European and American experts, the German ambassador, and former vice chancellor of Austria weigh implications of the May 1 accession of 10 new states.
Some sixty expert participants and observers gathered at the UCLA Faculty Center April 23 and 24 for a wide-ranging discussion of the social, political, and economic aspects of the then-impending May 1 enlargement of the European Union from 15 countries to 25. Speakers at the two-day event ranged from American political scientists to Germany's Ambassador, Wolfgang Ischinger, and Erhard Busek, former Vice Chancellor of Austria, and Heather A. Conley, Deputy Assistant Secretary of State for European and Eurasian Affairs. A number of the presenters came from the states about to join the union. The new members, it was generally agreed, would boost the EU to the role of a superpower that, at least economically, would rival the United States. But there was also much discussion of the effect of adding 75 million people in countries that for the most part are at a substantially lower level of development than the existing 15. The conference was sponsored by the UCLA Center for European and Eurasian Studies, with support from the Delegation of the European Commission to the United States, the Goethe-Institut, and the German Consulate General of Los Angeles. It was chaired by historian Ivan Berend, the center's director.
Following is a brief summary of the remarks of the speakers.
The first speaker was political scientist Geoffrey Garrett, vice provost of the UCLA International Institute. He divided the last fifteen years into two periods: the immediate post-cold war period when globalization took off and "markets became the dominant social institution and became the solution to most problems in the world while security was residualized" and the reversal of those priorities after September 11, 2001.
For the United States, he said, economics dominated politics as the U.S. under the first Bush presidency and Bill Clinton built U.S. globalization and carried out limited military operations with minimal American casualties in the first Gulf War, Bosnia and Kosovo. Europe, in contrast, he said, was beginning to concentrate on political unification, "the opposite of the American trend." Garrett commented that the use of the Euro to form a monetary union to promote political integration "has worked out amazingly well." Europe's other major initiative in the decade past was "the idea that newly post-communist countries of Eastern Europe need to be integrated into Europe."
The Western world was relatively unified in 1990s. That changed on September 11, 2001. "Europeans supported America until the Iraq war started," Garrett said. "Now we are in a post-September 11, not a post-cold war world. Rumsfeld's declaration that the mission defines the coalition, not the coalition defines the mission marks the split between Europe and America." Of those European states that dissented from the continental consensus of Old Europe and supported the American war in Iraq, most were among the more recent adherents to the EU or, like Poland, are part of the New Europe marked by the May 1 accession. "The accession will strengthen New Europe," Garrett said. He said it was likely that if Tony Blair actually holds a national referendum in Britain on the new EU constitution it is likely to fail. "If Britain fails to pass the EU constitutional referendum," he concluded, "the symbolic rift between Anglo-Americans and continental Europe could last a long time."
Ivan Berend summarized the economic weight of the expanded EU:
"A population of 450 million, about 50% bigger than the United States. A single market of 450 million. The GDP is $7.5 trillion compared to $7.4 trillion for the United States. The economic strength is about the same, although Europe is lower per capita. But they have gone from half to three-quarters of U.S. per capita from 1950 to the present. Labor productivity in 1950 was only half; it rose to almost the same in 1990. The EU has a far larger share of world trade than the United States. Fifty years ago multinationals were mainly American companies acting abroad. Today European multinationals have basically the same strength as the Americans . . . it is an equal strength in many respects."
He distinguished this remarkable economic growth from Europe's weaker political structure compared to the highly unitary U.S., and added, "The EU is an economic giant but a military dwarf."
Berend said he stood firmly against the Euroskeptics who see the current expansion as posing more risks than gain. He pointed to the unifying effect of the Euro currency and the first steps now being taken for the creation of a pan-European army.
Benjamin Cohen, professor of Political Science at the University of California, Santa Barbara, took a less sanguine view, concentrating his remarks on the multinational currency.
"Enlargement will have no impact on the Euro in the short term," he said, "because new members will not use the Euro for some time. The new members are obligated to join the monetary union, but are prohibited from an immediate conversion to the Euro. There are convergence criteria that must be met before new members can shift from their existing national currencies. They must first peg their national currencies to the Euro and maintain a stable exchange rate for at least two years before converting. Most observers expect all new entrants to be on the Euro standard by 2010-11."
