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Go Big or Stay Home?

Go Big or Stay Home?

The EU has more options than it thinks in the all-contentious enlargement debates.

Dalibor Roháč

The EU’s enlargements in the east are not getting a lot of love these days. Having refused to open accession talks with North Macedonia and Albania in 2019, French President Emmanuel Macron compared the EU to a poorly managed house in which some residents refuse to fix the lights and invest in repairs—yet are always encouraging their new friends to move in. In the eyes of their critics, enlargements belong to the same category as “nation-building” in Afghanistan and Iraq: a 1990s-style display of hubris that assumes the evolution of countries toward liberal democratic ideals follows a linear path.

There is more than a kernel of truth to such criticisms. The EU’s ability to smooth out the differences between “old” and “new” member states has so far proven limited, as shown by “democratic backsliding” in countries such as Hungary. All six of the Western Balkan nations—Serbia, Kosovo, Albania, North Macedonia, Montenegro, and Bosnia and Herzegovina—are classified as “hybrid regimes” by Freedom House, and some—most notably, Serbia and Albania—are seeing a de-democratization comparable to the one going on in Hungary. Is it really a good idea to try to bring such flawed neighbors into the club?

The EU’s wide and heterogeneous membership has already made it difficult for the bloc to act cohesively in times of crisis, whether involving immigration or debt problems within the eurozone. An even deeper question lurks in the background: Is the EU’s main purpose to serve its member states and their citizens, or is it to export a distinctly European set of values—democracy, freedom, the rule of law—to countries on Europe’s periphery, as the enlargements have tried to do?

Even if one thinks the EU’s ambitions should be limited to the former, the current reaction against enlargements has swung too far. Enlargements, whether of the EU or NATO, were not simply displays of naiveté or triumphalism at the putative “end of history:” They were largely pragmatic and, in fact, successful responses to the European situation that arose with the fall of communism, the disintegration of the Soviet Union, and wars in the Balkans.

Enlargements have clearly succeeded in economic terms. As the Financial Times reports, real incomes in post-communist countries like Estonia and the Czech Republic now easily surpass those of “old” member countries on the Mediterranean periphery. Credit for this progress does not go uniquely or even primarily to the EU; instead, the entry and economic opening of a dozen post-communist countries created strong incentives in Central and Eastern Europe to improve competitiveness, simplify tax systems, and strengthen the rule of law. From 1990 to 2006, these countries were home to the deepest economic liberalization in the world and attracted more foreign investment than any other region.

While the benefits of this opening accrued mostly to Central and East Europeans themselves, they also put competitive pressure on other Western economies. Chancellor Gerhard Schröder’s Hartz reforms, which liberalized Germany’s labor markets and trimmed existing welfare programs, were probably the most successful response—from which the German economy continues to benefit to this day.

More significant, for all the grumbling about “social dumping” and West European companies shifting production capacity to Central and Eastern Europe, the real alternative to the explosion of foreign direct investment in the region was not a preservation of the status quo but a movement by Western businesses to countries further east, including China, thus sacrificing close geographic and transport links in favor of lower costs of doing business.

In light of the intensifying geopolitical competition with China, having encouraged the emergence of a broad-based manufacturing base for the EU in Central and Eastern Europe in the 2000s seems like an almost prescient move, certainly a strategically astute one. And if the West seeks to reduce its reliance on Chinese manufacturing and bring its production to friendlier and more reliable jurisdictions, especially in strategically sensitive sectors, this may be a good time to revive some of the key lessons of enlargement and adapt them to the present.

As the cost advantage held by most of the EU’s post-communist economies dissipates, countries need to look elsewhere for locations that can serve as an alternative to China as an industrial base for the EU and the West more generally. “Enlargement-like” tools can encourage industrialization and foster economic links with countries friendly to the West. In contrast with the 1990s and the 2000s, the EU has good reasons to insist on transparency and an absence of dual loyalties. To bring in Belt and Road Initiative countries like Serbia would not make the EU more resilient; instead, it would create new inroads for Chinese influence in Europe.

