- The Washington Times - Saturday, March 11, 2006

PARIS — Europe’s unity has become increasingly fragile as national ambitions gnaw at the fabric woven to turn the Continent into a new superpower.

The hopes of the 25-member European Union have stumbled against Russia’s reach for world influence and its own inability to speak with one voice on foreign-policy issues, such as Iraq, which have divided its ranks.

As a new year unfolds, trans-Atlantic relations remained in flux, with EU members divided between those proclaiming “Europe first” slogans and the former communist countries preferring the security of close links with the United States.

At the same time, the economic initiatives of member states have dwarfed the union’s overall objectives, causing Jose Manuel Barroso — head of the European Commission, the EU’s executive body — to caution against “economic nationalism” and call for an effort to “avoid national rhetoric.”

From the eastern part of Europe, whose selected countries were admitted in 2004, come reports of growing frustration with the economic gap dividing the Continent, and accusations of “second-class treatment” for East European workers seeking employment in the West.

After a year which saw a blow to the planned European constitution in referendums by France and the Netherlands, the EU has yet to recover from setbacks compounded by an excessive desire for further expansion, an inability to control globalization and unemployment, and a deepening rift between the rich western part of the Continent and the still poor former communist countries.

As the ranks of “Euro-skeptics” increase, a report from the French Council for Economic Analysis warns of “nationalist and protective instincts” and “unusually frequent and aggressive mergers.”

“The nationalist and protectionist instincts are hard to reconcile with the idea of European integration,” said the report.

‘Eurocrats’ left out

European analysts note a considerable and apparently growing dichotomy between the aspirations and projects of the Brussels-based army of “Eurocrats” employed by the commission and the population.

To many people, the EU has remained a distant concept, showering the member nations with decrees requiring more expenditure and bringing little immediate benefit.

In a recent Paris interview, Poland’s President Lech Kaczynski said: “What interests the Poles is the future of Poland and not that of the EU. The same applies to France, where people are interested more in what [President] Jacques Chirac says than in Mr. Barroso’s statements.”

Despite rising nationalism and the increasing cost of living in the 12 countries that have adopted the euro, the European Commission has maintained a strong facade of optimism.

Perhaps significantly, most voices of caution have come from the “have not” countries to the East, of which Poland is the largest with half of the population of the 10 members admitted in the recent expansion.

The concerns of the Eastern and Central European countries focus on several key issues, foremost among them being their status as “poor cousins” whose economies still suffer from the sequel of 45 years of communism.

Economic adjustment has been slow, painful and costly, opening the doors to a flow of investment from the richer West, while West European finance companies acquire factories, hotels and even newspapers east of the former Iron Curtain.

In the other direction, workers head West from Eastern Europe in quest of higher pay. They have encountered strong opposition from labor unions, which fear the newcomers sought by governments as a needed economic stimulus will pull wages down.

Higher pay in West

Most East Europeans appear satisfied with even substandard wages in the West, which represent an improvement of what they were paid at home.

In one of its latest statements, the European Commission stressed that workers from the East “do not take jobs from the people, but fill the shortages and thus contribute to economic growth.”

Still, about 50,000 people demonstrated in the French city of Strasbourg when the European Parliament debated the controversial “Bolkestein directive” — which, despite numerous amendments, allows service companies supplying skilled labor to function anywhere in the EU.

Although some East European countries found flaws in the final version of the directive, European press described the measure as “opening the doors wider to the Polish plumber,” a reference to an ad in French newspapers showing a young man clutching plumber’s tools with an invitation to visit Poland which, contrary to Western Europe, has an excess of cheap skilled labor.

Besides the now proverbial “Polish plumber,” there is a growing West European demand for an array of trades, including hospital personnel, construction workers and even butchers.

But so far, only three countries have lifted all restrictions on foreign labor: Britain, Ireland and Sweden. Most of the others impose quotas and limitations, mainly in response to pressure from their labor unions.

There are also signs that some governments have begun to take seriously grass-roots indifference or even opposition to measures tightening EU control over member countries. The rejection of the European constitution by France and the Netherlands played a major role in the current reassessment of various EU institutions and their effect.

Predictably, Piotr Slusarczyk of the League of Polish Families, a political party, charged that the EU is “an artificial creation — an immense and useless bureaucracy.”

EU charter, euro shunned

Mr. Kaczynski, Poland’s president, feels there is no chance of his country adopting the European constitution in its present form, either by a referendum or parliamentary vote. The charter has to be approved unanimously by all EU members.

“We need to elaborate a new text that would put things in order,” he told the French daily Le Figaro.

East and Central Europeans appear to be in no hurry to adopt the euro, even though some of them may soon fulfill the criteria for joining “Euroland.”

There has been growing criticism of the joint currency in Poland, the Czech Republic and Hungary. “To think of the euro as a driving force for any reform is naive,” said Laszlo Halpern of the Hungarian Academy of Sciences.

Said Jaroslaw Kaczynski, brother of the Polish president and head of the conservative Law and Justice party: “We don’t see any benefit in adopting the euro. Such a measure would lead to lower exports, lower national income, higher unemployment.”

In Prague, Pavel Mertlik, an economist, predicts an erosion of the euro after its initial success. “Smooth enlargement of the euro zone was expected by the financial two years ago,” he said. “Now it is less certain.”

In Western Europe, the EU has been thwarted by the effect of globalization on the labor market and the inability to stem persistent unemployment.

Mr. Barroso has propose setting up a “global adjustment fund” of half a billion euros ($600 million) to retrain and relocate up to 50,000 workers a year who have lost their jobs to mergers and “business consolidation.” The EU’s current unemployment stands at 19 million.

‘Business nationalism’

The intensity of mergers across the Continent has brought to the fore the strength of “business nationalism.” Thus the French government has brokered a merger of SUEZ, a power and water company, and Gaz de France, to thwart a rival Italian bid.

In recent weeks, Spain has been trying to block a German bid for Endesa, a Spanish utility company.

Meanwhile, Britain ceded the rotating EU presidency to Austria for six months ending in June. Prime Minister Tony Blair left the scene without accomplishing what some commentators called “the idea that Britain could steer Europe out of years of stagnation.”

Austria’s presidency of the EU appears to promise little but routine assurances. One major difference from Mr. Blair’s stint is that in Austria, about 80 percent of the population opposes Turkey’s EU membership.

Turkey’s protracted negotiations with the EU received a jolt when Hubert Gorbach, deputy head of the Austrian government, bluntly accused the EU of “not being honest” in the talks because “if we pretend we are ready to take on a member country like Turkey, we are ignoring reality.”

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