INTRODUCTION A HISTORY OF ITS SUBREGIONALISM

This chapter lays the foundation for this study. It begins with the drive for

panregionalization of the European Union as a means to cope amidst an environment of

globalization. It then attempts to define and underline the current difficulties faced by the

subregion of Central Eastern Europe by drawing parallels with other moments of ‘federalization’

of the subregion’s past. Further, the study searches the past for signs as to whether future

subregional cooperation is a viable alternative to the larger panregional institution of the EU. In

doing so, it is hoped that outlining the successes and failures of subregionalization as it has

affected this region over time, that the reader appreciates the need to steer clear of past missteps

and to understand that there is an alternative to current policies – one in which the states of this

subregion might be better able to serve themselves, specifically, as well as their larger neighbors

more generally.

Explaining Subregionalism

World politics is in transition, and by and large the trend is toward globalization; it

having omnipresence in much of our everyday lives. Yet with all the attention given to

globalization, it is true that this phenomenon is not new. There have been numerous periods in

the past with greater or increased means to network beyond local confines; each successively

building or expanding beyond the boundaries of the previous, giving way to a growing expanse

of interactions and understandings. Successively, this pattern of global diffusion has been

accelerated; and movements across borders reflected in trade, migration, investment, and

organizations have softened the traditional identities so long harbored within a state’s boundaries.

As a result, this generation’s era of globalization it would seem is, on the whole, more expansive

than at any time in history. Everywhere and anything, relatively speaking, is within reach and

possible - extending well into the physical delimitations of time and space: where far off lands

are not so distant; just as a relatively unknown place or topic can be studied via a travel ticket, or

even the internet. This ease of information and cross-border transactions have given added hope

and has aided in the development of countries and the upward mobility of their peoples.

However, this has not necessarily been the case with everyone, everywhere.

It is often associated that with globalization has come general development and gains,

where associated interactions have unarguably assisted in bringing gains to many across the

many regions of the world. And while that seems to be quite the achievement, there is still the

others to remember: the others still waiting for globalization to bestow these same benefits upon

them – waiting, perhaps, for themselves to catch up with globalization. Still, even within areas

positively affected, there remain pockets that have been left behind, or pockets that have seen a

fraction of the progress of its neighbors, perhaps even feeling that their neighbors’ progress has

come at their own expense. And it is this state of uncertain gains that has led some to seek

protection from such fallout of globalization, and to turn towards ameliorating partnerships. For

those in Europe, it can also be seen as a turn towards Europeanization and the European Union

(EU). However, while European regionalism might be seen by some as an answer to the

tribulations of globalization, the EU is still a political construct for integration – one confronted

with constant obstacles, as shall be seen. As it turns out, integration that might aid in mitigating

some affects of globalization is equally fraught with many political, social and economic

challenges, particularly so following the Union’s enlargement into Central Eastern Europe.

The panacea for Europe, originally resting in Western Europe (WE), has shown itself

actually to be a remedy less universal – and in need of some modification following the EU’s

own expansion into the subregion of Central Eastern Europe (CEE). The focus of this work is,

then, on this smaller region within Europe, the subregion of CEE, a region of long held

contention which is perhaps still yet on the cusp of its own transition toward this larger

international network. More specifically, this study investigates the viability of closer

cooperation amongst CEE states, as a means to compensate for what these states lack in their

process of Europeanization. After all, nationalism, for its part, has not sufficiently retreated for

full regionalization to be successful. And in this, there is room to move towards not so much

lesser integration but smaller integration at a subregional level. While much of this subregion is

in the process of Europeanization, some of these CEE states have already partnered together to

supplement that which western Europe has been unable to provide an answer. It is my contention

that there is also much stock from which to draw on in the expanding partnerships of the

Visegrad Group, as they have come to be known; and, perhaps, even further to include their

neighbors. While such subregionalism may seem to unnecessarily complicate European

integration, this inherently fragile subregion is worthy of additional measures to develop

sufficiently for proper stability and growth. Nowhere is this proven more than in the history of

the subregion itself. But before we introduce patterns of CEE subregionalism, let us first clarify

the use of the term: Central Eastern Europe.

Defining the Middle Zone

There have been many names for Central Eastern Europe, as it can find definition in a

number of ways: ranging in their reference from the geographic, the political and economic, to

nationalistic and ethnic. At varying times these layers fit over each other on a map quite nicely,

yet by and large these definitions of identity tend to overlap with some, and then others: time

and type depending. One such term given is simply Central Europe, not to be confused with the

‘central European’ states of Germany, Austria, and Switzerland. As a group these latter states

would be considered more ‘Western Central Europe,’ but more generally, here, they are

considered to be a part of Western Europe. While our term had been used prior, it was renewed

in the mid 1980s when a historian of the subregion, Timothy Garton-Ash, declared that, “Central

Europe is back.” Similarly, Milan Kundera, a Czech born writer living in exile since the 1970s,

when writing of the Tragedy of Central Europe, stated very knowingly that it was, “an uncertain

zone of small nations between Russia and Germany.” It was “uncertain” because time,

migrations and imperial powers have made a more permanent and stable understanding of CEE a

fleeting hope, as well as making its borders a bit amorphous at times.

Kundera’s own reference to Central Europe speaks of the time and place of his written

work during the Cold War. Being a writer of his times, to speak of Central Europe, as he and

Czeslaw Milosz, a Polish writer living in exile since the 1950s, had done, was meant to ‘distance’

this subregion from the Soviet Union lying in Eastern Europe – and to underline a desire to find

some respite in WE. But this did not sway others of this same period referencing CEE states as

actually being Eastern European – at least politically and economically, for they did fall within

the Soviet sphere of influence. So, both Central Europe and Eastern Europe do not quite

sufficiently define the subregion, as there are characteristics of each that lie in the other.

Jacques Rupnik, a Czech born academic and former advisor to Vaclav Havel, seemed to have

picked up on this when he referred to CEE as simply the “Other Europe;” so as to differentiate it

from the two ‘extremes’ upon its East and West where most of the greater region’s attention

seems to focus. But even with the ‘extremes,’ we must come to some acceptable description, if

even with an element of subjectivity.

Eastern Central Europe and Central Eastern Europe have both been used. The former is

quite likeable as its base lends itself to the central character of its place in Europe – central but

incontrovertibly on its eastern side. However, as mentioned above, it is the other countries of

‘Central Europe,’ noted above, that then change the flavor of using this base. In other words,

using this base of “Central Europe” would seem appropriate if the states of focus of this work

were felt to be closer to ‘Western Central European’ states rather than Eastern European States,

such as Belarus, Ukraine, but more specifically Russia. This, of course, can be argued.

However, it is a central thesis of this work that the states in focus lie outside the primary interests

of those in the west. It will be shown that historically, and arguably today, the states in focus

have been distanced from the West, at times; and, at other times, they have not been fully

incorporated in the West. Therefore, Central Eastern Europe (CEE) is used throughout this work

– not to show that the subregion identifies so much with the East, but rather to underline its

dissimilarities with the West which are also prominent. Subjective as it may be, the differences

of CEE from its neighbors is something that can be felt.

When the eventual first president of Czechoslovakia, Tomáš Masaryk, wrote of his

Central Europe (CEE) in 1915, he limited it geographically as being established from Trieste to

Thessaloniki to Istanbul, north to Gdansk and then to St. Petersburg “in a line not straight, but

curved in the direction of Berlin.” He called it “the Central Zone,” where a number of vulnerable

“small nations” reside. However, Milosz might have disagreed with being able to accurately

encapsulate this zone in such a geographic manner, as he believed there are “mental lines” that

remain in the conscious thought of those associated with it. Perhaps well understood by them,

this still leaves a sense of uncertainty, or at least an element of subjectivity depending who is

asked. What seems to be certain is that while some of its inhabitants might feel ‘western,’ the

subregion is not German; and while many inhabitants might come from Slavic origin, it is also

not Russian. Instead, their territories comprise the ‘lands between,’ or the “Middle Zone,” as

Stephen Borsody, a former Hungarian diplomat and scholar living in exile since the 1940s, had

termed this space: flanked by the larger historical powers of Germany and Russia. And while it

may be possible to stop here, this Middle Zone contains a few other subdivisions within and is in

need of some clarification.

If we are to consider all the ‘lands in between’ historically between Prussian and

Russian power, it is inclusive of the littoral states along the Baltic and Black Seas. However, for

the purposes here, the northern Scandinavian countries are not included when referencing CEE;

nor are the Balkan countries of former Yugoslavia. Instead, CEE is meant to refer to not only the

‘lands between’ Prussian and Russian power, but also the Intermarium, or the lands in between

the Baltic and Black Seas. Having said this, when discussing the greater area of CEE, or perhaps

a Visegrad Plus scenario, consideration is given to the states of Lithuania, Romania, and

Bulgaria. Even Austria, Slovenia, Croatia, Moldavia and, now perhaps, western Ukraine could

eventually be considered in partnership with the subregional cooperation sought and discussed

here; however, those considerations would not likely come, if at all, until a distant future. Here,

while much is discussed of the Middle Zone of CEE, the focus states of where it is supposed that

greater CEE cooperation might originate is within the smaller collective within, the four

“Visegrad” states of Poland, Hungary, the Czech Republic, and Slovakia. These four states form

the core of CEE’s subregional cooperation in the past, its present, and have the capacity to do so

into the future. They have shared the same turbulent environment, in one form or another; and,

together, they can enable stable subregional cooperation in CEE today, provided that the lessons

of history can find implementation.

Visegrad States, in the Lands In Between

Tangential Dawns of Centuries

Those lessons, still important, have yet to leave an indelibly positive effect upon the

region. After all, just as in early 20th Century, in the dawn of the 21rst Century CEE has yet to

find solid ground. It is questionable as to whether or not the subregion has even found its

European home, regarding its social and cultural integration within the European Union. It is

debatable as to whether or not it has found economic integration suiting its best interests. And,

perhaps more now than in recent memory, it is debatable in our post Cold War era as to whether

or not the subregion will find lasting security in light of rising tensions between the transatlantic

powers and Russia – over Western expansion and the crisis in Ukraine. All in all, it is par for the

course for the states of CEE. The tragedy of CEE subregionalism, if we might refer to Kundera

and Borsody, is that CEE states had once achieved and then lost this cohesion, and since have

come so close to the crossroads of re-affirming subregional cooperation only to miss it time and

again.

It may be appropriate to say that, today, CEE stands again at one of these crossroads in

its history; and its subregional states would gain much in comparing past experiences with their

present. When we see today, for example, the Visegrad Four forming defensive battlegroups

amongst themselves in answer to their views on regional security, does not this harken back to

CEE’s desire for greater security during the interwar years nearly a century ago? When we see

the disparity today, for example, in regional influence between WE and CEE states, and whispers

of greater representation in regional affairs, does this not stir parallels of CEE’s desire to recover

autonomy lost from the division of the Polish Lithuanian Commonwealth, and calls for greater

voice within Prussian and Hapsburg imperial policies later in the mid 1800s? In both

comparisons, neither was security answered nor greater representation found, and the historical

records proved their subsequent futures to be dire. History, here, can provide a useful lesson, as

we should want to steer clear of this pattern and, instead, to encourage greater subregional

strength and cohesion.

It is arguable that this cohesion might well have been better had it succeeded during the

interwar years or following the fall of the Iron Curtain, in that it might have grown to become a

more autonomous and stable zone. Nevertheless, the subregion is within the European Union

now, and can still pursue an organized caucus within the institution itself. Therefore,

subregional cooperation and greater cohesion need not lead to a partitioning of European

regionalism, but instead could coexist within the institution in a sort of compromise. After all,

the current process of European regionalism is nothing more than a discussion of the process of

federalism, and its limitations found in confederalism. The former being a system forming more

of a unitarian or centralized state; whereas the latter being characterized as having more

intergovernmentalism, or a system of independent states due to their adherence to nationalisms.

Within these extremes lies a spectrum of possible realities, where states can portray more, or less,

centralization to decentralization, depending on the compromises made amongst its member

states, and their nationalisms that were at play. Legal scholar Rudolf Schlesinger referred to

Triepel’s “forma mixta,” when he wrote that, “Federalism is everywhere a compromise

between…” these two extremes, being influenced by the degree of nationalism present.

Schlesinger gave the example of the use of nationalism. For Germany, nationalism was

used as a centralizing force and resulted in enhanced influence, whereas nationalism for the

Austrian and Hungarian states resulted in its decentralization and fragmentation. The problem,

he continued, “is whether some way can be found of combining allegiance to a politically

sovereign multi-national State with the allegiance due to the autonomous national unit.” Rather

than, then, full sovereignty being had, as under a confederation, partial or split sovereignty is

realized. But at all times, it is understood that within this compromise, entered into freely, its

longevity runs parallel with the satisfaction of its included ‘members.’ As John Stuart Mill

established earlier as a precondition of successful federation, Schlesinger explains, “mutual

sympathy, to ensure that the mutual obligations will be fulfilled…” and a ‘balance of strength’

amongst its member states must be had. “A system works on federal lines just in so far as it

works between equals, and tries to secure the maximum possible degree of consent from all the

members.”16 With these ‘landmarks’ in mind, let us look upon the mantle of subregionalism of

CEE by reviewing examples of cooperation and the compromises made by these states in history.

It should not be surprising that much of the instigation to cooperate has been accompanied by, if

not born from, the desire to pushback against encroaching influence of external actors.

Subregional Origins

In attempts to hold its own, there has been a long tradition of opposing the German

‘Drang Nach Osten’ as well as Russia’s search for the west in CEE, since well before German

kings monopolized the power of the Holy Roman Empire and before the Russian seat of power

moved from Kiev. However temporary the situation may have been during this time, success

was eventually found, where the origins of a greater CEE confederation are found in the 14th

century, with the agreements between the Polish, Hungarian, and Bohemian kings in Visegrad.

This would later include cooperation between them and Lithuania via their Polish intermediary;

the former then being significantly larger than today. At its height, the federation extended from

the Baltic to the Black Seas. Together with its breadth of power and influence, along with a

position of relative equal footing, the Polish Lithuanian Commonwealth (PLC) attracted other

communities to join against the imperial pressures of its primary neighbors, particularly that of

the Teutons of Germany.

During this time, the PLC grew in strength and subregional influence. Indeed, rather

than simply having been the object of contention between the empires of Rome, it became the

potential broker of peace between them in ending the schism between Catholicism and

Orthodoxy. However, the power of Moscow opposed any path upon which its religion and

politics would be subject to the West, wanting instead to be seen as equals. From this, following

the fall of the papacy’s second empire, Byzantium, in 1453, Russia declared itself the third

Roman empire – taking up the baton of orthodoxy and furthering the contradistinction of its

position in the east from the papacy and empire in the west. Despite this, the transition from the

16th Century to the 17th was rather positive for CEE. The Union of Lublin, 1569, consolidated

the PLC into a common republic; and the Union of Brest, 1596, made the remainder of Ruthenia

(extending into today’s Belarus and Ukraine) Catholic, and therefore suzerain to the PLC.

Russia, on the other hand, did not fair as well.

The height of PLC power and influence in CEE coincidentally paralleled with one of

Russia’s lows, following the end of the latter’s Rurik dynasty. As the Commonwealth would

later come to realize itself, the succession between dynasties can be a difficult time. And while

the PLC took advantage of Russia, even occupying Moscow for a couple of years during its ‘time

of troubles,’ eventually the Romanov dynasty expelled the intruders along with an agreement to

cede back Ruthenia. Retribution, though, would eventually follow the Peace of Westphalia as

now the PLC was succumbed by succession problems of its own following the end of the

Jagiellonian dynasty, whereupon the Romanovs of Russia worked to dismantle PLC’s influence

along the periphery – leading PLC into the Northern Wars, and essentially the beginning of the

end of this centuries-old federation between the seas and between East and West. This would

eventually lead to the partitions of Poland (PLC) in the late eighteenth century.

The Power of Large States

Following the partitions, dissolving their representative governments within the middle

subregion of CEE, the great powers in Europe’s west and east became neighbors, where they

remained for generations; and where the power of the three empires which partitioned the PLC in

the late 18th Century was omnipresent. Nevertheless, the tragedy of the expansionist policies of

Germany, Austria and Russia were not lost on the peoples of CEE. During the Napoleonic

revolutions that crossed Europe, and within the generation following the partitions and the

French Revolution, nationalism had also become quite popular in the subregion. And while the

people within could not be represented by just one nation, they shared a common sense of being

neither German nor Russian, and welcomed the opportunity to seek their renewed independence.

However, at the turn of the 19th Century Prussia and Austria, and others, were cooperating

against Napoleonic France. As well, both Napoleon’s appeasement to the Russian Alexander I,

and Napoleon’s eventual defeat left the status quo intact.

The Congress of Vienna which followed, while it was hoped would finalize legitimacy

and a restoration of the balance of power in Europe, in the end was not to include liberating the

former Commonwealth from the common interests found between the elites of Prussia, Russia

and Austria. And one of these states would rise to a position able to exert increasing pressure

upon its smaller neighbors in the middle zone – Germany. The subregion’s patience would end

up having to last over a century, which left plenty of time for hope to be restored, and to be

quieted, again. It was at Vienna, that a German Confederation was allowed to reshape from the

ashes of the Holy Roman Empire, soon establishing a German customs union, the Zollverein,

which would allow the confederation in time, to challenge Austrian influence in Germanspeaking

lands. This came to pass in 1848, during the Springtime of Nations. During this time, when

many ethnic nations of Europe were attempting to realize their independence from authoritarian

rule, Germany was vying for a chance at a greater German state through CEE compliance.

František Palacký, a Czech historian and politician, penned the famous “Letter to

Frankfurt” that very same Spring, in answer to an invitation from the German Congress regarding

the consolidation of other German lands. In his letter of refusal, he urged that the

Austrian empire should hold its position as a counterweight in the lands between. He felt that a

‘universal regime’ extending from east or west and into the lower reaches of CEE, within the

Danubian lands would restrict the autonomy of all Hapsburg territories. Given the situation, it is

noteworthy to point out that while he mentioned the desire to avoid Russian universalism, and

some writers have preferred to emphasize this aspect on the east, he made it plainly clear that his

letter was intended to counter the universal identity of a burgeoning German state. Palacky

explained that an association of states should not come with serious costs to membership,23

which was feared with the inclusion into a unified Germany. The following year, in 1849, many

of the nations that would later make up the interwar period’s Little Entente would take up arms in

support of an Austrian federation of semisovereign states. In the end, the revolutions proved in

short time to be relatively weak in comparison to their stronger centralized governments, as the

spate of nationalism at this time did nothing to quell the centralizing Germany towards its east.

Still, unification, and the answer to the problem of ‘German dualism’ would not be redressed

until the 1860s.

It was during this time, in 1866 that Germany overcame Austria for authority of its

midland territories following the Austro-Prussian War. Austria, effectively then, became an

appendage of an enlarged German state. All the while, it should be remembered, the many

nations within the Hapsburg domains still called for greater autonomy. Federalist options were

more than acceptable for the smaller nations, provided that it were to entail greater

selfdeterminism. Again, however, these calls would go unanswered; where, instead, a

‘compromise’ of sorts was found in their place. The Austro-Hungarian Compromise of 1867, as

one scholar of the subregion, Vojtech Mastny, has put it established a “dubious federation, thus

poisoning the ground for a genuine one,” where only a minority were effectively represented.

As the Springtime of Nations beforehand, the Compromise failed to address the issue of

sovereignty for the multiple other nations under the empire. Masaryk explains, “The dynasty

could have justified and made possible the continued existence of this collection of nations and

fragments of nations only if it had allowed each race full opportunity for self-development and

widest possible measure of autonomy,” though it did not. Therefore, the eventual “collapse of

the whole crazy structure of the Hapsburg monarchy” did not simply add significantly to just

European instability, but precisely because their desire for self-determinism was brushed aside,

Mastny concludes, “its flawed federalism became a prescription for international instability.”

The Weakness of Large States

While the Ottoman Empire, a similarly mixed-nation empire at the turn of the 20th

Century, was referred to as the “Sick man of Europe,” as its nationalist troubles were

contributing to its own decline, Austria and Hungary were similarly ‘sick.’ They, as well as

Russia, became known as “prisons of nations.” They all shared the same plight with regimes

housing multiple nations, many of whom were part of a never-ending search for their own

selfdeterminism, yet constrained by a strong central authority. But this might not have remained

so.

The heir to the Austrian throne, Archduke Franz Ferdinand, was, according to a prominent

Slovak politician with an ear to the throne, Milan Hodza, very sympathetic to the federalist

proposals of granting more autonomy to its many nations inside the empire. Hodza wrote,

“Although I knew what he wished and how he wished it, I cannot say, and nobody else can, how

far he would have persevered in putting his programme into practice.” And, while we do not

know how much success his program might have had, at the same time, it just may well have put

a cap on that ‘powder keg,’ constructed in the partitions of the PLC, and disturbed in the Spring

of 1848.

A coming crisis could be seen on the horizon in the years preceding World War 1. After

the annexation by Austria-Hungary in 1908, and the following Balkan wars, Europe had already

been set on a course for increased instability. During this time, two influential books were

written which take two somewhat opposing views of how to return peace and prosperity to the

region as a whole, with the understanding that the crux lied in the subregion. Friedrich

Naumann, a German politician, wrote of a loose confederation of states, along with its core to be

formed by the empires of Germany, Austria and Hungary. And while in his text, he speaks of

sovereignty for its members, it is understood that the proposed union would be dominated and

led by Germany. John Neubauer, a scholar of the subregion, writes, “Naumann cared little for

self-determination” and that his notion of Mitteleuropa was suggested out of German selfinterest,

one with hegemonic intentions. So that on the eve of the Great War, a war of nationalisms, the

push for centralized federation persisted. In opposition to this, Masaryk wrote of exactly how a

notion of a Mitteleuropa (or the previous century’s greater Germany) driven policy leads to the

‘problem that small nations in this subregion have.’ They were being absorbed, and then ruled

within by minority factions. This points to, as he explained, the dichotomous relationship within

the ebb and flow of regional formation.

Like the yin and yang, Masaryk describes how in the process of a region’s formation,

there also comes an element opposed to this. Both are ever present, and over time each has its

turn or chance of overcoming the other. He wrote, “History is a process of integration, but at the

same time of disintegration; the double process appears as the strengthening of individualism and

the simultaneous growth of collectivism.” The sum affect of the two shapes the nature of

(sub)regional formation. And while Masaryk may have held federalist leanings, on this he was

clear, that when it came to democracy and the allowance of self-determination, he believed that

smaller groups, or the disintegration of large multi-nation states, would be more successful.

Because of this, he advocated for the fragmentation of the Austrian and Hungarian empires; and

with it, a rebirth of independent nations. Indeed, it was a policy advocated by both U.S.

president Wilson within his “14 Points” in 1918, as well as Soviet leader Lenin, in “The Right of

Nations to Self-Determination” of 1917. With such a political atmosphere, along with the

generations of pent up nationalist frustrations, Kundera comments, “the other nations of Central

Europe blew apart their empire in 1918, without realizing that, in spite of its inadequacies, it was

irreplaceable.”

Interwar-Intermission and Determinism

World War I marks the fall of the four empires; all of which, coincidentally, had

traditionally opposed or attempted to encroach upon the PLC. With their fall, not so

coincidentally, came a renewed independence for the nations of CEE. But this interwar year

independence did not yield much cooperation able to be capitalized on for subregionalization.

On the contrary, while Masaryk may have spoken of federalism, he had intended it for the distant

future, and not for CEE so much as for all of Europe. And, when it came to his proposals that the

“zone of small nations” of CEE would stand as a barrier to a greater Germany, he had not

intended federalism to form a foundation for CEE but rather throughout Europe as well. Due to

this, researcher Satoshi Koyama feels that Masaryk was “inconsistent” on the topic

subregionalism; and Mastny has referred to Masaryk’s association with federalism as “specious”

as he failed to reach beyond its general advocacy. However, one voice with a plan happened to

come out of Hungary, then a defeated nation and one just having been at the receiving end of the

power of nationalisms.

At the end of the war, Hungary’s Minister for Nationalities, Oscar Jaszi, proposed a

federation spanning CEE based on the Swiss cantons, what he referred to as “Eastern

Switzerland.” This would have been more of a confederation than a unified federal structure,

one with considerable autonomy for the new ‘nations’ it housed and providing for considerable

opportunity for cooperation amongst them. However, this voice came from a defeated nation,

one that had taken part in the largely unpopular and unbalanced union of the fallen empires. It is

reasonable that the nations of ‘New Europe’ might not have been so excited about any manner of

confederation, ‘Swiss’ or otherwise, coming from a Hungarian voice. And by this time,

underlined in Wilson’s 14 Points, Borsody explains, “the Western Allies had already committed

themselves to Masaryk’s New Europe plan.” However, his “zone of small nations” were

illprepared for the burden of being small nations in a region beset with large states upon its

flanks. What complicated matters more immediately was that Mazaryk’s zone was decidedly

nationally deterministic. As it came to be, the resultant self-determinism in the subregion would

succumb CEE states into being, in Borsody’s words, “tormented by the rigid dogma of national

sovereignty.”

Generations of suppressed nationalisms, perhaps, caused the failure in the fruition of an

“Eastern Switzerland.” Instead, following WWI when the model of the nation-state was liberally

applied, in Hiroshi Fukuda’s words, a scholar of the subregion, CEE became a “testing ground for

small [nations].” But their newfound freedoms found themselves as individual polities, and at the

same time at odds with one another in a precarious subregion. In effect, Wilsonian nationalism in

the ashes of German/Austrian/Hungarian control more than hindered the capability for cohesion

necessary to procure a stable CEE. As scholar Judy Batt states, “the dogged nationalist pursuit of

sovereign nation-statehood” made the search for CEE stability “self-defeating.” In other words, it

might be explained that the nation-state is simply incompatible for the subregion. Borsody writes,

“without extolling federalism as a panacea for all the ills of modern mankind, I believe it is the only

conceivable foundation upon which peace can be built in [sub]regions, such as Central Europe.”43

Now, while Masaryk would not have the same benefit of hindsight, Borsody says of his record,

“Masaryk was proven right in coming to the conclusion that nationalism was the world revolution

of the twentieth century.” Without cooperation, Borsody believes, the subregion was doomed from

what he termed the “anarchy of nation states,” Not contributing to their cooperation, but actually

exacerbating the subregion’s unease, as the small nations strove to attain their respective

sovereignties, they began to intrude upon one another’s sensibilities.

And, the successor to Masaryk, Edvard Beneš, a Czech diplomat, continued nationalist

policies with vigor, which served to further the bickering between the new ‘small zone of

nations.’ Much of the hostility can be attributed to the treaty table of Trianon, which oversaw the

dismemberment of Hungary. Three political entities emerged from the former empire:

Czechoslovakia, Romania and Yugoslavia; and when plotting their new boundaries, about

onethird of all Hungarians of the Danube would be absorbed by them. Benes “was a chief

architect” of the loose confederation of these three, the Little Entente, which was constructed to

maintain the unrepresentative postwar Trianon status quo. Trianon, however, was a tragedy; or

as Borsody says, “it was a clear case of a punitive peace” by those previously impugned as early

as the attempted Spring of Nations the previous century. Unfortunately, any manner to heal CEE

in looking forward to productive subregional cooperation would require these states to find some

common ground amongst themselves. While the battles over Teschen, perhaps, were eventually

set aside, the Entente of Trianon would end up blocking any prospects for real cooperation. As

such, the fruits of Wilsonianism harvested in CEE were soured by its contradictory lack of

adherence to full self-determinism itself.

As it was, the principles of Triannon ran counter to the very tenets of nation-state self-

determinism by the very fact that so many Hungarian ‘minorities’ were left outside the new state

of Hungary. Their situation was but a mirror of other neighboring states, where ‘not one of the

new states consisted of a single nation.’ Borsody declares, “the territorial settlement resulting

from the partition of the Habsburg Empire grossly violated the very principle of the ethnic

nation-state.” Beneš, himself, elaborates, “In the new Central Europe it is entirely a question of

States created by the will of the majority nations. As regards their minorities, it is no longer a

question of whole nations under the rule of foreign governments and peoples, but only of

fragments belonging to certain nations which possess elsewhere independent States of their

own.” It ‘begs’ the question: out of all the efforts of self-determinism being voiced, whose was

being adhered to?

The inter-war years left many people in Europe unhappy. Not only was the peace

between the wars sought upon an unsound foundation, but after signs of (con)federalism having

been established in the north with the Baltic Entente and in the south with the Little Entente, the

states of CEE were unable to find sufficient support, inside as well as outside the subregion, for

greater cooperation between the Baltic and Black Seas. Certainly voices regarding the subregion

were heard, though those more vocal originated from outside, particularly towards the end of the

1930s. While the CEE states did find some support in France, France soon realized they were

questionably ready to defend even themselves from a regenerating German power: a Germany, I

might add, that would soon re-partner with Russia as both, it would seem, were dissatisfied with

the renewed cordon sanitaire re-established in the lands between them.

Less inclined to cater to the voices of the small nations between them were the larger

states on the flanks. Although the argument is not attempted here, it stands to reason that both

Germany and Russia would stand to gain from mutual cooperation between each other, as it was

the re-establishment of the states in their ‘Middle Zone that served as a “bulwark” against them.’

With the disinterest of WE and the U.S., a reversion of the status quo was ripe. Effectually, as

Borsody explains, “The cordon sanitaire, directed against Germany and Russia had the logical

effect of bringing these ‘two outcasts’ closer to each other.” This was made well understood as

early as 1922 with the Treaty of Rapallo, as well as a non-aggression treaty a few short years

later. More than this, all was well understood by a number of notable individuals, some of whom

have been mentioned here already. However, no matter their persistence over the decades nor

their desperation, their voices were ignored.

Not to be forgotten, Milan Hodza had long attempted to rally support for greater

subregional cooperation, rather than to simply strive to form multiple small independent states as

Masaryk. Instead, he correctly believed that only an organized bloc could assert its stability.

Hodza’s persistence in pushing for CEE federation lasted throughout this interwar period.

Wanting to capitalize on the formation of such groups as that initiated by Benes, the Little

Entente, Hodza had wanted to combine it along with others nearby, the Rome and Balkan

Pacts. He knew, as well as anyone else, that “it [was] not wholesome to leave in new Central

Europe such a vast political vacuum.” Even as others spoke early on of pan-Europeanism, such

as nobleman and politician Count Richard Nikolaus von Coudenhove-Kalergi, Hodza noted that

it was impossible to “speak about the consolidation of Europe as long as Central Europe [was]

not consolidated.” And although he preferred a federation not immediately inclusive of larger

and stronger states in CEE, he believed that eventually there could be room for greater

cooperation with Poland as well. In a similar vein to Hodza, a Polish general and statesman,

Jozef Pilsudski, having struggled to reinstitute a stable Poland in the early interwar years, had

also long pushed for subregional cooperation. Both voices, however, were ignored – until

Munich changed perceptions, a bit too little and too late.61

Benes had hoped that WE would support New Europe’s position with respect to a

strengthening Germany. However, Munich, and Western disinterest in ‘the lands in between’

disappointed many. As a result, he and Polish prime minister Sikorski began talks of a

Czechoslovak-Polish Confederation in hopes to achieve greater security. However, at about the

same time, Benes also looked to the Soviet Union in hopes that a special relationship would help

retain some autonomy for Czechoslovakia. The latter, unfortunately as history would have it,

made the former a non-starter. At that time, Moscow did not want to entertain any prospects for

subregional cooperation in CEE – particularly not with the anti-Russian sentiments left in Poland

from Pilsudski’s regime. As a result of the strong-willed minds for autonomy and

selfdeterminism relaunched during this period, the subregion’s states failed, again, to unite in a

fashion able to deter neighboring nations from capitalizing on their disorganization. Each

nation, then, as Stanislav Vincenz noted in 1942 “became the dependency of a greater unit.” The

defeat of Germany in 1945 merely shifted domination from west to east. So that by the end of

the Second World War, Russia would come to command all territories through CEE. And with it,

all realistic hope for independence and the mending of this subregion’s Shatterbelt would have to

wait until the post Cold War era – making it only recently that the states ‘in-between’ have had

the opportunity to act upon their historic inclination toward greater partnership.

The Project of Greater-Regionalism Renewed

Now, during the Cold War, CEE states were under the influence of the Soviet Union,

which created a relationship different than that experienced during the interwar years, but

familiar in terms of the century that preceded it. That is, again, not only was the subregion

subordinate, though this time strictly to Moscow, but also that the subregional states had little

interactions amongst each other, and instead were forced to look toward Moscow for political

and economic relations. This top-down structure left CEE societies screaming for a chance to

assert their own self-determination yet again. Numerous times, in fact, communities rebelled

against Soviet control, only to be repelled by Soviet intervention. Examples abound, from

protests to uprisings in Poland, Hungary and Czechoslovakia, as well as East Germany.

Nevertheless, even early on in this period and against all odds, there were those such as the late

scholar Karl Sinnhuber that believed “Middle Europe [was] by its very nature destined to be a

‘mediator [of] Europe’.” And so it may have come that by the end of the 1980s, at the cusp of

transition into the awaiting post-Cold War period, it was understood that a new Spring of Nations

was afoot. For better or for worse, with the hoped for self-determination of the subregion,

Rupnik believed that along with it would, unfortunately, also come instability;68 unless, that is,

they were to coalesce into a partnership of small nations. Now, this has not really happened, of

course; but Europe did, more or less, unite during this time – and it is arguably a process that

CEE states could draw some lessons.

The European project for Europe’s transcendence from its conflicted history to regional

integration is based on the liberal functionalism of Romanian born scholar David Mitrany, “that

political unity amongst states depended upon the links at lower mostly economic levels.”

Accordingly, from the minds of its planners, the EU would have a ‘bottom-up’ approach in

order to establish a more cohesive link between, and then amongst, its founding members. And it

is from here that the European Economic Community was born into the merchant powerhouse of

today’s EU. The successive harnessing of European economic power, sector by sector, seems to

have worked. It is impressive to think upon the totality of Europe’s rebound: sunk as a continent

between the two world wars, today Europe as a union boasts some impressive figures, surpassing

even the U.S.’s GDP. There is no doubt that as a union, Europe’s presence is noticed. And since

its inception, the EU has worked to instill stability and growth in Europe, relative to its

experience in the first half of last century.

However, even in its early stages when the union consisted only of western European

states, there was much to critique. For outsiders, a point of contention was and remains that the

EU benefits only its members, that its customs union and associated policies restricts trade and

investment with non-members. Of course, this was by design in order to jumpstart the privileged

industries within the union; however, these policies did not truly jumpstart the European miracle.

Author and analyst Blair Bolles noted in his argument for sovereign self-sufficiency that

“although the EEC [European Economic Community] has indeed advanced the economic welfare

of its members, each of those six countries had already achieved a remarkably high level of

economic activity and standard of living before they entered the EEC.”72 Taking this into

consideration, perhaps, then, it was simply foundational coordinated efforts that began the

European rebound, and not the eventual union of its member states and its consequent expansion.

Despite this, or perhaps capitalizing on it, the community of western Europe continued to grow

in numbers.

Other than the sheer tenacity of the statesmen and policymakers involved, the early

European community’s “functionalist” working premise, largely co-attributed to political

scientist Ernst B. Haas, was that the cooperation and interdependence in one area (beginning with

industry and economics) would “spillover” to related areas, and thereby expand integration

across Europe, deepening into a more political union. It was believed that the expanding

interdependence and, hence, the trend toward “the limitation of sovereign independence,” Haas

wrote, would lead through its “political evolution” to a new “identity” or “consciousness of the

new political community”, and through this identity “loyalty, (…) uniting the erstwhile nations

which had joined.”

Haas also goes onto to say that with loyalty to a new “authority” comes “expectations”

of authority, which must be ‘satisfied.’ Yet for as much as the EU has matured, economically and

in trade particularly, not all are pleased – thereby making the “expectations” of

“satisfaction” a hefty task. After all, the WE states have been the engine of the European Union’s

growth, and as such the center of gravity within the Union leans westward. For example, as

subregional scholar Zdenek Kriz notes, it is the “tendency among some of the key actors,

specifically France and Germany, to present their particular interests as European interests in

general, without first discussing them with the other EU members and without trying to

determine the common European interest on the basis of this discussion.” As such, it may be

understood that membership to the EU is a process of vertical Europeanization, rather than the

‘partnered’ union implied within its rhetoric. The truth is that the ‘lower-linked’ functionalism,

based on the bottom-up structure of Mitrany and Haas, eventually plateaued leaving an idea of

Europe that has since been carried forward from the top-down.

In this manner, essentially, the original nation-state led project to unite Europe in order

to stabilize and develop the continent was to shed the nations’ individual sovereignties under the

umbrella of an ever-emboldened supranational entity. An entity that, now with shape and

substance, would work to consolidate control and governance hierarchically above the slower

and more limited intergovernmentalism from which integration began. This has occurred in

multiple sectors, and it continues today amidst the lull of the recent financial crisis. For example,

Herman Van Rompuy, former President of the European Council, not long ago called for

increased coordination of policies at the regional level for the purpose of “delivering and

sustaining a common European strategy for more growth and more jobs.” Indeed, this is an

option to reign in the effects of the current economic downturn within the Eurozone, and its

affected members. However, it remains questionable that this is necessary or whether it will

even be permitted ever so politically, within the national interests more locally.