Still, bringing the Western Balkans, Ukraine, Moldova, and Georgia into the fold in some capacity—even short of full membership, and even with an insistence on cutting Chinese ties—should be a no-brainer. True, dealing with Belarus, Turkey, or Russia is challenging under present political circumstances; yet the EU should seek to change those circumstances. Also true, the EU missed opportunities for deeper engagement and economic liberalization in North Africa after the Arab Spring, in part because EU membership was never in prospect. But that is not a good reason for a future lack of engagement, especially in light of the ties to the region enjoyed by countries like France.

The EU’s continuous flailing and equivocation have costs. Earlier this year, Albania, North Macedonia, and Serbia—three countries nominally on a path toward EU membership but without a timely prospect of it—formed the Open Balkan Union, which liberalized their trade and investment relations and connected their labor markets through a system of mutual recognition of diplomas and other professional qualifications. While the initiative is meant in part to complement these countries’ efforts at EU membership, it is also a substitute for it, creating new economic and trade opportunities outside the EU—and outside the control of Brussels.

The EU’s envoy for Kosovo and Serbia, Miroslav Lajčák, described “Open Balkans” as “unhealthy competition” for the EU’s integration efforts; but the enlargement process has proceeded at a glacial pace, mired in political uncertainties, including the outright refusal of some EU governments to consider the possibility of future enlargements. To see Western Balkan countries make their own arrangements—with Serbia, presumably, in the driver’s seat—understandably concerns EU officials; but they cannot beat something with nothing.

For other countries that may look up to the West, similar regional initiatives are not even an option. Ukraine, Moldova, and Georgia would have nowhere to turn for alternatives except Russia, a fact of which Europeans should be reminded while Alexander Lukashenko’s Belarus forges even deeper political and military ties with the Kremlin.

The idea of enlargements, together with any number of clichés of the 1990s, may sound like a remnant of an age long gone. Thinking of it in that way is a mistake, as is approaching the question in binary terms. Many highly desirable benefits of membership—access to the single market, the Schengen Area, free movement of labor, mutual recognition of university diplomas and other qualifications, or participation in common European initiatives in areas from education to defense—can be extended to non-members and even used as sources of leverage.

In 1994 Wolfgang Schäuble and Karl Lamers, then prominent foreign policy voices within Germany’s Christian Democratic Union, argued that the accession of new member states should only be gradual. The proposal, seen as cynical and orientalist in its “othering” of post-communist nations, was abandoned in favor of a much more ambitious plan that granted full membership to post-communist countries within a few years.

Yet framing EU engagement with its neighbors as merely a choice between offering paths to full membership and tolerating a vacuum in the Western Balkans and Turkey is simply setting up the bloc for failure. The EU’s most important source of influence is the frictionless access it can provide, even if partial access, to a single market.

Europeans have been clumsy in using this source of leverage, as their waning global influence attests. The problem is not just the Western Balkans and Eastern Partnership countries, though they have good reason to feel abandoned by the EU. More, despite the efforts of the Juncker Commission, the bloc’s trade negotiations with other partners around the world—like Mercosur, India, and the emerging economies of sub-Saharan Africa—have stalled. Tunisia is another distressing example—along with North Africa at large, which the EU has left largely to its own devices since the Arab Spring.

The EU toolbox needs to be more flexible than in the past. EU membership should not be a goal in itself: It should not be offered indiscriminately, especially if there are other ways to forge deeper ties. Yet, the logic underlying enlargements remains as valid as ever, if not more. The West, including the EU, cannot succeed against China without a network of friendly, resilient, stable economies in its vicinity. There is now no better way to pursue that goal than to help bring neighboring countries into the West’s economic orbit.

Dalibor Roháč is a resident scholar at the American Enterprise Institute and a contributing editor of American Purpose. Twitter: @DaliborRohac