He pointed out that even among the existing 15, only 12 are on the Euro standard, with Britain, Denmark and Sweden retaining their local currencies. A few micro states such as Monaco and the Vatican use the Euro without being in the EU.
Cohen said the optimistic view of the enlargement adds up the total new population and sees the Euro ready to challenge the dollar as a global currency. He said he remained skeptical.
On the plus side, he said, the Euro has been successful in 12 EU countries, becoming standard issue including in ATM and vending machines. He cited two problems, however, that he regarded as serious if not critical. First is what he called an antigrowth bias, and the second is a problem of governance.
"The European EMU [Economic and Monetary Union] is structured to have an antigrowth bias. Monetary and fiscal policies determine the macroeconomic environment. The monetary policy of the European Central Bank [ECB] has only one mandate: to preserve the stability of the currency, to fight inflation." In contrast, he said, the U.S. Federal Reserve Bank "has a dual mandate: to defend currency stability and to preserve full employment."
Cohen said the problem was compounded because there is no clear way to change the policy of the ECB. "It is an antidemocratic institution, not answerable to anyone, unlike the Federal Reserve Bank. The ECB is the product of a treaty, but the European Parliament cannot control the ECB." The bank's target in fighting inflation has been a ceiling of 2%, "Very low. On balance this is excessively tight and antigrowth."
EU members are not supposed to run budget deficits in excess of 3% of GDP. "This has been a struggle for many governments which has created a vicious circle of slower growth." The results have been obvious, he said, "in the sluggish growth of recent years," which he called Eurosclerosis.
The second problem, that of governance, Cohen saw in unclear hierarchies between EU institutions and those of the member states. The new members to the EU, he said, are likely to have higher inflation rates than the old members, while the ECB has in the past tried to formulate an EU-wide monetary policy. "Six of the 12 EU countries using the Euro are already exceeding the 3% deficit limit of the Stability and Growth package, including France. That means a breakdown of the existing rules."
He also felt that 25 members is too large for effective decision making. "25 is too many to effectively decide where to go for dinner, much less how to manage monetary policy." He concluded, "Without reform of the ECB and the governance structure, enlargement will be more negative than positive."
Ramiro Cibrian is the former EU ambassador to the Czech Republic and is currently a visiting scholar at the University of Southern California. He rose to the defense of Europe against disparagement by the Bush administration, declaring, "I am alarmed to see that a united Europe that does not follow what the United States wants might not be of interest to the United States."
As a Spaniard, Cibrian supported his government's decision to pull its troops out of Iraq: "90 percent of the Spanish public opposed the dispatch of troops to Iraq. For those who say that Spain was yielding to terrorism, does a government need more strength to resist terrorism or to resist the pressure of the United States?"
He argued for a multinational response to growing security threats: "No single country is able to tackle today's complex global problems only on its own." He identified the main threats as terrorism, proliferation of weapons of mass destruction, regional conflicts, state failure, and organized crime. All of these problems are magnified, he said, by increasingly open borders. He also mentioned competition for water in a climate of global warming and competition for energy imports. "The most frightening scenario," Cibrian said, "is where terrorist groups acquire weapons of mass destruction, permitting them to inflict damage previously possible only for major states." He also noted the "weakening of the state system in many countries and the privatization of force."
He called for defusing hot spots through multilateral efforts, for example, notingthat Europe has long stood for a two-state solution to the Israeli-Palestinian conflict.
Cibrian concluded, however, by asserting that "We are not in favor of preventive war as part of our security strategy."
The keynote lunch address was given by German Ambassador to the U.S. Wolfgang Ischinger. In unaccented and idiomatic English, acquired during his years as a student at the Fletcher School of Law and Diplomacy at Tufts University, he began by saying that the single most difficult problem for him in the last two and a half years "is to explain to Americans why Europe matters to them. It has been an uphill battle."
Ischinger took issue with the efforts of the Bush administration to fish for allies in the EU pond. "The new Europe is on the agenda of your event. Don Rumsfeld began to speak about the new Europe and the old Europe. I have a friend who has a baseball cap inscribed Old Europe. I don't think that is a very useful distinction. Clearly we failed to get our act together on Iraq, but it is an essential American interest not to follow the old Roman policy of divide and rule."
He pressed that point, adding forcefully, "Those in the Bush administration who seemed to think it was in American interests to drive little wedges into Europe to create the coalition of the willing, I hope will see that this is not in America's long-term interests."
