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Eastern Europe: Brussels offers way to modernization

?«We have seen theneed of the Union, as a bulwark against foreign danger, as the conservator of peace amongourselves, as the guardian of our commerce and other common interests, as theonly substitute for those military establishments which have subverted theliberties of the Old World?». At the beginning of the Nineties the countries of Central and Eastern Europe that wanted to move on to a new pagein their history and find their way to political, economic and social modernitycould have written these words which concisely state the promise they saw intheir much desired accession to the European Union (EU). The fact that theywere written by James Madison in 1787, when another continent saw the union ofpeoples as the only way to the future, reminds us that, although history neverrepeats itself, it sometimes seems to do so.

 Little more than three years after theenlargement of the EU to the East, it is worthwhile to see if those new memberstates are taking advantage of the opportunities offered. The response to betaken from this issue of Monthly Report, which has been devoted to this matter,is affirmative. The countries of Central and Eastern Europe have grown substantially more than theEU-15 in the past decade, reducing the enormous per capita income differentialseparating them from Western Europe. Furthermore, this real convergence has come aboutthanks to the improvement in productivity and capital investment, which shows atransition toward economic modernization. At the same time they have benefittedfrom major inflows of foreign direct investment and have taken great advantageof the possibilities provided by agreements on customs tarrif removal begun in1995 in order to move ahead on trade integration. Even in the criticalfinancial sector the process of updating has been unquestionable.

 Economic progress has thus been notableif we are to go by the precarious conditions on starting out. However, the goalis still not yet in sight. To paraphrase Winston Churchill, this may not be theend but perhaps the beginning of the end. The countries themselves, in theirNational Reform Programmes, set out the challenges still to be met, such asbudgetary consolidation, investment in infrastructures and creation of humancapital. Furthermore, the opinion of their citizens, gathered in the Eurobarometeropinion survey, is notable for its common sense. People are concerned about theeconomic situation, inflation and the welfare state. It is the ordinary human concernsthat strike home. They have major structural challenges still to meet and the fearis sometimes mentioned that, when the incentive coming from the EU extension hasworn out, the drive for reform could lose its popular and political support. Thefact is we are still a long way apart.

According to the Eurobarometer survey, citizens of the EU-15 say they are concernedabout immigration, crime, terrorism. the climate and the environment. The gapbetween the agendas of the various countries reminds us that the new memberstates have only one foot in the stirrup of economic development. But don??™t letus be fooled. This may be a strong point hiding behind their state of weakness.They have the whole world to win and their weapon lies in the European Union. Ingeneral, their citizens are more confident in the future of the EU than thosecountries with a longer status in the new Europe. They are betting on further enlargements even thoughother views are quite against that possibility. And they have greaterconfidence in the EU institutions, far from the disdain expressed by somecitizens of the old EU-15. Finally, they are betting on Europe.How like this isto the situation of Spain in 1986!