EU – ECONOMY OR POLITICS?

Lucas Cranach, the Elder

I think it’s time to re-think the whole EU idea in general. EU started as an economical union and it was doing fine but situation in Europe has changed significantly over the past two decades so economical frame actually doesn’t fit very well anymore. So here comes the question – what Europe really wants and what it really needs?

Let’s look at Ukraine as a prime example. The European Union and Ukraine signed the core elements of a political association agreement last month. Well, some substantial parts of the agreement concerning free trade will only be signed after Ukraine will have new president elected in May. So I would say that both sides shoved the political will, leaving economy for later. 

And so did Russia - coinciding with the signing in Brussels, Russia's upper house of parliament unanimously approved a treaty annexing Ukraine's Crimea region. 

Ukraine’s former president Viktor Yanukovich turned his back on signing the EU agreement last November in favour of closer ties with Moscow. That, in turn, started months of street protests in Kiev that eventually led to Yanukovich fleeing the country. Soon afterwards, Russian forces occupied Crimea, which in turn spiralled into outrage and sanctions from US and EU. Now tanks and economy are all mixed up in one ball.  

So why it’s all happening only now? Well, there had been talks that its Ukraine’s own fault, that it had been rather reluctant to join EU in the first place. Is it actually true? 

The fact is that Ukraine's government declared that integration to the EU is the main foreign policy objective exactly twenty years ago - in 1994. Surprisingly little has had happened since then. 

Why?

Let’s blame EU itself in the first place. Swallowing the first three bits of former UdSSR – the little Baltic States - was easy-peasy as all three together had population less than 8 millions back in 1992 and since then it has declined by 20% already. They had rather organised economies, no big political hiccups and all three were very willing to secure themselves away from deadly hugs of Russia. 

But!  Who wants a tidal wave of poor post-soviets from Ukraine wash over the borders?  As a matter of fact, Germany still has its hands full to get both parts of Germany united while UK has had enough with the “Polish plumber” (according to latest census data, Polish are the largest minority in UK now) so nobody was really keen to expand deeper into the post-Soviet space and accepting into EU club another 46 millions from Ukraine....  

The second thing – the poor performance of the Ukrainian economy. Ukraine’s GDP per capita is 3,867 USD (2012) while UK, for example, has ten times more – its GDP per capita is 38,514 USD. Let’s be honest, today Ukraine is still eons away from Maastricht criteria. So even if the political will might become really strong, chances of Ukraine joining EU in nearest future are very dim.

So – what to do? Stick on economy and strongly insist on Maastricht Criteria for every candidate or to make a very serious political decision, dump the criteria and invite all post-soviet countries who have had expressed such a political will?

By the first scenario, everybody in current EU will be rather happy in a short term as poor immigrants will be not littering their streets and burdening social services, healthcare and education systems until... until Russia will decide that it needs to expand a bit more again.

 By second scenario, EU will face rather significant short term economy downfalls as the price for stopping Russian bear lurking around EU doorsteps but it might gain a much more serious political weight in future. 

Would you agree to dump Maastricht Criteria to rub Russia’s nose?