This aspect of ever greater deepening and widening associated with Haas’s spillovers

has been debated since the union’s early years. Political scientist and scholar Stanley Hoffman

argued that integration would have its limits; that in the end, national interests would be

protected and its policies would be maintained despite the European partnership. And, as

sociologist Neil Fligstein believes, “Hoffman was right that governments would severely resist

Haasian spillover.” Even Haas, himself, later recanted his belief in inevitable expansion. There

is no doubt that there have been strains to integration. The period of Eurosclerosis during the

1980s is just such an example. Disillusioned by the hierarchically led integration emanating

from the institution, and its original members, which as historian Eric Hobsbawm states is

“outside the scope of the democratic politics of its member states,”83 there has been a

corresponding lack of drive to accept the institution’s terms. Scholar Peter Stirk notes, “The lack

of popular enthusiasm was one of the most striking features of the history of integration. All of

the efforts to gain popular support for European integration failed dismally.”

And so it has come that the evolution of European integration has resulted in Haas’s

“expectations” being less-“satisfied” by members of Europe’s Union in the way that the

persistence of memories has been the bane of greater integration, and thereby making

“satisfaction” an inherently hefty task. One could think that if all elements in the process of

Europeanization had begun in a Mitrany-esque fashion of beginning in a smaller if not more

limited fashion, further integration might naturally have followed suit in time, but this has not

been the case. This is partly due to the unrequited desire for greater unification that has stilted

enhanced regionalization of the EU. According to political scientists Alec Stone Sweet and

Wayne Sandholtz, it has been the ever-present aspect of national interests that

intergovernmentalism has attributed to the region’s rather “rigid” integration. Mitrany’s “lower

links” worked ‘wonders,’ at least for its original members so it seems, up to a certain point. After

which, as Haas himself admits, a certain amount of accommodation was permitted to encourage

the “deliberate”, if not “inadvertent”, “upgrading [of] the common interests” to the institutional

level. Haas concludes, “in terms of results, this mode of accommodation maximizes … the

‘spill-over’ effect of international decisions.” In other words, when linking at the lower levels

failed expanding ‘upwards,’ the community’s project of regional integration took a ‘topdown’

approach instead. This, however, did not deter the subregional states from seeking membership;

and in turn, bringing with them further challenges for them as well as the Union to consider.

The Challenge of Ever-Expansion

Since Europe’s ‘big bang’ in the years 2004/2007 CEE states have become a formal part

of this union. In doing so, the subregion has significantly enlarged the EU; and, similarly, this

has expanded the challenges posed to the EU and to the subregion itself that must be seen

inclusively of the history presented thus far. Historian Holly Case reminds us,

“The 1848 revolutions met a bitter end here, the two most devastating global

conflagrations of all time began here, national self determination went haywire

here, the ideal of a socialist utopia was forever tainted by what happened here, and

now the most optimistic project of the twentieth century, the European Union, is

being tested here.”

It were as if she meant to suggest accepting some caution with that ‘optimism’ of EU expansion.

Such a vast enlargement could actually impede the integration of EU member states. As political

sociologist Markus Thiel discusses, the inclusion of CEE into the EU has negative implications

on the union’s policies of ‘deepening and widening,’ or rather deepening versus widening, in that

the “accession of new states is seen by national minded citizens as a further dilution of

commonality, but it is potentially also perceived by supporters as a prevention of deeper policy

integration.” That is, the EU was already facing significant challenges to deeper integration

having enlarged from its original six members to fifteen. These challenges speak to the

integration limit possibly already reached prior to the ‘big bang.’ Without addressing these

issues, perhaps, the attempt to integrate (with) the subregion was simply too much, too soon. If

not for the union, then too soon for the subregion.

When CEE ran to the West following the Cold War, perhaps it did so in error. It is not

that CEE should not be within the EU, per se, but rather that it missed a step. In their haste, they

overlooked their need to first come together subregionally, in some type of confederation. Even

so, for all the EU’s faults, it may be argued that at the time there was nowhere else to turn.

Having just come from a recent history where the subregion’s states had been wiped from the

map, again, with the complexities of their new found sovereignty and the relative success of

Europeanization, understandably there was an attraction to the stability and normalcy exhibited

by its western neighbors.92 It may be said, as Borsody does, that CEE states no longer wanted to

be “puppets of a sphere of influence, but neither did they wished to be left alone.” And, it was

because of this that they leaned westward. They did so even though WE was less than

welcoming. Borsody is well within reason when he wrote, “The enthusiasm of the liberated to

rejoin Europe was greater than the enthusiasm of the West to receive them.” It was at this time,

however, that the CEE states would have been better to find reconciliation amongst themselves

and realize the necessity of greater collaboration.

It is important to note that more than a dozen CEE states did look to the subregion as a

political project under the assumption, as Lonnie Johnson explains, “that they would have more

political leverage if they demonstrated solidarity by acting as a group.” However, such projects

as the “Central European Initiative” formed in the early 1990s faltered in that, according to

Johnson, it did “not have much of a real agenda.” The effort was inclusive of a small group of

four who reclaimed their namesake, Visegrad, based on their historical 14th Century agreement of

the same name. Yet both, medieval and contemporary Visegrad groups, were failures in

Mastny’s eyes, in that neither effort of cooperation lasted for very long. Borsody, again, recalls

this as a tragedy: just as the subregion’s pleas for representation in an equal federation were

ignored in the mid 1800s; and as the subregion failed to capitalize on a more encompassing

confederation following the First World War; and as their supposed independence, then hijacked,

following the Second World War – the subregion, again, failed to capitalize on their opportunity

following the Cold War, leaning westward without prior reconciliation, instead. However, the

Visegrad Group did not exactly “fail” in one regard. Its four members were the first of CEE

states to reach accession to the EU before all others. Yet since this achievement these states,

noted by Slovak scholar Samuel Abrahám, have “been busy transforming [themselves] in

isolation, directing [their] attention to Brussels or Washington and only marginally to its

neighbours.” While this behavior is voluntary today, they were mandatory during their soviet

rule.

And, while its cooperation may have been brushed to the way side shortly after

accession agreement, it should be remembered that the medieval Visegrad group eventually

reunited into what became the Polish Lithuanian Commonwealth, which in comparison was

much more durable than its origins in the small town of 14th century Visegrad. An idea parallel

to this, continued by subregional political scientist Barbara Curyło, is the idea of a ‘second

European Union.’ Curyło explains that with the enlargement of the EU into the subregion that

the “geopolitical gravity” of the union has moved from Europe’s west eastward. She continues

with “The point of the concept is that the post-enlargement EU should no longer strive to deal

with its inherent paradoxes but rather draw lessons and utilize them as a background for future

intellectual, political and institutional arrangements – ” a secondary center of gravity within the

Union.

The concept is not new, of course. Not only would the CEE union, or even simply a

CEE caucus within the EU, be able to draw on the historical links of the PLC, but even within

writings during the Cold War Kundera shows that the mindset has remained latent when he

wrote, “Central Europe longed to be a condensed version of Europe itself in all its cultural

variety, a small arch-European Europe, a reduced model of Europe made up of nations conceived

according to one rule: the greatest variety within the smallest space.” And while this possible

return to its past might be questionable in its future, so is the EU itself and CEE’s place within it.

After all, Bolles once wrote, at a time of relative EU infancy, when there were only six members,

that “The number of countries participating is too small to bury nationalism.”102 To borrow from

this, we may also say that, today, the variety and numbers of countries participating is too diverse

to bury nationalism – and that something other would be more successful than panregionalism. As

such, ‘lowered links’ and cooperation at the subregional, and then eventually more collaboration,

in CEE could be used to mitigate the negative affects of this hierarchical approach.

Answer: Re-Subregionalization

Partnership within CEE could, actually, come to resemble more of a concert of interests,

within Europe. Subregional cooperation need not be outside, or even against, the EU as such

policies have already been ‘allowed’ for within the institution itself. The notion that subregional

cooperation can be more efficient, explained by Major-General Pierre Hougardy, “lead[ing] to

less fragmentation and … encouraging pooling and sharing of capabilities,”103 is supported by

the Union’s principle of subsidiarity. Article 5 of the Treaty on European Union regarding the

concept of subsidiarity, as defined through the EU’s website on European Union law, states that,

“in light of the possibilities available at national, regional or local level […] the EU does not take

action (except in the areas that fall within its exclusive competence).”104 This was necessarily

agreed upon, not specifically for the purposes of subregionalism, but to maintain protections for

state nationalisms, as the proponents of the institution had been receiving mounting popular

102 Bolles, op. cit., 107.

103 Pierre Hougardy, “Permanent Structured Cooperation,” in The Lisbon Treaty and ESDP: Transformation and

Integration, ed. Sven Biscop & Franco Algieri (Gent, Belgium: Academia Press, 2008), 12.

104 Similar verbiage can be found in: European Council, “Consolidated Version of the Treaty on European Union,”

Title I: Common Provisions, Article 5, Official Journal of the European Union C326, October 26, 2012: 18; and

European Council, “Treaty on European Union,” Title II: Provisions Amending the Treaty Establishing the

European Economic Community with a View to Establishing the European Community, insertion for Article 3b,

Official Journal of the European Communities C191, July 29, 1992: 6.;

http://eurlex.europa.eu/summary/glossary/subsidiarity.html

hostility from some states, like Denmark. And, as will be presented in the accompanying

chapters, the EU itself has yet been able to completely and competently address the breadth of

issues for inclusive development and stability in the focus subregion of Central Eastern Europe;

let alone Europe as a whole for that matter. According to Eurobarometer surveys of samples of

the EU citizenry from 2012, there has been increasing pessimism about the future of the EU,

with total optimism dropping from 69% in the spring of 2007 to a borderline 50% in autumn of

2012, as shown in Figure 1.1.

The clear delineation between that which is retained at the level of nation-state versus

the region, as understood within subsidiarity, thus leaves room to interpret a relationship of

progression toward these ends, where subregional cooperation may provide a stepping-stone to

even greater integration. In other words, the functional argument for acceptance of a regional

entity above the nation-state has rested on its ability to facilitate a service better than an

individual state could provide alone. Less than this, the member states should elect to resolve

matters themselves. According to another Eurobarometer survey from 2013 and 2010,

respondents throughout Europe, to include those in CEE, believed that decisions, with regard to

EU regional projects for example, should not be taken at the EU level, but rather at a more local

level, as shown in Figure 1.2. In this case, and in a world or region where it is increasingly

unpopular to strike out alone, subregional or less-than pan-regional organization, might garner

increasing support. Establishing joint developmental programs meant to benefit subregional

CEE interests foremost, followed by others West and East, can further bridge this fissure – not

just within its ‘zone of small nations,’ but even between the subregion’s larger neighbors to the

east and west. This integrative approach, yielding more functional cooperation within, would

greatly benefit the prospects of establishing greater autonomous growth in CEE, and with it,

perhaps, the value-added development the subregion has historically lacked.

With history and potential in mind, a change in course is necessary as this fragile

subregion is unable to maintain its present path with any expectations of successful diffusion

through the international community alone. Rather than competition over this territory with

force, as has historically been the case, a stage may be reached where the local actors are ripe, if

even through desperation, to take matters into their own hands. Given the right conditions,

CEE’s zone of convergence has the potential of progressing to a locally sustained gateway across

the zone linking substantial commerce and relations on either side of the east-west divide. In

order for polities along the convergence zone to escape history, so to speak, they must endeavor

to increase cooperation and development more through increased partnerships at the

subregional level – to mend their common region through locally sustained interdependences. It

is important to note that while increased subregional integration in CEE is the end goal, this

would not need to progress to political union as is sought within the EU, and yet remains so

elusive. In fact, it may be argued that in limiting enhanced cooperation primarily at the level of

joint ventures and investments, the consortium’s simplicity in its technical nature may aid its

focus on efficient subregional development, and stable integration within the globalized world.

As shown in this chapter, small states tend to be overwhelmed with the influence of

larger neighbors, as they are equally underwhelmed in their ability to change course on their own

terms as easily as may be desired. But while this fact may seem trivial, the above also served to

underline that it is within these small states, particular those that lie amongst or between larger

polities, that large scale disruption can originate within them. What should be clear, as any student

of European history knows, nationalism may be said to have been born upon its grounds; and it is

not likely to subside within our lifetime. Further investigation along this line of thought continues

in the following chapter on the social dynamics of Europe and the ‘lands in between.’ CHAPTER

CULTURE AND SOCIETY: WHO IS CEE?

This chapter continues along the same historical vein as Chapter One and examines

CEE’s social links to Europe, as the historic contrast between Western Europe (WE) and Central

Eastern Europe (CEE) extends to its social and cultural realms. The objective of this chapter is

to identify the social identity of CEE, and its historical relations with Europe, which is important

as the challenges of membership to the EU come to the foreground. In doing so, the work seeks

answers to these additional questions: Do cultural differences remain the same today? So long

associated with the east during the Cold War, are CEE’s cultural origins more eastern, western, or

simply other? The results speak volumes as to how the subregion’s identity in Europe relates to

its place within the institution of the EU. In the end, a rather unique CEE identity is understood

as it sits on the periphery of Europe, or rather wedged between its western and eastern nodes. It

is an identity that should be adhered to, creating opportunities for subregional collaboration;

perhaps within the EU, but necessarily distinct from WE.

European Identity

Social identity is an amorphous concept. Depending on the circumstances, individuals

within their society (and by extension, a society amongst many others as in the case of member

states of the European Union [EU]) might be identified by their nationality, ethnicity, amongst

many other identities. Perhaps their race or sex are the issue of the moment, or their religion,

political ideology, caste or social status, line of work, etc. All shape the individual, and their

societies of which they take part. When we are to think of social identities, it serves us well to

identify the norms and values which its members find in common. When present, these

commonalities can form a common identity from which a society’s identity takes shape. From

this, as the following pages reveal, we find that the communities within Central Eastern Europe

(CEE) share such commonalities that set it apart from both East and West; and that these

elements of solidarity have the opportunity to take shape into a common ethos of its own - with,

perhaps, greater value felt than its membership in the EU alone. More broadly yet still pertinent,

for much of Europe one such common ethos stretches back to its envelopment into Christendom;

and it proves to be a vital link in the historical development of a European identity.

Christianity’s influence in Europe by about the turn of the 4th century was anchored to

its empires in the west with Rome, and in the east with Constantinople, the latter would come to

represent the foundations of the Christian Orthodox faith of Eastern Europe. However, it was

during the reign of Charlemagne and his Carolingian dynasty at the turn of the 9th century that

began to put greater pressure on the territories in the vast expanse east of western Europe and

north of southeastern Europe. Ethnically, these lands between East and West were primarily

Slavic. In fact, political geographer Halford Mackinder clarifies that it was during this time that

“the rivers Saale and Elbe divided the Slavs from the Germans.”3 Yet western pressure was to

follow, and push even further east of the Odor following the finality of German control of the

throne to the Holy Roman Empire in the mid 10th century. Even then, however, there was no

swift conversion of this subregion.

Much of this area ‘east’ of the empire remained quite tolerant of other faiths, in fact;

and had attempted at length, and over centuries, to keep the Holy Roman Empire at bay,

particularly while under the control of the Polish-Lithuanian Commonwealth, itself also pushing

southward and eastward. To show how long this stubborn resistance maintained, over a half

millennium later, just prior to the turn of the 17th century, still less than half of the population of

the Commonwealth was Roman Catholic; a quite formidable show of its resistance to complete

conversion. It is no doubt that this extended period of resistance to conversion as well as

tolerance of other faiths speaks to the paradoxical character of these lands in between, both

stubborn as well as open, as competing faiths set upon its vast expanse. Eventually the peoples

were indeed converted, due to compounded troubles presented not only by its persistent German

west and the steadfast resistance and counters of the eastern Slavs, but also out of protection

from another encroaching culture even further afield, Islam from the Ottoman Empire.

Over time, much of the area between present-day Germany and Russia came to identify

with Roman Christianity; and having spread from its west, the Czech writer Milan Kundera

explained, this “spiritual notion [became] synonymous with the word ‘West.’” This history and

their ‘found’ religious identity have been long celebrated in CEE as the subregion became the

frontier, or the bulwark against politico-cultural challengers. It was, indeed, the last frontier,

whether that be Islam as it encroached onto Europe through present-day Turkey and only to

recede toward the end of the 17th century, or whether that be the Orthodox Slavs of the East.

Still, the structure of ‘the church’ has changed somewhat over time, and with it the social identity

of its followers, albeit perhaps not equally across the European divide.

The Reformation, and Counterreformation, for example, did not make it to Eastern

Europe and effect Orthodox Christianity as it had in the west. In fact, this frontier sets a long

observed demarcation upon the continent between the conservatively-minded East and West.

Political scientist and scholar Samuel Huntington once said that “[t]he most significant dividing

line between [East and West]…may well be the eastern boundary of Western Christianity in the

year 1500.” Reaching back further into history, in thinking upon the time of the Cold War,

Hungarian historian Jenő Szűcs has mused that, “[i]t is as if Stalin, Churchill and Roosevelt had

studied carefully the status quo of the age of Charlemagne on the 1130th anniversary of his

death.” Indeed, this historical bulwark within Christendom has survived to this day, now

representing the frontiers of the European Union, itself, with a more distant East, even amidst a

shared ethno-linguistic identity across the division line.

Distinct from the East

On that note of shared ethno-linguistics, perhaps it may be said that Slavism has lent

some sense of identification in CEE, itself. As mentioned, going back some time Slavic peoples

occupied the lands from the River Elbe to the Don and beyond, and also from the Baltic to the

Black Seas. Nevertheless, this Slavic identity is believed to have receded in comparison to

others. Václav Klaus, the former president of the Czech Republic, admitted that in contemporary

times it had a rather weak sentiment in comparison to being European, Central European, or even

their various state nationalities. Of course, it is understandable, particularly with regard to

Klaus’s own experience, as well as his generation’s during the Cold War, that his remark would

want to separate ‘Central Europeans’ from their unwanted association within the Soviet Union,

having a high proportion of Slavs across their borders.

In resisting the Soviets to the east, the CEE countries of the Warsaw Pact held fast to

the cultural ties slowly absorbed and then forged over the previous centuries with its west.

During this time, political scientist Alexandra Tieanu explains “the forgotten concept of Central

Europe re-emerged,” not only due to the shared resistance against Soviet communism, “but also

on shared cultural and historical characteristics.” Here, in the geographical center of Europe

while politically in the East, CEE was culturally in the West; at the very least, CEE states were

yearning for a more practical association with the West. The attempt was to identify with the

European Union, to ‘return’ to the West, and re-become, in a manner of speaking,

‘European.’ Kundera referred to the Warsaw Pact states of CEE during this time as a “kidnapped

[West], displaced, and brainwashed, nevertheless [one that insisted] on defending its identity; to

preserve their Westernness.” To be fair, though, this “Westernness” never relied on one

characteristic alone, such as religion. Take, for example, the social changes that took place

between the Late Middle Ages through the Early Modern Period.

The Renaissance and, later, the Enlightenment periods found far more adherents closer

to their origins in the west. Together, these movements, have left modern Europe with, as

historian and scholar Dennis Hupchick identifies, a culture of “liberal democracy, industrial

capitalism, and nationalism.” This has been used to show divergence from the West and those in

the East (to include, though in mixed character, CEE), in both religion and civilization, just as

these movements show greater to lesser influence along the political cultural spectrum as we

travel from west to east. The truth is that these historical events through time, and the social

movements that surrounded them, also affect political identity and can change the importance of

some ideals over others. Kundera believed as much when he said that eventually “religion

bowed out, giving way to culture, which became the expression of the supreme values by which

European humanity understood itself, defined itself, identified itself as European.”

More presently, CEE has focused on the cultural values that have come to be associated

with Western Europe (WE). Wanting to find change, this relationship with its west has spurred

and continued CEE’s path toward Europeanization within the EU. The Hungarian writer George

Konrád had thought, Tieanu explains, that with their “cultural similarities to European

civilization” that CEE would be accepted as a full member within the European community. The

result, it is claimed by historian Holly Case, has been “a broad consensus […] that integration

and Europeanization are things that East-Central European states must do, implying that there is

an already existing static entity called ‘Europe’ that can be joined by assimilating to its ideals.”

However, the subregion began integration with a western Europe not ready to accept CEE

completely. Unfortunately, as subregional political scientist Barbara Curyło notes, the pursuit of

integration was with an idealized Europe, a “mystical ‘West’.”

Distinct from the West

While there are calls from European regionalists to incorporate all of the EU into a

“super-state,” just as analysts James Rogers and Luis Simón propose a “final unification of [the]

continent,” its member states still cannot seem to get past divisions amongst themselves, to include

between the subregions of CEE from WE. For example, for all that is said about the EU slogan of

“Unity in Diversity,” not long ago in the summer of 2011, the EU allowed member states to take

measures restricting the much acclaimed Schengen agreements, which had established the free

movement of peoples between EU members. As the most important positive impact coming from

CEE’s integration with the EU is the free movement and travel within the EU, as shown in Figure

2.1, according to a Eurobarometer survey of CEE citizens in 2009, 30 no doubt CEE has become

increasingly disappointed with these new Schengen restrictions. Apparently, as journalist Gareth

Harding responds, borders are “back in fashion.” This parallels general sentiment from the more

affluent states in Europe’s west that have repeatedly balked at the Union’s process of increased

economic and social integration. It would seem that in the drive to usher in “Central Europe’s”

return to Europe, and increase controlled distance from the ever present ‘East,’ the EU had lost

sight of the ‘natural’ divisions within Europe itself. This ‘distance’ between CEE and WE has

shown to be quite prominent and perpetuates, as phrased by subregional scholar Tomasz Kamusella,

the “mental barriers” erected through history by a rather disinterested West. No doubt, these

‘natural’ divisions are somewhat blurred, but nevertheless prevalent, and it should be of no surprise

that these cultural divisions have a persistent trend in history, and it helps to explain the lack of

integration within the EU.

Subregional historian Larry Wolff argues that the concept of “Eastern Europe,” or

rather all territories thought to be European yet east of the core western states, was a resourceful

term used by the French philosophes during the Enlightenment period to draw a cultural

distinction of the civilized West from the backwardness of the East. Now, this distinction was

not without its merit. As mentioned, developmental divisions between western and CEE

countries had been visible since at least the late Middle Ages. While much of Europe would

eventually suffer from famine and disease, (sub)regional developments took different paths.

Where western states moved away from feudalism and its support from the peasantry and more

towards urban and international commerce, east central states took to a renewed economic

system based on the landowning gentry elite; further, where the West grew through its budding

entrepreneurship, the East grew via its imposed “second serfdom.” Perhaps because of this the

latter’s growth was not equal to the former, as it impeded social and economic development and

created, as Czech academic Jacques Rupnik describes, “a time-lag” in the East’s attempt to catch

up with the West.

This perception between WE and CEE with regular repetition and time to absorb would

come to effect relations between the two for centuries; and can even be said to have helped turn

the tide for further western expansion eastward. For example, at the end of this period of

Enlightenment, WE states set to work on the fragmentation of the PLC and much of its political

incorporation within the ‘western’ dynasties of Germany and Austria. The impetus for external

appropriation may originate from geostrategic reasoning, or equally likely out of a ‘civilizing’

mission in their ‘near abroad.’ Whatever its origins may have been, it should be noted that there

was no equalization or cultural integration of these lands; significant cultural difference

remained.

This, now ‘civilizational,’ division between WE and CEE would be reinforced later

during the Cold War as the West allowed CEE to be dominated by the estranged Soviet Union.

Perhaps it was there and then that culture ‘gave way,’ as well, as had religion before it; but not

before the allies betrayed those same states to both Hitler and then Stalin on the eve of ‘victory’

in Europe. It was, after all, the Prime Minister of the United Kingdom who justified the

appeasement of Hitler during the Anschluss and Munich Agreement in speaking of CEE as lands

“far-away…of whom we know nothing.” Indeed, as Konrád writes, from the Congress of Vienna

of the early 19th Century to the “imperialist bargain” struck between the emerging superpowers

of the West and East at Yalta, the peoples of CEE “were treated as objects […] subject[] to very

different imperial arrangements,” where theirs were decidedly more “disturbing and unpleasant.”

Polish writer Czeslaw Milosz has said, “After the first tentative partition of

Europe by the Ribentropp-Molotov Pact, the second partition in Yalta sealed Europe’s fate.”

And this left, Rupnik describes, “a ‘Yalta of the spirit,’” as he quotes Kundera explaining that

“’Europe [had] not noticed the disappearance of its [Central European] cultural home, because it

no longer perceive[d] its unity as a cultural unity.’”42

Still, to fast forward to the fall of the Berlin Wall and the disintegration of the Soviet

Union in the last decade of the 20th Century, CEE states set aside their less-than-lack-luster

history with WE to join it, in another of its ‘times of need’ in hopes that promises of integration

were, as historian Eric Hobsbawm describes with regard to promoting a more cohesive Europe,

more “technical rather than political” in nature. However, even during the courtship of

integration of the 1990s, there was no positive ‘European consciousness.’ Stephen Borsody,

former Hungarian diplomat and scholar, explains that “they were disappointed…[in]…the

expected fruits of their liberation.”44 And since this time, even following CEE’s accession to the

EU there is measured fealty to the EU. “Nor is any likely to develop,” as Hobsbawm believes,

within the other member states either. There is much surprise in fact, as sociologist Neil

Fligstein states, in relation to “the creation of a European society [as to] the degree to which

people in Europe are unaware of it;… there is little evidence of what could be called the

emergence of a European culture.” This is striking considering that the peoples of CEE, in

believing they were part of a “kidnapped West,” having become lost from this “mystical West,”

were in fact promising themselves to more of a mythical West, instead.

CEE as Unique

Where the EU, on the whole, finds a common story and European cohesion elusive, this

is not necessarily so for the subregion of CEE – they do have a common history, one distinct

from the rest of Europe. Even amongst their own differences within, Kundera wrote, these CEE

states “nevertheless lived through the same great existential experience.”47 They have

experienced history in a manner that has had a direct effect upon the rest of Europe. This can be

seen, for example, in the rhetoric surrounding European participation in the very controversial

war in Iraq beginning in 2003. The desire for some CEE states to support the U.S. in Iraq during

this time was very controversial, and made more so as then U.S. Secretary of Defense Rumsfeld

referred to the European center of gravity as shifting eastward, resulting in heated comments

from western European leaders referring to the subregion’s support for U.S. intervention as being

“infantile” and “reckless.” This, of course, did not sit well in the capitols and streets of CEE at

the time.49 Even today, scholars Peter J. Katzenstein and Jeffrey T. Checkel explain, “new

members have their own visions, programs, and policies grounded in a history that points to

persistent differences in experiences and memories.”50

From this, it may be seen that the political cohesion of the EU based on WE is in

decline, where the newer member states are, Katzenstein and Checkel conclude, “creating a

Union that differs greatly from its limited predecessors.” Milosz said as much back in 1991

when he said that “[t]he simple fact is that our perspective, whether we are Poles or Hungarians

or Yugoslavs, is different from that of Western Europeans, Russians, or Americans.” It would

seem that time, and even integration, has not ameliorated this. CEE was and remains unique to

Europe, somehow separate from territories, yet with partially shared cultures, that surround it.

Perhaps CEE is, as Rupnik once wrote, the “heart of Europe.” After all, it is here in the

transitional zone that cultures merge; where, as Konrád offers, the Eastern and Western cultures

of Europe “intermingle;” making CEE “neither East nor West; [it] is both East and West.”

Parallel to a constructivist take on self-perception, where one’s “[identity] is defined in

relation to a specific other,” as political scientist Elsa Tulmets explains, CEE is different from

WE due to its shared history and culture with its east, just as CEE is not completely eastern due

to its affiliations and related past with its west. Szűcs explains this in how CEE has “oscillated in

terms of its social and institutional structures between the other two Europes.”59 Almost a Catch-

22, this middle zone is simultaneously unique from one side due to its relations with the other,

which then sets the base for its paradoxical relationship in Europe. It has never been able to, if

ever been wanted to, be fully Eastern nor Western due to its identity able to be found in the other.

And it is partly from this that the middle zone has, in subregional scholar John Neubauer’s

words, “a tradition and culture of its own,” and with a perspective all their own that lives deep in

the heart of all Central Eastern Europeans. Konrád wrote that “[b]eing a Central European does

not mean having a nationality but rather an outlook on the world,” with, as Milosz continues, “a

tone and a sensibility not to be found elsewhere.” Konrád, perhaps, would agree with Milosz in

the thought that “[t]he guarantee of our independence is that we won’t become export

commodities and won’t blend in anywhere.” While this might be so, it is not completely so. This

subregion is, after all, European. If it is to blend in, if even in part, somewhere, then it will be

here. However, how strong is the Union with whom CEE has already made this attempt?

Declining Panregional Interest

The EU as a whole suffers from declining positive consensus throughout Europe. In

2001, following a historic low turnout (49.51%) for the European Parliamentary elections, the

European Commission published a white paper stating that “many Europeans feel alienated from

the Union’s work,” and argued that reform was required to bring the Union back in touch with

the public. However, their efforts have not been successful. Actually, the 1999 turnout was

merely part of a downward trend from the 1970s, when the EU could boast a near 62% turnout of

voters. In fact, every election for European Parliament since has been a historic low, 1999

simply being a drastic drop from 1994 when it was 56.67%, lower than its previous election. In

2014, the percentage was even lower, at 42.61%. What is even, perhaps, more striking than the

consecutively decreasing turnout of voters in the European Parliamentary elections, is the

conversely increasing percentage of votes for Eurosceptic parties, increasing from about 17% in

2009 to nearly 30% in 2014. This change calls for a closer look at the most recent parliamentary

elections.

Out of the eight groupings for European Parliamentary parties, four seem more positive

toward EU integration, or centrist, such as: the Group of the European People's Party (EPP), and

the Group of the Progressive Alliance of Socialists and Democrats (S&D), and the Alliance of

Liberals and Democrats for Europe (ALDE), and the Greens/European Free Alliance

(Greens/EFA). On the other side, the remaining four are more skeptical toward EU policy and

further integration, such as: the European Conservatives and Reformists (ECR), and the

European United Left/Nordic Green Left (GUE/NGL), and the Europe of freedom and

democracy Group (EFD), as well as the Non-attached Members (NI), which in many cases can

represent extreme anti-EU ideals. Using this, data shows that Eurosceptics significantly

increased their representation from 2009, gaining 99 seats in the 2014 European Parliamentary

elections, now making up close to one third the representatives. The centrists took huge losses in

the 2014 elections, with all parties losing seats, a total of 74 seats.

Now, the pro-EU federalists, or as a BBC report also identifies them, “centrists have

already got their candidates into two top jobs” (the presidents of the European Commission as

well as the European Parliament). However, a soft Eurosceptic did come in as runner-up for the

latter position, even pooling a significant portion of votes outside his own party. As

Euroscepticism is on the rise, a EurActiv report reminds us that “although the number of

Eurosceptic MEPs increased, there are still not enough to systematically block EU legislation;”

however, it will likely force the centrists parties to work together more closely. More

importantly, it is not necessary for the Eurosceptic MEPs to “block” further integration,

technically. Their increasing presence will still allow some measure of influence into EU policy;

if nothing else, they can flex their influence at the national level in reducing the regional drive

for more integration and, perhaps, promoting desires for less. On the matter of how to respond to

this surge of Euroscepticism, Mark Leonard, a co-founder and Director of the European Council

on Foreign Relations, and his co-author José Ignacio Torreblanca, a senior fellow at the council,

advise that centrist parties should refrain from “huddling together in a ‘Europe cartel’” as this

could aid in the perception of increased integration “by stealth” and create a backlash between

the Euro-ins and the Euro-outs, 72 and thereby inviting greater cooperation between the left and

right Eurosceptics.

This seems to be part of a much broader phenomenon, political scientists Nathalie

Brack and Nicholas Startin observe, from early sympathies of the EU public reflecting a

“permissive consensus” to Europeans now having a “constraining dissensus.”73 Integrative

measures such as the Maastricht and Lisbon treaties have many, to include prominent western

leaders Holland of France and Cameron of the United Kingdom, questioning the path of the

European Union. Other factors have also shown to correlate with increased skepticism, such as

Europe’s declining economies. The Economist newspaper noted that while “it was the roaring

economic growth of the [European Economic Community]” that drew many states to apply for

membership, “it [has been] the gloom about the economy … that [has played] the biggest part in

the rejection of the constitution and in the spread of Euroscepticism across the continent.”74

However, scholars Liesbet Hooghe and Gary Marks find that Euroscepticism has changed over

time, “in tandem with the policies pursued by the EU,” having begun with “opposition to market

integration” to “defence of national community,” showing a growing mistrust following

Maastricht and the EU Constitution.75

On the matter of trust and legitimacy in the EU as an institution of pan-regional

integration, Besir Ceka has also looked into the region’s ‘crisis of legitimacy.’76 Using data

72 Leonard and Torreblanca, op. cit.

73 Nathalie Brack and Nicholas Startin, “Introduction: Euroscepticism, from the Margins to the Mainstream,”

International Political Science Review 36, issue 3 (June, 2015): 239-249; See Matthew Loveless and Robert

Rohrschneider, “Public Perceptions of the EU as a System of Governance,” Living Reviews in European

Governance 6(2): 5–28; and See Liesbet Hooghe and Gary Marks, “Postfunctionalist Theory of European

Integration: From Permissive Consensus to Constraining Dissensus,” British Journal of Political Science 39

(January, 2009): 1-23.

74 The Economist, “Fit at 50?” The Economist, March 15, 2007.

75 Liesbet Hooghe and Gary Marks, “Sources of Euroscepticism,” Acta Politica 42 (2007): 119-127.

76 Besir Ceka, “The EU May Have a Democratic Deficit, but National Governments Are Facing an Even Greater

Legitimacy Crisis,” London School of Economics Blog, posted on October 29, 2013,

compiled from Eurobarometer, Ceka addresses the apparent decreasing public support for the

performance of member-state governments, over the loss of support for the EU project, and

argues that while the EU may indeed have a “legitimacy deficit,” according to the data, its

member states are in a far worse situation. Yet, he explains that the poll results of trust in the EU

depends upon the perception of how society’s specific member states have been able to adapt to

the demands of globalization. In this lies, perhaps, an alternative take to his analysis of

Eurobarometer. The state, to begin with, and its elected officials are much nearer in physical

proximity than those for the EU, particularly with regard to the public getting their voices heard.

This makes local governments a far easier target for hopes of redress. Furthermore, of those

holding a low opinion of their state government, many hold such reasoning with the view that

their respective governments have failed to protect them from the difficulties of globalization –

that, as Fligstein describes, “their governments appeared to be willing to sell them out to

heartless corporations.”77 The ownership of fault, as Ceka sees it, would seem to be

misinterpreted, as much of the policy in dispute is decided not at the national level, but at the

regional level.

Nationalism, as it relates to ‘dissensus,’ exists not simply amongst the state members in

relation to the institution of the EU, but also amongst themselves, where, as researcher Christos

Papanikolaou explains, “Europeans have become more prejudiced against other member states,

…and more disbelieving of [European integration]” to the point that the Union can now be “seen

as a potential existential threat.”78 Perhaps it is true that, as political scientist Cecile Leconte

http://blogs.lse.ac.uk/europpblog/2013/10/29/the-eu-may-have-a-democratic-deficit-but-national-governments-

arefacing-an-even-greater-legitimacy-crisis/ (accessed July 30, 2014).

77 Fligstein, op. cit., 17.

78 Christos Papanikolaou, “In Crisis-Ridden Europe, Euroscepticism Is the New Cultural Trend,” Open Democracy,

October 10, 2012, https://www.opendemocracy.net/christos-papanikolaou/in-crisis-ridden-europe-euroscepticism-

isnew-cultural-trend (accessed May 19, 2016).

believes, Euroscepticism is representative of the “global phenomenon of populism” as some

Europeans feel that they are disadvantaged in the process of globalization. And this may be so;

but she also relates how the process of Europeanization has shown the EU to be a “monster

bureaucracy” managing integration from the “top-down,” portraying the EU as an actor best

avoided.

With such perceptions, increased integration is an unlikely prospect as it could only

come about with a greater perception of the Union providing better solutions to peoples’

concerns than the capabilities of their own nations. And for the Union, that does not bode well

considering that since the ‘big bang’ there has been repeated reports of a decrease in trust in the

EU as an institution across the board, from a 57% majority having felt trust in 2007 to a 57%

majority distrustful in 2012, as shown in Figure 2.2, reported in Eurobarometer surveys through

2012. Additionally, these surveys also show an overall drop in support for the EU as a political

union since 2005, shown in Figure 2.3, and a significant 11% drop in attachment to the EU from

2013 to 2014 alone, shown in Figure 2.4. Not to be left out, even within the European

bureaucratic elite, Europeanization is desperate for support; as Leconte reports, “less than 40% of

administrators stand for a federal EU.”

