absurd step of cooling the economy down to remain eligible for subsidies. "Hogwash," says Janez Potocnik, the Minister for European Affairs. "I would gladly postpone joining the E.U. if we could raise our GDP by another percentage point." The 53% of Slovenians who either think that joining the E.U. is a bad idea or are neutral can be excused for their lack of enthusiasm.

Overall, melding their economies with the west is expected to boost the incomes of people in the accession countries. But before reaching this promised land there will be higher unemployment and a growing gap between rich and poor as inflation hits basics like food and energy. And Europe's core economies may not prove quite the locomotive the new riders had hoped. Existing members are constrained by E.U. rules that curb their powers to lower taxes or run deficits even as growth slumps. And public expectations in the candidate countries are out of whack. "People have in mind the systemic change back in the early 1990s," says Péter Balázs, Hungary's Secretary of State for European Integration. Then, the free market plus foreign investment sparked a revolution, but those huge shifts have been absorbed. "They think this time will be similar. It won't."

Even so, the E.U. is being sold as something that will fatten people's wallets. But voters in the aspirant countries seem to know better. They can see that Germany's reunification is still sputtering despite hundreds of billions of euros spent to fuel prosperity in the east. Yet existing E.U. members plan to spend no more than €40 billion to subsidize newcomers through 2006. That amounts to less than .15% of their GDP, and the financing after 2006 is still to be decided.

Under such abstemious rules, enlargement is certain to produce losers as well as winners. Currently protected industries like steel, food and telecoms will suffer as national tariffs and subsidies are cut, while small companies may find themselves becoming part of the food chain for foreign invaders — or going bust because they can't afford E.U. safety and environmental standards.



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FROM THE OCT. 21, 2002 ISSUE OF TIME MAGAZINE; POSTED SUNDAY,OCT. 13, 2002

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