How Will Central Europe Shape the European Union?

An undefined grey mush or the yeast that will give the entire European Union a new impetus? Once neglected Central Europe is again at the centre of attention. This time, however, not because of its collective resistance to refugee quotas but because its understanding of the European Union may provide a model for the future.

The European Union is again discussing what appears to be its favourite issue: what form should it take? How far should its geographical boundaries reach? How to achieve a consensus between the interests of a variety of regional groupings – South European, Scandinavian and Central – and East-European?

A year ago, there was a touch of existential angst about these discussions. Following the shocking decision of Great Britain to leave the EU after forty years, and Donald Trump’s equally surprising victory in the US presidential elections, it seemed certain that the wind of populism blowing through Europe could not avoid the European Union. Given the potentially large number of hot spots of centrifugal and populist forces as well as the problems that had been smouldering for a long time, the future of the Union seemed to hang in the balance, with pessimists warning that it might collapse altogether.

With hindsight, we can state that not only has the “super-election year” in Europe belied the original disaster scenarios but that it has actually opened up new prospects for the European Union.

In addition, several key member states, such as France and Germany, as well as some smaller ones, such as the Netherlands and Austria, with their specific and clearly defined traditions of political populism, were about to hold elections. Significant success for the populists or, indeed, their victory, would have been interpreted as a move away from the EU’s past direction. At the same time, the EU was involved in a conflict with the “Union’s troublemakers”, Poland and Hungary, without prospect of a compromise acceptable by either side.

With hindsight, we can state that not only has the “super-election year” in Europe belied the original disaster scenarios but that it has actually opened up new prospects for the European Union. Although populist parties have increased their share of vote, it was the avowedly pro-European parties that won. As a result, the threat of further fragmentation of the EU in the form of fresh exit referenda has been averted for the foreseeable future. The European Union has thus gained some time for self-reflection, an opportunity it should not waste.

Things can’t go on as before

The gravest mistake the Europeans could still commit would be to believe that the European project is now “forever safe” and to regard the election results in key EU states as a mandate for carrying on business as usual. For example, despite the victory of the pro-European candidate Emmanuel Macron in the French presidential election, the fact that his anti-European rival Marine Le Pen was able to garner 34 percent of the vote cannot be ignored. The same goes for Germany, where Chancellor Angela Merkel may have won a substantial majority over the other candidates, nevertheless, riding the euro-critical wave, the protest party Alternative für Deutschland (AfD) has shown a strength suggesting that it has become a fixture on the political scene.

Nevertheless, the EU leaders don’t seem to have drawn the appropriate conclusions. A typical example is the European Commission’s president Jean-Claude Juncker. Although in response to the British referendum on EU membership he outlined five possible scenarios of the EU’s future development—which included further integration; a multi-speed model; focusing exclusively on developing the internal market, or limiting the Union to a handful of joint activities—this September he came out strongly for increased integration.

Moreover, he did so in a manner that will have ruffled some feathers: he demanded, for example, that all EU countries without exception should join the Schengen system and abolish internal borders. He would also like to see all member states introduce the euro, with Brussels providing financial support to those states that aren’t financially up to it.

Risks within and outside the Union

However, the challenges the European Union is facing relate not only to its internal make-up. In recent years the situation in the world at large as well as on Europe’s doorstep has worsened considerably. The war in Ukraine continues and a change in Russia’s assertive policy is not in sight, just as there is little chance that things will calm down in the Middle East and Sub-Saharan Africa, easing the migration pressure. And ultimately, the global security system could be further destabilized by an escalation on the Korean peninsula.¹

These prospects lend some weight to the idea that EU member states should strengthen their collaboration in the field of defence and security policy. This might take the form of increased cooperation in certain sectors of defence policy or even a kind of European defence union or, indeed, a “European army”.

In the past, the main opponent of this kind of idea was Great Britain, out of concern that tighter military cooperation between EU states would necessarily come at the expense of the North Atlantic Alliance (NATO), tested over decades and headed by the United States, thus weakening the transatlantic bond. However, what could be read between the lines of the negative British attitude was the concern that any firmly established EU military structure would result in strengthening the role of Germany. The country’s potential dominance could be prevented only by its lack of preparedness in terms of adequate military capacity and the social climate in the country, which is opposed to greater military engagement. The role of being the driving force in the EU’s military cooperation would thus logically fall to France, a country which not only has such aspirations but also possesses the requisite military capacity, including a nuclear arsenal.

However, the question remains how smaller EU member states might respond to these ideas. This is illustrated by the attitudes in Czech society which has consistently shown a positive view of NATO as the basic pillar of its external security.²

The Czech Republic has so far shown no appetite for projects of this kind, let alone making them part of its official political agenda. Prague continues to bet exclusively on the tried and tested Alliance.

The key task is defending the EU’s external borders

In spite of this, the Czech Republic currently allocates less than one percent of its GDP to defence and the Ministry of Defence spends a mere seven percent of budget on investments. The Czech Republic is by no means the only EU country displaying such a half-hearted attitude: its lack of enthusiasm is shared by most European NATO members, undermining the Alliance’s relevance and the United States’ willingness to guarantee security on the European continent. At the same time, European countries are not able to guarantee their own safety.³

Calls for an EU military or defence force have been growing in recent years, particularly following the wave of migration that swept the European Union in the course of 2015. It is thus not surprising that Hungary’s voice has been the most powerful among them. Viktor Orbán believes that protecting the external borders from illegal migration ought to be the EU’s primary task.

This attitude, though initially regarded as a result of the specific Hungarian situation and a reaction to the surge of refugees that the country experienced in 2015, has gradually turned into political consensus at the EU level. Virtually all documents adopted in the period following the refugee crisis give high priority to the protection of the Union’s external borders.