According to social historian Hartmut Kaelble, “only slightly more than half of

Europeans identify with Europe and regard themselves as Europeans,” and of these, scholars

Peter J. Katzenstein and Jeffrey T. Checkel report, only 10-15% are “unambiguously committed

Europeans.”86 By the numbers it seems, as Harding adds, “[w]hatever common European culture

exists is the preserve of a tiny band of well-educated and rootless cosmopolitans: junior EU

officials, Eurostar frequent travelers, and foreign exchange students.” Fligstein also believes

them to be “a small fraction of the whole [which] contains the most privileged members of

society.” We may say, then, just as he compares the EU to an iceberg, that its tip lies in the west

with particular member states of the EU along the Rhine and Rhone that relate more strongly to

the EU as an institution than the rest of Europe as a whole; while the rest of the iceberg along

with most of the peoples of Europe are more nationalistic, than regionalistic.

Here, the question of what holds Europe together arises. Within its cultural milieu,

perhaps emboldened by the EU slogan “unity in diversity,” political sociologist Gerard Delanty

questions whether Western values might serve as its glue and Europe’s ‘legitimate’ promotion.

If so, what are these values? He suggests that these Western, or rather European, values are:

property rights, a strong social contract, along with a substantial public sphere. Whereas,

Harding reduces these common values to peace, prosperity, and freedom; but he, then, begs the

question, “what else is there?” Actually, in this day and age, it is hard to argue that these values

are not important the world over; and the EU as an institution hardly owns the rights.

Still, even within the EU, the values noted can be found in greater and lesser degrees depending

on the subregion, and even within particular member states. As it turns out, finding Europe’s

cohesiveness is a bit elusive. Even though the values noted are so general as to be almost blasé,

and likely found in common by all, Harding underscores, “[t]here is no consensus, not even the

beginning of a consensus, about what European values are.” And as such we find that after so

much work and vertically driven integration, there exists “a European Union without Europeans”

due to the stubborn differences that remain amongst the member states.

We find that, as Rogers and Simón write, “[t]he old postwar motivating myths [are] no

longer strong enough to sustain a common European mission, [that] integration is no longer

invested with a powerful motivating vision […] to drive and then keep the community together.”

We find that there is, as Harding agrees, “no common story” sufficient. Kaelble explains this

well when he writes, “Lacking are the typical ingredients of national history – a common war of

independence, a common period of defeat and suffering, a common period of subsequent

reaffirmation of the body politic, a history of common frontiers, and a common historical

memory.” Even Jacques Delors, who served three terms as the President of the European

Commission, has expressed that “there is no dream, no vision that strikes a chord with today’s

European citizens in the way that reconciliation and an end to war did [in the years following

World War II].” The lack of such, Katzenstein and Checkel remind us, is due to the presence of

multiple European identities. However, for as much as has been mentioned above regarding the

lack of finding a common Europe for all member states, it is possible to say that being European

has not been lost nor forfeited, not in the least.

To some degree it may be said that European identification has been on the rise, though

not in correlation with support for European integration. Here, we must draw a distinction, aptly

raised by a recent study conducted by political scientist Michael Bruter, between a cultural verses

a civic dimension to ‘Europeanness.’ Feeling culturally and historically European is much

different than associating that ‘Europeanness’ with belonging to and supporting EU institutions.

This is not paradoxical when one separates the idea of Europe as home, versus the pan-regional

institution. While support for integration is declining, the perception of being European is

nevertheless on the rise, according to the study. The study confirms the related polarization as

described above between WE and CEE, and adds that “as citizens feel more and more European,

as they appropriate the EU as their political system, they are also less and less willing to accept

its institutional and policy shortcomings.” As such it is possible to say that with the rise in

European culturalism, recognition of the faults of its institution have become more readily

apparent; and along with this recognition, disappointment. This relates to Eurobarometer reports

of a significant 10% drop in satisfaction toward the way democracy works inside the EU since

the financial crisis, as shown in Figure 2.5, and can be further explained by how few (35%)

believe that their respective country’s national interest count inside the EU, and how few (28%)

believe their voices are heard at the EU level.

Considering this, contrary to calls for even greater integration, something akin to the

‘United States of Europe,’ scholar Andrew Moravcsik counters that instead, perhaps, we need a

“more decentralized vision.” Not in the same vein as Leonard and Torreblanca, who advise to

help create division amongst the Eurosceptics, but rather that a decentralized EU would be

beneficial for the furtherance of a democratic and proportionally representative entity, Brack

adds, “open to society in its diversity.” It would seem that much of European integration has

been an attempt to render, as scholar Richard Bellamy phrases it, “a single European people,

rather than [] increasing [] deeper forms of cooperation between them.” The latter lends to

establishing greater democratic legitimacy within the EU through a return to

intergovernmentalism, or what Bellamy refers to as “demoi-cracy.” 107 The argument is that an

attempt to bridge, or ‘unionize,’ its member states into a unitary structure would be a sub-optimal

form of integration. Absent common issues and the willingness for collective action, where

“their most important interests are more or less equally tied up in that community,” the

experiment could, then, allow for imbalance amongst the integrating states, possibly imposing

“inequitable and disadvantageous terms” upon weaker states. Indeed, it may be argued that this

has already been the case. While dissatisfaction can be seen throughout Europe, let us return to

how this affects integration in CEE.

Rising CEE Negativity

Curyło reminds us that, “CEE states commenced on their path to the EU

euroenthusiastically.”108 The states and peoples of CEE needed to ‘come in from the cold,’ as it

were, following the Cold War, and in doing so they looked to the west. Today, however,

disappointed expectations have led to, as scholar Matthew Loveless is quoted, “more

sophisticated and nuanced assessments of what their countries’ membership in the EU means.”

Political scientist Florian Hartleb describes this as “post-EU-accession syndrome,” when the

fallout of Europe’s ‘economic and cultural crises’ left the realization of the Union’s costs and

benefits.110 Since the subregion’s accession, Curyło expresses, “[p]ainfully it turned out that the

EU was a club of contradictory interests and hard compromises in the first place, and a

community of common ideas in the second.” What is more is that CEE states are not alone;

other states in the EU have shown similar interest in distancing themselves from the institution.

Notably, Great Britain, Denmark and Sweden have, perhaps, in Fligstein’s words, “the greatest

skepticism toward the European project.” Though CEE’s Europragmatism is particular to the

rest of Europe, having been traditionally more Europhile than the West, Euroscepticism has been

on the rise there, and it actually predates the ‘big bang’s’ post-accession blues.

A couple years before CEE accession, scholars Petr Kopecky and Cas Mudde noted that

while there was “still a large and positive elite consensus on the issue of European integration in

ECE [read CEE], […] criticism of the EU [was] growing.” Also in 2002, scholars Paul

Taggart and Aleks Szczerbiak reported that there were “higher overall levels of support for

Eurosceptic parties” in the CEE candidate states than in member states at that time. A

disconnect, however, was more readily apparent in these early years. Subregional scholar Attila

Agh noted this in the manner that local “national elites support[ed] EU integration more

assertively than their populations.” He explained this peek into this “democratic deficit” in how

CEE had lost much in the decade leading up to accession. The transformation in CEE resulted in

a loss of about one quarter the GDP of the subregion, leading to impoverishment, social

inequality and dislocation; and, thus, along with “economic exclusion” came “social

fragmentation,” so that by just prior to accession “social polarization was complete” with a

drastic difference between high and low wage earners. And yet, while many states in CEE might

lean naturally toward intergovernmentalism, they continued down the path of second rank

membership, as relations with the EU, constitutional scholar Anneli Albi explains, were lacking

“restraining principles such as subsidiarity [and] proportionality,” and with CEE states having

“no rights and little say in determining the substance of relations, leaving the EU as a hegemonic

actor,” and with larger states having a greater voice. The consequence of this, again highlighting

CEE dissatisfaction, has led to, as subregional expert Søren Riishøj terms it, a “retrospective

utopia” within their burgeoning Euroscepticism realizing a prior “uninformed enthusiasm”

toward integration, seeing has how the Union has not become the institution it was once thought

to be.

It may still be true, as political scientists Reinhard Heinisch and Monika Mühlbock

write, that “overall, CEE has shown greater confidence in EU institutions than do Western

member states that tend to display greater trust toward domestic ones.” For example, the EU’s

overall manageability is seen quite differently across EU, but particularly between WE and CEE.

While 65% of respondents believe the EU since CEE accession has been more difficult to

manage, shown in Figure 2.6, CEE does not seem to think that it is as difficult as even the EU

average believes, with a difference of 16%; let alone a larger difference between CEE and a

couple of larger states in its west (France and Germany), as shown in Figure 2.7. It seems that

some of this stems from a perception of difficulties regarding cultural and value differences

within the EU; again with a difference of 9%, where CEE states do not perceive this as much of a

problem, shown in Figure 2.8.122 However, there are indications that CEE patience is growing

thin on the matter of second rank membership where CEE sits in the shadows of its western

neighbors. Eurobarometer surveys show a markedly less interest in Europe’s ‘two-speed’ vision,

having had 7% greater support than the EU average in 2006, to 19% less support than the EU

average in 2008, dropping by more than 10%. Disinterest is also visible on the matter of even

greater integration, which may be seen represented in the gains made by Eurosceptics in CEE

during the 2014 elections.

Now, it is true that the aforementioned seats gained and lost during the European

Parliamentary elections for CEE are not as impressive as the EU cumulative: on balance,

centrists still lost seats, a total of 15, and the sceptics gained seats, a total of 5; and in looking

specifically at V4 states, centrists lost 4 seats, and the sceptics gained 2 seats. While these

numbers are significant, in the realization that there are fewer representatives that categorically

support EU policies and more that question it, it might not seem so by simply looking at seats

gained and lost. However, when analyzed by percentages of available seats, their significance is

even greater. Eurosceptics, as mentioned, now hold nearly 30% of all EP seats available, up

nearly 10% from the previous election. CEE (or the Visegrad Plus states), on the whole, is not as

Eurosceptic with the sceptics holding only 21.6% of the seats; however, they do hold over 32%

of the available seats in the V4 states, remaining more sceptical than the EU average towards

current EU integration policies.

On the more specific topic of interest in a constitution, there is much less support

throughout Europe for this political process generally speaking since the initial ‘big bang’ in

2004 according to the Eurobarometer survey reported in 2007. However, the greatest drop in

support came from the states in CEE: having previously been in greater support for a

constitution than the EU average to having much less support than the average a couple years

after their own accession, let alone the more pronounced variance between CEE and states in

Europe’s north and west, as compared between Figures 2.3 and 2.9. As it stood in 2007, the

majority of the public in CEE were against further political integration. Political scientist Nicole

Gallina cites how in April, 60% of the “Czech people thought that a EU Constitution was not

necessary.”

In such a Eurosceptic environment, particularly as, according to political scientist

Aleksandra Sojka, “older citizens in CEE countries have slightly smaller odds of trusting the

EU,” some have hope in the youth of Europe believing that “young people favor more

integration.” However, if the 2005 referenda in France and The Netherlands are any indication,

according to Leconte, youthful optimism should be taken in measure in that “opposition to

further integration reaches well into [this] theoretically Europhile segment” of society. As well,

journalist Paul Mason notes that across Europe, from Spain to Poland, the youth share increasing

distrust of EU institutions and the existing power elite. It would seem that public opinion has

changed the perception to the point where, as Hooghe and Marks believe, further “European

integration is no longer determined by insulated elites.” Though even in the case of elites, their

opinions are changing – as already noted in western Europe, as well as in CEE.

Following accession, political leaders in CEE, particularly in the Visegrad states began

to be more vocal in the doubts of their success in Europeanization. This, actually, began in the

pre-accession process as both Poland and the Czech Republic argued for equal voting-weights

with the other members of the EU. Václav Klaus was the Czech Republic’s president during the

country’s accession to the EU, and he spoke on the imbalance of influence between member

states and the regional institution just one year later. In addressing an audience at the University

College London, upon the same grounds as Masaryk had done 90 years previously, Klaus

included praise for the “opening up” of Europe through its integration process. However, he

admitted his belief that the Union has “gradually, and for many Europeans invisibly

metamorphosed into something else, in the building of a centralized, supranational entity with

only very limited residual sovereignty left in individual member countries and with ambitions to

mastermind Europe from above.” He believed that this has led to “a huge democratic gap,” as

many Europeans are uninterested in taking direction from Brussels. Similar to Klaus, Fligstein

points out that the voting rules within the Union changed with the Single European Act from

unanimous to a qualified majority. He explains that as member states have “ceded sovereignty to

a supranational political body,” there is a consequent lack of political participation that is even

possible for the citizenry; and that this restricts the ability of citizens to participate directly in EU

politics.” The consequence of this is that the EU is seen to be remote from the average person,

leaving a sense of resentment, which should strike some historical images.

The EU, it would seem, has not learnt the lessons provided by history. The ruling

classes that subjugated Central Eastern Europe and South Eastern Europe in the 19th Century

failed to respect the wishes of its peoples; and their resulting nationalisms were the power that

eventually brought about the fall of the Austro-Hungarian empire. Interestingly, during a protest

in Hungary in 2006, debating the origins of the failed revolution of 1956 against the Soviets,

participants, in a fit over current policies, removed the EU flag, reminiscent of the debated

revolution itself. Arguably, nationalism has retained its strength. Case raises the relevant

question, “Was the EU just one more foreign oppressor – like Austria in 1848, or the Soviet

Union in 1956?” There is little doubt that the Austrian empire, debating its own internal troubles

found amongst its minorities in the 1860s, particularly the Magyar elite, sowed its own

destruction with the fateful Compromise of 1867, in choosing not to address all or even the

majority of voices. Today’s EU, with the accessions of 2004/7, is a ‘compromise’ of sorts itself,

as it is also an unequal institution. Now, while the EU was not directly imposed upon its member

states as the Austrian empire had been, there does exist the similarities, as Harding relates, in

“resentment toward political elites,” as well as “bruised national identities, and the desire for

self-determination.”

This desire emanates from the reminder of their minority existence and treatment,

forever on the periphery of Europe; and, therefore, this is not incredibly surprising, as its simply

‘par for the course.’ As Konrád said, “To be Central European is to be in a minority; to be in a

minority is Central European.” It can be characterized as not having a voice, or, more directly,

not being given one. Hungarian writer Péter Esterházy epitomized this sentiment when he wrote

just prior to the often praised 2004 accession, “Once I was an Eastern European; then I was

promoted to the rank of Central European. Then a few months ago, I became a New European.

But before I had the chance to get used to this status – even before I could have refused it – I

have now become a non-core European.” It should seem that even these sentiments are forever

stuck on the periphery of the other two Europes, where their voices seem hardly heard.

As shown in this chapter, a nation’s identity can be delicate subject. This, of course, is

true of Europe, and other regions of the world; and its difficulty extends into the subregion of CEE,

as well. Unique identities are everywhere, and Europe is not without its variants. This can be seen

in the rather broad generalizations of WE, CEE, and EE. And though their communities do share

space in Europe, they were cut from different cloths; each being unique from another.

As such, there is difficulty in matching them together, as can bee seen in the expansion of EU

through CEE. What ‘unity,’ really, has come from Europe’s ‘diversity?’ The rising negativity, cited

above, questions the viability of the Union, itself. One wonders if a more simple base in

collaboration, upon which the Union was actually founded, can continue to hold the EU project

together as it has for so long. This “base,” of course, is economics; and it is toward this topic to

which we now turn.

CHAPTER III

ECONOMY: DEPENDENCY & DIVERGENCE

This chapter continues the case of a relationship unrequited, but in the economic realm.

The objective was to investigate CEE’s relationship within Europe’s economy, and how this

relates to the subregion’s own economic development. A few questions drove the chapter’s

research: To what extent is CEE dependent upon the EU economy? In what manner has

membership furthered development in CEE states? What is the best path to growth? Findings

identify CEE’s peripheral dependence in Europe’s economy and development, stemming from an

all too common, and all too sudden approach to the opening of their economies to globalization.

Economic development has come only in the form of foreign direct investment and cohesion aid

from its European partners. For as much as these have been praised, this chapter presents

argument and data that puts both of these policies into question. Then, it explores a number of

options to improve subregional economic development along an alternative path.

In from the Cold

The era of globalization born in the final decades of the last century has ushered in an

environment where states and their firms have found themselves on the global playing field

competing for market share. Immediately following the end of the Cold War, Central Eastern

Europe (CEE) began its rather abrupt transition to the market economy and European

regionalization. Arguably what was needed was another Marshall Plan; a plan that would bring

the subregion together and aid its growth and integration with Europe. Now CEE’s initial growth

can partially be explained through neoclassical growth theory in that capital investment increased

due to its ability to gain a higher return in this capital starved subregion. And while the early

1990s was a period when CEE states were interested in policies that would benefit internal

growth, by the end of the decade externally oriented strategies based on competition for foreign

direct investment (FDI) became the norm, in which all CEE states shared a bumpy yet relative

increase in FDI. This increased, incredibly so, in the immediate periods leading up to and just

following Europe’s ‘big bang’ in 2004/2007, when 12 new states along this periphery became

members of the EU and experienced an impressive average GDP growth of over 6 per

cent.

Unfortunately, this growth was tainted with debt accumulated during this period of

‘economic expansion.’ According to World Bank data, much of Visegrad show an increase in

central government debt as a percentage of GDP from about 2000 onward, without much change

during the 2008 recession, which contrasts with the EU average; the latter having a decline in its

debt until the 2008 crisis, with then a marked rise with data available through 2012, shown in

Figure 3.1. The Bank for International Settlements also shows, in data available through 2014, a

general increase in central government debt securities through 2014 for Visegrad. And according

to the European Commission, “given the accumulation of deficits and the slowdown in growth,

sovereign debt ratios have increased markedly, from 60% of GDP on average before the crisis, to

80% in 2010 and they [were] forecast to reach 89.5% in 2015.” With such a trend into negative

public spending, where is the EU’s positive influence upon the subregional economies?

This, actually does not spell positive news for the European economy; and it is a topic that will

be returned to in the next chapter. At present, though, even with its GDP growth, it is

questionable, considering its expansion of debt, how much positive growth CEE has attained

overall.

With this mind, as can be surmised, growth has deteriorated since the crisis. Indeed, it

returned for a peak in 2010, but only to fall dramatically afterwards. This is the case for CEE, as

well as the EU in general. It is not surprising, then, that within surveys taken by

Eurobarometer at the beginning of the crisis, respondents expressed on average that life would be

harder for the next generation in Europe, shown in Figure 3.2. Even after the crisis, a majority of

EU states believed that worse was still to come. The mood throughout the EU, to include those

in CEE, had not abated by 2011, as the average pessimism on the future of the crisis increased,

shown in Figure 3.3. The results of which, it may be argued, have left those in CEE wanting

policies to supplement their reduced growth, if not very different policies that had, here to fore,

been followed. But before new possible opportunities are discussed, it is important to set the

background to CEE’s current decline in growth, and the debate surrounding its initial post Cold

War growth.

The Western Transition

There is nothing particularly crude or necessarily coercive in the premise of Western-

led transformation – as the West would naturally have some desire to mold its neighbors in an

image conducive to positive relations, relative to that previously had during the Cold War. And

this is supported by political scientist Ashok Swain and economist Jane Hardy who referred to its

application in CEE quite benignly as ‘the reintegration of the Marchlands into the capitalist world

economy that is being transformed by globalizing and internationalizing processes.’ And

subregional political economist Jan Drahokoupil remarked that their policies would be similar to

others advised by such economists and foreign advisors as Jeffrey Sachs, who worked to integrate

states with globalization through “market-like rule and creation of a local capitalist class.”

Drahokoupil explains that reformers reasoned that they only needed to unleash the natural

economic abilities of CEE, based on their “pool of skills, knowledge, and industrial prowess that

was competitive on the world market and merely needed to be liberated from the constraints of the

command system.” And this is how CEE transition began.

Some of this occurred within a relatively brief timespan; however, for CEE it was a

noteworthy change framing its economic integration, as Drahokoupil words it, “from

collectivization to globalization,” where policies were interpreted through a new lens, shaping a

new “’structural literacy’ of the policy-makers and policy-shaping social actors.” The

transformation to new capitalist regimes embodied a paradigmatic shift in CEE’s goals and

values regarding their economic policies, hereby metamorphosing the traditional national

interests and identity of the renewed states and a former collective to that of the European Union

and their individual places within.16 European expert Alan Dingsdale explains this well.

“This had a particular resonance in the Marchlands [CEE] because of the

restrictions that communist modernity had on individual identity, inventiveness,

innovation, mobility and action. Personal self-development uniting thought

worlds and action worlds was liberated by the return of the west, which in its

neoliberal guise promoted, encouraged and applauded the very qualities that had

previously been most suppressed, frowned upon and even criminalised.”

Now, while CEE certainly sought western integration, there was some division within as to how

intensively to commit to the western export-oriented regionalization program.

There was much debate early on, as some reformers had wanted a more state-led or

internal approach, than a regional institutional model. The word institutional is used, rather than

simply a market-capitalist approach, as institutional rules and limitations were set by the EU,

underlining the political influence had by the Union. An alternative ‘third way’ based on market

socialism or a social-democratic system was proposed, in which Sweden had been hailed as an

appropriate model.20 The ‘third way,’ also referred to as the French proposal, incidentally had no

intention of excluding EE from CEE’s inclusion with the West; but rather envisioned a pan-

European economic bloc with its West and East included. As it happened, this opposition was

insufficiently organized to secure policies alternative to the western regional paradigm – nor for

greater state involvement toward regional integration. Drahokoupil attributes this to “the

political weakness of labour and enterprise managers,” and the absence of united “domestic

capitalist classes.” The resulting vacuum then allowed for CEE’s “domestic politics [to be]

transnationally constituted,”24 along an externally oriented path, unable to put local strategies as

priority.25

Perhaps transition may have proceeded very differently had early reformers been able to

secure that more gradual approach to CEE’s transition into European trade and the world

economy. Some CEE states such as the four Visegrad countries (V4) may have converged with

globalization more smoothly than other developing countries. In one way, at least, they were

different: contrary to neo-liberal advisors’ advice for austerity, their governments took more

social compensatory measures in foregoing shock therapy,26 preserving a modicum of social

cohesion, as Drahokoupil explains, by “extend[ing] subsidies and credits to [local] enterprises.”27

Still, many of these benefits had been reduced by 1993.28 Furthermore, by this time a number of

CEE decision-makers had already participated in Western exchanges with neoliberal thinkers,29

and were familiarized with policies of the popularized Washington Consensus,30 advocating open

markets, privatization,31 and reduced public spending.

In the end, and in the absence of investment, as well as the absence of access to

markets, CEE had to give up attempts at self-sufficiency and their want of long-term internal

development. Due to international pressures and domestic disorganization, CEE was forced to

Transnational Social Forces and the Neoliberal Configuration of Poland’s Transition,” New Political Economy 8, no.

2 (2003): 225-244.

24 Drahokoupil, Globalization and the State, op. cit., 27 and 179.

25 Ibid., 184; H. Overbeek, Global Capitalism and National Decline: The Thatcher Decade in Perspective (London:

Unwin Hyman, 1990).

26 Drahokoupil, ibid., 36-37; see M.A. Orenstein, Out of the Red: Building Capitalism and Democracy in

Postcommunist Europe (Ann Arbor: University of Michigan Press), 36, 42.

27 Drahokoupil, ibid., 36.

28 Ibid., 42; see M. Godfrey and P. Richards, Employment Policies and Programmes in Central and Eastern Europe

(Geneva: International Labour Office).

29 Drahokoupil, ibid., 18-20.

30 The Washington Consensus: promoting trade liberalization, industry privatization, and fiscal austerity. 31 It is

noteworthy that this privatization favored foreign-based investment. This is likely due to its greater availability,

and eagerness.

compete regionally and globally, as FDI attraction seemed all-important, thereby leaving little

room to address the restructuring of the social safety nets. All CEE states, albeit at different

speeds, inevitably changed from an internally oriented path meant to promote domestic

accumulation, to the externally oriented institutionalist path. It was reasonable, after all:

market fundamentalism is firmly embedded in the global economic framework; and, as it was a

time when CEE officials trusted this popularly hailed path, their reformers were given

extraordinary autonomy. During this time, Drahokoupil believes neoliberal reformers “[took]

advantage of the period of ‘extraordinary politics’ when greater change was possible because

they did not face the [unified] opposition of social interests.”

This is what opened the door for multinational corporations (MNCs) to enter into the

developing markets of CEE, during a period of hardships and immense political and economic

transition. Perhaps their entrance was inevitable, considering the circumstances of the 1990s. At

the time, foreign investment was seen to be an elixir for ‘the lands in between;’ as a former U.S.

ambassador said, it was to be “a new Marshall Plan to help Central and Eastern Europe.”

Unsurprisingly CEE desired what the MNCs possessed: the technology, capital, and access to

markets necessary for trade. So, while in the 1990s there were justifiable fears, as Drahokoupil

expresses, that “FDI would buy out the commanding heights of respective economies,

destroy[ing] the viable economic structures in the East,” needing capital resulted in a change of

local perceptions by the middle of the 1990s. This, essentially, framed peripheral CEE along an

internationalized integration path that set WE as well as the interests of transnational capital

dominant, ‘forc(ing) states to compete in the adoption of FDI-friendly policies.’ In this manner,

CEE states were coopted by the influence and strength of foreign capital, to the degree that, as

Drahokoupil adds, the “social base of the state cannot be located purely at the national level any

more;” but rather that, “the power of the national state ha[d] shifted and transformed upwards.”45

Comprador Integration

This transition of power and influence having moved from local hands to those

regionally has given some justification to the popular perception that this neoliberal transition has

been exported, forcing the subregion into economic competition for investment and market

share. And it should go without much contest that powerful regional politico-economic influence

did in fact pressure the former Warsaw Pact countries into this manner of transition. Though

while orientation turned to foreign investors, it must be said that this process depended

on interests of key domestic groups, or as Drahokoupil refers to them, the “comprador service

sector;” “comprador because it is structurally dependent on transnational capital, whose interests

it represents.” These local actors often provide services to foreign direct investors. So, rather

than the transition having extended solely from coercive international pressure, Western

influence provided moral and financial support to locals with common interests, in the banking

and business sectors. The inclusion of the banking sector might very well be a telltale sign of

Western design, rather than market-capitalism merely running its course. This is explained by

legal scholar Rudolf Schlesinger:

“Quite apart from the specific needs of war economy under the specific

organisation of Central European economics it is evident that any hegemonic

power is bound to attempt the stabilisation of its rule by getting control of the

banking system that controls most industrial enterprises. …[A]ny kind of

‘leadership’ in a capitalist reconstruction of Europe involves securing control of the

banking system, or collaboration with such groups within the banking system as

are ready to become the tools of the leading power.”

Capital, essentially, is what linked these actors operating figuratively from the top-down and

from the bottom-up. Those that could capitalize on the internationalization of CEE, where the

new environment began to be centered, did so through it. Drahokoupil explains that the local

actors, being dependent upon the economy and structurally dependent upon the production

process, increasingly became dependent on foreign capital and the EU – fostering a symbiotic

relationship between foreign and limited domestic actors in which their actions privileged each

other, forming a power bloc stronger than others. Oddly enough, in many cases, the leadership

that became the winners in the local capitalist class were often actually the same ‘winners’ of the

old communist elite, merely maintaining privilege amidst the changing economy. In their drive

for their share of regional trade, let alone global trade, CEE states found it increasingly difficult

to protect their own firms. Their newfound place in the competition for foreign capital made

quick work for the privatization of CEE industries. Transnational capital garnered so much

influence that even local unions had come to represent the interests of MNCs over that of locals,

and eventually foreign capital came to control all key sectors of the CEE economy, such as

leading export industries, public utilities, and of course the banking sector.

If a Marshall Plan similar to post-WW2 had been an appropriate prescription, former

Hungarian diplomat and scholar Stephen Borsody believes, “privatization of the economy with

some influx of foreign capital was a poor substitute.” The privatization of CEE spurred intense

competition amongst states and their firms, rather than any manner of cooperation such as that

inspired by the Marshall Plan of the west. Drahokoupil describes the “competition state,”

representative of CEE, as having political, institutional, and structural “underpinnings.”

Politically, it is supported by the local actors coopted by international finance. Institutionally, it

is restrained by coercive conditionality established through the EU. And, structurally, it is

subservient to the MNCs and their access to capital. From these, states have been made

dependent on foreign investors, the latter benefitting from the institutional conditionality.

And the resulting competition amongst states, in a manner of speaking, ‘asserted a sense of

selfdevelopment at the expense of subregional collective development.’ If these “underpinnings”

of the neo-Marshall Plan drew CEE’s transition down any path parallel to the original post-WW2

plan, it would be a very different one at the very least – as the subregion would not develop in a

similar manner as its west.

If CEE states had any hope of using foreign capital and integration as a means to later

turn towards desired inward accumulation and development, where a greater domestic stake

could be had in local growth, they were disappointed. Drahokoupil states, “EU competition

regulation effectively prevented attempts to promote national ownership.” Where there was

interest in privatization, though an attempt to make gains more local than international, the

voucher method was used – generally for medium to large-sized businesses, in which the public

received shares in the business. The idea seemed sound, perhaps, if one follows the belief that

greater competitiveness can be found in greater corporations. Still, many of these shares ended

up in the control of state-owned banks. And, as states were indebted to international capital, and

local neoliberal reformers were eager for the benefits of foreign investment, their banks allowed

the sale of lucrative state-owned enterprises to international investors for a song.

And for what? How much growth did FDI actually contribute to the aforementioned

growth that was had in the subregion? Heavy industrial growth has traditionally been an area

that regions have aspired to succeed in. And while it may be argued that this has been

superseded by technological industries more closely associated with the modern ‘knowledge

economy,’ major manufacturing remains a solid base for economic development. But while

integration seems to have included CEE states within the general supply chain of western

manufacturers and service providers, the CEE economy has had little chance to move past labor

intensive, low-tech industries. This might be explained in the desire of western actors to want to

protect their interests and long-term investments from competition.

As FDI took hold of industries in the region, foreign investors were not only in the

position to benefit from industries and wages already established in CEE, but also to steer

industrial, and thereby economic, development in their preferred direction. According to

Schlesinger, generally speaking, it is in the long-term interest of the larger successful firms in

Europe’s west to incorporate industries of other countries that are complimentary to their own,

but not in competition with them. It is understood that a good portion of the Soviet base of

manufacturing and skilled labor resided in CEE, a comparative advantage that could have been

capitalized upon to benefit the owners of these assets and resources. However, as the new

owners represented their long-term interests already established in the west, CEE would be used

as a supplement, rather than to flourish as a potential competitor. This speaks to the larger

picture in which competitive capitalism was nurtured in the subregion.

Political Scientist George Friedman has been regularly critical of the structure and

balance within the EU. He has a case for believing that this band of developing CEE states along

the EU periphery should actually have a positive balance of investment and trade within the

Union. There is no doubt that this was a hopeful venture for many in the subregion early on.

However, the original estimation of benefits was simply over-estimated considering that the free

trade zone is dominated by a center-led export dependent economy. And it seems that the CEE

supplement was the intended structure designed within the Union’s expansion. As CEE wage

and industrial advantage presented more of a threat than possible opportunity to actors within

WEU, political scientist Wade Jacoby writes, “management efforts allowed [WEU] actors to

exploit investment opportunities in [CEE] but without immediately exposing [WEU] economies

to large increases in migration or trade pressure in sectors where [CEE] had comparative

advantage.” This, then, shifted inherent potential growth to one based on FDI, to where WEU

firms own many that it trades with in CEE, and essentially control much of their leading export

industries. The result has been low growth in locally owned (and thereby locally-benefiting)

export manufacturing capabilities, particularly when it comes to high-tech industries. Other

inequities related to free and fair trade were also present.

The EU’s integration of the periphery not only encouraged the subregion to provide,

even to specialize in, services less lucrative such as labor intensive and low-tech industries, but

also encouraged CEE to abolish trade restrictions on EU imported goods. This latter point might

seem well and good in an atmosphere of opening trade and reducing restrictions. However,

during this time, EU policies maintained protection of certain sectors of the economy, denying

particular CEE industries from western markets, within which CEE had held significant

comparative advantage. According to eastern European political scientist Mikhail Molchanov,

CEE states were accused of “dumping” products within a “so-called sensitive group.” This did

not sit well in the subregion, causing, in the words of scholar Peter Stirk, “irritation and

recrimination.” CEE industries that suffered in the unequal liberalization within EU integration

included: steel, textile, apparel, chemicals, and agricultural products. This process further

subordinated the subregion to the core economy in Europe’s west, as they were unable to utilize

their previous comparative advantage. Since this time, CEE economies have contributed less

toward heavy manufacturing and even less toward the knowledge/service economy, as the

owners of FDI had set preference toward their base of origin in the west. To a degree, this has

served to ‘subsidize’ the economies of the west, as CEE’s position in the periphery has provided

resources and light manufacturing to a less contested, and now more competitive economic core

in the west.

So, again, the question arises, what good has directly come from the neo-Marshal plan

based on foreign investment. It is popularly argued that FDI benefits rest on its access to capital,

as well as management and technical experience. It bears repeating that there was measured

growth, yes, over 6%;80 and, were it that foreign capital was the necessary component for CEE

growth during this time of transition, then perhaps it was worth the subjugating policies that

followed. However, this is debatable. The increase in FDI, accompanied by its control of

leading export industries, most public utilities, and the banking sector, along with the refocusing

of exports toward EU markets,81 has produced uneven results in CEE.82 While foreign

investment does seem to correlate with the economic recovery in CEE in the late nineties, G.

Hunge’s research contradicts this correlation between the amount of FDI and the pace of

economic growth.83 And rather than the performance of foreign directed industries, Dingsdale

also explains that it was the “change in corporate governance, [and] adapting production and

marketing to new demands.”84 As well, rather than the presence of large foreign corporations, it

was the development of small and medium-sized businesses that contributed to growth.85 In the

end, just as Dingsdale had predicted a half decade prior to the financial crisis, FDI fell

precipitously from 2008 onward,86 reaching near 1990s levels for some, as shown in Figure 3.4.87

80 Orlowski, op. cit., 16; see also: World Development Indicators, FDI inflows, op. cit.

81 Drahokoupil, Globalization and the State, op. cit., 55; see D. Bohle, and B. Grèskovits, “Neoliberalism,

Embedded Neoliberalism, and Neocorporatism: Paths Towards Transnational Capitalism in Central–Eastern

Europe,” West European Politics 30, no. 3 (2007): 443–466; and P. Pavlínek, “Transformation of the Central and

East European Passenger Car Industry: Selective Peripheral Integration Through Foreign Direct Investment,” in

Foreign Direct Investment and Regional Development in East Central Europe and the Former Soviet Union: A

Collection of Essays in Memory of Professor Francis ‘Frank’ Carter, ed. D. Turnock (Aldershot: Ashgate, 2004), 71–

102; and P. Pavlínek, “Restructuring of the Polish Passenger Car Industry Through Foreign Direct Investment,”

Eurasian Geography and Economics 47, no. 3 (2006): 353–377.

82 Drahokoupil, ibid.; see J. Pickles and A. Smith, “Technologies of Transition: Foreign Investment and the (Re-

)articulation of East Central Europe into the Global Economy,” in Foreign Direct Investment and Regional

Development in East Central Europe and the Former Soviet Union: A Collection of Essays in Memory of Professor

Francis ‘Frank’ Carter, ed. D. Turnock (Aldershot: Ashgate, 2004), 21-37; and A. Smith and P. Pavlinek, “Inward

Investment, Cohesion and the ‘Wealth of Regions’ in East-Central Europe,” in Transition, Cohesion and Regional

Policy in Central and Eastern Europe, ed. John Bachtler, Ruth Downes, and Grzegorz Gorzelak (Aldershot:

Ashgate, 2000), 227-242.

83 Dingsdale, op. cit., 237; See G. Hunge, “Contribution of FDI to Economic Recovery and Restructuring” in G.

Csak, G. Foti and D. Mayes (eds) Foreign Direct Investment and Transition: the case of the Visegrad countries:

Trends in the World Economy (Budapest: Hungarian Academy of Sciences, Institute for World Economy, 1996), 73-

84 Dingsdale, ibid.

85 Ibid., 240.

86 Ibid., 236.

This has renewed concerns over adequate access to finance, particularly with their current

account deficits. Everything considered, it would seem that there is sufficient reason to doubt the

benefits of the neoliberal Marshall Plan, which has served to subordinate CEE’s economy to its

west – a relationship more reminiscent of Europe’s medieval past.

Parallel Peripheries

It should be remembered that CEE’s long-term position along the periphery of Europe

has come with it socio-economic dependency to the core in WE to which it is ‘situated.’ And

there is a pattern through history that supports this. Take, for example, the rise of Europe and the

disparate development of WE from the rest of Europe. The 14th and 15th centuries beset Europe

with social economic crises, first to its west, then to its east. At about this time, approximately

three quarters of Europe’s entire population lived west of the Elbe, in the West. In this time,

famine came upon WE states and affected it particularly negatively due to its relative

overpopulation. And while famine eventually came to CEE and beyond, the two subregions

recovered through very different means.

The West had already begun a full transition to urbanization prior to the crisis,

eventuating in the elimination of serfdom; and it was this transition that helped enable the WE

states to recover. It also established predominant trading relations between WE and CEE. Trade-

wise, CEE had been a source of grains and raw materials for its powerful neighbors, in all

directions. And while the early WE metropoles increasingly became urban entrepreneurial

centers, CEE did not urbanize remaining tied to agriculture – effectively instituting a ‘second

serfdom’ upon the peoples, and effectively delaying, perhaps inhibiting, modernization.

