Development, politics, nationalism and EU integration

One of the EU’s broadest objectives is to foster growth and development within its member states. Expansion of the EU to include poorer east European and Baltic states was prompted partly by this aspirational goal – and by the large, low cost labour markets that those states contained. Public faith in the concept of European integration, and participation in the institutions of the EU is therefore closely tied to the economic opportunities that it can provide. The existence of the Euro, and continued support for Eurozone members that have encountered financial difficulty as a result of giving up their ability to dictate monetary policy, perverts this nurturing, social democratic set of principles. Rather than visibly promoting growth and ensuring that weak eastern European states undergo necessary political and legal forms, the EU has spent the last two years providing colossal loans to some of its wealthiest members. Contrast the treatment of Portugal and Italy, which have GDPs of $312b and $1.77t respectively, and current unemployment rates of 12.5% and 8%[i],[ii] who have been bailed out, with that of Latvia. One of the poorest EU members, its GDP is only $23.7b, while its unemployment rate is a startling 18.7%,[iii] it was forced to undertake one of the world’s harshest austerity programmes.[iv] Such a distorted allocation of resources will inevitably damage the faith of many member states’ populations in the integration narrative that the EU promotes. From the perspective of an impoverished Latvian farmer, or a semi-skilled Polish labourer, spending money on ineffective bailouts of the Greek and Irish economies will seem unjust. The complicated justifications and factionalism underlying attempts to strengthen economies weakened by adoption of the Euro obstructs the integration narrative and makes its core message- that Europe is working and wants to share its prosperity- seem deeply hypocritical. Cynicism or hostility toward an integrated Europe has correlated strongly with a rise in xenophobic nationalism in many EU states. The German popular press continues to propagate stereotypes of the Greek nation as dysfunctional, workshy and profligate; far right and anti-immigration political parties have polled strongly in Slovakia, England, Poland and the Baltic states. Since 2008, the nationalist Sinn Fein party has gained substantial influence in the Irish parliament. If bailout schemes are allowed to continue, the creation and redistribution of wealth within the EU will come to be seen as a sham. Poorer Eurozone economies have not been exposed to risky investments and bubble events that have endangered their weaker neighbours, but they still require- and expect- intensive investment and assistance from the EU. The popular perception of German-led bailouts is that good money is being thrown after bad – the bailouts are seen as threatening the EU’s development and assistance budgets. The core political message that the EU has been seeking to promote is at risk of being compromised by financial mismanagement. In such an environment, resentment of the EU is likely to build, lending authority to the isolationist and xenophobic discourses of nationalist politicians. [i] Bureau of European and Eurasian Affairs, ‘Background Note Greece’, State.gov, 9 December 2011, http://www.state.gov/r/pa/ei/bgn/3395.htm [ii] Bureau of European and Eurasian Affairs, ‘Background Note Italy’, State.gov, 12 May 2011, http://www.state.gov/r/pa/ei/bgn/4033.htm [iii] Bureau of European and Eurasian Affairs, ‘Background Note Latvia’, State.gov, 18 November 2011, http://www.state.gov/r/pa/ei/bgn/5378.htm [iv] Buckley, Neil, ‘Latvia weighs human costs of its austerity programme’, Financial Times, 6 November 2011, http://www.ft.com/cms/s/0/6fb57f46-0717-11e1-90de-00144feabdc0.html#axzz1hBjizftf