Even before that, Central and Eastern Europe, after having long been relegated to the margins of the EU political mainstream, had become a focus of attention because of the region’s response to the refugee crisis, more precisely, to the setting of strict quotas for redistribution of the refugees. As a result of their resistance – which in the case of Slovakia and Hungary went as far as lodging a complaint with the European Court of Justice – Brussels shelved the compulsory quotas. Instead, it has come up with new proposals based on the principle of voluntariness.

Neither black nor white. Central Europe is not just euro-sceptic

Two Central European countries, Czech Republic and Austria, have coincidentally held general elections recently, while in Hungary, which will be holding them in the near future, a kind of “pre-campaign” already began several months ago. It is directed against “Brussels” or those who are alleged to be behind the European Commission’s decision (George Soros). Viktor Orbán’s current government needs not just a victory but a resounding one that would secure it a constitutional majority to enable him to continue transforming the political system of the country and cementing the changes that have been wrought.

The challenges the European Union is facing relate not only to its internal make-up. In recent years the situation in the world at large as well as on Europe’s doorstep has worsened considerably.

In Brussels and in Western Europe in general the results of the Austrian and Czech elections, held within a week of each other, were interpreted as a confirmation of an “anti-European” or anti-integration trend, since the victorious parties reject the EU’s refugee policy.

This is especially true of Austria. The winner of that country’s election and probable future chancellor Sebastian Kurz never tires of emphasizing that both he personally and his conservative people’s party (ÖVP), are pro-European. Nevertheless, he was planning a coalition with the Freedom Party (FPÖ), which has rejected the “Brussels diktat” and promoted a change in the country’s foreign relations. This is typified by the FPÖ’s position on Russia: not only has the party condemned the sanctions imposed by Brussels in 2014 following the annexation of Crimea, but it has actually signed a cooperation agreement with Russia’s current ruling party United Russia, President Vladimir Putin’s main instrument. Kurz and his People’s party have supported the sanctions but they are also aware of their negative impact on Austria’s economy, particularly because of the ÖVP’s traditionally close ties to business circles. On the other hand, it is quite unlikely that this would be sufficient to make the Austrian People’s party willing to risk the country’s close economic relations with Germany. Or, indeed, their political relations, which have recently improved and intensified after years of the two countries ignoring each other.

However, from time to time a Central European country sets out in a different direction, as has been the case with Slovakia. Not long ago its government was the most vocal opponent of refugee quotas, joining Hungary in its complaint to the European Court of Justice.

Lately, however, in the context of discussions about the future direction and make-up of the EU, Slovakia has declared its desire to be a part of the “European core”. President Andrej Kiska, Prime Minister Robert Fico and Speaker of the Slovak Parliament Andrej Danko have recently signed a joint declaration to this effect, which is all the more remarkable given that, until now, the country’s three highest officials have been the fiercest of political rivals and expended much effort on emphasizing the differences between them. Only the future will show whether this consensus will survive in the long term or if it is just a tactical manoeuvre and, most importantly, whether it will have any practical impact on Brussels.

The results of the Austrian and Czech elections, held within a week of each other, were interpreted as a confirmation of an “anti-European” or anti-integration trend.

However, it seems to lend credence to the notion that Central Europe cannot be regarded as some homogenous, a priori negativist, entity but rather as one with a potential to evolve.

Central Europe is the European Union in a nutshell

Another reason why these countries are worth keeping an eye on is because here, in a relatively small space, we find a concentration of problems that Europe has already been grappling with, or is about to face. Apart from the demographic crisis, which will increase the demand for new solutions in the field of social security, what is particularly at stake is the transformation the local industries will have to undergo in the space of the next 15 years. The question is whether Central Europe will remain primarily an assembly line for the West European automobile industry, or whether it will achieve the transition to modern industrial strategies.

For example, an OECD study suggests that the Czech Republic is a country whose labour market will be most affected by these changes. In particular, this concerns the structure of the education system and its capacity to prepare graduates for the economic situation that is likely to arise.⁴

The predicted changes are linked to the major role of the automobile industry in the Czech economy at a time when the entire sector is expected to undergo dramatic changes over the next few years, which will also be reflected in the labour market.

This necessitates a major injection of funding into the education system, especially into teachers’ salaries. The Czech Republic has neglected its education system. Along with Hungary and Slovakia it ranks lowest among the developed OECE and EU countries in terms of the percentage of GDP invested in education.⁵

This is also connected to the transformation of the secondary education system in particular. For example, vocational schools in the Czech Republic are insufficiently attuned to current economic developments, which reduces their graduates’ chances of employment. The generally low literacy level of these graduates also limits their chances of further education and of adapting to the changing labour market.⁶

Undoubtedly, a number of “old” European Union member states face similar challenges. Central Europeans have the advantage of having already weathered the often brutal and demanding transformation processes that accompanied the transition from the planned to the market economy, without much help from either their government or any other higher institution. Similarly, they don’t expect a body like the European Commission to be their cat’s paw. Nevertheless, the allure of seemingly bottomless multi-million euro funds is strong. Should they manage this future transformation without European Union funding, that might also inspire some old EU member states.

The text is based on the outputs of the 2017 Aspen Annual Conference — The Shape We’re In: Czech Republic & (Central) Europe. Aspn.me/Annual2017

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1. Tomáš Pojar, Aspen Institute Central Europe annual conference, 29.11. 2017

2. ibid.

3. ibid.

4. Bohumil Kartous, Aspen Institute Central Europe annual conference, 29.11. 2017

5. ibid.

6. ibid