Some Thoughts on the Current Moment for the European Union
"It is very important that Americans understand that what we are creating here is a single market," the ambassador said, "the biggest in all of the developed world with 450 million people. Not just a historic and political phenomenon but something that offers unprecedented economic opportunity for growth in investment and trade. Including for Americans.
"With entry into the EU, the ten new members will be represented in all the European Union institutions. They will represent some 20% of the population but only 5% of the GDP. It will be a big struggle to maintain compatible standards of living across the entire expanded EU. In agriculture the new members joining on the first of May have 4 million farms compared to 11 million in the existing EU. There are only 2 million in the United States."
How the Transnational Organization Smoothes Relations between States
The peaceful unification of Europe in the EU has been often described as a remarkable achievement. Ambassador Ischinger turned the issue around and suggested that because of Europe's violent twentieth century past, it needed the transnational structure for states to trust each other again.
"It's hard for a country that has only two neighbors to understand this. Germany, for example, has nine. The Germans at some point in time invaded almost all of these neighbors or were invaded by them. My generation of Germans believe the we could not successfully manage our relations with our neighbors, who are troubled by a difficult and sometimes catastrophic past, without the glue of the strong institutions of the European Union. This is not just an instrument to increase our exports."
The Question of Turkey
Turkey was admitted as an associate member of the European Union in 1963. Forty-one years later it is still knocking at the door of full membership. Wolfgang Ischinger took up the issue of Turkey's application.
"It is very easy for you as Americans," he said, "to make the point to Europeans, 'Why can't you do more and move faster to make Turkey a full member of the EU? Turkey is an important bridge to the Muslim world.'
"Well, the simple answer is because we tend to be democracies. It is a simple truth that the membership of Turkey in the EU is not a very popular idea. Why not? Just imagine North America as a North American Union, and imagine that Mexico had the same number of people as the U.S. with a birth rate three times that of the U.S. It would be easy to predict that in a few decades Mexico would have a majority in the North American House of Representatives. What would people in Massachusetts or New York think about that?
"Turkey is a huge country with 100 plus million population. The German government has decided it will support opening negotiations with Turkey if Turkey will meet the conditions. It is a hotly debated issue. You shouldn’t believe that we aren't trying very hard to look at Turkey as an opportunity of the first water, but in a democracy. . . ."
Is the Expanded EU Going to Be a Challenge to American Power?
"I could demonstrate to you," Ischinger said, "that the accession of the 10 new members a week from now will make this French-dominated EU significantly more pro-U.S., although I think it is a myth that the EU is dominated by an anti-U.S. France. The EU of 25 is going to a be a solidly transatlantic union. You will have essentially a European Union that will have a stronger interest in enhancing and maintaining relations with the United States on all the major issues from terrorism to trade, and perhaps on such issues as the Kyoto Protocol and treaties that have not yet been ratified by the United States such as on nuclear nonproliferation. The European Union after the first of May is going to be a better and more trustworthy partner of the U.S. than ever and it is correct for the U.S. to continue its strong support for the integration of Europe."
Ann-Christina Lauring Knudsen, a UCLA historian and director of the European Studies degree program, took a critical stance toward the European Union's Common Agricultural Policy (CAP). This program provides subsidies to farmers. Initially linked to output, the CAP was reformed in the summer of 2003 to decouple subsidies from production, which was supposed to encourage farmers to invest in public goods such as animal welfare and the environment.
Knudsen challenged the underlying assumptions of CAP, that agriculture should be a special sector treated differently from other capital investments. The effect of the subsidies are to insulate agriculture from the market, which Knudsen did not think was a good idea. "We are very far from a market economy," she said, asking "Why does the EU want to maintain such a perverse policy?"
The policy had originated in a market failure: "Farmers were not able to maintain an income comparable to urban workers. The thinking was the same as the welfare state, but for agriculture: how to maintain farm income." But she concluded that the Common Agricultural Policy was too generous. In part she objected to a Europe-wide subsidy and price standard because growing conditions vary so greatly: "You cannot easily have a common price for wheat when the snow hasn’t melted in Finland and they are already sowing in Italy."
