Enlargement to the East — Beyond the Iron Curtain

In 1989, the Berlin Wall fell. The Iron Curtain that had divided Eastern and Western Europe for more than forty years lost its meaning almost overnight. Across the nations of Central and Eastern Europe that had been under Soviet influence, one-party Communist rule collapsed one after another, and people chose free elections and a market economy.

At that moment, the European Community that had grown up in the West was confronted with an unexpected question. Countries that had long stood on the other side of the hostile bloc were now knocking on the door, declaring that they too belonged to Europe. Should they be welcomed in? And if so, how deep a commitment would that require? Having only just stepped into the gamble of monetary union in the previous episodes, the EU now found itself facing, almost simultaneously, another enormous undertaking: the task of reuniting the continent itself.

From Beyond the Iron Curtain

Europe under the Cold War was torn in two, both politically and economically. The West had a market economy and parliamentary democracy; the East had Soviet-style central planning and one-party rule. Between 1989 and 1991, this Eastern system collapsed in a chain reaction, and in the end the Soviet Union itself dissolved.

The liberated nations of Central and Eastern Europe faced a double transformation. One was rebuilding the institutions of democracy — free elections, a multi-party system, and freedom of the press. The other was converting an economy in which the state had controlled everything into a market economy with liberalized prices and ownership. Accompanied by the pain of soaring prices, the dismantling of state-owned enterprises, and rising unemployment, Poland, Hungary, Czechoslovakia, and others pressed on with their march westward.

For many of these countries, joining the EU was more than mere economic policy. It was also a symbol of a historic choice — a ‘return to Europe’ from the sphere of Soviet power.

2004: Ten Countries at Once

After a long period of preparation, the day arrived. On 1 May 2004, the EU admitted ten countries at once: Poland, the Czech Republic, Hungary, Slovakia, Slovenia, and the three Baltic states of Estonia, Latvia, and Lithuania, joined as well by Cyprus and Malta in the Mediterranean.

This was the largest enlargement in EU history, in both population and number of countries. According to materials from the Council of the European Union, this simultaneous accession made roughly 74 million people new citizens of the EU, pushing the community’s outer edge far to the east. Warsaw, Prague, and Budapest — capitals once separated by the Iron Curtain — now stood within the same framework as Brussels.

The momentum did not stop there. In 2007, Bulgaria and Romania joined, bringing the membership to 27. Then, on 1 July 2013, the accession of Croatia made the EU a body of 28 countries. In less than a decade, the community had transformed dramatically toward the east and the south.

On paper, this was an enormous integration. But behind the numbers lay a difficult question: how to make countries with vastly different wage levels, prices, and degrees of social maturity coexist within a single set of rules and a single market.

The Vitality Enlargement Brought

Enlargement is said to have brought many blessings. For the nations of Central and Eastern Europe, access to the EU’s vast single market became a tailwind for growth. Investment flowed in from the West, infrastructure was built up, and over time people’s incomes rose. Support through the EU’s cohesion and structural funds also helped drive regional development.

The movement of people grew more active as well. One of the EU’s principles is that citizens of member states can cross borders and work freely. For workers from the new member states, mechanisms were initially put in place to let receiving countries set transitional periods to regulate the inflow. But the United Kingdom, Ireland, and Sweden imposed almost no such restrictions and opened their labor markets early. As a result, many people, particularly from Poland, traveled to Britain and elsewhere to work. They supported sectors facing labor shortages and are credited with contributing to the economic growth of the receiving countries, while in their countries of origin a different side emerged — the outflow of young workers.

For the West, too, the expansion of the market was an opportunity. Production bases could be shifted eastward, and goods delivered to a new class of consumers. As the continent began to move as a single economic zone, the vitality of Europe as a whole did indeed increase.

The Friction of Becoming One

Yet binding together such diverse countries so rapidly made friction unavoidable.

Economic disparity was one source. The income levels of the new member states were lower than those of the West, and the gaps in wages and working conditions created tension in both societies through the relocation of production and the movement of workers. Anxiety about an influx of cheap labor, and conversely the worry that jobs were draining away to the east, came to be voiced in many places. In later years, such sentiments are said to have become one cause of euroscepticism.

There was also the difficulty of decision-making. When a community that began with six countries grows to 28, securing the agreement of everyone becomes far harder. How should institutions be designed so that an enlarged union could still keep functioning? This became a challenge the EU would carry for a long time.

Further on, in some of the new member states, tensions with the values the EU upholds surfaced over the independence of the judiciary and freedom of the press. Would the ‘rule of law’ demanded as a condition of membership continue to be observed after accession? Enlargement gave the community vitality, but it was also a trial that called the consistency of its ideals into question.

With the end of the Cold War, the EU took in half a continent anew and extended its domain of peace and prosperity to the east. It was, one might say, a culmination reached by a Europe that had endured two world wars. And yet, beneath the now-vast union, another time bomb was quietly ticking. The common currency, the euro, on which the previous episode had embarked — its structure of national finances but a shared currency — was about to begin creaking. Yet beneath the expansion, the common currency had quietly begun to creak.