Historian Holly Case notes this dichotomous relationship quite well, as she quotes from historian

scholar Dan Berindei, that:

“’Core’ Europe could sit back and enjoy the fruits of overseas trade networks and

the Industrial Revolution. States and peoples on Europe’s Eastern periphery

repeatedly sacrificed themselves on the alter of Europe, serving as the ‘last

bastion of Western civilization.’ But they did so at the expense of their own

development, focusing on resistance above all else, becoming proud, poor, and

stubborn, while Western Europeans became enlightened, rich, and tolerant.”

As a result, the classic divide between East and West, at least economically, became relatively

fixed in these pre-industrial times as well as its subregional division of labor by the 16th century,

where territories west of the Elbe River experienced faster development than that to its east. This

has helped establish the path of dependency between these two subregions of Europe, as the west

produced the manufactured products, whereas CEE naturally provided the critical resources for

them. This has been a common theme for CEE’s relations with its west, from the time of the

Hapsburgs – even Nazi Germany during the interwar period; as well as a theme made worse in

its east by the political divisions and economic setbacks of the last century.

During its period within the Russian empire and then the Soviet Union, CEE’s

peripheral integration with its east would come under the Soviet’s integrating policies of its

Council for Mutual Economic Assistance, or Comecon. There are obvious parallels between

pre20th century WE with its CEE periphery, and the USSR with its Warsaw Pact and Comecon

policies in the CEE periphery; as well as, it should not surprise, with CEE’s contemporary

peripheral position in today’s WE-led EU. However, this is where those broad similarities nearly

come to an end. Interestingly, towards the end of the Soviet Union, Comecon’s restricted trade

with WE was relaxed and seen as a means to improve the Soviet economies. However, in the

end, the attempt to piggy-back atop more open trade with its west was too little too late for the

Soviet Union. Today, across the divide, WE has yet to relaxed its preferential core position in

allowing greater collaboration with its east. Today, CEE seems still quite entrenched in WE’s

periphery – an all too ‘comfortable’ position having come from centuries of conditioning.

Since the Cold War, CEE has fallen back into the economic orbit of WE. A basic look

at trade relations highlights their relationship. CEE has much more dependence on trade as a

percentage of GDP than the more affluent WE. Furthermore, CEE is dependent upon trade with

WE, particularly Germany, as the Visegrad states send nearly half of their exports to WE, with

more than a quarter going to Germany alone. Data from the World Factbook confirms, as well,

that this is not equally reciprocated with CEE, but does show that WE also favors exporting to

other partners in WE. Imports nearly mimic the data on exports, with CEE depending on WE for

nearly 40% of their combined imports, with over 25% coming from Germany; and WE neighbors

importing nearly the same. Now, it is understandable that due to centuries of developmental

disparity, CEE’s dependent peripheral position would likely be the case anyway. However, with

the acceptance by EU members of what has been referred to as ‘two-speed Europe,’ the

subregion has been formally allowed to both lag behind the modernization of WE, as well as

being beset by certain economic restrictions otherwise not equally followed by WE due to

Maastricht’s opt-out privileges. While it can go without saying that CEE would also appreciate

the same opt-out privileges allowed for WE, the result has been to more formally relegate CEE

into peripheral integration within the modern regional economy.

Perhaps this is the natural result of regionalization with WE; one that might be

conformed to as a privilege of its acceptance. Still, some of this might also be the general result

of globalization. While globalization tends to have the positive connotation of free market

capitalism, it has also made many insecure in their ability to keep pace, positively, with its

changes. And, as it happens, the feelings of unease felt in CEE are shared with many across the

EU. Eurobarometer surveys indicate that respondents do not believe that the Union protects

citizens from the negative effects of globalization, as shown in Figure 3.5. As this relates to

European integration, scholar historian Eric Hobsbawm responds that, “the rise of free-market

extremism [has] undermined the Community’s cohesion as much as had the collapse of

communism.” And since European membership must have a sense of value, more so than its

cost, to help in this endeavor the Union has instituted an attempt at socio-economic cohesion

through its “structural funds,” to which we now turn to see its effects upon CEE’s convergence

within Europe.

Convergence, Amidst Divergence

The EU’s policy of convergence has stemmed from a desire to protect the peripheral

regions of Europe, such as to its south and east, which are most susceptible to the harsh realities

of globalization. There are five main funds that comprise the European Structural and

Investment Funds (ESIF), and all contribute to supporting economic development across the EU;

however, only the less developed regions have access to the Cohesion Funds, meant to raise the

general standard of living within the new member states relative to the core EU states. Again,

similar to the influx of FDI within CEE, these ESIF funds were also hoped to be a quasi-

Marshall Plan for the peripheral states, and believed to be able to render similar benefits.

Ideally, CEE growth would come within reasonable reach to that of their counterparts in the

West; perhaps even to be competitive in the European market. Again, however, competition for

these funds are also present; and as there is greater heterogeneity within the EU, so come a

greater divergence in interests, at least as it relates to the basic self-interest of being awarded

funds.107 It may be argued, therefore, that resulting deficiencies persist if not in the total amount

allocated then amongst potential beneficiaries.

Since the induction of the EU12 in the east, EU’s southern members have had less

access to these funds. This is due to those now in greater need in CEE, who, by the way, have

received nearly half of the total ESIF funds, and over half of the Cohesion Funds meant for

convergence within the EU. In fact, due to their need of greater cohesive measures, 85% of the

Cohesion Funds have previously been afforded to states in CEE, nearly 63% just in the four

Visegrad states alone. Reacting against this, EU’s south have shown interest in changing

cohesion fund requirements to better suit their own interests. One such aspect of change has

been to raise the requirement for participation in the Fund, referred to as the Berlin method, from

its original 75% threshold of the EU GDP average. The argument in EU’s south is that the 75%

threshold for cohesion funding eligibility used to be a reasonable marker due to the previous

great disparity between the rich and poor within. However, more states across the Union have

reached this marker, particularly in the south, where four of its main representatives (Portugal,

Spain, Italy, and Greece) average a per-capita GDP of about 78% the EU average. One can see

how a relatively small rise in growth or decline can make their internal regions eligible or

ineligible for these funds.

As scholar John Bachtler correctly noted, “it is likely that variants on the Berlin method

would be put forward to ensure that Cohesion policy continues to be of interest to at least some

of the EU15 as well as the EU12.” Knowing the heterogeneity within the EU, and that EU

member states still have to seek outcomes that serve their own national interests, raising the

eligibility threshold to the proposed 85-90% of EU average GDP is understandable for some of

those members. And from the EU South’s perspective, perhaps even that of the Union as a

whole, these regions standing at or near the 75% threshold, that might find renewed or continued

aid, still have much potential growth and could use these funds to overcome their current

development challenges. At the very least, the Cohesion Funds could be used to bolster already

active and competitive market centers. But the fact that European growth is in decline, no doubt,

complicates matters.

Europe’s growth rate has steadily declined over time; and just as economist André Sapir

found in 2003, while noting that strong development must be a priority, the average percapita

GDP in Europe versus the US should not stagnate at deficient levels, which at that time had been

around 70%. This remains true even after the rise just prior to the financial crisis of 2008.

According to World Bank data following the crisis, per-capita GDP has essentially stagnated

since 2009. And while following the crisis, the EU enjoyed an average of 65% higher per-capita

GDP in comparison to the US, this advantage has dropped markedly since 2012 averaging just

57% that of the US, a significant drop, indeed.

Further, sociologist Marek Kozak et al. writes that it is well possible that many states’

regions’ “successful ‘graduation’ from the eligibility status will be used as an argument in favour

of limiting spending on Cohesion policy.” And it is noteworthy that since Sapir’s findings,

progressively fewer funds (more in principle, but less by GNI percentage), according to Kozak et

al., have been made available for the Cohesion policy, regardless of whom and how many are to

attempt to divide its ‘largesse.’ This character of stagnation also seems to be the case

specifically, at present, for the EU12. And this situation is made worse still for two of the newer

members of the Union from 2007, Romania and Bulgaria, as due to a capping of funds for the

current period (2014-2020), they have received considerably less than others. This could be a

signal of further disinterest in EU’s cohesive measures.

Herein lies the dilemma: while there is pressure to adjust the eligibility requirements to

allow greater participation, it will diminish the total amount of funds allocated to those eligible.

And as fewer total funds become available, as a percentage of EU GNI, then convergence

becomes even less attainable. With this in mind, it is difficult to fathom how the newest, and

poorest, states to join the Union are to react, and compensate, for the reduction of cohesion funds

based on limited spending and the likely move towards more competitive markets in the EU.

This will surely decrease the intended benefits previously ‘enjoyed’ and expected by the EU12 in

CEE. While EU’s southern members desire for change is understandable, considering their

interests, it is equally arguable, for the betterment of CEE as well as the Union, that instead the

threshold should be maintained at 75% – thereby concentrating these funds upon those still yet to

approach reasonable development, making it easier to bring these weaker economic regions to

convergence. This had been hotly contested by those within the subregion, and should be even

more so considering that the number of Europeans at risk of poverty and socio-economic

exclusion increased by nearly 10% in the immediate years following the financial crisis. The

European Commission has recently observed that there are signs that “this convergence process

has slowed and even gone into reverse in parts of Europe.”

Again, this is dangerous for the sustainability of the Union as it runs counter to the very

purpose of Europe’s convergence project, a very important project for the EU. According to

surveys in Eurobarometer, as shown in Figure 3.6, CEE respondents believe that economic parity

with the core of Europe is of overwhelming importance for them; but yet not so for respondents

of WE, perhaps as they are the more successful subregion. Perhaps it is that WE opinion is that

CEE has already improved economically that Europe need not concentrate any longer on it. As

for the public opinion as to whether living standards had improved in CEE following the ‘big

bangs’ of EU accession, shown in Figure 3.7, it is apparent that the rest of the EU is a bit out of

touch with its newest counterparts in CEE – as the EU respondents’ average indicates the belief

that CEE has attained a higher quality of life since the end of the Cold War, and has benefitted

more since the accessions than the actual CEE respondents indicate.128

As it turns out, as of 2014 the new threshold has indeed been changed to 90%, which

should decrease yearly aid as a whole, if not at least by a percentage of the total. In an effort to

shine light on the matter, an analysis of data provided by European Commission’s 2007 guide to

cohesion policy and Eurostat’s 2015 regional yearbook show that while total ESIF funds have

increased from the 2007-2013 period to the current 2014-2020 period, they have only done so by

just over 1%, from 347.4 BN to 351.9 BN; actually, this registers being even less than a 1%

increase when data directly from European Commission spreadsheets were used. Either way, the

increase is nominal, at best. Still, while total ESIF has remained relatively unchanged between

the allocation periods, what is more telling is the drop in total Cohesion Funds allocated

throughout Europe, dropping by about 9% from nearly 69.6 BN to 63.4 BN. More specifically,

as it relates to the Visegrad states in CEE, their cohesion funding has decreased by nearly 14%

from the previous funding period. This spells quite the challenge for Visegrad and their fellow

CEE states.

Questioning Development

And for what? How much growth has the EU’s ESIF programs actually contributed to

the growth had in the subregion of CEE? This question arises in Ognjen Mirić’s research to

which he notes the concurrence of many analysts that it is simply a difficult matter to establish

the actual impact of EU policies from other sources of economic growth, to include changes such

as democratization and institution building that have come with the general process of

Europeanization.133 He continues with the realization that contrary to initial public opinion,

inequalities amongst the regions would not be mitigated simply through a shared single market,

but rather that peripheral areas would continue to ‘lag behind’ the core states or regions of the

Union, and that this could bring into question the efficacy of the EU itself. Now, again, it is

understood that the CEE economy has improved since the initial post-Cold War period. “For

example,” as head of a Czech financial firm Jan Jedlička reports, “Hungarian and Polish GDP

levels were close to 50% of total EU27 in the middle of nineties, and, twenty years later, it is

almost as high as 70% of total EU27.” However, how much of this was made possible through

the implementation of EU policies such as ESIF, and the Cohesion Funds in particular?

In a recent report on whether the current convergence period, from 2014-2020, will be

enough to “give CEE a boost,” Jedlička reports that the appropriated funds would only be of any

real significance if CEE can achieve a 90% absorption rate, to which it is believed that “CEE

countries have a long road ahead in terms of improving their still low absorption.” At the hoped

for 90%, the Visegrad countries would gain .5 percentage points, on the average, which is just

over 20% additional growth in annual GDP that could be attributed to absorption of these funds.

20% additional growth certainly has some significance, as it is measurably higher than growth

had without these funds. Having said that, there is, then, growth that is had without these funds.

On the average, Visegrad countries have been measured to have a GDP growth rate of 2.375%

without these funds. In this context, having to be kept at the economic periphery for an

additional half a percentage point seems hardly as advantageous as might have been expected.

Still, this 20% growth, from the half percentage point, would only come with the required 90%

absorption rate, of which Visegrad is far from. Actually, the Visegrad average absorption rate is

closer to 57.7%, equaling a mere .32 percentage points of growth, or approximately 13.5%

additional growth in GDP that can currently be attributed to Europe’s Cohesion Funds. This

brings about some serious questions regarding whether the conditions set for access to these

funds is actually worth these measurably small benefits.

The bottom line is that there is a mixed review of the effectiveness of these funds, and

from some surprising sources. As European Commission economists Janos Varga and Jan in ’t

Veld summarize, “Empirical studies of EU Cohesion Policy have generally given only mixed

support for positive effects from large transfers,” explaining that “it is not evident to what extent

[increases in per capita incomes] can be attributed to Structural Funds interventions.”

Furthermore, other regions that have received similar assistance have remained relatively poor.

In short, They report that statistical regressions “show generally no significant impact from these

transfers.” In fact, according to European Central Bank economists, the funds transfers might have

characteristics of “immiserizing convergence,” or a positive effect on disposable income, yet a

negative effect on output growth from the region.

Take, for example, the change in the value of imports and exports, or estimated growth,

between 2000 and 2013, provided by the World Bank. It can be seen that imports rise even more

as a percentage of change than exports. Actually, this seems to be the general pattern across the

world unless, perhaps, the state is small, fragile, or heavily indebted. In comparing the

differences in export growth analyzed between CEE and the EU, one can find that the EU has

had considerably more growth over the thirteen years as a percentage of change, a near 40% rise.

This is considerably more than the near 20% achieved by the Visegrad states; that is

approximately 20 percentage points difference. It is concerning, as well, that the estimated

greater CEE average also performs better than our Visegrad representatives. Worse, from the V4

perspective is that even the small, fragile and heavily indebted countries of the world on average

fair better than the Visegrad four in this respect. Yet V4 and others generally still look to the

bright side.

It is true that CEE states tend to be very optimistic, at least more so than the EU average

when it comes to the cohesion benefits perceived from membership in the EU, as shown in

Figures 3.8 and 3.9; even amidst the related increase in unemployment which increased by over

50% from 2008, according to the European Commission, and by over 20% if taken from

economic ‘recovery’ the following year. These statistics have been felt by those in CEE, and are

not so easy to be glossed over. According to Eurobarometer surveys, CEE respondents have

shown that they understand this job loss to have come since their accession to the Union, and

they perceive their situation significantly worse than the EU average in 2012, as shown in

Figures 3.10 and 3.11.

With the convergence attempted through the years, it might be thought that their

percentage growths in production should be about equal, or nearing equality with core Europe.

Yet when the difference between the years 2009 and 2013 with regard to export growth are

analyzed, the greater CEE region and the EU still perform better than Visegrad, though the

percentage point difference with the EU is much smaller at 5% from 2009 rather than the 20%

from 2000. And yet, it must be remembered that the first leg of the quasi-Marshall Plan

discussed earlier, FDI, has also dropped since the 2008 financial crisis, precisely when CEE

begins to close the export growth gap. So, again, it is questionable how much the Union has

done to make that improvement toward convergence.

Returning to convergence through Cohesion funds, even European Commission

economists Varga and Veld believe that while cohesion funds boost per capita income in the

receiving countries, the follow on effects of this growth in consumption is akin to ‘putting the

cart before the horse;’ that rather than fund income for growth, instead we should find income

from real growth. They explain that, with real growth, “Liquidity-constrained consumption is

driven by employment and wage developments and is also generally higher. Wages grow in the

long run in line with productivity and, as productivity gains become stronger over time, incomes

rise.” Furthermore, Varga and Veld write that policies related to cohesion’s fiscal transfers and

increased income can lead to “inflationary pressures” and eventually “crowd out productive

private investment.” Therefore, as the benefits of these funds are in serious doubt, an

investigation of the manner in which these funds are used is required.

That is, since the efficacy of these funds remain questionable, not to forget the

aforementioned reduction of these same funds for the current period through 2020, the EU and

CEE member states have to take greater responsibility for how these funds are being used.

Implementation of EU’s Cohesion policy from 2004 to present shows there exists significant

investment deficiencies in the manner in which Cohesion Funds are earmarked towards, as

economist Gyongyi Csuka explains, “human and physical capital, factors which can improve

conditions for sustained productivity” and growth. This poses somewhat of a problem between

intention and reality, as the main goal of the Lisbon Strategy and its contributing Cohesion Funds

was set, as Kozak et al. notes, to “make Europe, by 2010, the most competitive and the most

dynamic knowledge-based economy in the world.”150

Consequences of Misallocation

With regard to EU aid to CEE, access to EU cohesion and structural funds stipulates

that monies are granted to area projects that offer the greatest return on investment; or, as

Bachtler explains, “the best added value and most effective results,” as well as doing so at a

“European level which could not be matched by national or local spending” alone. And yet, the

structural policies of the EU in the new members states have been consistent in insufficiently

preparing them for competitive entry into regional and global markets. Although it should be,

sociologist Tomasz Grzegorz Grosse reminds us that, “EU Cohesion policy is not aimed at

building national innovation systems; and the priorities related to developing an innovati(ve)

economy are not positioned as most relevant for the growth of less-developed regions.” This

exposes a lack of priority and/or a misallocation of resources.

As such, the allocation of Cohesion Funds used in CEE can be much improved upon

through their selection of programs funded. Further, evaluation studies for the European

Commission indicate a lack of strategy in the implementation of coherent development in these

same regions, in that there is little evidence of a strategic development concept. It is argued that

with too many activities and projects being attempted, significantly less value-added progress is

actually being achieved. Lessons can be learned in the lack of specific growth in CEE through a

smaller geographic scale in, for example, the reconstruction of East Germany – now wholly part

of Germany, and closer geographically and sentimentally than CEE. Here, the rather

indiscriminate distribution of capital transfers has led to less growth and development than could

have been possible had investment been more focused within competitive clusters of the

economy. The result is an eastern Germany still far less developed with relation to its western

half.

Another aspect of misallocation of funds with regard to the subregion is that the EU12 of

CEE have been allowed to use their funds primarily to develop infrastructure, affecting social

conditions and income. In an attempt to aid the social transition, CEE states, according to

Drahokoupil, have “offered higher subsidies for investments in high-unemployment regions.” As

well, another focus of politicians has been upon the implementation of farming measures,

tourism, and basic infrastructure regarding transport and the environment. Perhaps their

argument could be that in order to aid CEE economic regionalization investment in infrastructure

is needed to bridge supplier-producer logistics in order to spur greater growth, as insinuated

within a recent report on Visegrad integration within the Union. However, such policies are

simply limited and short-term in effectiveness. Investment in this direction, while perhaps a net

positive, is not as sound a concentration of investment for CEE, than having value-added

foundations.

Even the report above on Visegrad integration admits that further infrastructure was

followed amongst the Benelux countries after their accession to the Union. Benelux is a term

that likely needs no explanation; however, for the purposes here it should be underlined. It is a

political term for the territories that have formed the lowlands of northwestern Europe, and their

politico-economic fixture for centuries. It can be safely assumed that plenty of infrastructure was

already present well before their accession. Therefore, believing that infrastructure investment in

and of itself can spur economic growth is, again, the metaphoric equivalent of ‘putting the cart

before the horse.’ Now, it is not this author’s view that spending on social development is not

worthy; however, at the crux of it, this spending in of itself does not yield long-term economic

growth in today’s world market. It may even be argued that such areas invested in are, in

Drahokoupil’s words, “structurally handicapped” and have been artificially awarded investment,

as CEE states have not even had to spend 60 per cent of these funds, the EU requirement, on

issues compliant with the Lisbon Strategy – the knowledge economy. It makes much more sense

for CEE to build new endogenous high-value potential within their own periphery states.

The result of this misallocation has left a larger gap in industry development, enabling

other states within the traditional EU15 to further argue for a change in Cohesive Fund

allocation, from concentrating on the less affluent of the Union to those who show greater

economic competitiveness. Actually, Bachtler notes that according to the EU’s Third and Fourth

Cohesion Reports, the EU Commission has been heading in this direction as a means to make the

Union more regionally and internationally competitive by “mobilizing underexploited potential,”

in an effort to promote innovation. Perhaps, while it could be necessary to establish some

parameters in which natural nodes of competitive markets (western city centers, say) do not

completely out-compete their neighbors (to the east, for example) and drastically increase

disparities, the argument can be made that changing to competition-based cohesion funds would

be more inline with western ideals of capitalism. Perhaps it is so that the methodto-date of

substantial aid to the poorest states is too purposive in practice, and that aiding areas that may

capitalize more efficiently could have greater benefits. Furthermore, if the Union awards

competitive capabilities, rather than the economically weak who have joined, perhaps the

benefits from those more able would eventually spillover into awaiting and opportune areas.

Then again, if CEE is to receive significantly less in convergence funds to aid sufficient

economic development, perhaps the enlargement process itself, being much to absorb, was too

much, too fast; as enlargement has taken its toll on overall EU integration and cohesion.

The hope has been that with joining the EU CEE can grow in achieving similar

affluence found in Europe’s west, that economic convergence would be forthcoming. And for all

the rhetoric of positive growth in CEE due to Europeanization, Drahokoupil reminds us that,

“rapid internationalization in CEE came to a close in the mid-2000s;” and both exports and

foreign investment have dropped, pushing several countries into recession. It would seem that

EU investment and growth was forthcoming to see CEE through accession – ‘only.’ The fact

remains that there is a deep economic divide across the former Iron Curtain, with, in economist

Witold Orlowski’s words, a “rich West and poor East.” Perhaps these new member states have

benefitted from large financial transfers quantitatively, yet they have not improved their relative

competitive position in recent years qualitatively. It should be reiterated that the resulting

change that would come from raising the recipient threshold, mentioned earlier, and awarding

more competitive markets would decrease the original expectations that CEE had in joining the

EU. These changes would, in the end, further contribute to the disparity of economic abilities

between the core of Europe and those at the eastern periphery, as the lack of funds, then, would

continue to marginalize the CEE economies. The seeming inability of realizing these previous

hopes continues to plague the convergence of economic development across the EU. Ironically,

it would seem that the method used was likely chosen to guard against such results, as it has been

warned that a potential side-effect of integration would be the exposure of weak economies to the

stronger competition of stronger growth poles of the EU. Therefore, the maintenance of a two-

speed, or two-tiered, European Union with the unequal development and influence that it

accompanies will be, sociologist Valeriu Frunzaru believes, “an important source of tension and

also obstacles for the creation of a strong and competitive entity in global society.” Without the

means to overcome this, as Kozak et al. predicts, the possibility of EU disintegration will grow,

despite itself.

Therefore, Convergence, as it were, has faltered; and the divergence, as it is, is

characteristic of how CEE has become ‘integrated’ within the regional economy. In this

situation, the West has held a favored position with regard to finance, production and advanced

technology; the lack of which for CEE had constrained earlier strategies for a local direction

toward regional integration. As well, it has constrained CEE states’ abilities to direct the process

of production in direct benefit of local development. This presents the costs of CEE integration

with the European Union. It is not so much the lack of growth, albeit limited and declining, but

the lack of long-term, value-added, locally-sustainable development to bring CEE within

reasonable economic convergence with WEU. This can change, however, as the situation and

members’ relations are not everlasting; or in Drahokoupil‘s words, the “power bloc is not a static

coalition, but rather a dynamic process of coalition-building.” In other words, the interest groups

that came together in the name of integration can change, and should in hopes for the benefit of

the CEE states more directly. In light of this, an appropriate question might be: how might

Europeanization have been implemented differently?

What would the transition have been like had the EU12 acceded in the 2000s without

having had to accept the disadvantageous requirements that has accompanied FDI and Cohesion

Funds; yet still be allowed to integrate with EU structural support? Under such conditions, it is

understandable that FDI and other funds might have been significantly less than it had been for

the decade prior to the 2008 financial crisis, as it may have been limited due to the amount of

control it would have had over the subregion’s industries. Nevertheless, this counterfactual is

important as we look toward options for its subregional development – what could be done? And

it is this to which the societies of CEE together must respond; and that they must do so together

cumulatively, with their common voice. It is a point that will be returned to after a reminder of

the potential present within the CEE subregion itself. The fact is: CEE, now as a subregion, let

alone the individual member states of which it is comprised, is a minority within the European

Union it joined – an organization they joined to be given a voice or voices as relative equals;

however, it will only be in the consolidation of their subregion that their voices may be heard,

having been kept so long to a whisper.

Caucus for Convergence

The continuation of the two-tiered development policy in Europe which aids the core’s

ability to compete more adeptly in the regional and world markets, and yet only benefits the

periphery in terms of traditional development (resources and labor), can only lead to the

continual dependence of CEE upon the EU. This is addressed in a relatively recent study of the

Visegrad states, edited by subregional sociologist Sándor Köles. The study notes the

significant growth potential and profits had by western European companies in CEE, also seen as

a source of growth for the EU. It also observes that the record growth had by CEE states preceding,

and during the initial years of, accession must now be replaced with not only fiscal stability, but

also growth “based much more on savings rather than easy credit.” And Köles makes it clear that

those savings should be locally based. While conceding that this type of growth could be

significantly slower, the study reports, “development based on cheap external funding has been

replaced by development fuelled by domestic savings, which will thus be better conceived.”174 It

seems that only local sources can bring future growth in a sustainable fashion for the subregion;

and that this can be bolstered fittingly through solidarity amongst CEE’s

Visegrad states.

Subregional political scientist Tomáš Strážay explains, that this “solidarity is important

from the point of view of the cohesion of V4 countries in terms of strategic interests and

decisions,” as it may help to “protect the V4 from becoming a ‘multi-speed’ regional initiative.”

Now, as a more unified subregion of Europe, CEE has had its challenges. It has been

reattempted, almost haphazardly, many times. And it may be said that in its present form, its

Visegrad Group is relatively weak. Subregional expert Søren Riishøj notes that since EU

accession they have “rarely acted as a group.” They do have a joint declaration signed shortly

after accession from which to form a base of cooperation as new EU members; however, it has

yet to be capitalized upon. The lack of such consolidation, the lack of such conviction, might

perpetuate CEE to long be relegated to a status of relative insignificance. The Hungarian writer

Konrád did warn, “[W]e can only count if we’re together…If we fail to link Central Europe

together,…I fear, we will all disappear from the face of the earth together.” Still, there is hope

for Visegrad cooperation.

Greater convergence could be addressed by the CEE states, themselves, should they

attempt policies which cater more directly to their own subregional needs. That is, if EU policies

and realities are to change in a manner previously unexpected by CEE, then the subregion’s

participation in the Union should also be allowed to change along with it. In doing so, as

subregional scholar Wojciech Gizicki forwards, “the Visegrad Group can be an important

common front of action […] a kind of pressure group,” so as to become a policy shaper rather

than policy takers. And as current policy does not work toward the subregion’s long-term

interests, perhaps the EU should not play the primary role in the subregion’s development. In

fact, it has been shown, according to Grosse, that ”EU policies are more effective in a situation

where they play an auxiliary role to national activites.” It would seem logical, then, that both

FDI and EU aid should be complimentary to the national, and/or subregional, policies of the

member states.

Realizing this, and based on the principle of subsidiarity, they should take measures to

make change, according to their own interests. And as it is not the EU’s concern to build

innovative economies in CEE, and yet a network of such would prove to be more effective at

preparing these peripheral regions to better join the commmon market, CEE states should seek to

build an innovative economy in the subregion, together. In addition to this and the task of

rebalancing the powers of influence in Europe’s EU, there also exist numerous common interests

that the Visegrad states have as opportunities to pursue: from the particulars of trade within the

Eurozone, to migration and infrastructure, to energy independence and the expansion of the

subregion’s economic potential.

How to Cultivate Growth

This is an important area from which to begin. It is one less threatening than the topic

of defense, which follows; and it is one of fewer perceived obstacles that may stem from society,

and its related emotive nationalisms, covered previously. Here, within the economic realm, it is

possible to build upon the foundation of precedence. Just as the European Coal and Steel

Community brought western Europeans together for the purpose of peace and rebuilding, so

should a community be harnessed in CEE for the purpose of stability and development. In time,

this new community in the east of Europe could even come to be an influential caucus within the

EU, aiding in the development and representation of its associated members. The times,

however, between the still remembered chaos of World War 2 and the all but forgotten end of the

Cold War are very different, as are its principal actors. But while the Visegrad states may not

have the same impetus for delving into a similar scenario, on the matter of where to begin,

thankfully, a model for such change in the subregion has already been provided.

Subregional political scientists Jiri Blazek, and Marie Maceskova have offered a model

from which to work, called the “5S model.” It stipulates that monies must be used toward the

‘Stimulation’ of long-term economic growth, and that they must be rather ‘Selective’ so as to

avoid the dilution of precious capital. Drahokoupil can be used to expand on this as he argues

that by “discriminating among investors upon their potential contribution to the local economy

[…] they attract ‘appropriate’ FDI and [can then] attempt to cluster it in the regions…” in hopes

to harness “spill-over effects and industrial upgrading, reduc[ing] the risk of [investor] departure

by making it more local[ly] dependent.”188 Further ‘Support’ from the state, itself, should be

harnessed and its regions that benefit so as to provide increased cooperation in its facilitation;

and that locating the proper firms and industries to benefit from this cooperation might have a

combined ‘Synergistic’ effect upon growth. Finally, that the policy of ‘Subsidiarity’ remains

intact in the manner in which the central governments relate to a nation’s subregions; as well as

in the manner the EU’s central authorities relate to Europe’s own subregions. Blazek and

Maceskova summarize, “the model stresses the need to achieve synergies among different

policies and programmes and the need for mutual support [cooperation] between the relevant

actors on different governmental levels.” But a question, then, lingers as to how or even if

sources of external investment and/or aid would want to abide by these five stipulations.

Either way, CEE states will have to re-adapt to the requirements of the globalizing

market place. Significantly, a few short years following EU12 accession, FDI began approaching

diminishing returns resulting in FDI decline. This is compounded by the effects of the 2008

financial crisis, further reducing FDI investment into the subregion. While this means that less

profit was found since previous foreign investments, it also means that in reaching this threshold,

a measure of convergence, then, has been achieved in a few industries. Economist Michael

Porter says just as much when he writes, “Convergence arises when the potential for growth is

declining in the level of economic activity as a result of diminishing return.” In other words,

investors have seen sufficient growth that their investments no longer are able to garner as much

profit due to the presence of local growth. This might spell lesser profits for external actors,

though it also means greater opportunity for those present than had been previously available.

Perhaps it would even be possible to ‘piggy-back’ atop industries already ‘nurtured’ from this

growth. Now that the subregion is expecting less European aid and FDI, these industries and

cities are prime for re-investments toward domestic accumulation; and ideally with greater

support from domestic sources.

There is little doubt that local sources of capital would be highly advantageous, as this

would be more likely to have long-term contribution to the local economy, their development and

integration.192 There would also be the advantage of preferable refinancing options that come

with domestic debt that makes its investment more sustainable. As well, with regard to

convergence aid, as Grosse explains, greater use of local capital would also help to avoid the

“imported social redistribution schemes [simply] concentrate[ing] on raising the earnings and

living conditions of the population, rather than on initiating a comprehensive [sub]regional

development process,” which is necessary to narrow the development gap between the core and

periphery. Still, if European investors continue to show a lack of desire to participate in further

CEE development, and should domestic sources be slow to mature, Visegrad and others might

decide to invite a greater stock of Asian investment. According to an editorial, China has shown

the will to invest in the subregion, to the tune of up to $10 billion in credit, with hopes to have

reached a total trade volume 10 times that by 2015. In late 2015 it was reported that China has

made good on its efforts through 2014, though not quite near its goal. Through 2014, trade

between China and the entirety of CEE reached a little over $60 billion, or about 10% of

China’s trade with the entirety of Europe.

While it may be that preference should be given to domestic investment sources, it is

true that external assistance is often important. However, regardless of its origins as Grosse

states, “it has to be directed towards the stimulation of the internal potential, and thus to be aimed

at the mobilization of self-activating processes of endogenous development,” and fostering

”cooperation networks[,] grouping development-oriented regional [public and private]

institutions.” As such, the subregion’s governments must come to be more selective of

“investment proposals that meet local developmental requirements.” For, in order to promote

long-term development, to eventually sustain the subregion in(ter)dependently, the focus should

be on promoting a means for this internal dimension – utilizing resources to generate innovation

within. Now, while this has not been a focus of FDI, it does not mean that foreign capital could

not be utilized in some measure to achieve this endogenous development. Perhaps it could be

harnessed to better cultivate CEE, without necessitating majority control or ownership. At least

there is evidence that some external investors might have interest in seeing growth within a more

select area of the economy in CEE. A difference, between both the development of CEE

preaccession as well as the rebuilding of WE post WW2, would be that rather than focusing on

development of the industrial economy, for today’s day and age, CEE might focus on the

knowledge economy and its related value-added industries.

High Value Markets and Knowledge

What complicates convergence, and thereby integration, increasingly so is the leaps in

technological developments, with which have come a change in the measure of economic

growth. Previously, the basic factors of production – land, labor, and capital – in the form of

resources and accessible transit, labor costs and market proximity – were guidelines to growth

and provided the recipe, based on their endowments, that states should follow to integrate within

the specializations of the global economy. However, the world economy has changed. Today,

we have what has come to be known as the ‘knowledge economy,’ related to information

processing and high-tech skills. It is reflective of technology and know-how that has much

greater influence upon economic growth, as its increased demand has established it as an

integrated and desired ‘factor of production.’203

Due to this change, a developing nation wanting to eventually achieve similar success

as a developed country through modern industrialization already has a steep hill to climb. This is

now made steeper, still, thanks to technology and the competition of the knowledge economy.

Not likely having an abundance of skilled labor or capital, developing states have always had to

attract them in some fashion for greater development, whether or not this would eventuate into

national or domestically derived skilled labor and capital. Now, with the knowledge economy, it

could potentially increase this ‘barrier to entry,’ so to speak, as these lesser developed countries

are now even further behind – not just in having to attract capital, but now having to invest in it

for generations, potentially, before possibly being competitive in today’s era of globalization. A

look at some general numbers is enough to give a decent perspective of their challenges.

Already CEE education expenditures are nearly 18% lower than the EU average, and

it is still focused more on older and traditional growth than states in Europe’s west. According to

the World Factbook, as a percentage of GDP, CEE depends on agriculture nearly twice as much

as WE, and it is over 15% more dependent on industry, while behind by nearly 8% in the service

sector. On the matter of the technological exports related to the knowledge economy, according

to data from the World Bank, the EU average has a significantly higher proportion of

technological exports as a percentage of their manufactured products. Even a combined number

of all those within CEE, to include the Baltics, pails in comparison to Germany. This is likely

related to the importance paid to the percentage of GDP expended on research and development,

in which the EU is spending much more than the average for CEE.208 And even the EU average

is far below, and with limited progress, to the target set of 3% by the European Commission for

2020. These patterns of investment must change, and are likely to pose somewhat of a challenge

to CEE states.

Nevertheless, if this is what it takes to properly compete in today’s economy, then it

must be started at some point – and the earlier for policy to move in this direction, the better.

There should be no question that CEE states are going to achieve greater equalization by

concentrating greater efforts toward development of the ‘knowledge economy’ within the

subregion. CEE needs to channel its investments into innovative and high value-added

development, to modernize their own endogenous resources, by supporting universities, small

and medium sized business, and research centers associated with high-technology. This will

allow the subregion to eventually become competitive within Europe, as well as to enter the

global market more effectively. In time, investment of CEE’s knowledge economy would yield

great structural improvements for the EU as a whole; and there is one place in particular where it

is best possible to capitalize on this.