More fundamental, however, is that many farms, especially in the new adherents, are not really commercial enterprises. "Within the EU there are many small farms that are semi-subsistence, with too many people living on them, so they cannot sustain the same level of income as urban work. This is particularly true of Poland." The consequence is a high level of employment in the farm sector, but extremely low incomes. Knudsen suggested that continuing the CAP, especially in the newly added states, "Could be a disincentive to modernization in the countryside."
She also noted that CAP has a negative effect on the environment. "It is the opposite of industry where the polluter pays. In agriculture the polluter is rewarded."
Ronald Rogowski, UCLA professor of political science, looked at the possibility that a bipolar world dominated by the OECD bloc and the NAFTA bloc could be a world of rivalry. "The United States and the European Union overwhelmingly dominate the developed world," he said.
"On the economic side there are powerful arguments for continued collaboration. Bilateral trade is enormous. We account for about a fifth of each other's trade in goods and some 40% of trade in services. About half of our foreign investment is in the EU. EU affiliate firms operating in the U.S. employ about 4.4 million workers. U.S firms in the EU employ about 4.1 million EU workers."
Though these economic ties should produce closeness, Rogowski pointed to some warning flags on the economic front: "Most of the difficulties that have arisen are the fault of the United States," he said. "There is not much danger of anti-U.S. sentiment dominating Europe, but there is considerable danger of anti-European sentiment dominating the U.S."
The figures are significant. Foreign Direct Investment (FDI) in the United States from Europe has dropped by about 70%, Rogowski said. "In the last few years, U.S. investment in the EU has dropped only slightly, with the exception of Germany. FDI links are fraying." U.S. investment in Europe has fallen from $79 billion to $55 billion while the reverse has tumbled from $181 billion to $35 billion.
Rogowski touched on some of the sore points: "The capitulation of the Bush administration on steel tariffs was scandalous." Washington has held onto agricultural subsidies, which they had promised to do away with. "The bullying attitude on intellectual property rights, including raids on servers in the EU yesterday. The U.S. is fraying also on the issue of free trade by an administration that allegedly endorses free trade."
On the European side, he said, there are fewer obstacles, but he cited the EU's "extreme barriers on genetically modified organisms, despite assurances from science -- although science is sometimes wrong. Their GMO position is a major barrier to agricultural trade."
Spheres of Influence
Rogowski lamented "the carving up of the world into spheres of economic influence." The U.S., he said, "has let this happen and encourages it happening. WTO is at the top, but below that are regional agreements such as NAFTA." He said that NAFTA, although a U.S.-dominated regional association, does not measure up to a real free trade agreement. "U.S. protectionism has essentially stalled an effective free trade area of the Americas."
While the U.S. procrastinates in making NAFTA a genuine free trade alliance, the European Union is negotiating a free trade agreement with Mercosur, the subregional common market established by Argentina, Brazil, Paraguay, and Uruguay in 1991. "Full free trade will be established between the EU and Mercosur, locking the U.S. out," Rogowski predicted.
Rise of the Euro
Here Rogowski turned to international currencies. "What once seemed a kind of ridiculous scenario in which the U.S. dollar ceased to be the world currency and had to make room for the Euro seems more real. The U.S. deficits is a drunken sailor kind of expenditure. The dollar is plummeting. That bothers people, especially those whose assets are denominated in dollars. OPEC may begin to denominate oil prices in Euros rather than in dollars. If that happens we will be on the way to the situation in which the Euro becomes the major reserve currency."
The Military Superpower
As a military power, of course, the European Union is not a serious competitor of the United States. But, Rogowski cautioned, that can lead to hubris. "There is the view that is only slightly restrained that we are the superpower and we can do whatever we want. The basis of this attitude is the overwhelming military dominance of the United States. In 2003 figures, U.S. military expenditures were 43% of the world total, not counting the Iraq war." The EU's military expenditures in contrast account for about 17% of the world total, and "this probably overstates their capability. A lot of the money they spend is not on fighting issues but on auxiliary services."
He added: "The huge military imbalance tempts the United States to bully others. The Iraq episode is a particularly foreboding omen about the future."
The second day of the conference began with a presentation by Andras Vertes, president of GKI Economic Research Co., a prominent Hungarian economic research firm based in Budapest.