Networked Metropoles and Clusters

Metropolitian capitals, naturally, have become the main host and beneficiaries of

globalization, as cities have an obvious advantage for concentrated growth. If and or when it

comes to using Cohesion funds or any other means of funding growth, the decision between

applying these toward universal national growth across the board or toward competitive locations

for more efficient use of investment, major cities in CEE are where this increased capitalization

can take place. Geographer Peter J. Taylor explains, ”(t)he starting premise is that cities are

essential loci for any sustainable economic development. Cities are where the processes that

generate economic growth are concentrated.”213 It is here that the dynamism of the labor force

and capital available are that produce the synergism for development.214 Analysis done within

ESPON finds that changing to a more competitive-based orientation, Kozak et al. write, “would

lead to the concentration of economic activity in the so-called Pentagon regions, [of WE, and,

consequently,] a relatively limited number of growth poles […] in more peripheral areas.”215

These Pentagon cities of London, Hamburg, Munich, Milan and Paris are so successful that the

measure of activity in major cities of CEE pale in comparison.216 This seems to be supported in

the measure of urbanization provided by the World Factbook, which shows that CEE is about

15% less urbanized than the EU average.217

Still, this is not to say that all would be lost, or that this could definitively relegate CEE

to the dust bin of development in the shadow of WE’s economic prowess. As we address the

development of states, generally speaking, but particularly the states of CEE, it is necessary to

consider the status of its most able metropolitan areas, as it is within these more capable cities

that we are likely to see a more marked increase in development from investment added –

indeed, a bigger ‘bang for the buck.’ No doubt this is the reason why so much FDI was

213 Taylor, op. cit., 158.

214 Taylor, op. cit., 158-160; see M.E. Porter, “Clusters and the New Economics of Competition,” Harvard Business

Review 76, issue 6 (November/December, 1998): 77-90; and J. Jacobs, The Economy of Cities (New York: Vintage,

1969); and E.L. Glaeser et al, “Growth in Cities,” Joumal of Political Economy 100 (1992): 1126-52; and R. Florida,

The Rise of the Creative Class (New York: Basic Books, 2002).

215 Found in: Kozak, Opala, and Samecki, op. cit., 290. See: European Spatial Planning Observation Network,

ESPON Project 1.2.3: Identification of Spatially Relevant Aspects of the Information Society, Final Report

(Luxembourg, ESPON Coordination Unit, March 2007),

http://www.espon.eu/export/sites/default/Documents/Projects/ESPON2006Projects/ThematicProjects/InformationSo

ciety/fr-1.2.3_fin_revised_march2007.pdf

216 Gorzelak, Bachtler, and Smetkowski, op. cit., 329 and 331.

217 The World Factbook, op. cit., Urbanization.

concentrated in CEE’s capital cities. As European development expert Jan Maarten de Vet

underlines, “The Re-invented capitals are the unrivalled growth engines of [CEE’s] national

economies.” In fact, in the years leading up to Europe’s ‘big bang,’ the cities of Warsaw,

Bucharest, and Vilnius achieved an average annual growth rate of more than 7 per cent, 3 per

cent higher than their respective national figures. They have large urban centers with skilled

labor, research and development facilities; as well as the greater presence of physical logistical

infrastructure, and the potential environment conducive to attracting opportunities. Yet, perhaps

it is not enough to simply concentrate development in and around city centers. Development

might grow exponentially more if interactions amongst these cities find new priority.

Traditionally, it has been found that smaller actors, such as the CEE states, require the

aid of larger actors in order to reach success. This is also the viewpoint of Köles’s study on

Visegrad integration, as it is written, “Integration between less developed countries does not

cause rapid economic development. These less developed economies generally rely on a

modernsation centre (an ‘anchor’) that often lies outside the strict boundaries of the region.” As

this relates to the subregion, Drahokoupil describes this as a “hub-and-spokes structure between

the West and the CEE,” where “each state in the region […] relate[s] to the others principally via

its relationship with the Western hub.” Peripheral Dependency Theory explains this privileged

position of Western Europe upon that of its expanding east. It is here along the periphery, where,

as political geographer P.J. Taylor puts it, “capital is sucked to its core,” perpetuating the

proportionality of underdevelopment of the periphery, as “such regions supply primary

commodities…for the benefit of others.” The dependency of the peripheral states has already

been shown to set these states at a disadvantage, formalizing their satellite status to Europe’s

economic core. Still, perhaps, the declining nature already put forward regarding FDI and

convergence aid will somewhat diminish the established western-centered relations had amongst

the subregional metropoles.

With this in mind, and having, then, the mind to rectify their path for development, the

subregion should take action in encouraging its own ‘central’ position in Europe – so that it may

utilize its location between East and West positively, so that it may realize its growth potential.

Instead, the structure should come to resemble more of a honeycomb, where clustered firms and

cities through public and private partnerships might, in political sociologist Wendelin Strubelt

words, “become the locomotives for the other less-developed ones, pushing or pulling them,”

into a more self-sustainable subregion. If nothing else, as political scientists Susan Birgerson and

Roger Kanet may have predicted in 1995, “Given their shared frustration with […] the West, all

these parties might be expected to reestablish economic links among themselves,” which, in this

author’s opinion, is central to sustainable subregional development. Konrád may have said it

best, when he wrote, “Central Europe’s cities will remain irredeemably provincial unless they

come to see themselves a parts of a metropolitan constellation.” The key, here, is to link these

metropoles into a value-added network, where development need not end at the cities’ limits of

this honeycomb of subregional cities.

As growth expands from the city centers, even if diminishing with greater distance,

their expanse potentially reaches that of other city centers. As P.J. Taylor outlines, this, then, has

the potential of harnessing through Central Flow Theory the combined potential of multiple

metropoles for even greater growth. This mirrors the writings of economist Michael Porter who

wrote on the synergisms of clustered firms. Here, the extrapolation could be one that capitalizes

on clustered metropoles – to create a spillover into related industries in nearby locales – having a

sort of Porter-Monnet combined effect. And as specialization were to lead to higher levels of

interdependence between firms and their cities, this common localization to be harnessed in CEE

could potentially be the ‘yellow brick road’ to the subregion’s development; particularly if it

were to enhance local ownership and investments. Still, at the ground level, so to speak, Porter’s

ideas on business clusters could take a more direct application, as he had originally intended.

That is, interrelated firms could be harnessed to drive CEE’s economy forward.

According to Porter, a cluster is “a geographically proximate group of interconnected

companies and associated institutions in a particular field, linked by commonalities and

complementarities.” It is, essentially, an agglomeration of industries within a familiar

comparative advantage that is, then, able to achieve a synergism where the clustered ‘whole is

greater than the sum of its parts.’ As already argued, CEE states should seek to expand upon,

even if to create, clusters within the knowledge economy. In addition to this, according to data

from the World Factbook, CEE states already have a number of industries, perhaps a local

comparative advantage, that seem to be popular imports for rich countries, such as: machinery

and automobiles, oil and gas, chemicals and minerals. If not already, then, this is an

agglomeration with potential synergisms just waiting to be taken advantage of. But not all agree

with the benefits of agglomerations. To return to Köles’s report on Visegrad integration, he

believes that successful economic cooperation can find trouble with countries of similar

comparative advantages. As well, Mirić writes that “the concentration of economic activities in

agglomerations can also create negative external effects (such as traffic congestion, urban

collapse, exhaustion of natural resources and ecosystems) and can lead to under-used economic

potential in other regions.” However, Porter’s own research, and his collaboration with others

prove the benefits of these business clusters.

Porter’s research finds that “positive spillovers across complementary economic

activities provide an impetus for agglomeration;” and that these “spillovers” come in the form of

“increasing returns,” as well as higher rates of employment.236 Other benefits include “lowering

the costs of entry, enhancing market and innovation opportunities, and allowing firms to leverage

local resources,” such as through the sharing of technical know-how, as well as the pooling of the

labor market. Porter also finds that as these clusters grow, specializations can form within

regions as well as competition between them. This, then, returns us to the aforementioned

clustered firms, to clustered metropoles, to the clustered subregion. It is possible with time, and

given the opportunity for success, that the synergism and spillovers would spark a

dynamism in these lands that might extend beyond, connecting both east and west.

Subregional Gateway

As for the east, dissatisfaction with EU development and integration is also present in

Eastern Europe, across the historical Curzon Line between East and West. As states in CEE and

EE are both interested in capitalizing on their own comparative advantage, the task for the

Visegrad partnership should be to cultivate their shared capabilities. Economically, support for

small and medium-sized enterprise development would be a step in the right direction, focused

on desired themes at the local level. Both the concentration on linking local firms, and focused

efforts in key industries could be sufficient in beginning to bridge the divide. Taken together,

deconstructing the Curzon Line in the construction of partnerships could come to resemble the

aforementioned Porter-Monet spillover into other industries and onto other levels of cooperation.

In this manner, greater energies put into higher-valued industries could capitalize on the joint

competitive advantage that these states share within their subregions.

Other technical areas, such as transport, logistics, and tourism have already been

identified as achieving success in cross-border integration with EE states; more easily than, say,

the energy sector. And, while this is most certainly the case, were the situation to become ripe

for such a venture, local cross border initiatives in energy also show much promise. For

example, both Poland and Lithuania continue cooperating on shale gas exploration. In fact,

according to an energy study, a CEE energy arc exists from Bulgaria, through to Hungary, and on

to Poland and Lithuania. Poland, alone, has enough “recoverable gas” to fill Gazprom’s Nord

Stream pipeline for close to a century; not to mention the other states along the Curzon.

Expanding this cooperation to Ukraine, where much transit infrastructure lies, might greatly

enhance economic development, as well as energy diversification. CEE could also end up being

a major thoroughfare for trade with Eurasia, home to two-thirds the world’s population and half

of the world’s GDP. However, any discussion on energy will inevitably, and unavoidably,

involve the interests of other neighbors, i.e. Russia as a major provider of energy resources, and

Europe being a major consumer. Here, it should be underlined that both East and West should

have the opportunity to use this ‘burgeoning’ bridge across Curzon symmetrically rather than

asymmetrically; an issue with which the rest of Europe would eventually need to come to terms.

Whereas previous policies had decoupled CEE states from Russia and the former Soviet

Union, and made them exclusively closer to the West, new policies towards subregionalism in

CEE could more effectively bridge trade and other relations between WEU and countries to the

east, Russia being but one example. After all, there is much more further afield for CEE than just

trade with the EU. Perhaps a worry for the European Commission, they estimate that over the

next decade “90% of the world’s growth will come from outside the EU.” This need not,

necessarily, be deemed an attempt by the CEE states to balance others against the Union –

although one could see it being a card to play. Rather, the desire to open up trade, for example,

with countries to the east is wholly within reason. Even in the 1990s, when CEE states first

began to experience the cost of opening up to the West, maintained protections against

agriculture and steel, for example, Poland began to flirt with the notion of increasing trade with

Russia. While that was then, and politics are different now, as an economic base from which to

progress, realizing CEE space as a conduit or gateway for trade between East and West is a

good example of utilizing its central location in Europe. And with a base in Visegrad from which

to maintain cooperative links, and the Porterian business clusters, CEE could highlight this

central position, in a similar manner described by P.J. Taylor through Central Place Theory, and

harness the flow of commerce across its plains, as put forth through Central Flow Theory.

In all, much can be done to improve economic relations within CEE, as well as with its

neighbors further east. Even so, with all of its possibilities, in a reminder applicable to the

Visegrad states of CEE, Russian scholar Vladimir Kolossov writes in relation to improving cross-

boundary cooperation (CBC) between the EU and Russia that, “the effects of communications

and transit are more considerable if cross-boundary personal and social networks already exist,

and if there is more trust among officials and ordinary citizens.” It should be of little dispute that

increased political distance between East and West is no answer to bridging the divide (political,

economical, cultural, or otherwise.), and should not be sought for the stability and security of

‘the lands in between.’ In fact, it is quite the opposite, states along the periphery should be

brought even closer to better improve stability. As Kolosssov summarizes, “Isolation leads to

ignorance, ignorance gives rise to mistrust, and mistrust is a key obstacle for cross-boundary

cooperation[;] [t]he best medicine against isolation is circulation…the more contact with the

neighbours, the more objective and benevolent is the attitude to a neighbouring state.” However,

if increased ‘circulation’ were to be perceived as a political or economical threat, then its efforts

would likely be for nothing, as reactionary measures would return to maintain or restrict this

threat. Therefore, these measures must come accompanied by, if not be derived from, the urges

of the local communities across the borders, and equally accessible by others, ‘larger’ states, to

the west and east, as intended under the original French proposal.

Unfortunately, this is not yet popularly so, as Kolossov reminds us, “Geo-economy is

subordinated to geopolitics.” This is, for example, the case in a Baltic region called Narva:

historically a location much contested between Sweden, Germany, the Polish-Lithuanian

Commonwealth, as well as Russia. Here, along the Narova River, separating Narva, Estonia with

Ivangorod, Russia, high politics continues to separate these two small towns at the expense of the

local inhabitants. This artificial restriction shows in the manner that some feel, along the

Russian-Estonian border that other states further afield (France and Italy, for example) are

actually felt to be much closer due to the ease of travel to these locations – quite paradoxical

considering the distance. To make matters worse, in 2007 the Estonian government chose to

remove a monument of a WW2 Soviet soldier from the center of its capitol city of Tallinn, which

did not sit well in Moscow. As a result, business transit dropped by 40%, significantly affecting

Estonia’s GDP. This benefits no one. This is also presently the case with regard to trading

sanctions against Russia, and their retaliatory sanctions against EU products. Increasingly, CEE

states are voicing their concerns about the negative effects upon their economies, with some

discussion to end their participation in the debilitating sanctions. While it may be politically

practical, it has no benefit for the communities in which it negatively affects. A change in trust is

somehow in order.

Not only is greater trust necessary, but a radical change with the border’s customs

procedures, making its transit less costly and more timely. Two possible examples to build from

are between Russia and the two countries of Finland and Poland. In the first case, the generally

very time-consuming customs control takes place upon a high-speed train between St. Petersburg

and Helsinki; and in the second, due to new use of technologies, a single joint Russian-Polish

border control replaces the need for the redundant double process. Norway has even proposed

the creation of free economic zones between its larger cities across the borders.260 Such changes

between Russia, its satellite states and Europe could invite other opportunities for transit with

CEE states as well, crisscrossing CEE like a gateway between East and West. Proposals have

already been made: the ‘Baltic Way’; the ‘North East West Corridor’; as well as the ‘Northern

Dimension’ program. As well, at present a project is under way to replace the smaller-gauge

railway between the old Soviet borders with Austria and even Germany, connecting the

TransSiberian railway between Europe and Asia, possibly increasing railway traffic between by

60 percent. With such changes, one could easily envision utilizing CEE as a conduit for trade

with Asia. According to Kolossov, trade between Europe and Asia is worth $600 billion per year,

and is growing. And while much of this is currently done via oceanic trade, easing these land

borders could become quite economical – and would benefit all involved.

As shown in this chapter, CEE’s multiple transitions in relation to its neighbors has

never been easy; even the celebrated one surrounding the end of the Cold War and CEE’s

accession into the EU. This round, however, even though CEE’s choice to join the EU was

voluntary, today’s primary difficulties seem to emanate from a very basic nature common within

relations amongst states, and that is the balance amongst its actors. There was no balance in

relation to the power of economies between EU’s WE states and those incoming from CEE prior

to accession; and there is little wonder why this persists in being the case today. Differences

were so profound that simply bringing CEE in from the cold, and into the warmth of the Union,

has not been sufficient in bringing CEE’s socio-economic progression at pace with its western

partners. Further, WE states’ own actions show that, while an interest, it is not a priority; and

from a realist perspective, this is understandable. Along with the above outlined changes to be

made, that CEE states might want to take into consideration, they and their neighbors might find

the impetus in the changing world around them – and it is this to which we now turn our

attention in the next chapter.

CHAPTER IV

PRESCIENT INTERNAL CRISIS: EURO INSTABILITY

Simply put: The European Union’s project of the Euro is a story of a failed experiment.

It is one that began in the background of European states’ own national interests. And it is their

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persistent differences, or simply their individual natural national wills, that quickly emerged in

the foreground to roost within financial crises spanning well over a generation, and persisting to

this day. While the Euro’s progress has come quite a long way, its trajectory has led it into a gray

zone: one that has attempted to move fiscal and monetary decision-making to the regional level,

at the expense of national sovereignty; yet has also proven unable to reign in the ability of some

to take advantage of loopholes within the system, affecting sovereign members now feeling

trapped within the system. These conditions have set the tone for the currency’s own fragility,

traceable to the Community’s early years, as they have historically shown differing member

views of money’s utility.

Introducing Euro Instability

These first three chapters have presented the history behind subregional cooperation in

CEE, and covered faults within the subregion’s integration within the EU, both socially and

economically. Nevertheless, it is useful to remember that states of CEE, like the many other

states in the EU, were swept up in what the Union seemed to have on offer: development and

stability – progress. The previous chapters should serve to show that neither have been entirely

successful across the board for the Union, but particularly so as we focus on the subregion.

However, if these internal points of interests and dissatisfaction are not enough to draw proper

attention to the subregion, then permit an investigation into a couple external, yet associated,

issues that help to highlight potential avenues to greater CEE cooperation. That is, as

subregional sociologist Sándor Köles believes, it may actually take some type of crisis to

sufficiently alter the status quo; if not at least the need to take its potential subregionalization

more seriously.

The first scenario underlines the fragility of the EU’s project of the Euro currency.

While this work is meant to show the viability and necessity of CEE subregionalism within the

Union or without the Union, certainly, the threat of the ongoing Euro crisis is presented due to

the possibility that were the EU to fragment or buckle under the pressure in any way, it would

give even greater cause for the Visegrad states and others to band together in solidarity. The fact

is, the EU has compartmentally succeeded in progressing from its post-WWII birth, yet not fully;

and the truth is that it has had its own problems with currency solidarity and stability since its

very early years. This can be seen in the manner that its main impetus for growth, integration

within economics, has not been met with unimpeachable success. While positive words might be

said for its tenacity in pushing forward nevertheless, should the Euro currency experiment fail or

falter, calls for greater national (or subregional) autonomy may become the norm – to which

greater subregional socio-economic cooperation might provide a measure of stability.

Europe’s Road to Monetary Union

Europe’s monetary union can be followed through its own tale of treaties and

committee reports – treaties and reports often ushered through by crises, competition, as well as

shear persistence. The success of Europe’s early common market encouraged the budding

community at the 1969 Hague Summit to gradually progress to a functioning economic and

monetary union. The Werner Report, which followed, aimed to make inroads upon this goal; yet

there was some reluctance within Werner and the European Council to reconcile themselves with

a more ambitious transnational alternative. Most noteworthy of their attempts was to align their

fluctuating exchange rates, in the form of a ‘monetary snake.’ However, significant internal

variables halted the efficacy of this arrangement. The simple explanation is that each country

had its own monetary, as well as fiscal, policies; the differentiation of which as it pertained to

their national interests made it nearly impossible to align the tunnel to match the movements of

the varying currency exchanges. The ‘tunnel’ was not big enough. Significant external variables

further reduced any possible success of the “snake and tunnel.” Still, even with these setbacks,

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in economics scholar Barry Eichengreen’s words, there remained a “forced march to monetary

union.”

After the realization that the “tunnel” was simply too claustrophobic for the times, the

‘snake’ was allowed to float within a wider stream, so to speak. This European Monetary

System, in short, was a more tenably flexible ‘pegged’ system. It allowed for much greater

fluctuation while anchoring it to a single European Currency Unit represented by all participants’

currencies. Nevertheless, it was still constrained by the national interests of some to over-inflate

their economies. Not deterred, their answer was to push for greater unification. Neofunctionalist

efforts to prepare for a more integrated monetary union came with the Cockfield Report, which

led to the Single European Act (SEA) of 1985. The SEA, according to Eichengreen, attempted to

resolve what had been lacking: “streamline decision making within the EC so that priority could

be given to the collective rather than the national interest.”

With the SEA and the subsequent Delors Report, it would seem there existed an almost

unidentifiable optimism for the regional economic convergence during this period, as their texts

were replete with words reminiscent of the Treaty of Rome, such as “rediscover,” “relaunch,”

and “renew.” Perhaps for good reason, as it was the SEA and Delors Report that stand as the

primary steps leading to Maastricht just a few short years later in 1992; attempting still greater

harmonization between the states’ central banks through the European System of Central Banks

(ESCB), and greater decision-making power upon a transnational level, and to finally fixed

currency parities. The treaty laid out convergence criteria for new members and a three stage

plan toward ‘complete’ economic and monetary union: free capital movement, establishing a

European Central Bank (ECB) for greater convergence, and a single currency thereby fixing

exchange rates. However, due to the Community’s historical reluctance to grant extra-national

powers to an authority outside the European Council, the latter two stages were left rather

obscure as to their implementation.

This was a point of contention, a point made in 1989 for example by eminent economist

and former central banker Norbert Kloten, due to the repercussions of such imbalance between

national and community interests; and as such Kloten believed that the transition to greater

transnational authority (stages two and three) should be short, if not shortened. Perhaps this was

intended to veil the inadequacies of converging centralization; perhaps it was meant to rush past

market alternatives that Delors reportedly did not have much trust in. Whatever its true reasons,

in the absence of transnational oversight, Maastricht proceeded to the present without the ability

to enforce monetary and fiscal discipline – except merely to remind nations of their obligations

to adhere to prudent economic guidelines, known as the Stability and Growth Pact (SGP), which

has progressed little, but in name, since its inception. Now, while this does set the Euro up for

the fragility witnessed today, it is not sufficient by itself to effect Europe’s current crisis.

What the brief outline above between national versus Community interests fails to

accentuate is the dichotomy that has existed between the means to achieve Europe’s rebirth; and

how the utility of money was to be used to benefit European growth. That is, stability and

growth do not necessarily trend equal and parallel: a stable economy does not necessarily bring

about the same level of growth desired by governments just as strong economic growth does not

necessarily bode well toward a long-term stable economy. Europe was in need of both following

World War II; yet as a whole, they chose to grow at the expense of stability. It is helpful, here, to

focus on two primary actors within this debate: the two founding countries of the Community,

itself, France and Germany.

Now, while all of Europe lost the war, Germany was its biggest loser. And this left

France in such a position that with Schuman’s Plan to incrementally integrate functional aspects

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of French and German industry (coal and steel), it also served the French ulterior motive to

accomplish its own, and Europe’s, rebirth via the newly instrumentalized regional yoke placed

firmly upon the German economic engine. And it would do so with French flare, or in economic

historian M.B. Lynch’s view, French political leadership and economic tone. Yet, this German-

led growth has come with significant growing pains, as Germany’s own version of money’s

utility has been markedly different from those of France and other southern European countries.

The European (i.e. ‘French’ or southern European) consensus to curb the restrictive

German Bundesbank’s policies are addressed below.

Ordo-Liberalism on the Mediterranean?

The consensus to rebuild Europe upon alternate foundations from pre-war Europe may

have been virtually unanimous; however, the choice of which foundation was most appropriate

was a topic of much debate – and it remains so. At the outset of World War II, two economic

visions of Europe stood as possible pathways: the classical liberal vision and the socialist vision.

These may be seen as broader categories from which more particular forms, capitalism and

communism, had been discredited if not at least severely challenged during the interwar period.

Here, classical liberalism refers to government’s reliance on the markets, with minimal if any

intervention; whereas socialism favors the intervention of the state within the markets. In fact,

one might argue, it is the regular chafing between these philosophies that has had kept

Europe in a regular state of economic flux to this day, even amidst any perceived progression.

What did bring Europe together following the war was the consensus to regrow, and

economics scholar John Maynard Keynes already had their answer. In the desolation that was

left of Old Europe, the market (private companies and consumers) had little ability and will to

begin the initial motion of market productivity. Keynes, in his wisdom, believed that

governments could, and indeed should, be used to spur the exchange of goods and services, to

artificially intervene in the market if necessary. Quite opposite from conservative Ordoliberals,

Keynes believed that the government knew better than the market and had a responsibility to

intervene. The use of public spending (which would eventually amount to deficit spending) into

the economy would set the European market back on its feet. This, of course, was quite

attractive within Europe and employed with great success in the first couple decades of the

European Community; though some members exhibited much more alacrity and tenacity toward

deficit spending than others. Nevertheless, even amidst such growth, Europe was not able to

ignore the economic elephant within their new common market: Germany, which had instilled

within it a very different point of view for stability and growth.

“Ordo-liberalism” with its emphasis on minimal interference was alive and well within

Germany, and other like-minded governments following the war; and some had good reason to

be after having experienced the hyperinflation of the inter-war years. Because of this, the

Ordoliberals of the German central banking community were devoted to a stable non-inflationary

currency, which is not a traditional match with Keynesianism, and therefore at odds with much of

the rest of Europe. Now, the Germany economy, naturally upon its wealth of capital and central

location (CPT), outpaced others in the community creating a growth imbalance within the

budding Community. And during a time attempting greater economic convergence this

difference in growth amongst European economies exposed the initial difficulties of monetary

integration. The difficult lesson learned on the road to the European and Monetary Union (EMU)

was that the European economy would be unchangeably linked to the German economy; and

powerful as it has been, the latter would eventually have surprisingly little input toward the new

European monetary regime.

In the1970s while the European Community attempted to stay within the “snake and

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tunnel,” external economic variables substantially enhanced the fiscal and monetary problems

within Europe. The global breakdown of the gold standard and the oil crises prompted many

governments to continue state intervention in the form of massive inflation, rather than to allow

markets time to rebalance or to pursue difficult measures of austerity. Here, inflation occurred

for a couple of reasons: continued deficit spending, supported by inflation, was deemed

necessary to cover the drop in market activity within states; as well, inflation as its own recourse

was deemed useful as a means to devalue a state’s currency thereby increasing exports.

However, not all states inflated in unison; Germany’s central bankers at the Bundesbank refused

to inflate the Deutschemark (DM) as much as their contemporaries in the Community.

These variable rates in inflation created strong fluctuations in the exchange rates

between currencies, favoring the value of the German DM, and making it very difficult for other

countries such as Spain, France and Italy to remain inside ‘the tunnel.’ Due to the strength of the

German economy and its DM, other state currencies were pressured to conform to its monetary

policy, yet not happily nor always so completely, even through the subsequent EMS and SEA.

And due to pressure from its neighbors, the German Bundesbank became increasingly worried

with the Community’s rate of inflation as it was forced to intervene increasingly, as it revalued

the DM, to aid in the convergence of the European economy. This is the result of attempting a

monetary union of economically disparate states: flux. This is what the conservative leadership

of the Ordo-Liberals was meant to help control; yet it was unable to stem the tide of frivolous

fiscal and monetary policy. So far overshadowed, in fact, had the Bundesbank become that even

after more formal limits of inflation had been agreed within the community, Germany also

reached inflationary levels, inconsistent with formal policy; enough that sanctions should have

been imposed, as others had deserved. It is this pattern which has led the EU into its current

economic crisis, one inadvertently kindled by: Werner, Cockfield, Delors, and even Schuman.

With the Maastricht Treaty, members have technically not been allowed to finance

budget deficits, yet their ability to do so is part and parcel of how the Euro crisis came to be.

And, as if having been foreseen, members have also not been allowed to bailout other member

states. The Treaty was very clear on this. According to Article 104b of the Maastricht Treaty,

“The Community [to include individual member states] shall not be liable for or assume the

commitments of [anyone] without prejudice to mutual financial guarantees for the joint

execution of a specific project.” The danger of a state finding itself in such a need for a bailout

was much greater, perhaps, prior to the Euro as each state had control of its own monetary

supply, free to expand its monetary supply base and spend in Keynesian fashion at will. And yet,

while individual states no longer had this control over monetary policy following the issuance of

the Euro, their will to continue found a way in that they are still able to deficit spend based on

their ability to independently issue currency ‘credit’ in the form of their sovereign government

bonds. Their issue and purchase result, essentially, in bailouts becoming all but official policy.

In the past, while still a suboptimal system of currency support, the ECB accepted

government bonds from third parties within the marketplace. The markets, then, still had some

measure of influence upon the governments’ roles. Yet, since early 2010, the ECB has taken a

more direct role. Not only are sovereign bonds allowed on the market, but the ECB has taken to

purchasing these bonds outright. At present, even under the strict rubric of Maastricht, states

have been allowed to continue running high deficits through their remittance of government

bonds via the aid of the ECB. The direct purchase of these sovereign bonds by the ECB is an

attempt to bailout troubled high inflationary states, in a bid to save disruption of the Euro

project. In order to do so the ECB’s capital base was predicted to double, when the ECB

signaled a marked increase in the purchase of government bonds. Finance columnist Carl

Mortished commented, then, rather sarcastically that in Europe’s predicament, feeling it had no

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other recourse in its crisis of inflationary exuberance, that the ECB would purchase massive

amounts of sovereign debt through “quantitative easing (QE) on a colossal scale;” that it was

acting more “like an alcoholic who has leapt off the temperance wagon to indulge in a final

binge” rather than a responsible institution meant to aid economic stability.

This presents a situation that should be addressed in some manner. Europe has a crisis

that has originated in, and with a shown pattern of, over-inflation; and even though the EU has

attempted to restrict member ability to reinflate, economist Philipp Bagus explains that the

leadership now believes that “the ECB can and actually must print money in order to support

economic policies.” This is current policy, when it should be plainly clear that an attempt to

spend their way out of debt is an oxymoron. More than this, as inflationary spending has now

moved to the regional level of the EU, it seems that the ECB’s combined role with supervision

and regulatory responsibilities, in addition to its role in monetary policy, sets up a moral hazard

where the ECB has no substantive accountability to others in these dual roles. As a result of

ECB policies, political economist Willem Buiter believes “There is a risk that the Eurozone

central banking emperor, while clutching frantically to the fig leaf of formal, legalistic

operational independence, could turn out to be wearing no politically legitimate clothes.”

Wherever one happens to stand on this issue, there can be little argument that the Euro

project today remains fragile, and its cause has been the mixed economic policies of its member

states – if not more directly, its lack of adherence to sound money. And, as it stands, the ECB

efforts to tame the economic crisis have, instead, served to exacerbate it. Because of this, there is

also doubt that the current Euro crisis could be quieted within a greater politico-economic union

of the EU member states. This would either postpone discontented voices from speaking out, or

provide enough ‘cover’ so as to keep those voices quiet, wrapped up in ‘ever closer union.’

As previously mentioned, it was the bipolar policies of the EU which has led the

members out into turbulent waters; and that were they to have committed themselves more

completely toward either an interventionist, even if it be inflationary and centralizing in nature,

or toward a non-interventionist market approach that it would likely prove more stabilizing than

at present. And if history is to be a guide, its trajectory over the decades of muddling along as it

has does not leave much room for optimism. Credit rating agencies, such as Moody’s, also do

not seem to have much regard for the EU’s “’muddle-through’ strategy.” Standard and Poor’s, as

well, has seen Europe’s attempt at economic recovery since the crisis to be nominal, at best,

especially as external variables have recently come that are likely to put additional pressures on

Europe, such as the rise in the U.S. federal interest rate and the economic slowdown in China, the

latter of which is on its second consecutive year. The Economist newspaper also notes that even

with the recent drop in oil prices, which should aid in boosting consumer spending, the

Eurozone’s growth has proven to be more anemic than robust, and the ECB’s inflationary policy

of quantitative easing (QE) is not likely to aid EU’s growth.38 Instead, as the newspaper’s

authors believe, policies and circumstances may put us right back to where we started, sitting

upon another crisis. Nowhere is this exemplified better at present than in the immediate crisis

surrounding Greece, and its still possible ‘Grexit’ from the Eurozone.

To Chase a Euro Tiger by a Greek ‘Tale’40

In the case of the crisis in Greece, the government did not save enough while the

economy boomed prior to financial troubles; and since this time the government has been unable

to cover its debt. Greece has only survived this far through the compliance of foreign financiers,

and that its debt continues to be financed through the sale of its government bonds.

As Bagus explains: once, or “if foreign banks stop buying or start selling Greek government

bonds, the government may have to default” on its sovereign debt. But this is not the only

avenue to sovereign default.

In early 2012, Greece defaulted on its private debt, and since this time Moody’s has

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consistently reported that without some manner of fiscal consolidation of its sovereign debt,

which is substantial, that Greece’s economic situation will only worsen, and its risk of sovereign

default would rise. The IMF concurs, and that if Greece is to avoid eventual default on its

official debt, sovereign debt restructuring is necessary. Just to give an idea of Greece’s debt

realities, according to Moody’s in the summer of 2015, Greece has had “the largest sovereign

bond exchange in history, with US$262BN of debt caught in the exchange.” Compare that to the

Argentinian or Russian debt crises of the past, US144BN and US73BN respectively. The sum is

simply insurmountable for Greece following its current trajectory, even considering the most

optimistic of possibilities to pay down its debt. Even finding a way to pay down its debt would

not be conducive to any attempts to allow for any meaningfully robust economic growth in

Greece. Some path other than to ‘pay’ under austere conditions should be allowed in order to

keep Greece and its affects upon the Eurozone stable. Alternatives of such may be seen

elsewhere, Iceland, for example, where the nation chose to hold the risk-takers and gamblers of

weak investments to account.

Iceland did not bail out the banks and instead negotiated a significant reduction in debt

with the foreign creditors. The country’s steady ease out of the crisis is an example that slogans

of “too big to fail” may simply not be correct. In some manner or another, it was a method of

debt forgiveness. This might also be fitting within the Eurozone today as some members may

simply have no other means to recover for the long-term. However, former EU president

Herman Van Rompuy once said that the Icelandic approach would not be forced upon the

investors.48 Perhaps this is more a political decision than a sound economic one, as the majority

of investors within the troubled economies inside the Eurozone come from large states, such as

Germany, France, Italy and the United Kingdom – who, of course, have no interest in voluntarily

suffering a loss on their investments. The result of which leaves Greece with little room to

maneuver, except to increase the stakes in bargaining.

At the apex of the most recent political crisis that surrounds the Greek/EU financial

crisis in the middle of 2015, Greece defaulted on $1.5B owed to the IMF, and would have

defaulted on close to $10B to the ECB had it not been for the deal reached at the end of summer.

The tension that accompanied the associated Greek-Eurogroup summit meetings is indicative of

the strong beliefs held by both sides. Greeks, to include its elected government, believe that the

country’s debt was due to the policies of previous officials and should not assume responsibility

for the intense austerity measures prescribed by opposing officials; whereas the finance ministers

that represent the Eurogroup have little more patience for subsidizing Greek delinquency, under

the belief that states should own up to their debt. These feelings lead to the brinksmanship

shown in summer, as The Economist printed, “breeding contempt among the creditors and

resentment among the debtors.”

An example of this brinksmanship was witnessed during the Greek-Eurogroup

negotiations. During the summer negotiations, EC President Juncker presented a veiled threat

when he announced that “We have a Grexit scenario prepared in detail.” With this statement, he

wanted to show, on behalf of the Eurogroup, that there was little choice for Greece unless it was

fully prepared to depart from the Eurozone. There was, in effect, no room for Greece to find

compromise. While Greeks voted in referendum to oppose austerity, they also chose to stay

within the Eurozone, thus giving ample strength to the Eurogroup to essentially resubmit the

same austerity program Greece had been trying to avoid. And in all the logical recommendations

for debt restructuring, as noted at the summit according to Daniel Harari, a researcher at the UK

House of Commons Library, it was decided that “none of Greece’s debt will simply be written

off.” This could imply conditional restructuring following positive Greek performance, yet

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others see conservative ministers intent to punish Greece, as if to make it an example. The

understanding that was reached states that additional loans would be provided in return for

severe austerity; however, it does not seem that either side has accepted the eventual default that

is likely to come.

Moody’s cites some significant implementation obstacles with which Greece must

contend: such as that the “Greek population remains highly ambivalent towards the deal, […

along with] Greece’s weak institutions, and its poor track record of implementing the conditions

of financing support.” Furthermore, Greece has a less-than-stellar record of bankruptcy,

spending 50% of the past two hundred years in bankruptcy. These facts, along with the external

China and US variables, and absent a fiscal union, leaves an eventual default a high probability.

Another concern is that Greece is in a veritable Catch-22: where the government is damned by

the will of the people if it follows austerity, and equally damned by the will of the Eurogroup if it

does not. Being in such a predicament, as former chief economist for PricewaterhouseCoopers

Harry Broadman believes, the Greek government is likely to follow a similar path to that of the

Union, itself, in kicking the proverbial ‘can down the road,’ as it attempts to institute just enough

austerity and reforms as possible to absorb the bailout payments in piecemeal. But, like the

Eurozone, this policy is likely to fail, particularly as the state continues to spend increasingly,

with a debt to GDP ratio at the end of 2015 near 200%, shown in Figure 3.12. But for as much

that is spoken about Greece, it is not alone in this economic crisis.

Other Tales to Chase

The long-term trouble that the Eurozone countries have is not simply a Greek problem,

nor its potential “Grexit.” It is not even, directly, a sovereign debt problem. Yes, in the case of

Greece, it does have substantially more government debt than private debt, and some of this is

due to unwarranted government expenditures; however, as The Economist explains, often it

happens that massive private debt is later converted to public debt. This means that stemming

from the high levels of private borrowing in European economies, when the recession came and

the economy slowed, the fear of bank failures hastened the explosion of sovereign debt as states

moved to nationalize the burden of these private misfortunes. In this sense, as The Economist

reports, “exploding sovereign debt was the symptom rather than the cause of the crisis.” And in

this very manner, other states have found themselves in a similar predicament as Greece. It is not

just one, or a few, small state(s) that stand to test the mettle of the Euro experiment, but other

larger states of the Union, to include its core region.

For years, other states in the Union have seen troubles. As the periphery has seemed to

stabilize in relation to the core, Moody’s reports that the latter has actually begun to deteriorate.

Fortunately for some, such as the second- and third-largest Eurozone economies (France and

Italy), as consulting firm Strategic Forecasting (Stratfor) reported in 2014, the EU was

overlooking their mismanagement of policies, subsequently bringing up questions of the Union’s

own credibility. And yet, Spain, France, and Italy do not yet seem deterred as their debt

continues to increase; not abated as seen by the still high fiscal expenditures that they maintain.

Portugal, for that matter, as Stratfor reports, although its public debt to GDP is much less than

Greece’s, at about 130%, when one includes the state’s corporate and household debt, Portugal

holds more debt than any other country in the Eurozone. This is indicative of key core countries.

Even when Standard and Poor’s reported at the close of 2015 on “Global Sovereign Rating

Trends” that they had three positive outlooks and only two negative ones, they qualified any

optimisms in noting that “the combined GDP of the sovereigns with negative outlooks

(France and Finland) is almost 37 times as large as that of the sovereigns with positive outlooks

(Cyprus, Malta, and Slovenia).” And, again, present variables – such as: low oil costs, EU QE,

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the U.S. Fed rate increase, or China’s slow performance – have failed or have been deemed little

able to mitigate Europe’s malaise.

The fact is, many European countries (to include Germany) had run internal public

deficits with the intention to spur growth. Yet, even through the good times prior to the Great

Recession, as Eichengreen admits, “Keynesian demand stimulus provoked increased wage

demands, not additional output and employment” as had once been the hope. Still, the

temptation for easy growth had often been too great to close the fiscal spicket and cap the

monetary inflation that accompanied it. Yet, these countries, not far behind Greece, are rarely

mentioned as potential causes or reasons for Eurozone fragility. The result, merely if the crisis

were to be maintained at the periphery, could end up playing out as Eichengreen had predicted in

2010, a Latin-style lesson of the 1980s: a lost decade for Europe. The potential of such may

simply entail another approximate half decade of low growth and investment. It also may, as in

journalist Gareth Harding’s words, have “condemned millions of Europeans to decades of

penury.” Either way, it could prove more devastating than what has been experienced thus far if

core states continue along their path. Even though central and northern states, such as Germany

and Finland, have also expanded their economies to some extent, it is questionable whether there

is deeper interest to continue along the same lines as the southern spending and inflationary

states. There have been attempts, albeit muted, to curtail such policies in the past.

The Stability and Growth Pact (SGP) was adopted prior to the Euro’s introduction, for

the very purpose of mitigating the affects of national wills inside the EU. It was meant to put

reasonable fiscal limits on debt and public spending: by requiring all members to respect fiscal

discipline, and by keeping an annual budget deficit no higher than 3% of GDP as well as a

national debt lower than 60% of GDP. The present turmoil, actually, developed as it became

known that a number of member states had not been following the SGP guidelines, over

spending and issuing more sovereign bonds than which they have been able to cover, thereby

reducing the value of their bonds; and, in turn, the Euro. The Fiscal Stability Treaty signed in

2012 is essentially a reiteration of the SGP, yet, just as previous, France and Italy, particularly,

but also Portugal and Spain, have continued along their same path either oblivious or without

care for consequence. This is, in Bagus’s view, “the tragedy of the Euro,” that there exists no

means to enforce the SGP. In light of this outright defiance in the use of the community’s

currency, it is pertinent to ask why some states have chosen to keep the Euro.

Why Keep the Euro?

Unfortunately, neither in individual states’ monetary systems, let alone the greater

Eurozone area of the EU, Bagus informs us, “property rights in money are not adequately defined

or defended, giving rise to inflationary credit expansion … produc[ing] a tragedy of the

commons, leading to an overexploitation of resources,” and where the ECB’s artificially low

interest rates encourages overspending.73 The ability to issue money or expand its supply with

relative ease has historically tempted such inflation;74 and the sheer ability, then, to print money

or to issue further bonds allows the acting central bank to monetize its debt which, then,

redistributes purchasing power from the populace to the banks and/or government, who are

already benefitting from the bailouts. For example, according to international politicoeconomics

consultant Dan Steinbrock, “90% of the [previous] two bailout monies in Greece have been used

to rescue major European private banks, especially in Germany and France.” This may seem

outrageous, but it is not as if it is an easy task to prevent the ECB from taking such measures.

Now with the ECB in place, independent of the Union, when as political scientist Amy Verdun

reminds us from the Treaty Article 107, “politicians may not even seek to influence the ECB,”

states have no real authority to coordinate ‘de-intervention’ to prevent such policies themselves.

The ECB, effectively, now has control.

On a certain level, the ECB as the purveyor of monetary policy in Europe is, political

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economist David Howarth says, “the principle victor in terms of real power,” at least

institutionally. That is, while the ECB was meant to copy the Ordo-Liberal policies of the

Bundesbank, from the inside where its council is comprised of the presidents of all national

central banks, the conservatively-minded voice of Germany is outnumbered by those in the south

who have been more prone to Keynesian policies of debt, deficits, and inflation. In this sense,

perhaps economists Charles Wyplosz, Stephen Nickell, and Martin Wolf are correct in calling

this reversal from a generation past a central banking “coup.” For certain, it is safe to say that

inflationists have thus far prevailed, despite warnings from remaining Ordo-liberals such as

former Bundesbank president Poehl. No doubt, the Ordo-liberals of Europe are disappointed in

the manner that the EMU has worked wonderfully for the Community’s high inflationary

countries. It would seem that the latter are the real winners when it comes to the Euro project.

Howarth goes as far to say that it is France that has succeeded in constraining the DM, and in

gaining an “autonomous voice in setting Eurosystem monetary policy”. However, Bagus

believes more broadly that, “Southern Europe has control over the ECB”. And it is their

changing influence which has allowed them to take greater advantage of the Union’s monetary

policies.

This approach, now long pursued, has ultimately not been tempered in Europe’s past

with enough capacity of reason to prove enough is enough. There is some logical reasoning to

this, being that these inflationary states have been incentivized to continue their wayward ways.

So long as their bonds are accepted, they will continue to issue bonds in order to finance their

expenditures. Absent the political will to exercise the principles of sound money, it would seem

the incentive is for states to externalize their own costs within the Eurozone and continue

expansion in debt, in an effort to profit from the redistribution of wealth. Bagus explains: “The

incentives to run high deficits in the EMU are almost irresistible. […] only if a country runs

higher deficits than the others can it benefit. You have to spin the printing press faster than your

peers in order to profit from the resulting redistribution.” The proven result is, as previously

argued by former research associate at a federal reserve bank Paula Hildebrandt, that with the

continued incongruencies in economic growth, inflation, and deficits: “stronger members would

bear the financial burden of bailing out heavily indebted members.” So long as this practice

continues to be allowed, inflationary states will continue to benefit from the wealth that flows

into their countries.

The above outlines strong reasons why many in the Eurozone support its continued

existence, particularly under present policies as they have much to gain. However, even though

it has been announced in 2012 that member central banks no longer have to accept sovereign

bonds as collateral (i.e. Greek bonds), the status quo is still likely to remain as the inflationists

are not the only states that stand to benefit. As it turns out, even the Ordo-liberally-minded

Germany has good reason in appeasing France and others. While it may be commonplace to

believe that Germany accepted the Euro in a bid to secure its own reunification, according to

scholar and European integration specialist Andrew Moravcsik, its main motivation was “to

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Steinbock, op. cit.

promote its own economic welfare through open markets.” Again, Germany is the main

economic engine of Europe; its resources and central location support its position as the main

producer and exporter within the Eurozone. So, not only does it benefit from having captured

the Eurozone market, but an under-valued Euro also allows it to competitively export outside of

Europe, alongside other states that earn great trade surpluses due to their own weak currencies,

like China.

As such, it is in Germany’s better interest to avoid a collapse of the Euro, and its virtual

“golden egg.” So, while it is fiscally wise to advise austerity policies to troubled member states,

Moravcsik acknowledges that in order to promote greater convergence, Germany must actually

“move to increase its public spending, wages, and consumption at a faster rate,” believing that

“this would help bridge the competitiveness gap between surplus and deficit countries.”88

Economics scholar Paul de Grauwe has written for the European Commission similarly as he

advises that debtor countries should contract, while creditor countries should expand their

economies. Without such a compromise, the Euro project will continue to feel the friction

between conservative and expansionary policies.90 It may be argued that Germany, despite any

rhetoric, has been moving towards this policy for some time: from readjustments made during

the ‘snake and tunnel,’ to the continued allowance of a weak Euro, to its own spending patterns

going against its own conservative traditions; Germany may, indeed, attempt to maintain the

status quo by bridging debtor-creditor behavior. However, this would be a game changer as it

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Steinbock, op. cit.

would be a change in the very nature of the country’s economy, and this would profoundly effect

how the Eurozone is viewed by other member states.

Smaller, newer member states already feel discouraged with the notion that their views

are not deemed as important as the core EU states. While Visegrad states had perceived

Germany as a stabilizing influence in Europeanization, they also have opposed a stronger role

for large member states, like Germany, during the Lisbon Treaty negotiations. Political scientist

Hubert Zimmerman further argues a significant drawback that comes from this, noting at the

inception of the Euro, “that many societal interests were not able to voice their views in the

negotiations, thus opening a democratic deficit which will become virulent as soon as the

Eurozone pursues policies which have a deep impact on the prerogatives of elected

governments.”

What is more is that even after acceding to the Union, and having to accept the stipulations at

Lisbon, V4 and other CEE states have conceded under the belief that the older and larger

member states were competently guiding the Union; however, rhetoric regarding the Euro has

been rather inconsistent: austerity amidst bailouts, fiscal guidelines yet no discipline for

enforcement; and through all of this, Euro authorities have ‘undermined its attraction.’

The Euro has not reversed the decades of trending growth decline. From the CEE

perspective, alongside the Eurozone, itself in a funk of stagnation and inflation, CEE states have

also been “in a growth limbo.” 94 Even the many states in CEE that are not within the Eurozone

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Steinbock, op. cit.

have currencies that have weakened alongside of it. Conservatively-minded Poland and the

Czech Republic have been at odds with the ECB’s policy of inflation, no doubt due to their more

frugal nature. Hungary, taking a different stance but still in disagreement with EU policy,

specifically austerity measures, has argued on grounds of national sovereignty that it will not

tighten fiscal policy. By itself, Hungary is significant enough to create ripples within the EU’s

Eurozone, though it could potentially snowball if other members along the eastern periphery join

the resistance to center-led austerity measures. Perhaps Slovakia, the only Visegrad state within

the Eurozone, should serve as a warning for the other CEE states still thinking to join the

Eurozone.

For Slovakia, according to Slovak economic analyst Juraj Karpis, many now have

second thoughts – doubts that they had made the right decision to join the Euro at the time that it

did. They see the cost now of Euro solidarity, redistributing wealth within the zone, and

question the quality of benefits that had been initially supposed would follow with use of the

Euro. Deals made with Greece are often seen in CEE with disdain. From their vantage point,

they had struggled for so long to be admitted into the Union with legitimate prospects of joining

the Eurozone, and they see Brussels and traditionally conservative states like Germany as being

too soft on Greece.100 In light of this, other CEE states should wait: wait until the Eurozone

states have some modest growth, and wait for the Euro to regain decent stability, if not

significantly

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Steinbock, op. cit.

100

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strengthen. Perhaps other CEE states should wait until the Eurozone finds greater balance and

equality amongst its member states: resources, spending, trade balances, etc.; as Czech

economic theorist Marek Loužek recommends. Perhaps the other Visegrad states should wait

for the EU to finally establish an optimal currency area.

After all, a consistent need for the EMU’s success and proper convergence has been to

establish an optimal currency area (OCA), yet the Eurozone has never been characterized as

exhibiting such qualities. Unfortunately, it was argued that an OCA, which is slower to form if

not already inherently present was not right for the times; or, at least, it would take too long to

establish. Instead, it was thought better by France, for example, to move more quickly toward

‘monetary union,’ believing that greater formal integration itself would bring about economic

convergence. Even following the launching of the Euro and the establishment of the European

Central Bank (ECB), the single market fell short of an OCA due to a number of reasons: low

intra-migration, lack of intra-fiscal transfers, and the lack of convergence toward the labor

market. A proper OCA is also meant to consist of like members, having similar wealth, growth,

resources, and markets. And the absence of it, economist Stephen J. Silvia explained prior to the

Great Recession, “leaves the national economies within the euro area vulnerable to inadequate

adjustment to asymmetrical shocks.” These problems have left some amount of trepidation

within EU members.

According to Eurobarometer surveys, there is both some support and some worry with

regard to use of the Euro. It is true that the majority of members feel that the Euro is on balance

positive. 61% of respondents believe it is a good thing for their country, with 71% believing it

good for the EU as a whole, even amidst the belief that inflation will continue. However, it

would seem that these respondents are more in favor of the idea of the Euro than of the project

itself. Take Greece’s respondents, for example. Greece, obviously dissatisfied with the affects

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that austerity and low growth that has come with the Euro and its recession, had an impressive,

above EU respondent average, 65% believing that the Euro remained a force positive for their

country, and 73% believing it good for the region. They, more positive than the EU average, are

in a more dire economic situation than many and should actually want to shed the weight of the

Euro. At the same time, another survey taken specifically of EU members that have yet to adopt

the Euro, their responses were decidedly more negative. When asked if non-Eurozone members

were ready to adopt the Euro, 79% of respondents answered “no;” with an increasing majority,

from previously polled, believing that it would be negative for their nation and for their person,

shown in Figures 3.13 and 3.14. This was particularly so for Poland and the Czech Republic,

having higher negative responses than the average. The dismay expressed in the surveys begs

the question as to whether the EU and its Euro are delivering the progress that had been

promised them, and the greater EU for that matter.

Legitimacy of EMU

It has already been argued that since the Lisbon Treaty there has been a question of

“input legitimacy,” in the way of democratic representation, equality of membership, and the

challenges that regionalization has put upon membership sovereignty. However, economists

from the Centre for European Studies; Cizia Alcidi, Alessandro Giovannini, and Sonia

Piedrafita; writing for the European Parliament also discuss the problem of the EU’s “output

legitimacy,” and the success rate of the Union living up to its assumed responsibilities. Alcidi et

al note that, “The crisis in the euro has exposed serious shortcomings in the output legitimacy of

EMU,” with regard to its “ability to avoid or deal with negative externalities emerging from

shocks in individual countries.” Their answer to this lack of legitimacy, considering history, is

not all too surprising, unfortunately; nothing short of greater convergence through regional

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centralization – all the while being critical of the relatively centralized EMU’s ability to delivery

growth and stability to date.

Ultimately, Alcidi et al would like to achieve full political union, but knowing the

challenges to this they recommend, instead, greater fiscal union in the attempt to patch the failed

architecture of the EMU. It would seem that rather than taking issue with the source of the

matter, the EU leadership have used the crisis to present the need to move toward greater fiscal

cooperation. Why these economists would believe that a more centralized institution would be

willing and able to maintain a realistically achievable common budget, considering Brussels’

willingness over the decades to appease the Mediterranean states is little other than wishful

thinking. While there are a number of ways that the crisis can play out, as Alcidi et al note in

their report, The Economist reported that it is the consensus of European leaders to allow for

greater fiscal transfers within the Eurozone. And though the ECB has been indirectly bailing out

trouble states through the direct purchase of their sovereign bonds, the economists further

advocate that members, through the supervision of the Union, directly transfer wealth from

richer states to financially troubled states in the Union, which remains open to much criticism.

Another reason to be critical is the manner in which Alcidi et al believe the EMU lacks

“output legitimacy,” believing that it is “due to its inability to assure price stability,” as if this

were the monetary union’s “main task.” This is nothing new, of course, as this has been policy

since the time of Delors, if not before.114 But a more accurate and opposing viewpoint comes

from the Austrian school of economics, which would declare more directly that the main

monetary policy of any contemporary central bank should be currency stability. Price stability,

then, would simply be a symptom of currency stability - sound money; rather than a circuitous

process of chasing relative price stability for its own sake. It must be remembered that the ECB

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has altered its originally inspired guidance of Ordo-liberalism and maintaining monetary

stability

(i.e. low inflation) to a much different policy of Keynesian-based price stability.

Economics scholar and Mises’ protégé Murray N. Rothbard explains that as modern

Keynesian monetary inflation tends to stem not from an increase in base commodity worth but a

mere expansion of bills of credit based less and less on the original valued commodity of choice,

monetary expansion at the behest of public deficit spending has a double and sequential effect

upon the economy. While at first it may maintain price stability through the influx of currency,

inevitably the market adjusts to the expansion of said currency through a parallel rise in prices.

Price stability, then, is only maintained by the lag in time for the market to react to the

expansion of credit, thereby increasing the need to inflate and subsequently bestowing an

artificial sense of relative price stability. As Buiter has acknowledged, when attempting to

maintain price stability amidst variable inflation, the combination risks the preference for

inflation in an attempt to bid down prices. In other words, the ECB’s current policy of

maintaining “price stability” seems merely a euphemism for inflationary policies to aid

governments in the fruitless hopes of spending their way out of the debt crisis: instituting

inflation as a means to chase prices. Political economist and Nobel prize winner Friedrich

Hayek explains this well with his metaphor of ‘chasing a tiger by its tail:’

“Now we have an inflation-borne prosperity which depends for its continuation on

continued inflation. If prices rise less than expected, then a depressing effect is

exerted on the economy. … We now have a tiger by the tail: how long can this

inflation continue? If the tiger (of inflation) is freed he will eat us up; yet if he

runs faster and faster while we desperately hold on, we are still finished!”

It is difficult to be optimistic towards the Euro when the EU has proven time and again to

support policies that tend to undermine it. Is the public to suppose that a more extensive

monetary and fiscal union will put an end to the generations of internal squabbling as to which is

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the most stable means to unify the continent? If history is to be our guide, were greater

centralization to actually prove anything, more centralization would simply continue to provide

a weak and unstable currency, resulting in deficits and debt, that satisfies some internal budgets

at the expense of others. Perhaps, instead, alternatives to the status quo might serve the EU as a

whole, at least subregions, better and provide a real impetus for greater harmonization and

unification.

Alternative Scenarios

As it stands the Euro has failed to prevent the constant decline of EU growth over the

decades; rather, as a paper from the Václav Klaus Institute correctly notes, the Euro has instead

presided over its continuation. With the direct purchase of government bonds by the ECB,

comparable if not lower rated than junk bonds, the ECB is allowing states to further decrease the

value of the regional currency. That is, not only does the process spur inflation, through QE, and

thereby reduce the value of the Euro by expanding the money supply, but the capitalization of

ECB’s assets in the less-valued government bonds (such as those of Greece and others) also

devalues the Euro even further. It is highly doubtful that all members of the EU wish to ‘bank’

on a weak Euro currency. Some must object; if no longer Germany, then other still

conservatively-minded states. While the Memorandum of Understanding (MoU) signed in the

summer of 2015 with regard to Greece, economist and editor of Mises Daily Ryan McMaken

believes, is a “victory for the European creditors in the Greek crisis, and the demonstration of

ECB power over a local political system, [it] has undermined the efforts by advocates for

political unity in Europe,” rendering “the call for European integration [to be] fundamentally

about coercion and transferring power away from local populations to the machinery of a central

state.” This has been Europe’s path, and yet it has proceeded along with significant member

differences.

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With the disregard for the SGP and Fiscal Treaty, Stratfor sees a divergence in

Eurozone unity; one that might eventually rekindle individual nationalisms in Europe as their

differences become more acute. Traditionally this is where north and south, relatively speaking,

have diverged. Analyzing the crisis, Loužek pointedly underlines that a major divide exists

within the Eurozone, and it has quite a past. The Mediterranean states have over two centuries

of significant default history.123 The southern subregion’s biggest offenders being Spain and

Greece: the former having had thirteen defaults, with a quarter of its time in bankruptcy; and the

latter having six defaults, with, astoundingly, half of that time being in bankruptcy. This history,

based on divergent capabilities with central states is the primary obstacle toward the Eurozone

effectively establishing an OCA and a proper financial and monetary union; as well, of course,

the questioned desire of individual members to share the wealth and risk with which it would

come. It is true that Europe already has a divided Eurozone; and Loužek believes that another

crisis might not necessarily spell the end of the Euro. Instead, presuming Germany is to

maintain its Ordo-liberal origins, then what may result is a more formal division within the

Eurozone, between the northern and southern members.

Understandably, this is not the desire of the Union.

Europe’s unification, if it were to be the penultimate desire, would best be served

through the economic unification from which it was inspired, even through the Euro, but upon

wholly different means. While a most unlikely scenario, it would be necessary to rid the Euro of

its fiat nature. In other words, the Euro would actually have to be based on some commodity,

with 100% reserve requirements, and based on the principles of free banking. It might seem

difficult to fathom in today’s day and age, as it requires fiscal discipline, basic banking

regulations, and trust in the market. However, it is actually not such a far flung notion. In fact,

less than a century ago, the western world still adhered to this through the gold standard. It was

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a system that worked quite well until protagonists of the Great War suspended convertibility,

adopting inflation, in order to finance their own participation. Most important, here, would be to

return legal tender to the market, where it serves society, rather than giving that power to

governments for them to serve themselves. These conditions present the best case scenario for

European peace, stability, and unification. Again, though, it is an unlikely one. Therefore,

another alternative, assuming that the EMU is to continue as is without returning to sound

money, is for members to distance themselves from the Euro. This most certainly should be a

consideration for those not already in the Eurozone; but what of the others, such as Slovakia,

already inside?

It is widely believed that there is no exit; that is, that there is virtually no exit from the

Eurozone. While, of course, it is still possible for a sovereign state to cede from the Union and

reinstate its own monetary and independent fiscal policies, it is widely believed to be a very

costly endeavor. It would likely entail significant loss of international reputation, along with the

loss of trade and economic credibility. Eichengreen writes that its members are “irrevocably

locked” within the European Monetary System, explaining that “attempting to exit the euro area

would be the equivalent of burning down your own house in order to find a way out.” Further,

any significant departure from the EMU (other than the few who have “opt-out” agreements)

would require a complete departure from the European Union itself. However, with the power of

the ECB near absolute and virtually unaccountable to its members, perhaps an exit is now the

only recourse; and it is possible to do so. The Lisbon Treaty does allow for EU secession, and

one might argue that with decades of Maastricht violations, overspending and bailouts, that

member states have an obligation to their constituencies to move towards the exit – to throw off

the yoke of the Euro. Conservatively oriented states that have been paying towards those more

profligate might end up benefitting in their standard of living, by no longer having to

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unnecessarily contribute their wealth to others following policies so drastically different than

their own. And here is where greater subregional cooperation can prove of great use.

As noted, Slovakia has already begun to question their own role within the Eurozone, as

Karpis has noted, believing that the state entered into it blindly. And yet while the other

Visegrad states still feel that the Euro could one day be a net positive for them, they are hesitant

today and their willingness is likely to sour if the crisis continues to worsen. No doubt they

should heed the warnings of those already dissatisfied. Their combined voices, and mutual

support for each other, would be useful, if not necessary, were one or all to wish to distance

themselves from further economic deterioration caused from the Euro.

As shown in this chapter, the EU has made regular progression toward a centralized

monetary policy, even with the obstacles along the way. The obstacles, in large part, have been

complicated by the battling ideals of differing economic values. As it turns out, ultimately, the

lesser of the two has been winning thus far: an attempt to spend one’s way to wealth. This path

has benefitted many states, yet still treads fundamentally against other states’ sovereign ideals,

such as those in CEE. In the end, as all member states have their expectations of benefits and

progress, the lack of which centering on the Euro presents a question of legitimacy when it

comes to the path of monetary union; and instead it suggests that membership should look to

alternatives. The crisis, here, should prove compelling, as it was upon the lower links of

cooperation – largely based on economics – that EU success has largely stood; and yet it is upon

this mantle that it may, actually, be most susceptible to collapse. Here, it is interesting to

juxtapose this: where instead of observing the lower links of economic cooperation, somewhat

successful, we should turn to the ‘higher links’ of security and defense. This is a level which has

generally been elusive to EU member cooperation, but which has been comparatively successful

with Visegrad.

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CHAPTER V

DEFENSE: A SUBREGIONAL SECURITY REGIME

This chapter tackles the assumption that Europe has escaped its tumultuous past; that it

has succeeded in progressing from history to a union at peace. In truth, for all of its success, the

EU has yet to ally itself toward a common foreign and security policy. In fact, not only has it

not done so, Europe has simply been unable to overcome its differences to a degree sufficient for

security cooperation. That this state of the union has persisted for over 50 years is troubling for

some, and worrying for others --- and likely to persist as a whole. The Eurozone crisis is but the

most apparent example of disunity on the continent, and a source of fissures possible in coming;

the Ukraine crisis might complicate this. The focus of this chapter, then, is to investigate within

Europe’s cleavages whether the prospect for a subregional security regime across Mitteleuropa

might serve its associate members more satisfactorily than the often spoken of, but

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nonfunctioning, European security that has been aspired. It is the conclusion of the author that

states between the Baltic and Black Seas are moving toward this alternative path, toward a more

independent subregional security regime. This need not, necessarily, conflict with the

established security architecture of NATO or a proposed structure of European defense. Rather,

Central Eastern Europe’s prospects in forging its own security regime may indeed be the

foundation, perhaps the necessary transition as well, for an emerging continental-wide program.

A Dissatisfying Tale of European Security

The tale of European security is, on the whole, best described as the lack of it. Taken

with some perspective, the history of Europe has been fraught with conflict, resulting in rivalries

that have made reconciliation difficult, if not only temporary and often only in dire

circumstances. Take for example, France, at the heart of Western Europe, it alone had a number

of enduring rivalries with Spain, the Habsburgs, Germany, as well as Britain. Germany, entering

late into empire and notwithstanding its nemesis in France, found Great Britain as a formidable

opponent leading us into the Great War. This has simply been the case among the major powers

within Europe – of the United Kingdom, France and Germany, as well as with powers relatively

on the margins of Europe: Russia and Turkey.

Frustrated with internecine rivalry and stifled on the European continent, Europe set

outward, both by land and by sea. Those that went by sea had better results, as powers that

attempted expansion eastward by land were abutted by those other formidable powers on the

margins: Russia to the east, and the Ottomans to the southeast. These latter powers on the

margins of Europe had also sought expansion, and while they were successful at empire, they

still encountered heavy resistance at these common fringes. One such region stretches between

the two European seas, of the Black and Baltic. If for no other reason than its geographic

location, Central Eastern Europe (CEE) has been a belt upon which great powers have

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encountered each other time and again. Who is to say what may have happened last century

had Germany chosen to avoid this zone. What is certain is that history has marked the “world”

wars upon German designs in the east --- and its threat was simply too much.

Political geographer Halford Mackinder had written as much a decade prior to the

Great War: that the region of ‘Central Europe’ would be the pivot upon which a power could

stake its claim for greater territory and influence. Whoever controls this belt way, he believed,

would have carte blanche throughout Europe and into the vastness of Eurasia. It is a theoretical

warning that has, by and large, been heeded. That is to say, no state has dominated this thruway

with enough capacity to launch past it. Yet, the attempts to do so, or to maintain the bulwarks,

have left the region a perpetual “Crush Zone.” Stuck between competing powers to either side,

this zone is characterized by another British political geographer James Fairgrieve as being

“(w)ith sufficient individuality to withstand absorptions, but unable or unwilling to unite with

others to form any larger whole, they remain in the unsatisfactory position of buffer states,

precariously independent politically, and more surely dependent economically.” To compare,

where Mackinder had warned of the subregion’s absorption leading to cross-continental

domination, Fairgrieve believed in its stubborn unlikelihood.

Western policy, as well, has supported this divided buffer as early as World War One

with the British Foreign Secretary’s “Curzon Line” dividing Central and Eastern Europe from

Russia. Again, at the outset of the Cold War, both East and West chose to split the region

leaving the fringe as a buffer of the bipolar world. And as such, it remained within its

traditional fragile state, seemingly forever stuck in history – a buffer between East and West. As

German ethnogeographer Friedrich Ratzel once wrote, the region is "not a border between two

states but between two worlds." And it would come to feel as much post World War Two, as all

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the while west of this buffer, and in part due to the threat perceived from the east, ‘free’ Europe

was undertaking a substantial experiment – an attempt at political union.

Europe today, as a region and in comparison to others in the world, is unique. While

conflict percolates and wages elsewhere, Europe has been able to shed the baggage of interstate

rivalry. The European Union (EU) began as a determined effort to end conflict on the European

continent. Wracked by two “world” wars, the European states were eager to alter their relations

amongst themselves so as to allow for growth, rather than invite another round of

selfdestruction. To succeed required concerted cooperation, which has not come so easily. As

Roman Holec notes on the topic of Europe’s contentious history, “(t)he common moments in

history rather divide all the countries and their cooperation is often rather pragmatic than

conceptual.” And, it is this character, inherent within the geographical divide of Europe, itself,

that makes the Union still tenuous.

I would further argue that as the current tensions in Europe persist, circulating around

the financial troubles of its monetary union as well as the Ukraine conflict, European integration

will increasingly be put into question. Certainly, something as difficult as the high politics of

national security is bound to be weighed down with understandable apprehension. After all, the

EU had a chance to shine before. It was the summer of 1991, when the Luxembourg Foreign

Minister, Jacques Poos, on behalf of the European Community’s Presidency, spoke of “the hour

of Europe.” It was the onset of Yugoslavia’s breakup, and Europe’s decision-makers were

determined to settle the matter themselves, preferably, and particularly before the conflict spilt

further into Europe. The EU faltered.

Disappointment and Divide

The lesson learned in the Balkans during this decade was one of European inability, as

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the U.S. was believed necessary for both Dayton and Rambouillet. Coming from a bipolar

world, the EU itself rising within the shadow of the remaining superpower, it is quite natural that

Europeans would aspire for greater independence within, or aside from, the Atlantic Community.

This is not to say that European leaders would intend to stand completely separate, or even

above its Transatlantic partner. Europe could neither unify enough strength in the foreseeable

future with or without a central authority in Brussels to do so, nor would it choose to.

Nevertheless, the ability to be less dependent security-wise – and more, to be an independent

partner – is highly desirable. This was an expected event in any case, following the end of

bipolarity, understanding the possibility of American overextension. It is ‘merely’ a matter of

fungibility.

What matters, of course, is Europe’s ability to harness its capabilities so as to be put

into action. It is not that Europe does not have the capabilities within it, but as a whole with

regard to Yugoslavia European states were unable to translate their individual abilities into

cohesive action. It was understood that in order to move beyond the EU’s normative actor

status, still largely civilian and economic in nature, to better mitigate threats and instabilities it

would have to restructure a European defense that at least had some measure of autonomy from

the U.S.

It is for this reason, in the aftermath of ‘Europe’s hour,’ that the Common Security and Defence

Policy was born.

The Petersburg Tasks outlined early by the European Community in 1992, while

modest and designed primarily to enable taking action in another Balkan scenario, did not gain

sufficient support. Lack in dedication continued later in the decade amidst the proposed

Headline Goal in 1999, which proposed for even more impressive military capabilities requiring

coordination and provisions for over 150,000 soldiers, presumed to be provided by all states

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across the expanding European Union. And yet, over two decades from the initial Petersberg

summit, there is little unity in the Union’s defense. Perhaps it is a symptom of the growing

pains of such cooperation.

The reason as to why the European Union has been slow to organize this hard aspect of

foreign policy is apparent. It had not been necessary during the Cold War, as it had been

provided under the Transatlantic nuclear umbrella. Marko Papic relates, “…the current political

and security architectures of Europe […] did not grow organically out of the Continent.” It was

first provided externally, and has since been driven from the ‘top-down’, in opposition to the

very foundations of EU’s origins. And yet even though it is driven from the top, progress is

encumbered by its individual members as “(e)very important decision requires that the states

meet and reach a mutually acceptable solution, often producing non-optimal outcomes that are

products of compromise.” Often, they are “non-optimal” because there is little “agreed-upon

perception of an external threat.” This was exemplified in another crisis, this time further afield.

Europe’s determination and capabilities were put to the test yet again in Libya. Libya is

one of the last states afflicted, or liberated, by the spate of uprisings known as the Arab Spring.

And yet, while European capabilities have improved, U.S. and NATO forces were largely

responsible, certainly so at the outset, in getting the Libyan operation off the ground. Further,

the Europeans remained split as far as whether and in what manner to react. Nicole Koenig

notes, ”While there has been a multifaceted EU response to the Libyan crisis, nearly every facet

of this response was marked by vertical incoherence.” However, Libya was not just a case of

“vertical incoherence”, the public split between the western European states of France and

Germany on the issue, marked a certain ‘horizontal incoherence’ as well, in that it typifies

Europe’s perpetual incongruence regarding its distinct national interests. Significant as it is, the

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internal divide that still exists within the western-led European Union, there is a larger divide

between Old and New Europe.

Brussels and its core members have attempted to bridge the divide between the core

western states within the community and those recently acceded. Nevertheless, a divide remains

between the core EU members and others; and this is understandably so, historically. And while

some differences are to be expected, and endured for the sake of partnership, security is not one

of them. This relates to the “consensus-expectations gap” understood to exist between EU

member states and the ambitions within Brussels. It seems sensible that this stems from the

difficulty inherent in the oversight of large and heterogeneous populations and their various if

not conflicting preferences. While extending the Union eastward, perhaps in good faith –

perhaps to extend influence, as Tomas Valasek concludes on the “’Easternization’ of European

security” the European Union has become “too diverse a group to pursue […] common

security.”

Therefore, if common European security is yet to be satisfactory, there is the standard

recourse for it to be tended to by individual nation-states, instead;19 as security is paramount to

national interest. Yet, here, rather than states revoking such privileges completely from an

institution beyond itself, and keeping in mind that the European experiment has been guided by

the irrefutable fact that individual states have been unable to underwrite continental security

without some cooperation, then it would seem that the Union has been missing a step.

Toward a Security Regime: Real and Theoretical

Europe’s rise in the security sphere need not be championed by all members in

harmonious union. That is, if the Union is unable to satisfy the security of its members, it is

unlikely to successfully continue its attempt in harnessing regional security - lest it be by decree.

Rather, it should be allowed to develop more or less independently, fostered so as to utilize the

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various pillars of willingness and capability in raising an evolving security network of a

different color and design. European and individual member national security should be

supplemented with quasi-independent subregional security regimes. This mid-step, or side-step,

need not seem to backtrack on the progression of the European Union, nor should it be

interpreted as a competing factor in the twilight of Pax-Americana. Rather, subregional security

regimes could actually be the natural progression, from the structure of interstate to often

desired supra-state. In any case, smaller and more cohesive regimes seem to be the way forward

with regard to cooperative security ventures – not quite ready to progress ‘beyond history.’

It may be described as a smaller network of states within (or outside) the Union, whose

collective (post-modern) character regarding security reaches only as far as their mutual interests

and fears take them; which is reflective of the fragmented consensus on security issues for

Europe. While this proposal may seem lofty, what remains historically certain is that threat

perceptions are not shared equally by all within the European community. It is due to this

unshared threat perception that an alternate and more localized alliance is likely to form in

balance against more closely shared “threats,” or in mutual support of otherwise shared interests.

Western European countries (WEU), on the whole, seem not to believe, for example, that Russia

poses a threat of the first order, which is characteristic of their place and interests. WEU states

have maintained a preference toward trading; they are merchant states, and as such are more

inclined toward the economy, internationally, more so than others particularly in the east. CEE

states are much more grounded in the security of their geography and their nearer neighbors.

Accordingly, while WEU seem to have progressed from nations’ “state of nature”, CEE would

seem to have mired in both time and place. For them, it is not a “return of history”, but, as

political scientist George Christou reminds us that this subregion is “characterised by recurring

political instability,” it is a reminder that it has not yet left. And for many EU members,

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muddling through is not acceptable. Hodza made clear that, “(i)t is not wholesome to leave in

new Central Europe such a vast political vacuum.,” and that “[w]e cannot speak about the

consolidation of Europe as long as [CEE] is not consolidated.” CEE consolidation is necessary

for peace in Europe; it also happens to be provided for under the Treaty of European Union, and

further under the Lisbon Treaty.

The Protocol on Permanent Structured Cooperation established by Article 42 of the

treaty encourages inter-member cooperation in the development of “defence capacities” inside

or outside of the Union itself. Essentially, it allows for the clustering of willing members into

relatively separate interest groups, enabling “smaller groups of states to go further and faster

absent political will on the part of all governments.” As Renata Dawn observed in 1999, a

decade prior to the Lisbon Treaty, by “facilitate(ing) and forward(ing) the goals of security and

stability in a particular subregion” these regimes “thus contribute to the fulfillment of national

and wider European goals.” And therefore, as a bridge, “sub-regional cooperation may serve as

a tool, enabling Europe’s border zones to overcome their peripheral status.”28 It also happens to

be realistically and theoretically sound, as well.