Vertes began with the evident gap between the existing 15 states and the 10 new ones. The population of the EU will increase by 20% but the GDP by only 5%, although he qualified this by saying that because prices are lower in the new states, in purchasing power terms the increase will be more like 9-10%. He went on to divide the new adherents into three groups:
"Slovenia is the most developed of the Central European five," he said, "and Poland is the largest and least developed."
As recipients of FDI, however, the new members receive the same percentage as the EU 15. Strengths of the 10 include the fact that 40% of their exports are of machinery and equipment, there is a rapid spread of IT technology in these states, and they are recipients of large tourist revenues. Half of the population of the 10 have cell phones, compared to 80% in the EU 15.
On the negative side for the new members, Vertes pointed to low productivity in agriculture, which generates only 25% of the per capita GDP of agriculture in the EU 15. "There are many micro and small ventures. These are not on the market but lurking out of the market." Unemployment is considerably higher in the new states, at about 15% compared to 8% in the existing European Union. "Total employment is also low, at only 56% of the population" in the prime labor force age group. There has also been a neglect of physical infrastructure, and "weak environmental protection, poor roads, and old postal technology."
One traditional strength of the former Soviet bloc countries was investment in human capital. That has slipped badly since 1989: "In the old regime high education was an asset. Now spending on education has been cut in the transition. Health care and education, there is much less spending than in the past. Only the pension system has made progress since the transition."
Vertes summed up by saying that industry is doing well in the former Soviet states but that the neglect of physical and human infrastructure will have to change. There is a need to increase the percentage who are employed. How long will it take for the new states to catch up with the 15? "Ten to twenty years at the most optimistic," he said. "It may take 40 years, 59 for Poland."
Erzsebet Szalai, a sociologist from the Institute of Political Sciences of the Hungarian Academy of Sciences, spoke next. She contrasted the social services of the ex-Soviet bloc states, especially Hungary, with the welfare-state norms of the EU. In Soviet days, she said, since the state guaranteed full employment, many kinds of social service that are needed in a market economy were neither needed nor did they exist. The welfare systems that existed at the beginning of the market transition in 1989-90 principally covered old age, health services, and child care. There was no institution that provided for long-term unemployment insurance, extreme poverty, or homelessness.
She postulated that the capital accumulation to fuel market development necessitated a fairly long period in which investment in social services would and did decline in these states. One reason was a negative shift in the proportions between those who pay into the social welfare funds and those who draw on them. This comes from the growth in unemployment, and the practice of many private companies of understating their employment levels to evade social welfare taxes. She felt the effects would be smaller where development is funded by foreign investment than where it depends on domestic accumulation. She added that the Central European states have made greater efforts to protect those disadvantaged by the transition than the Baltic countries have done.
Szalai looked at the discussions in the EU on these issues and concluded that the EU authorities "accept the welfare systems of the joining countries as they are now." That is, they are tolerant of fairly high and recent levels of inequality. The only areas where the EU officials included wording in the accession documents, Szalai said, was on the issues of sexual and ethnic discrimination, but they did not make any specifications that would push the new member states to strengthen social supports and set an acceptable floor on living standards.
Bojan Bugaric is a law professor at the University of Ljubljana, Slovenia. He raised concerns on the practicality of seeking administrative standardization across the EU. On one hand, the member states are entitled to regulate their own administration, "but there is a function within the EU Commission to work with member states to regulate their antitrust and other regulations, but no clear rules for doing this."
Administration, he said, "is becoming a hindrance to economic progress, so there is a surge in administrative reforms." This is supposed to work by aligning local practice with an enormous set of rules defining EU standards -- variously described as 80,000 and 120,000 pages long. The problem Bugaric saw was that local culture and practice frequently make real implementation very different from written statutes. "The differences between administrations are enormous, but on paper they are all the same. Too frequently we try to follow advice from international institutions, which often naively propose something that worked well in the United States. The German bankruptcy law was transcribed into many different countries and worked quite differently in Hungary and Slovenia."
He said he was not against adopting a Western model, but that an significant degree of arbitrariness had entered into the discussions between the new members and the existing EU. In addition to arguments over how nominally similar sets of rules were actually implemented in different countries, "many parts of the agenda were not in the common rules. They would ask you things that were not prescribed in European law. Things that were unique to a country and therefore not written down in the EU rules. Accession states, if they were smart, did not mention issues that would raise problems. Once mentioned there would be rulings on this. Slovenia had duty free shops. Some states did not mention them. Slovenia did mention them, and then had to close the shops. This created a big economic problem to relocate the people who worked there."