Realistic, and Supported ‘in Theory’

Neofunctionalism in Europe at the pan-regional level has worked questionably well

only within the economics and regional governance spheres, yet has not taken shape with

security due to divisions of nationalism combined with the breadth of space. As history lingers,

the risks levied on the European experiment, yielding partial economic sovereignty for regional

development and peace, is more easily done than hedging one’s peace and welfare upon the

whims of many; and is markedly different than the political integration necessary for broad

acceptance of region-wide security. The latter would risk parting with a landscape believed

purchased with blood, sweat and tears. And so, even with the strength of will to keep the

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European experiment alive and together, the attempt to include the security of territory in the

same manner as trade would be successfully worse, as security’s negotiable prospects are thin in

nature. Further, as security inherently involves an element of crisis, if not merely to hedge

against it, and “realism says that in times of crisis institutions do not hold up,” we should not

expect the Union’s weakest link and least successful project to withstand persistent or acute

pressures. And the anarchy that persists does little to assuage such relations.

When Alexander Wendt said, “Anarchy is what states make of it,” the message was that

anarchy’s perception to states and society’s subsequent relation to anarchy can change, be

changed, and even shaped by all parties involved. Thus, the more cooperation of international

actors that is desired, its conception being honed, the greater the odds of its success. Along the

way, it reaches a tipping point at which time the shared variables, it would be assumed with

more common traits, outline a new course. It is almost neofunctional in comparison to Europe.

The tipping point, or spark, need only be a successful case example; with which society’s

consensus accepts in praise as a model (or rejects for change). This was the example of post war

Europe, with the European Coal and Steel Community. Anarchy on the continent was

reconceived and offered a turn. Yet security cannot be reconceived so easily. Rather, security

conforms to the balanced perceptions at that time, anarchy and all, including others’ capabilities.

Not only does security rest on the relative position and gains of others, but it also rests on the

means to muster action when necessary, in- or ex-clusively. On the latter note, again, security in

Europe need not return to the nation-state exclusively; in this respect, security may be rewritten

if not reconceived.

If “security is what we make of it”, to re-paraphrase Wendt, it would seem intuitive

that EU members would follow a path more consistent with their neofunctional beginnings, and

that this would, therefore, naturally land on some middle ground. That is, as contemporary

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European security, for its part, has the presaged benefit of having begun from the ‘top-down,’

subregional security regimes realistically attempt to rewrite European regional security from the

bottom-up. The subregional level is that middle ground. Having already been sprung, its

reversed ‘bottom-up’ policy would link the national to regional levels more concretely – a

prerequisite to the formation of a security community. Theoretically, then, it would be modeled

under the same scheme as the neofunctional premise of binding a small, but key, industry

between states – so that it may then spillover into varied and related areas – binding its members

ever closer. By allowing the alliance between smaller, clustered, more like-minded, states to

flourish, the EU could later support a network of relatively autonomous subregional security

regimes that would have the potential of spilling over for the benefit of security in the greater

region – to be called upon or that could collectively join a larger EU endeavor, as a matter of

choice.

Subregional security regimes are a very pragmatic alternative to the panregional

attempts thus far. The only success that the EU has been able to conjure thus far regards the

‘pooling and sharing’ of interested participants. When assembled, they do have training events,

and a few have been sent on humanitarian and peace-keeping missions. However, on the whole,

the EU has had little to show for it, according to security scholar Claudia Major and her

coauthor, Stefan Krümpelmann. Military missions are rare, which is understandable considering

the compliance that must be attained by all participatory member states. Major and

Krümpelmann also underline that these missions are few due to the funding required of

participating states, which is not the case for civilian missions, as they are covered within the

EU budget. Considering the lack of significant success in collaboration so far, Major and

Krümpelmann suggest that of the multiple scenarios possible over the next decade, that rather

than continue to muddle along as has happened, and given the fact that supranational defense is

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a leap too large to make, that subregional security regimes are the practical compromise,

allowing for more easy agreement and quicker action. Major and Krümpelmann refer to the

concept as “mini-lateralism,” and that they could prove a net positive if associated at the

regional level. As it happens, Europe has a promising if not quite a significant start.

Evidence of Subregionalism

It seems the argument for subregional security regimes is not as hard a sale as the author

may have first envisioned. The reasons outlined above are convincing, and the examples that

follow mark a solid beginning. Subregional regimes, or other close relations amongst

neighboring states, are represented in nearly all corners of Europe, as represented in Map 5.1

and Table 5.1.

Between the Maastricht and Lisbon Treaties, in early 2003 – in the run up to the Second

Gulf War, the British and French proposed the EU Battlegroup Concept, to increase Europe’s

rapid reaction capacity. It has also modeled the modestly trimmed regimes that pairs and

clusters of states have proposed or begun. The shared burden in providing for these battlegroups

is a major benefit considering member financial constraints. They are modest, in that the

battlegroup is a relatively small yet complete force able to operate on intense, but short

deployments. At present, the groups would be optimally “used as a bridging force” for a follow

on organization, like the U.N. As political scientist Jan Joel Andersson at the EU Institute for

Security Studies emphasizes, the battlegroups are meant to be the “first force in, first force out.”

Though, no matter how small or limited in scope the Battlegroup Concept may be, the

commitment to pool and share each other’s resources requires shared common views. The

Anglo-French pair is one such example. In 2010, the British and French agreed to deepen

defense integration. Its proactive capability in Libya the following year, sanctioned under the

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“Right to Protect,” lends argument for some degree of success since Lisbon regarding the EU’s

permanent structured cooperative regime. Also involving France is the Weimar Triangle.

The Weimar Triangle was originally proposed in 1992, among the countries of France,

Germany and Poland. Later, the same year that Britain, France and Germany (the latter added

just prior) formally proposed the EU Battlegroup Concept, in 2011, the latter two along with

Poland agreed to form the Weimar Combat Group. However, while the ability of the Weimar

states to form a capable battlegroup will not be debated here, its deployment would likely be

restricted to a compromise sanctioned in Brussels, as the three members occasionally hold

different perceptions of the balance within Europe, if not simply the divide between WEU and

CEE members described above, that only the general common interests of the Union can

surmount. Elsewhere, however, other battlegroups have formed that do share more

commonalities and, therefore, have a greater chance of regime solidarity. Stratfor sums up the

searches made by the Baltic states for a more cohesive security regime: “With Poland being

wooed by Paris and Berlin, the U.S. consumed by the Islamic world and NATO quickly

becoming aloof to their security woes, the Baltic states are turning to the one alternative in the

region: Nordic states.”

In Northern Europe, Sweden and Estonia concluded an agreement on defense

cooperation, also in 2011. This was but the most recent evidence of pooling resources between

Nordic and Baltic states, as the first Nordic Battlegroup was already assembled in 2008.

Norway’s former foreign minister, Thorvald Stoltenberg, has even placed a broader NordicBaltic

subregional integration on the agenda. According to the Nordic Council of Foreign Ministers,

their common interests and fears revolve around Russia, energy security, and renewed spheres of

influence. Similarly, the Baltics have been unnerved with Russia’s resurgence. In addition to

Russia, there are other drivers of Northern Europe’s regional integration:

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counterbalancing austerity measures, increasing influence, aiding deeper integration into Europe,

and normalizing relations between NATO and EU members. Now, Lithuania is also a Baltic

state, and indeed does share common interests and fears with its neighbors, to include an

aggressive policy towards Russia and European energy diversification. However, for this paper,

Lithuania will be kept separate in this evaluation from the Nordic-Baltic battlegroup, as it seems

a more suitable member of the next and last example in the east, where subregional security in

CEE has a longer history.

A Commonwealth Intermarium CEE’s natural subregional cooperative rests on the Visegrad

Group. Not only does the

Visegrad group’s name stretch back to medieval times of the Polish-Lithuanian

Commonwealth, but it links to a regular tide attempting to reassert it. The last attempt was last

century during the interwar years when Poland endeavored to establish an independent

intermarium, between the Baltic and Black Seas.51 Polish General Pilsudski’s interwar

Intermarium was largely an attempt at a defensive alliance. And while its membership was not

limited strictly to that of today’s V4, neither was the proposed membership of another notable

figure of his time and place, Czechoslovakia’s head of state. Hodza, while more inclined toward

an economic bloc in CEE, also envisioned a group anchored by the Baltic states in the north, and

Romania and Bulgaria along Black Sea. Perhaps a more modified, expansive, version of the

Visegrad group, stretching from sea to sea could one day come to be, depicted in Table 5.2;

however, for now, it does have its renewed start amongst the V4 members of Poland, the Czech

Republic, Slovakia and Hungary.

The Visegrad Group again proved its natural subregional cooperation, being, in

historian Padraic Kenney’s words, “the first independent regional alliance” on the continent

following the end of the Cold War in early 1991. Its purpose at that time was to band together

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toward integration with the West. It is ironic, now, that the group should be harnessed to

facilitate greater autonomy of security matters in the east; and this is not lost on its critics. It is

true that its members have not always been united. For example, after Czechoslovakia’s split in

the early 1990s, the group simply muddled through.56 However, even though the four members

occasionally distanced themselves from the group diplomatically when seeking their bids for

western membership, a European External Action Service policy officer once wrote that, “major

security interests of Visegrad [had] not diverge[d].” And, they did gain admission to NATO and

the EU at nearly the same points in time. All, but Slovakia, joined NATO in 1999; and all

formerly joined the European Union in the middle of 2004. So, even after suffering through the

critics, Visegrad has been successful – if even despite itself.

Nevertheless, now in the West, under today’s circumstances, security under NATO and

the promise from the EU look differently. It is generally ‘difficult for CEE to follow WEU

leadership as western states put Russia’s relations over their alliance with CEE.59 The Visegrad

Group’s recent recast originates from this geopolitical theme, well-understood within the region.

It is true that Visegrad is following the same model as other subregions of Europe, following the

2010 policies of NATO’s “smart defense” and the EU’s ‘pooling and sharing.’ However, the

group is more than mirroring its northern neighbors with Russian fears, as Stratfor explains that,

“the group’s evolution was influenced by […]: Russian resurgence, the growing relationship

between Berlin and Moscow, and the overall fraying of […] NATO.” The confluence was

enough to remind CEE of its past in the Crush Zone, in the Shatterbelt between the empires of

east and west. So, though the Visegrad of the 1990s may have stumbled under weakened

solidarity, nearby crises and membership ignorance sets the stage for its growth, with the

potential of being “a strong player in the EU,” perhaps in “defining ‘central Europe,’” if at least

its own security.

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The Visegrad Group has also formed a battlegroup, which has been active as a part of

the European defense structure since the beginning of 2016. Poland, being the largest state in

the V4 and with the greatest capabilities, is unsurprisingly the leader of the battlegroup. With a

still precarious perspective from CEE, Poland seeks “to establish security alternatives in the

region.” This is a policy of Realpolitik and it highlights Poland’s active involvement in

Visegrad’s budding battlegroup. A group that if united, amidst regional division over key

foreign and security policy issues, Polish Prime Minister Donald Tusk has said could not be

ignored by Europe. And a battlegroup that, as former former Polish foreign minister Radoslaw

Sikorski once said, could be the “vanguard” of the EU’s defensive structure. Vanguard or not, as

exemplified through history, Polish leadership within the CEE is extensive; and given time, The

Visegrad Four could be the core, upon which security cooperation between the seas may cluster.

Although in its early stages, Visegrad consensus is that the battlegroup should remain

indefinitely. Visegrad leaders are already determined to make their battlegroup a permanent

force, noted by not only their combined defense ministers, but also their heads of state.

Comparatively speaking, a sustained Visegrad battlegroup is a very feasible project.

While in comparison with either partnership in WEU Visegrad’s numbers are less than

stellar, Visegrad’s prospects of success are quite good when stacked up next to the Nordic-Baltic

Group. Visegrad’s weakest characteristic is its GDP per capita, which drops to near half of the

others even when enlarged to Visegrad Plus. However, its overall GDP is double that to the

north. Plus, Visegrad has a significantly higher population from which to draw as well as

sizeable industrial capabilities to support a military force. These are the prospects of what is

possible provided that significant obstacles do not arise. Tusk was correct that a united Visegrad

could not be ignored by the EU, but this is also true of Russia as well as the U.S., as a united

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CEE can either become an efficient, if not accommodating, gateway to Eurasia --- or it could

pose as its bulwark.

Implementing Visegrad’s Battlegroup

It is understandable that the likelihood of states to cooperate with each other, generally

and with regard to defense particularly, increases with shared interests and/or shared threats.

Opposing, it has been argued by Bence Németh of Hungary’s Ministry of Defense planning

department that Visegrad states are less likely to cooperate as their militaries, felt to be disparate

in resources and abilities, have “lost many capacities, and focused on niche capabilities and role

specialization…” and therefore “have fewer options for co-operation.” However, is this not

merely a supposition? After all, these same niche capabilities outlined by NATO’s Centers of

Excellence (COE) were designed to complement cooperation within the Atlantic Alliance. It

stands to reason, therefore, that COEs would have been found sensible and worth such

substantial investment prior, rather than a stumbling block between European allies. Németh

further postulates that “countries [that] have a full spectrum of capabilities […] can choose from

a wider range of areas to co-operate.” Again, this would only seem to stand up if cooperating

states deem it necessary to collaborate with like resources, albeit reduced for the purposes of

“pooling and sharing.” While initially this would presume a degree if not significant

redundancy and overlap, participating countries could scale down their redundant forces to more

moderate levels. Perhaps it is true that this could make it easy to mutually reduce forces and

collaborate; though this quid pro quo seems to resemble disarmament negotiations between

distrusting states rather than partners. It also presumes that the reduction of redundant forces is

easier than the transformation of the present force structure.

Visegrad states are just as capable, and I would argue as likely, to create a significant

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defensive force even without these similar forces, so long as their interests in security remain

constant. The “niche capabilities,” just as NATO has surmised and indeed instituted as a

“network,” would if found beneficial compliment other Visegrad states where they lack these

capabilities. After all, these niche areas that Németh refers to are only battalions in size and do

not nearly represent the majority of the sponsors’ forces.77 So, when Németh writes that

“Central European countries have concentrated on the development of different niche

capabilities,” the word “development” should be stressed. Admittedly, these were

specializations that had to be built and required some “concentration” and funding. Németh’s

true ‘take away’ on this note, then, should not be that due to these concentrations that the

majority of CEE forces represent these specializations. Further, the developed COE’s of

participating CEE states would seem to be quite complementary components for any military

core of soldiers (e.g. intelligence, cyber, chemical, biological, and nuclear defence, medical, and

police units, as well as ordinance disposal are all niche capabilities developed by CEE). At least

Németh does amend his earlier words in stating that “identical capability needs can provide a

better ground for co-operation than institutional membership.” The stress, here, is “identical

needs.” Aside from these specializations, an enlarged Visegrad Group (to, say, 7 – a Visegrad

‘Plus’) already has a significant combined force, if pooled. However, as it stands, and for the

time being, Visegrad need not organize such a substantial force to be considered a player in

Europe’s defense.

The European Battlegroup Concept aims to be a rapid deployment force of minimum

size to tackle a variety of possible defense and stabilization contingencies. According to security

specialist Laura Chappell, “Each Battlegroup consists of 1500 armed forces personnel,” though

published numbers indicate closer to 3000, or a brigade. Today the EU is committed to sourcing

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4 separate battlegroups per year, 2 being rotated every half year. Since 2005, numerous EU

members have pooled their soldiers, and other military resources, to satisfy the Union’s quota.

For every mixed battlegroup’s participation with a Visegrad member, it is estimated that

Visegrad assets comprised over 50% of the necessary obligations. And since 2005, across the

multiple battlegroups assembled, Visegrad has taken on leadership positions as being the

“framework nation,” or point of contact, for its battlegroup on multiple occasions. This can be

considered rather substantial considering the resources that states in western Europe, and their

regimes, are more capable of contributing. Nevertheless, the times it would seem has imposed

an opportune restructuring of militaries from large standing armies to “smaller, faster and more

agile forces.” Were a Visegrad ‘Plus’ group to aim for a response force more substantial, we

need a rough model from which to compare. A look at two models should give decision-makers

in CEE some perspective on how and to what degree a restructuring of their own forces might

take place.

Measuring Visegrad’s Resources

In the West, NATO is in transition just as the remaining superpower is also

transforming its own defense and power projection capabilities. Begun in 2003, the U.S. is

molding a new military based on brigade combat teams (BCTs), rather than the larger

divisionbased force. According to military specialist at the Congressional Research Service

Andrew

Feickert, “The Army’s […] stated goal is to create 76 active and reserve brigade combat teams

(BCTs) – 48 active and 28 Army National Guard (or over 300,000 soldiers) – and approximately

225 active and reserve support brigades.” Their model for their multifunctional rapid response

force is the Stryker Brigade (SBCT), which consists of approximately 3,500 core troops, with

perhaps up to 1,000 or more in support, in “ready-to fight combined-arms packages.”

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Similarly, NATO has agreed to work towards a rapid response force (NRF) strictly on the

European continent, should “American forces [choose] not [to] or cannot deploy,” where an

“American Joint Task Force could quickly augment the NRF if a situation showed signs of

exceeding NRF capabilities.”86 Their goal for this expeditionary force is approximately 25,000

personnel (approximately 7 combat brigades, not including support), of which 13,000

(approximately 3 - 4 brigades, not including support) would be mobilized into an immediate

response force, with an annual rotation.

According to The Military Balance 2010, the year NATO and the EU began this modest

proposal, a fully ‘pooled and shared’ Visegrad ‘Plus’ is fairly impressive, significantly more so

than the current group of four; and even when compared to the currently more integrated Nordic

Defense Cooperation (NORDEFCO), represented by the Nordic-Baltic Group. Referring to

Table 5.3, it is true that when measured next to the western Anglo-Franco cooperative that

neither NORDEFCO nor a possible ‘VISDEFCO’ (Visegrad 7 Defense Cooperation) look very

impressive. However, it is assumed that as former great powers both France and the UK would

have a natural inclination toward retaining significant independence of their national forces

requiring more resources; whereas subregional regimes on the periphery, which have long been

dependent on regional powers for their security, might likely be willing to integrate more

completely – as NORDEFCO represents.

Should Visegrad 7 choose to maximize their collective interests, in their own defense,

while they are understandably unable to attain matching capabilities and numbers of the

proposed U.S. battalions, they could come close to matching NATO’S NRF model, while

assuming the U.S.’s Stryker format. What is also known in such a force structure and their

likely resource needs is that other than a strategic reserve force, and over 300 Calvary personnel

transport vehicles per BCT (about 1,000 for an immediate response force), approximately 200

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transport planes would be necessary for initial deployments. As already noted, Visegrad 7 has a

substantial pool of active and reserve personnel from which to draw. However, in the attempt to

establish a Visegrad rapid reaction force it is important to sift through, if not the excess then, the

less significant to the core force structure. Therefore, the numbers within Table 5.4 reflect only

those troops that were brigade ready.

A ‘pooled and shared’ Visegrad 7 could potentially have 36 brigades, approximately

126,000 soldiers, ready to assemble into BCTs. This far surpasses the 7 brigades required for

NATO’s NRF, let alone the battalion sized battlegroup which EU members have contributed

towards since 2005. Interestingly most Visegrad states tend to have few reserve personnel,

though two states impressively constitute 18 brigades that they hold in reserve – which in the

case of Lithuania makes up for the single ready brigade that they may contribute toward a

possible VISDEFCO. Nevertheless, these excess numbers would actually allow for a significant

reduction of redundant forces, lest Visegrad 7 prefer to maintain a large rotating force. Even if it

were to halve the 36 ready brigades to 18, Visegrad would still have over twice as many

available than what NATO has proposed for all of Europe. While this large force indeed could

prove very useful, the proposed immediate term goal, beyond the 2016 battlegroup, would be to

create and maintain an immediate response force sizeable to 3 BCTs. Therefore, CEE states

could greatly benefit from a drastic downsizing of military forces; while still retaining, should

they choose, a sizeable force for the sake of subregional security. Now that it is established that

a proper VISDEFCO can be practically manned, let us also see that it may be properly

mobilized.

As noted previously, approximately 1000 personnel carriers are required for 3

mobilized BCTs, and up to 200 transport airplanes would be required to a theatre as far as

Africa. Referring, again, to Table 5.4 we see that Visegrad was deficient, with only 98 transport

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planes, half that required. However, according to The Military Balance, in 2009 alone, the seven

CEE states procured an additional 47 more transport planes. Not including purchases and

acquisitions since 2009, this brings the Visegrad total to 145 transport planes. Therefore, while

CEE states would require additional vehicles and planes for its reserve forces, these assets come

very near the proposed requirements for a highly mobile and substantial response force.

Trimmed, Boosting Visegrad’s Resources

According to the U.S. Government Accounting Office, see Table 5.5 above, in

reference to the U.S. transition to agile modular forces, “the Army’s cost estimate through fiscal

year 2011 [was] $52.5 billion,” in total since 2005, which “includes costs for a total of 43 active

component brigades—covering upgrades to the existing 33 brigades and the creation of 10 new

brigades—as well as 34 brigades in the reserve component.” From this, “78 percent, ha[d] been

allocated to equipment.” Returning to CEE, Visegrad 7 spent over $21 billion on defense in total,

though only about one-third of this went toward equipment – even less toward BCT related

equipment, see Table 5.6. CEE states, therefore, have room to increase their BCT asset numbers

by spending together more efficiently. Initially at least, it may be proposed that CEE could redirect

moderate defense spending toward BCT related equipment, possibly even above the 78% allocated

in the U.S., so as to buttress their current brigade mobility.

According to figures from 2009, it was Poland and Bulgaria who would be able to

provide most of the necessary equipment for a proposed VISDEFCO, see Figure 5.1.

Expectedly, then, it was Poland and Bulgaria that spent the most toward equipment procurement,

but not with the highest percentages toward BCT related equipment. While the remaining 5 of

the Visegrad 7 spent 100% of their equipment procurement toward BCT items, Poland and

Bulgaria spent 69% and 25% respectively. Were both Poland and Bulgaria to have spent the

remainder, $2.5 billion, toward transitioning 3 leaner and meaner BCTs, or on BCT items, they

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may have acquired approximately 1000 additional personnel carriers, or about 125 transport

planes -- well past the threshold to field a VISDEFCO immediate response force.

As Europe’s defense transitions through the 2010s it is felt more incumbent upon states

and their subregional security regimes to acquire the means to field their own EU battlegroups,

so as to bolster an expected receding Transatlantic security umbrella. The above proves that not

only is it possible for the states of CEE to reach a level of security relatively autonomously, but

also that if CEE states were bound together under subregional security framework, their

potential ‘pooled and shared’ resources would allow them to accomplish so much more with

relative ease that in time a future VISDEFCO could reach comparable capabilities with those

proposed by the Atlantic Alliance for the continent at large, though dedicated to the security and

stability of Central Eastern Europe.

Concluding Greater Security

This chapter began against the backdrop acknowledging of Europe’s return toward

harder power. Further, it was the position of the author that with postwar Europe’s inability to

muster sufficient political will in support of the Union’s autonomous defense, the 21st Century’s

entry with flux would instigate the formation of smaller state-clustered security regimes:

clustered, so as to pool and share, though smaller than the Union – yet no longer the individual

state alone. Certainly, if the world could speak of Europe’s troubled financial union shaking the

success of the European project, then it would be hard to successfully argue toward a closer

political and defensive union. Indeed, with such discussions never having been able to get

passed the table since post-war Europe, while prospects of a two-tiered monetary union could

cause alarm for the success of the EMU, a multi-speed subregional security regime would be

expected to find greater acceptance as a satisfactory, if not desired, alternative. By itself, the

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notion would not seem to imperil a European Union unable to satisfactorily address the issue to

date.

More than this, in the grand restoration of Europe, a successful security regime in CEE

is necessary for Europe in order for it to be a competent regional actor. The evidence of

Lisbon’s permanently structured cooperation is present from the general demand for such across

the EU, though especially appropriate within this contentious shatterbelt region. However many

partake in the responsibility to underwrite its stability is not of issue, but rather that its clustered

zone be maximized by common interests, and evenly mindful of their accompanying threats. On

that latter point, alarm has come to many in response to the crisis in Ukraine. Western

Ukrainians are fighting for their greater independence from Russia, in their march toward

‘Europeanization;’and the turmoil that surrounds the civil war in eastern Ukraine, along with the

Crimean annexation, has arguably put some neighboring states on notice of how quickly

stability can fade. In the next chapter, we will address this very timely topic, and how it relates

to CEE subregionalism.

CHAPTER VI

PRESCIENT PERIPHERAL CRISIS: FRONTIER INSTABILITY

Simply put: The European Union’s efforts toward a stable foreign and security policy

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lacks credibility and capabilities. While it is a policy that shows similarities amongst its

members in that they all desire stability, they fail in their ability to come together in unified

action, nor to speak with one voice. And, as with the Euro, it is their persistent differences, or

simply their individual natural national wills, that has persistently remained in the background

and now poses a significant challenge to the Union with the affairs surrounding Ukraine. While

the EU’s programs to reach out to states further east have, perhaps, made some progress toward

their Europeanization, changes in Ukraine’s political leanings have led to the reaction of great

power involvement, which is reminiscent to centuries of similar great power rivalry – and all, it

seems, at the expense of the small state(s) along the periphery. Their actions, and the relative

inability of individual small states, have set the tone for the subregion’s continued fragility,

where continued great power involvement will likely lead to greater instability. The following

pages will look at the origins of fragility of these small states and their regions, and beyond, it is

wondered as to whether they are condemned to remain so.

Introducing Ukrainian Instability

The previous chapters of subregional cooperation have been presented, and past success

in CEE subregionalism has been proven in the multiple attempts over the centuries.

Nevertheless, it is useful to remember that these small states between East and West are often

overlooked in the presence of such larger actors, like Germany and Russia, now the entirety of

the EU, as well as the U.S., if even from a distance. Therefore, if history, or subregional

interests are not enough to draw proper attention to the subregion, then permit an investigation

into another external, yet associated, issue that helps to highlight potential avenues to greater

CEE cooperation. Just as the worsening of the Euro crisis could set the stage for changing the

status quo toward greater CEE attention and cooperation, many, such as subregional sociologist

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Sándor Köles, believe that the Ukraine crisis might also provide the need to take potential

subregionalization more seriously.

The second scenario draws attention to the inherent security fears that are typical of

peripheral instability: external interests and their actions. EU’s regional security policies have

not sufficiently placated the fears that some of these peripheral states have: either from Europe’s

south and southeast with the rather negative aspects related to Arab Spring and western

intervention, in for example Libya and Syria; to the matter of whether or not Russia is actually

portraying qualities akin to an irredentist state bent on resurging to its former glory. In 2008, the

Russo-Georgian conflict had some in Europe worry that Russia had intended to do exactly that.

Perhaps more of that mindset is present today following its intervention, and annexation of the

Crimea, in Ukraine’s more recent revolutionary turn towards Europe following its Euromaidan

movement. Whether or not Russia actually has any intent on pursuing influence further

westward, its actions have some calling for greater security measures along Europe’s eastern

periphery – to which greater subregionalism defensive cooperation could be the answer.

Frozen Conflicts along the Periphery

With such a broad topic of instability and its causes, it is useful to look at some cases

across a few broad regions, such as the greater Black Sea region with some comparisons in

Central Asia. Specifically, I will introduce the similarities amongst such fragile areas as the

Ferghana Valley and the Afghanistan-Pakistan border, as well as recent conflicts in Georgia and

Ukraine. All have reawakened the world since the century’s inception, and their growing

instability has increased calls for greater regional stabilization and democratization. And while

it may be argued that the spread of democracy is accompanied with greater stability and that the

premise of democratizing is arguably positive, it may be a necessary means, but not sufficient

means by itself for peace in the region. Just as peace tends to require more than a single

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ingredient, its opposite, conflict, is enabled by more than one cause. In search for an answer, the

literature seems to argue upon three fundamentals: internal differences (nationalism, ethnicity,

culture and religion); conflict over resources (water, minerals, oil-gas, as well as territory); or

outside intervention (by those having interests within the region, yet originate from without).

Investigating the possible ramifications of conflict along the CEE periphery, let us proceed along

the path of inquiry toward the origins of instability; and begin with: Who has the right to

control; and who owns what?

Who Has the Right to Control?

In many areas of conflict a multitude of causal explanations seem to be in play with

reference to an area’s divisive nature: religion, ethnicity, language, even caste. Ukraine, for

example, is primarily divided religiously within the fold of Christianity by Orthodoxy and

Catholicism, respectively between its East and West, but its Islamic adherents in the south

should also not be forgotten. Further, while the clear majority of its populace is Slavic, they

differentiate themselves between their Ukrainian heritage versus others such as Russian or even

Polish. This is very similar to its linguistic division, where the Russian language dominates in

Ukraine’s south and east. However, let us begin by noting some similarities in another region

tarnished by fragility, Central Asia, where stability has been tenuous at best, since the late 1800s.

Take Kashmir, for example. It is divided socially in a rather complex fashion beyond that of

Muslim versus Hindu. What makes this locale even more compelling is that it is claimed by no

less than three states (China, Pakistan and India). As well, it can easily be argued that at least

two other states have an interest in this area’s stability (Russia and the U.S.). Therefore, in

Kashmir alone, we have the internal conflicts of ethnicity, religion, language and caste; but we

also witness the unfortunate marriage with powers near and far. Political scientist Sumantra

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Bose believes that due to this bewildering multiplicity, there exists no practical “recourse to the

plebiscitary-majoritarian method”, such as that found in the Balkans, where a referendum might

be used to settle ownership or representation. Here, it would be a disastrous option. Neither

Pakistan nor India openly want independence of the controlled area. The multiplicity of

identities tethered to the multiple claimants of authority make this subregion susceptible to

instability.

Take the Ferghana Valley as another example. Here, we also observe shared ethnicity

and conflict across borders. In fact, Ferghana is a tinderbox in its own right, where the civil

stress within the borders of any of the three states of Ferghana (Uzbekistan, Kyrgyzstan, and

Tajikistan) contributes to conflict spillover across borders. Researchers at the Centre for the

Study of Civil War in Oslo refer to this as “a neighborhood effect.” They find that, “conflict is

more likely when there are ethnic ties to groups in a neighboring conflict and that contagion is

primarily a feature of separatist conflict.”5 This certainly does characterize the tension amongst

the states of Ferghana. As we shall see, this spillover effect has potential in other areas within

the region. Nevertheless, the multiplicity of identities and the spillovers associated within the

neighborhood effect has added to the subregion’s instability.

Take the Afghanistan-Pakistan (Af-Pak) border, held by ethnic Pashtuns, as another

example. It is a pocket of territory that has long been ungoverned. The Federally Administered

Tribal Areas is rather a euphemism as there are very little administrative capabilities exercised

by the central government in this area. Historically, this ungoverned territory is the center of

conflict; today, against Taliban insurgents fighting U.S., Afghan, and Pakistani forces. This, of

course, comes as no surprise observing Islamic fundamentalism’s transnational character that

has settled across the region over the past generation, migrating from the Af-Pak border north to

Ferghana and back to the destabilized Af-Pak border of today. Together, this ungoverned space

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mixed with the destabilizing traits of changing fundamentalism has inabled reasonable stability

to be found.

And so it goes, there are strong ethnic divides as well as cries for alternative sources of

social order that are present within a triangulated space between Kashmir, Ferghana, and

somewhere on or near the southern Af-Pak border. However, while compelling as all the above

references to ethnicity and religion may be toward root causes of instability, the conflict within

and across borders may have alternative sources. For example, Henderson and Tucker have

found that even “states of similar civilizations were more likely to fight each other than were

those of different civilizations.” Could it be that a more appropriate explanation of this regional

conflict reaches toward a level above the differences identified in ethnicity and ideas of religion?

In relation to such “territorial issues,” scholar Ronald Suny argues that, at least in the Ferghana

Valley, ethnic violence stems largely from economic competition. So, it would seem that in

order to find cooperation within or amongst these states, a consensus (or overwhelming

imposition) must be reached regarding regional ownership.

Who Owns What?

Following Suny’s line of argument, that conflict is primarily based on economic

competition, let us look at what communities (national, ethnic, or tribal) are actually competing

for. In Ukraine there is much at stake. Once, Ukraine was a breadbasket in the region, and was

appreciated as such by its neighbors. There are also the potential for energy deposits that lie off

the Black Sea coast. But more than this, Ukraine’s position along the periphery lies along transit

lines of trade between east and west, particularly that of energy trade. In 2006 Europe imported

just over 40% of its natural gas needs from Russia, via Ukraine, about 128bcm/year. Due to

political differences, diversification, and related squabbling this has been reduced by half in

2014, to about 62bcm/year. Also in 2006 Russia sent 88% of its total oil exports to Europe,

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3.66 million bbl/d, of which about 35% was sent through its Druzhba pipeline traversing

Ukraine.11 There is little indication that such diversification and decreases in oil will be sought,

as it has been with natural gas, but the numbers clearly show that Ukraine is an important

conduit for energy trade, and likely will continue to be so. Still, it remains a matter of persistent

bickering between the associated parties regarding their rights of transit and ownership. Let us,

again, look to similarities in our other regions.

Returning to Kashmir, for example. Since 1960, the Indus Waters Treaty has been a

recognized agreement to distribute the waters between the states of Pakistan and India.

However, its ability to completely prevent one side from depriving the other of this natural and

essential element has been less than a complete success. India’s Bahlihar Dam, in its own

administrative region in Kashmir, is one such example. This dam diverts water away from

Pakistan further south into India where, it is argued, increased capacity is necessary to supply its

growing population. While it is greatly debated whether or not India is actually diverting

significant amounts of water at Pakistan’s expense, it remains felt among the Indians that the

Indus (for which New Delhi controls the headwaters) has historically been in India and should

remain under its control. This problem of who owns the territory of the headwaters, upstream,

and another who geographically would benefit from these waters, downstream, is also a matter

of conflict in Ferghana.

Returning to Ferghana, for example. The Ferghana region is centered upon its valley

which is predominantly within Uzbekistan’s borders. The geographic tragedy of borders

surrounding Ferghana is the utter dependence that each has on the others. Taking water and

other natural resources as the area’s base of contention, Uzbekistan’s ‘valley’ within Ferghana –

the breadbasket of Central Asia – is completely dependent on the headwaters of the mountains

of Kyrgyzstan that nearly encircle it. Elsewhere, Tajikistan also provides Uzbekistan access to

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waters. Uzbekistan’s water dilemma rests on the others’ compliance to adequate access during

prime agricultural seasons, while the upstream states prefer to send water downstream during

other seasons when power is of greater necessity. While this conflict of interests exists, in turn,

the upstream states remain dependent upon Uzbekistan for oil and gas. At the best of times, or

at least ‘better’ as in the days of the Russian empire or the Soviet Union when the whole of

Ferghana was administered as part of a larger whole, perhaps there was an acceptance of mutual

dependence; today, however, these unwanted dependencies can further spur animosity felt

amongst the Ferghana states.

Based upon the argument of ownership, therefore, it is possible that instability may rest

more heavily on the side of territorial and resource rights, rather than superficially on who

administers over whom. However, if it is not a question of who rules, but of who rules what, we

must remember that these areas of conflict have been divided, purposefully, into nations through

the will of external states vying for influence.

Who Fans the Flames?

To begin, the Black Sea region (to include those extending from it, such as CEE and the

Caucasus) and Central Asia lie within an inherently fractious region, what geography scholar

Saul B. Cohen,14 and geostrategist Halford J. Mackinder before him, has referred to as a

Shatterbelt. Their view of dyadic competition between land-based and maritime powers pits

these converging areas of influence into a fractious belt of unstable polities. Scholar and

political advisor Zbigniew Brzezinski similarly wrote that the states within this belt are pivotal,

in that areas within that might be controlled by a single side could lead to undue influence upon

the other. And it is from this that the states within have historically long suffered as the space

between two or more powerful neighbors, sometimes as a “buffer zone,” and at other times a

“crush zone.” And it is because great powers have encountered each other time and again

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along this zone that this pattern points to a systemic issue of competition that keeps these pivotal

subregions along the belt in a perpetual state of instability due to designs of harnessing this

gateway for their own unilateral purposes. Ready to put this matter on more familiar ground, it

will be useful to inspect conflicts across the regions based upon historical intervention.

Take Ferghana, again, as an example. Boris Rumer, at the Davis Center for Russian

and Eurasian Studies at Harvard University, argues that instability may be maintained by great

powers jockeying for influence. He argues that, for the time after 2001 where the U.S.

gravitated toward the position of Central Asia’s main economic and security guarantor, Russia’s

opposition to the trend could have convinced Moscow that local instability may have been in its

own interest, in order to preserve Russia’s traditional stake and position in the region. After all,

Russia has been (and will arguably remain) Turkestan’s historical long-term security contributor.

History reminds us that the partition of former Turkestan into the Ferghana states of Central Asia

was a policy of Stalin’s to divide-and-conquer, for Soviet stability – so that they could no longer

threaten central authority as they had done during the Soviet Union’s fledgling years. It is

interesting and relevant to note that Stalin found all of this necessary due to the British stirring

dissent within the Basmachi in Turkestan during the Soviet’s early years. So,

for better or (seen here) likely worse, the Ferghana division and subsequent ethnic and territorial

conflict originated with great power intervention – from great power rivalry. As such, today, the

area remains divided where each states’ ethnicities may lay claim to numerous areas within

neighboring states; and each is dependent on the other and/or a central authority to keep regional

peace.