Bugaric also noted that the enormous length of the EU rules and their opacity provided opportunities for local bureaucrats to claim something is in the rules to get their own way: "Eastern European elites sometimes say a structure is required by EU law, which silences discussion."
He concluded: "Western European countries would never have accepted such forced changes in their administrative structures. Good reforms have to be created at home; however, they may be influenced by examples from other countries."
The keynote address at lunch on the second day of the conference was given by Erhard Busek, former Vice Chancellor of Austria and a specialist in South Europe for the EU. He stepped back from the details of the accession to make some broad observations on the current stage of European unification.
"The twentieth century," he began, "was a quite horrible time for Europe, by Nazism in the first part and by Communism in the second. A common feeling was not really existing with the division of Europe after the war. From Vienna it was possible only to move westward. No one went to the east. The downfall of the iron curtain brings back a normal situation. But the countries of the former Soviet bloc seem geographically further away than the equivalent distances to the west."
He said it was a bit patronizing to use the terminology New Europe and Old Europe. "The Baltic states are new to citizens of the EU, but they are old peoples. There is a certain arrogance on the western side. These are Central Europe, not Eastern Europe. Eight of these countries wrote a letter to Bush about Iraq. Chirac of France said, these newcomers, they should be quiet for a while and see how these things are done in Europe."
In regard to the new members, Busek commented, "They have to lose their Communist past. Attitudes, what the rules are, that takes longer than laws and administration." As an example he said he had given talks to groups of headmasters in several places in the applicant states on issues of the transition in education. When he asked for questions, no one would say anything. Finally he pressed one of the school administrators and they replied, "Dr. Busek, you have to understand that it was better to be quiet in the last 25 years."
Busek qualified this generalization with a still broader one: "The young generation is very competitive, the old generation is lost, the middle generation can still adapt," adding: "They are starting over from scratch, but like the losers after World War II this may be an advantage."
Southeastern Europe: The Next Step for the EU
Busek then turned to his own special assignment: preparing still more states for membership, in Southeastern Europe. "The next step of enlargement will be Romania, Bulgaria, Turkey, then former Yugoslavia." The former Yugoslav states would be particularly hard to tame, he said. "Europe has seen only four wars since the end of World War II," Busek said, "and they were all in the former Yugoslavia. Bosnia is under a viceroy, the high commissioner; Kosovo. Churchill once said these people have more history than they can consume. Who did what to whom, going back to the Ottomans. Here we had our first meeting with the Muslim belt: the Muslim Bosniaks. It was a rehearsal on how the Europeans will deal with the Muslim belt, but these are very secular people compared to the Muslims of the core states of the Middle East.
"Our next job is to take a clear position on Turkey. Here we get into terrorism and fundamentalism. It is not quite clear in which direction Turkish society is going. The elites are very Europeanized; eastern Anatolia is a very different story.
Russia and Its Environs
Another direction for EU expansion, Busek suggested, is to incorporate Ukraine and Moldova, "which stand between Moscow and the EU. Then comes Russia. Often there is intellectual discussion that Russia is also part of Europe. Yes, up to the Urals. But Russians still aspire to be a superpower and they are looking to Washington, not to Brussels."
Lastly Busek turned to the touchy issue of immigration. As in the United States, the influx of poorer peoples from less developed border regions has fueled a nationalist backlash. "Europe except for the Albanians has a very low birth rate," Busek said. "There are mixed feelings about immigrants. This is a misunderstanding of European history. Vienna in the nineteenth century was the second biggest Czech city. The mixture is typical Central European."
He reminisced about the ethnically confusing football teams of his youth. "My father explained to me that the team with the German name were Czechs, and the team with the Czech names were Austrian. Are we able to do it again? Then we will be European. If we have an approach that is more divided again, then the European project will not happen."
The conference had a special guest, Heather A. Conley, Deputy Assistant Secretary of State for European and Eurasian Affairs. Her comments were determinedly positive and stressed support by the Bush administration for good relations with the European Union. She called attention to the recent admission of Estonia, Latvia, and Lithuania to NATO, and complimented the former Soviet bloc states among the new EU members for "completing the transition to market economy and open democracy."
Conley asserted that "The United States has consistently supported EU integration and enlargement. The EU plays a role for democracy and symbolizes a Europe whole, free, and at peace."
She said the entrance of the 10 into the EU would have some impact on previous trade relations with the new members. "There will be some costs to U.S. interests. Most tariffs will fall but some will rise, as in Estonia. We are negotiating compensation under WTO rules." On the whole, she felt, "Business climates have improved. Reforms in law enforcement bodies have made the new members be more effective in the war on terrorism."
On the future Conley avoided any suggestion of a rift with Europe: "The U.S. and Europe relationship is one of the most important the U.S. has. They share a $2 trillion trade relationship. Nearly three quarters of U.S. stocks and bonds owned by foreigners in the U.S. are owned by Europeans. We have shared interests in promoting peace and stability in the Middle East, and in fighting HIV/AIDS. We must work together, whether to stop terrorism or to combat infectious disease or promote good government. Having a uniform set of regulations will give U.S. companies a predictable set of rules for doing business in the region."
The last speaker of the conference was Stephen Hanson, political scientist at the University of Washington and director of its Russian, East European, and Central Asian Studies Center. Hanson took up the EU's relations with the former Soviet heartland. "We are used to thinking of Europe as ending at the Ural mountain range, which leaves part of Russia in Europe. Russian culture is European but not likely to get Russia into the EU. Is Russia in Europe? If you ask Russians, almost all of them think Russia is in Europe, although they will concede that it is a strange country with a non-European portion."
Hanson suggested that "Europe" has various appeals that operate differently in its relations with Russia. As a tradition, ties going back to Peter the Great link the two; as a legal entity as defined on a map and by the membership roster of the EU, "only the EU is Europe and everyone else is a neighbor state." As a universal ideal or charismatic cultural standard, there is a Europe "that could embrace in principle Turkey, North Africa, or Russia." He added, "All three concepts are critically important to post-communist states. All three of these claims appeal to constituencies of post-communist states. Nationalists and Christians respond to Europe defined as a civilization, i.e., a past tradition. Liberal and modern oriented dissidents like rational legal claims, an end to tyrannical forms of rule, arbitrary rule. For those who want to extend the revolutions of 1989 the vision is charismatic, a miraculous transformation from communism."
He felt, however, that admitting many of the former Soviet states but not Russia could have a negative effect on Russia's view of Europe. Russian patriotism, he said, is not necessarily pro-Western.
One problem is that present-day Russians for the most part do not share the belief in political systems that unite Western Europeans. "All the ideologies that have been tried out elsewhere are discredited in Russia: Communism and fascism, but liberalism and capitalism are also discredited. This was evident in December 2003 when the two largest liberal parties did not get the 5% minimum in the Duma elections. Two thirds of the seats are controlled by Putin and most of the rest are nationalists and communists. The liberals were screened out."
Putin, Hanson said, has not offered Russia a new ideology but a hard pragmatism. "We see consolidation without institutionalization. Putin has worked to build a dictatorship of law. Standardize legal codes, the criminal code, a flat tax which is fairly successful, efforts to standardize federal relations, standardize constitutions of ethnic regions. This makes Russia a more coherent state, but there is also a witch-hunt and search for traitors. If he finds such enemies they do not deserve legal protections. Look at the arrest of billionaire [Mikhail] Khodorkovsky. Most recently there is the case of the physicist Igor Sutyagin from Moscow's USA and Canada Institute. He was arrested in 1999 for publishing a paper on nuclear matters from open source material. He was held for four years. There were secret hearings. He was accused of espionage but not of using classified material, and was just sentenced to fifteen years."
On the Russian economy, Hanson pointed to the country's enormous oil reserves as a windfall for Putin, but said the economy "remains highly dependent on the export of raw materials. Much of economy is still unreformed. They need to develop a small business model of autonomous economic development."
While Russian relations with the EU are fairly good, a number of problems exist. "The Chechens have been treated virtually genocidally. This is at odds with European human rights norms. The Baltic states are a problem area for the Russians. They feel Russians are mistreated there. The EU does not agree."
Hanson concluded by saying the United States needs to pay more attention to Russia. "The U.S. is overwhelmingly focused on security issues, not on economic integration issues."
Published: Wednesday, May 05, 2004
© 2013. The Regents of the University of California. All rights reserved.