Take Af-Pak, again, as another example. The current border, long in dispute between

the central governments of Afghanistan and Pakistan as well as the ethnic communities along the

border, dates back to the 1890s, at a minimum. The Durand Line, as it is also known,

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intentionally divided Pashtun tribes living in the area to prevent them from becoming a nuisance

for the Indian Raj. When the British left the region, however, the subsequent birth of Pakistan

left such ambiguities among the local population that ethno-nationalism emerged along this

border.25 These very borderlands, imposed by outside forces, have served as a center for Islamic

extremism in the region; and it remains today, in Paul Smyth’s words, “an unwelcome obstacle

to counterinsurgency […] efforts” from the Global War on Terror following the terrorist attacks

of September 11th, 2001. GWOT, itself, as U.S. intervention in the region, has been highly

criticized as having contributed to destabilization across the region.

Moving back closer to our region of interest, CEE, other conflicts also abound in the

ebb and flow of great power relations. Each also have their related attributes, such as the

differences of internal identification, resource competition, and the related external interference

by larger actors. Again, as it happens, these unstable locales lie within the aforementioned

Shatterbelt of fragile states. Some of them have been referenced as “frozen conflicts,” such as:

Kosovo, disputed between Serbs and ethnic Albanians, which is also contentious between Russia

and the U.S.; Nagorno-Karabakh, disputed between Armenia and Azerbaijan, which has

rekindled in the spring of 2016; South Ossetia and Abkhazia, disputed between Russia and

Georgia, which were at the heart of the 2008 Russo-Georgian conflict; Transdnistria, disputed

between Russia and Moldova, which has a chance to reignite considering events surrounding

Ukraine. Now, of course, we also have Ukraine; but before we focus on aspects of this frontier

state, particularly since its dust has yet to settle, perhaps there are further lessons to learn from

the Georgian crisis of 2008, now clearer in retrospect.

Georgian Conflict & Black Sea Tension

In the case of the Georgian conflict, Russia’s aggressive approach is often believed to

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mark its resurgence within its Near Abroad. For its part, Russia believes it restored peace to the

autonomous areas of South Ossetia and Abkhazia, towards whom Georgia had initiated

hostilities. While both sentiments are perhaps in a grey area and can be argued, there should be

little dispute that the Russo-Georgian war in August 2008 has increased a rift between the East

and West, which has only been exacerbated in the current conflict in Ukraine. Both seem to

prove that old sentiments still linger.

Background to Conflict

On the matter of lingering sentiments, for years prior to the war the ante for provocation

in relation to the ‘frozen conflicts’ had continually been increased. The Kosovo precedent, with

its independence supported by the West, had been set in the late 1990s, and with its

independence the diplomatic thorn in the side of Moscow only increased. With tensions having

increased, it was due for a spillover. In foreshadowing events in the Caucasus, nearly two years

prior to direct conflict, Moscow accused Georgia of a premeditated intent to launch military

operations in its autonomous regions, South Ossetia and Abkhazia. To add to this, six months

prior to the Russo-Georgian war Putin had commented that the growing political situation was

intended to ‘provoke’ Russia.

As it turns out, though rarely brought to public discussion, Russia had not ‘fired the first

shot,’ as it was Georgia that started the war. Therefore it may logically be presumed that

Georgia believed it had something to gain from war – that there existed tangible utility to the use

of force. Whatever the reasoning was, the Georgian government and its military command

could not have forecasted anything close to a reasonable military victory. From this, it is clear

that Georgia overplayed its hand, and at best could only have hoped for foreign political

intervention in the event that Russia chose to respond. Alternatively, one could suppose that, the

Georgian attack on Tskhinvali was nothing but a ruse. Perhaps, Georgia felt the Kremlin was

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itching to prove its power, and positioned the latter into stepping toward a fait accompli. After

all, it is not abnormal for states to make a show of force from time to time – if for no other

reason to convince other states of their seeming capabilities.

For years leading up to the war there had been a lively debate between the deescalating

Cold War powers concerning each nation’s power projection capabilities. Part of Russia’s

show of force and regional influence has been through the Black Sea Naval Cooperation Task

Group (BLACKSEAFOR), stationed out of Crimea. As it happened, the Russian task group was

on maneuvers prior to and during the war with Georgia. As well, that very same summer, the

Russian-led Collective Security Treaty Organization (CSTO) kicked-off its largest military

exercise to date, which also took place throughout the Russo-Georgian war. At a time when

Russia’s military was attempting to exemplify its great power capability, it was required, almost

invited, to prove its abilities. Timing was opportune; as was the a related situation to which

Russia may have been reacting.

Western Involvement

Upon thinking about the 2008 conflict in the Caucasus, as well as the 2015 annexation

of Crimea and their futures, it is necessary to observe the surrounding region’s ebb and flow of

relations with great power interests over time. As would be expected, some common aspects

are:

competition, loss, jealousies, and power. More contemporarily can be seen a Russian

retrenchment from a Western (United States and a united Europe) push eastward toward the

Black Sea region and beyond where political and economic foundations have been laid across

CEE, the Balkans to the Black Sea littoral. For its part, Georgia’s position in the Caucasus has

clear value on the map as a bridge joining the Black and Caspian Sea regions. With a renewed

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interest by the West, small states in the region have had a renewed choice of patronage, no

longer having to rely on Russia.

Now, the common practice for a small state is to strengthen its ties with another,

stronger power. Since the breakup of the USSR, Georgia and Ukraine have also desired to assert

themselves in a manner that shows that they are no longer the exclusive purview of their

northern neighbor, as they have since extended these privileged relations westward. In defiance

of Russia’s traditional desire to keep privileged status in its near abroad, Georgia has long

sought membership and protection within NATO, just as Ukraine has sought membership in the

club of Europe. However, while their weakness and geographic location call out to the West for

a commitment, these traits also present an obstacle, in that the view from Russia, if taken

asymmetrically, will likely make their counter interests converge within this fragile region.

This, then, requires an explanation of Russian interests.

Russian Reaction

How Russia determines policy is not so vague. Winston Churchill is often quoted

describing Russia’s seeming complexity, though few choose to continue Churchill’s full thought.

He once said: "I cannot forecast to you the action of Russia. It is a riddle, wrapped in a mystery,

inside an enigma; but perhaps there is a key. That key is Russian national interest.” With its own

national interests in mind, it may be said simply that Russia desires a secure and prosperous

Russia. Regarding security: Russia has historically felt vulnerable to invasion; and history has

proven this justified: Mongols, Germany, even China, now the Transatlantic powers of the U.S.

and EU. The 1990s until the mid 2000’s saw a renewed chance for Russia to find peace and

security through greater integration with Europe. The problem, however, has been that neither

wants to reduce conditions sufficiently in order to do so. Regarding prosperity: Russia is

outside the partnerships of trade within which the western European states have flourished. This

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has historically been the case, whether the reasons be its distance from the West, overland, the

complexity of the lands that lay between them, or the simple difference between them. And the

end of the Cold War has done little to amend this situation. Even with Russia being accepted

into the World Trade Organization, Western-Russian trade has extended little beyond resources

necessary for the West.

And perhaps herein lies the allure in crossing the proverbial ‘rubicon,’ as we return

briefly to Georgia. While a Western foothold in Georgia would grant projection through the

Caspian, this would not be willingly permitted from its most recent historical patron in the north.

Increased western influence in Georgia could threaten not only Russia’s Black Sea access as

well as further east on the Caspian in time, but could also allow for unwanted influence along

Russia’s North Caucasus region. This might also be the case if the consolidation of Ukraine

were to be pursued under Western protection. Either could potentially put Russia’s own national

security in jeopardy, and/or diminish its preferred trading privileges across those territories, and

would be opposed with great prejudice. Such a Western presence across the

Black Sea littoral would likely come at a cost: war. This can be seen clearly in the case of the

Crimea: where Russia’s perception of Western support for the 2014 Euromaidan movement and

the subsequent arrival of a highly nationalist government in Kiev, prompted Moscow to fortify

its own interests.

Now, for as much as they have similarities, Ukraine is a different situation from

Georgia. Both are amidst areas with “frozen conflicts;” however, their position of importance is

different. Georgia and its position in the Caucasus has historically been a challenge for Russia

to control, this is seen in the separatist areas of Ossetia and Abkhazia, Nagorno Karabakh, and

the North Caucasus in general. However, Ukraine (Little Russia) was the original seat of Slavic

power in the east, with Kieven Rus; it is, for all intents and purposes, Russia’s birthplace. The

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seat of power moved to the interior, but only for greater protection from its challengers along the

periphery. The country’s name, for that matter, “Ukraine” means “frontier” in Russian –

denoting its position along the periphery with Russia’s southwest borders. As such, it is the

geographic position of Ukraine that provides the greatest ability for provocation and, hence,

where Moscow feels the most vulnerability. It is useful, now, to turn attention to the events that

have led up to the current crisis in Ukraine; and with it the repercussions as it pertains to the

great powers involved along with the ‘lands in between.’

Ukrainian Conflict: Coloring Euromaidan

Ukraine has long been a fragile state, relatively so since its inception. But, why? What

has led to this? Which variable(s) can be said to attribute to its relative instability the most?

Earlier, we did discuss three general fundamentals upon which states tend be associated with

fragility: internal differences; conflict over resources; and outside intervention. On the matter

‘Who has the right to control,’ similar to the multiplicity of identities found in the examples of

Central Asia, long before Kieven Rus was even formalized, Ukraine suffered from the

bipolarsim of its inhabitants hailing from two opposed sects of the Christian faith, Catholicism

in the west and Orthodoxy in the east. The Dnieper River, running north-south through the

middle of the country, more or less, marks the relative boundary between the two faiths.

Accordingly, over the centuries differing identities also presented themselves in language and

nationality. On the matter of ‘Who owns what,’ similar to the resource dependency that exists in

Central Asia, there is the relative dependency surrounding energy trade traversing Ukraine

between East and

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West: which includes 35% of all RU oil to Europe, and 20% of all the EU’s gas needs. Ukraine,

itself, depends on 40% of its energy needs on natural gas; of which virtually all comes from Russia,

alone.

Still, though, the two fundamental variants underwriting instability noted seem to be

trumped by another, the intervention of major states. It should be remembered that shatterbelts

are the site of substantial foreign military and economic involvement, typically between at least

two competing major powers. The greater Black Sea region and its adjacent subregions of CEE,

the southern Caucasus and Central Asia are key in the examples that can be given in the

competition for influence within this zone. For example, much about Russia’s ‘grand designs’

for its near abroad as it aspires to new ‘imperial glory’ can be easily found in the literature and

the press. However, if one accepts this line of argument, then equal attention should be paid to

the tension that originates from Western actions, at least in terms of its attempts to temper

instability and to solidify its own influence toward energy,40 self-determinism and free trade.

Further, it has been found by scholar William Easterly that intervention such as that

attributal to the superpowers during the Cold War had severe counterproductive effects on the

intervened states’ stability and democratic progress. Supporting this, political scientist Gregory

Sanjian argues that “the superpowers were not agents of progress…they actually intensified

those problems.” As well, it is argued, here, that Ukraine has also received this same treatment:

just as Kashmir remains fragmented, in part, due to the claims from China, India and Pakistan;

just as Ferghana was divided into multiple nationalities due to the USSR reacting to

British agitation in old Turkestan; and just as the British imposed the Durand Line between old

India and Afghanistan, resulting later in an ethno-national civil war in the birth of Pakistan;

instability in Ukraine and these subregions have been the result of actions made in the interests

of great powers, such as Russia and the West.

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Ukraine’s Precarious Position

Ukraine’s position, as all other states within the greater CEE subregion changed

significantly with the fall of the Berlin Wall and with the subsequent dissolution of the Soviet

Union; and the EU’s general foreign policy with states to its east has been fairly consistent since

then, in parallel with NATO – eastward expansion. As explained above, the EU had

methodically expanded toward economic and social integration of its eastern neighbors since the

early 1990s, in part through its “Wider Europe Initiative” in 2003 meant to further cultivate a

further “ring of friendly neighbors” beyond the states that were intending to accede the

following year. However, following the EU’s ‘big bang’ of 2004, when much of CEE joined

both western regional organizations, Ukraine’s bid for membership or an action plan to pursue it

was postponed due to the country’s lack of progress in democratization. The country and its

people were, in Ukrainian political scientist Mikhail Molchanov’s words, “left behind;” where it

was forced to choose how to move ‘further’ in their restricted space between east and west.

After, as Ukraine attempted to maintain a multi-vector foreign policy, to accommodate both East

and

West, the movement against the Ukrainian government known as the Orange Revolution began.

Yet in the time leading up to the revolution, the public in general, according to the Ukrainian

Monitor, preferred an eastern policy with only conditional support for westernization. Still, as

proffered by Molchanov, the new/Orange Yuschenko government would have been wise to

continue a multi-vector policy in an attempt to reconcile its own internal differences, in addition

to those external, and make both its western and eastern policies compatible with each other,

perhaps then bridging the divide. This, however, was decidedly different that what took place in

reality.

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Following the gradual acquisition of CEE states through the 1990s, after the fall of the

Soviet Union, the ‘big bang’ accession of 2004, along with the Orange Revolution, which

followed a series of democratic revolutions in the post-Soviet space, the Kremlin felt that its

fears of Western expansion and imposition were real, and justified. Putin’s message at Munich

in 2007 was meant to communicate as much. Indeed, it may be said that the current regional

crisis and civil war in Ukraine had prior warning, what should have been plenty of warning in

fact: that if Russia’s special privileges across its near abroad were not going to be heard, there

was one location that would put these perceived Western transgressions to a stop: Ukraine’s

Crimea.

Well after Georgia’s Rose revolution, and shortly after the Georgian instigated Russo-

Georgian war, numerous analysts began to warn that the “next flashpoint” would be Crimea.

Two Ukrainian specialists, Natalia Shapovalova and Balazs Jarabik, also pointed to patterns

which should have served as a warning, going back to the 1990s. Following the 1991

Ukrainian referendum on independence from the Soviet Union, separatism is said to have

“flourished.” Significantly, this was, again, the same case following the Orange Revolution of

2004. While Shapovalova and Jarabik do allude to Russian involvement in the matter, they also

cite a study conducted by Kyiv-based think tank which showed that 63% of the Crimean

population supported the idea of joining Russia, while only 25% supported the idea of joining

the EU, with 52% against. Other opinion polls have similar numbers, but where differences are

present, it is likely due to the larger geographic population poled. According to a Russian-based

firm, poling the wider Ukrainian population, again, 63% supported joining Russia, while, now,

53% supported joining the EU, with 26% against.

These numbers which might seem to show a changing tone toward an increase in

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support for the EU actually bely the cultural split of the country’s population that extend back

centuries. It is no surprise, then, that a look into the popular supporters of the Orange

Revolution disproportionately hailed from the country’s western regions: a stunning 90% of

‘orange revelers’ came from west-central Ukraine, while those who opposed the revolution came

from

the eastern-southern regions. In light of this, it is not so surprising that people took to the streets

in opposition to events in 2005 and were against the unpopular oppositional regime of

Yuschenko, which eventually became a widespread sentiment primarily due to its lackluster

performance. Further, then, when analysts were looking for other possible “flashpoints” to erupt

following the Russo-Georgian conflict, opinions that Crimea should have been on watch were

not so crazy.

Multiple analysts, such as scholar F. Stephen Larrabee, thought that Russia might use

pro-Russian sentiment in Ukraine, particularly so in Crimea, as a card to play against the

prowestern regime. Two observers, in fact, nearly predicted Russian actions in Crimea in 2015,

journalist Luke Harding referring to an “accidental or deliberate confrontation,” and Leon Aron

describing a blitz-like operation that seized the peninsula in short order. For what it is worth,

and though it may be disdained in the West, pro-Russian sentiment remains consistent following

the Euromaidan revolution with a Pew Center survey reporting that 91% of Crimean

respondents stating that the referendum to join Russia was free and fair.

This is not to insinuate reasonable Russian leaders had prior designs or intentions of

Crimean annexation, as conflict in the ‘frontier’ has never been in Moscow’s better interest.

Politico-military actions are a burden, and in such a fragile subregion even dangerous of

escalation. This is highly unlikely, as a former state department analyst notes it was much to the

advantage for Russia to influence, even direct if so, policies from afar rather than to manage

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them more directly, with conflict coming with significant disincentives. Ukraine is certainly of

singular importance to Russia, and its response may have been set upon a hair-pin trigger, but it

stands to reason that Russia felt its hand was forced to follow through with the Crimean

annexation, and support for Ukraine’s eastern insurrection. From here it is reasonable to

wonder: to what, then, should we attribute this pressure?

Ukraine’s Western Hand Russia has historically felt that influence in CEE is asymmetric:

that is, another’s gain

is their loss, just as described by Schlesinger during the Cold War. Following the EU’s concept

of a Wider Europe, and its European Neighborhood Policy, this fact was highlighted by Eurasian

expert Vsevolod Samokhvalov after the Orange Revolution. It is understandable, perhaps, that

in today’s day and age that democratic development might be felt to be a normative issue, and

simply part of a state’s natural development; yet, as Samokhvalov noted, “Moscow tends to

consider [revolutions] as part of the machinery of Western geopolitical expansion, which brings

the states to the brink of anarchy.” To this, he soundly recommended great care, as it is exactly

that type of thinking that has arguably resulted in the tensions since 2014, and a renewal of our

present Cold War mentality.

Regarding the recent revolutions, their origins have been the topic of much debate,

particularly those revolutions over the past two decades, beginning around the turn of the

century. Doubts as to whether they were actually locally based, and a product of the people and

for the people, are strong; and claims that they were, indeed, of local origins are plentiful.

Alternatively, and of course the prevailing belief in Russia, it is possible that the revolutions

were not only inspired, but actually exported from the West. There is reason to believe its

plausibility, for when it comes to regime changing movements such as that of Ukraine’s 2014

Euromaidan, many political scientists and observers remain perplexed as to how such massive

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collective action has been able to be mobilized in cultures without traditions of sufficient social

capital to do so. This is ever more the case when some claim, as political scientist Olga Onuch a

specialist in democracy with regard to social mobility, that Euromaidan was organized simply by

‘ordinary’ local Ukrainians. There is certainly evidence that points to the West having a hand,

along with those that hold to their doubts.

Many who have investigated the recent spate of color revolutions, while concluding

little to no Western intervention, do find that western institutions have contributed in some

measure to the success of civil society organizations, such as the Ukrainian youth group Pora. A

current U.S. foreign service officer wrote that the U.S.’s National Endowment for Democracy

(NED), the main democratic assistance arm of the U.S. at the time of the Orange Revolution

only gave $350 thousand in the three years prior to the 2004 elections, and that none of that

money went to Pora. Yet this conflicts with Valerie Bunce and Sharon Wolchik, two subregional

political scientists specializing in democratization, who while arguing that the West had not

engineered the revolution and that its organization was locally based cite International

Republican Institute’s Ukraine Country Director, Brian Mefford, with his admission that, along

with $2.8 million provided to Ukraine’s democratic development from varied U.S. agencies, the

revolution would not have been possible without a decade’s worth of U.S. assistance.

Other arguments that the Orange Revolution originated from local social capital come

from academic/analyst Abel Polese, who then also admits that this same social capital is

somewhat artificial as it was able to flourish only after external aid. His claim is that the aid to

organizations such as Pora was necessary, though not sufficient for success. As well, Polese

continues the local argument, yet still is forced to acknowledge that others have cited up to $65

million of Western assistance before the elections. Actually, scholar historian/political scientist

Andrew Wilson reports that close to $250 million was provided by the U.S. between 2002 and

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2004; yet attempts to argue that money given to Pora was only “seed money.” Wilson also

acknowledges aid given to other popular youth groups such as Znayu, who were given up to $1

million and assistance with publication of Gene Sharp’s influential book on ‘regime change

through social movements,’ as well as a contract from a small non-profit from Vermont to aid in

the very same in the amount of $11 million. Despite all of this ‘seed,’ Wilson remains resolute

in the argument that not only must the revolution have local origins, but that it is because of the

lack of 100% success in U.S. aid to numerous other democratically challenged polities that the

suggestion “that the revolution followed some kind of US script […] lack[s] credibility.” While

this can certainly be challenged, as the numbers show, there is some measure of, for lack of a

better phrase, plausible deniability that could be present.

It might be argued that the U.S. is not ‘sufficiently’ responsible, as Bunce and Wolchik

write, that “it would be mistaken to conclude, […], that these electoral episodes can be reduced

to the machinations of the American government and democracy promotion community.”

Instead, they support the probability of diffusion of this model through transnational networks,

drawing comparisons between the waves of revolutions that spread through the former Warsaw

Pact countries in CEE during the Cold War and those that have occurred as well in the

PostSoviet period. Bunce and Wolchik reason that the revolutionary models were passed on

country to country due to the similar political environments that they share. Perhaps, indeed, it

is due to these shared histories, but in multiple publications they still had to acknowledge the

fact that the U.S. has dedicated significant resources to democracy assistance in this region since

the Soviet dissolution, with electoral assistance in post-communist states even surpassing that

provided to nearby Latin America.

Others have drawn further parallels between U.S. assistance and this modular

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phenomena across post-communist revolutions. Sovietologist Mark R. Beissinger, for example,

argues that the prior success of such revolutions inspires emulation, and that these adaptive

models can substitute for the lack of locally structured civil societal organizations. After all,

where did these organizations originate, when these post-Soviet states have had little base from

which to work? He also underlines that the U.S. has adopted the advocation of aid to these

growing civil society organizations, as well as their ability to channel up to $65 million to

Ukrainian NGOs through 3rd party organizations. Beissinger further notes that the U.S. had even

reportedly offered support for Ukraine’s primary revolutionaries of the Orange Revolution, Pora,

to spread their strategies for democracy promotion beyond Ukraine’s borders, in a similar manner

to which they received their own instruction. Subregional political scientist Michal Simecka

agrees with this diffusion theory and its ability to mobilize underdeveloped civil societies, as their

weaknesses to develop and organize are offset by the agency of veteran activists from prior

revolutions. Now, this is not to say that modular diffusion swept across the entirety of the populace,

or even just the whole of the protesters for that matter. A revolution need not encompass the whole

of the masses, but only needs, as Onuch concludes in her discussion of the Euromaidan movement,

a radical minority – a vanguard, to lead the median protester.

Numerous youth groups provided the bulk of the protestors during the Orange

Revolution, which remains consistent as a transnational model diffused from prior revolutions,

as well as a general practice of Western democratic assistance. Much of the means to attain

proper diffusion, apart from financing, were the face to face contacts made amongst social

movements in the subregion. Veteran activists from, for example, Serbia and Slovakia made

contact with Ukrainian activists as early as 1999, and their efforts were decisive in the 2004

Orange Revolution. An interview with Demokratizatsiya confirms that diffusion took place

through the intermingling of these foreign activist, like Marek Kapusta who was a leader in

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OK’98, part of the Slovak youth group that helped oust Prime Minister Mečiar from office.

Kapusta admits to making numerous trips to Novi Sad, Serbia, ‘the mecca’ for regime change

training, as well as training Ukrainian activists, such as Znayu (I Know) and Chista Ukraine

(Clean Ukraine), prior

to the Orange Revolution with the aid of Freedom House, a U.S. funded NGO. Apart from the

U.S. and Slovakia – Dutch, British, and Polish organizations were also represented in the efforts

toward democratic promotion. However, it was the Serbian youth group, OTPOR, that had the

greatest contact with the most crucial group, Pora (It’s Time). So, as can be seen, any argument

towards a transnational model, and the use of its transnational activists, in the diffusion of

revolution into Ukraine has to see the link that these organizations all still originate in the West,

and with funding and organizational aid provided by the West, whether it be directly from the

U.S. or from European partners. This is the case in numerous revolutions throughout the former

Soviet Union, and has been reasonably suspected in Ukraine’s Euromaidan movement, with

reports of up to 600 million Euros provided to participating states in the three years prior to

revolution.

Euromaidan, it should be remembered, is only the latest, perhaps, the most significant

of revolutions to occur in the subregion since the Bulldozer Revolution in Serbia that followed

the Kosovo conflict. As can be seen, the thawing of frozen conflicts within and surrounding

CEE have been on the rise for a generation, and the accumulated tension has made small, and

large, states in the vicinity rather nervous, which complicates cooperation within greater Europe,

between: Brussels and Russia; Russia and individual EU members; EU members and Brussels;

as well as all of the above and the U.S. Europe’s failure to reach sufficient security through its

own capabilities a generation after the end of the Cold War, virtually without means of

mitigation amidst the rising tension, makes the above all the more worrisome.

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To underline, conflicts abound around the subregion, particularly around the Black Sea:

Georgia, Eastern Ukraine; perhaps Transdniestria next. It must be asked if even an EU

peacekeeping/enforcement mission, based on the battlegroup concept, would be able to stabilize,

even temporarily, a Transdniestrian gambit if necessary. At present, the Black Sea region is the

European tinderbox that the Balkans was of last century. There is no question that were another

border skirmish to occur, instability within the ‘zone of convergence’ would only increase. The

ability to address these potential conflicts, without having to rely on transatlantic promises or

interests, should be more than simply desirable. This should be seen as an imperative,

considering the tinder already present in CEE, so that Europe does not move toward a greater

conflagration, such as that eerily foreshadowed in the formative days of the Cold War. German

sociologist Werner Cahnman wrote in 1949, “The two great sociopolitical ‘fields’ of East and

West thus stand out, and between them is a vast region of twilights, uncertainties, and

unresolved conflicts. This is the ‘shatter zone’ of Sir Halford Mackinder, the zone where two

world wars have broken loose and where lies the greatest danger of a third.” These potential

conflicts, even the one at present in eastern Ukraine, have the significant potential of negatively

affecting the surrounding states in CEE, as well as greater Europe; and they give greater reason

to underline the need for smaller, more viable capabilities achieved by the combined efforts of

smaller states within the CEE subregion.

CEE Effects

So we return: if not the EU, then the subregion, itself, must come to grips with their lot

in life and muster their combined efforts to deal with such contingencies. That is the logical

answer. However, the truth is that while the Visegrad states do still have many shared interests,

some remain pessimistic as there is little tangible cooperation at present. Part of the problem is

that CEE states, since their initial success with subregional cooperation in the 1990s, have

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become accustomed to, and have remained complacent in, dealing with their larger neighbors on

bilateral terms. All, for the most part and regardless of their size, certainly in terms of higher

politics, have followed this path since they were allowed to begin Europeanization. Yet the

Ukrainian crisis may have exacerbated this pattern.

The current crisis in Ukraine, and the tension between Europe and Russia, has

somewhat fractured relations amongst the Visegrad states. After all, a handful of the V4 are

strained under the weight of having to impose sanctions, and then dealing with sanctions

imposed upon them. Hungary, Slovakia and even the Czech Republic, for example would prefer

to ease sanctions, or drop them altogether. Poland is of a different mindset. Although Poland’s

farmers and manufacturers are also suffering under these current trade conditions, the Polish

government prefers to maintain, even to increase, sanctions against Russia. These are more

economic arguments that pit V4 states in opposition, though subregional security experts also

underline that V4 seems equally at odds in terms of whether they feel physically threatened by

Russia’s response in Ukraine; no doubt with Poland leading the charge. This is the dilemma.

Geopolitical consulting firm Stratfor acknowledges the singular importance of the Poland within

the group, believing that not only is Poland necessary for Visegrad, but that Visegrad is not

sufficient without it; and that, in addition to the differences in foreign policies, if Poland

continues to rely more on its bilateral relations with its Visegrad partners than working as a

group, then it will prove that CEE is simply too heterogeneous for subregional organization.

Due to this possible reality, if Visegrad cannot see it through to push towards tangible

political cooperation, then, perhaps, they should regroup with less ambitious goals.

Hypothetically, at least in terms of security, it might be best to begin greater subregional

cooperation with a modified V4: a V3, perhaps, able to move ahead at first without the weight

of Poland, who wants a permanent NATO installation in CEE, which is against the wishes of the

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others. That is, a triangulated V3 might be able to pursue social, economic, perhaps even

defensive integration much more easily. Still, to leave Poland out would be a major loss to the

group; it would, at least, lose a certain measure of its politico-economic depth – which returns us

to a presently fractured Visegrad Group. Subregional specialist Arthur le Liedekerke believes

that as this crisis continues to fray the seams of Visegrad, it also erodes the credibility of the

group, itself; perhaps even threatening the future success of the Visegrad Battlegroup. Perhaps

the realization of this might tease Poland and the others back to the Visegrad table. After all, it

has been shown in preceding chapters that CEE cannot rely on EU to attend to its interests.

The U.S. could provide sufficient impetus to Visegrad toward greater political

cooperation. And CEE states may feel they need the U.S., as CEE states continue to pull away

from the idea of the EU socially and come to realize that they are lacking defensively. That is, a

returning fear of abandonment may enhance their Atlanticism, perhaps even a dependence on the

U.S. to compensate. The U.S. has previously supported such efforts, and could find reliable

partners in CEE to bolster its interests in Europe. However, CEE has recently felt rather

abandoned by the U.S., as well, as indicated in an open letter written in 2009 by academics and

politicians. The letter was a request for the U.S. to rethink its policies in the subregion,

regarding NATO and missile defense, almost with hopes to become relevant again. Perhaps they

felt that Mearsheimer was right: that the U.S. had abandoned Europe. Well, if they were not as

relevant at the time, after Ukraine, the subregion is now. And, yet, it is not toward the U.S. that

CEE should turn.

The danger of doing so, of course, would be that any further significant activity by the

U.S. in the CEE borderland states, whether it be in the form of a permanent NATO base or a

U.S. supported missile defense system, Russia is likely to react negatively toward it. It is not

likely to raise the ire that resulted in the current Ukrainian crisis; however, it would certainly

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raise tensions. And, more to the point, CEE should not want to have to rely on U.S. support, nor

to be put in a position to have to follow its policies. After all, a recap of the spate of color

revolutions in post-communist states, and their resulting tensions, should remind us that great

power interference is part of the problem. Rather than rush to the security that has been for so

long hesitantly offered by the West, Visegrad can capitalize on the shake-up that the Ukraine

crisis has given, and to find greater cooperation.

Now, just to be clear, it is not in this author’s opinion that Russia poses any danger to

Visegrad, or other states. Moscow has already accepted the former Warsaw Pact’s induction to

the West, and has no interest in projecting its influence within Visegrad states as it has in

Ukraine. A scholar at the Carnegie Endowment for International Peace Balázs Jarábik writes

similarly that the development of events surrounding Russian actions in Ukraine were

“developed for its own neighborhood – not necessarily beyond it.” The Central Eastern

European states of Visegrad are not within this "neighborhood" as described, and as such should

not continue greater defense integration strictly out of the fear ascribed --- but rather to lend

greater foundation to the states of this subregion. Nevertheless, for some CEE states, perhaps

cooperation does come from fear. At least Visegrad has shown some solidarity following

Crimea’s annexation, as noted when Visegrad’s heads of state came together to announce

security cooperation, in the summer of 2014.

Actions came to back up those words with early training activities of the Visegrad

Battlegroup, both when they came together: in the fall of 2014 for NATO joint-defense

operations; and, again, in 2015 for the same, in addition to peace-keeping training. Even though

this beginning leans upon its Transatlantic partners, at least it is real stimulus towards

subregional security integration. And if this, then, can turn towards more independent

collaboration between them, then all the better; as, again, it would be better, and more stable, for

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these states to pull together themselves and under their own steam, so as to avoid isolation and

unwanted neighborly influence. Visegrad, without alienating East or West, should focus on the

inter-related needs of the group; and remember the words of Hungarian writer Konrád:

“We Central Europeans have the greatest interest in seeing that East and West do

not come to blows. With the idea of a Central Europe we can anticipate a European

solution. The more we shut ourselves up within our own boundaries, each locked

in the consciousness of his own small nation, the more we will put ourselves at the

mercy of the great powers.”

In this final chapter we looked at another timely topic, the Ukraine crisis, as it relates to

subregional cooperation in CEE, specifically as it relates to the new Visegrad security regime.

Conflict, across the world tends to have many similarities. The chapter found that these also

exist in the examples given within the Shatterbelt. However, as Ukraine’s and other conflict’s

position in the Shatterbelt also show, foreign meddling tends to trump all other causal variables.

And if it may be argued that they do not necessarily trump, then it should be accepted that they

tend to set the origins of other causal variables. This is the case in various examples given

across Central Asia, as well as others given across the greater Black Sea region. Ukraine’s

position and recent conflict could, eventually, reach a tipping point at which time nearby states

had wished they had made greater effort toward their own common security. Actions show that

this has already started within the Visegrad Group. Let us hope that it continues for the purpose

of their own stability; and hope that it shows itself to be a deterrence from increased agitation

from its larger neighbors.

CHAPTER VII

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SUMMARY & CONCLUDING REMARKS

Writer Jonathan Bousfield once wrote of a special link for this subregion, that during

Soviet times amongst the Warsaw Pact countries of CEE existed a train that ran along the

subregion’s spine from north to south, from Gdansk, on the Baltic Sea, down to Varna, on the

Black Sea. Train No. 76 united these ‘lands in between.’ It was at about the same time that the

newly re-assembled Visegrad states began to fizzle that the number of passengers dropped to the

point that its transit between the seas was discontinued. This study is meant to show that these

‘tracks,’ so to speak, still remain. Not to hasten the return of Soviet times, of course, but perhaps

the remnants of this, now metaphorical, train can be reclaimed. The chapters presented,

hopefully, show that varying measures of its resurrection have already begun.

In Chapter One we looked at the birth of subregionalism in Central Eastern Europe, and

how the Polish-Lithuanian Commonwealth, encompassing much of the territories between the

Elbe and the Don Rivers and between the Baltic and Black Seas, were successful in providing

security and growth for centuries. What is more is that the polities associated with the

PolishLithuanian Commonwealth stayed their cooperation in trade and defense amidst very

formidable challengers on all fronts. History shows, however, how stressed such an

environment can be; and previous attempts to return to it have failed for various reasons. In

some cases, the Central Eastern European states were not willing to cooperate sufficiently; and

in other cases external actors proved too overbearing for successful integration – though in all

cases in may be argued that a mixture of the two are most assuredly true. What is also true is

that meaningful stability and growth in the subregion has not effectively returned to the these

Central Eastern European states, and it will likely require similar cooperation akin to the

previous Polish-Lithuanian Commonwealth to see it through. The pan-regional project of the

European Union is not sufficient to do so. It is too large, too cumbersome, too diverse, and too

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disinterested to care for the fragility in Central Eastern Europe. Perhaps the situation may have

been different had a Visegrad 2.0 came to fruition in the 1990s prior to accession the following

decade – perhaps, then, Visegrad could competently represent the wills of the subregion within

the European

Union. However, as this did not happen, the lack of a single voice relegates Central Eastern

European states to subprime status and disappointment. This can be seen in the subsequent

chapters.

In Chapter Two we looked at another perspective of Europe’s history in search for

Central Eastern Europe’s identity, finding them distinctively other than the West. This remains

historically the case in their divergent paths of development over the centuries, but also remains

so as there is a sense of differentiation between Central Eastern Europe and Western Europe

within the European Union, if not veritable disinterest emanating from the West. Perhaps even

more different than the West, Central Eastern Europe is decidedly different from its East, as

well. At the very least, the Central Eastern European states have distanced themselves from

their unwanted Soviet past in hopes to find greater development in the Post-Cold War age. Still,

at least, they share common values and norms amongst themselves; they share a distinct history

amongst themselves. They do have differences, but as neither East nor West has been able or

willing to assimilate Central Eastern Europe, we can say that this common characteristic does

unite these states, if even indirectly. Another element in this social investigation, as their social

history relates to present-day, particularly against the backdrop of larger federalized polities both

past and present, is that dissatisfaction and skepticism are common traits – with regular appeals

to greater popular representation. Two time periods came to the fore with relatively congruent

trajectories: the period surrounding the Compromise of 1867, and the period the EU’s big bang

along with the Single European Act. Just as before, the populace yearns for a greater voice

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within the region. Nevertheless, both periods allowed for unequal power distribution, as well as

social-economic development. The former, as history would have it, led to the eventual

dissolution of the bloated federal polity; the latter, still within its adolescence, suffers from

growing pains.

In Chapter Three we followed Central Eastern Europe’s economic transition from,

essentially, Soviet subservience to that of the European Union. That is said, in part, because

there have been insufficient efforts to adequately integrate the subregion with the European

economy. Its integration followed a path which has privileged western interests, at the expense

of the vast majority of locals within the subregion. The patterns of investment and privatization

are an example of this. The dependency which results from this merger, so to speak, is nothing

new; as was presented, it fits a similar pattern of relations that harkens back centuries. There is

little balance between the subregions of Europe. However, in today’s day and age, as we

understand accession into the EU meaning to be a path toward convergence, considering the

patterns that still persist today, it is little wonder that we find its divergence, instead. Conflict in

appropriating funds relate to this. This and the misallocation of those same funds, do suggest

that local decision-makers have made mistakes as well. Nevertheless, if the economic cost of

membership is greater than the socio-economic benefits that the subregion believed were in its

future, a decade into the relationship shows that the subregion needs to take greater

responsibility for its own economic development, and into areas that will allow Central Eastern

European states to better handle their economic position within the greater region. The

subregion expanding its capabilities into the knowledge economy, and in promoting

development from within rather than having to depend on those from without, is also likely to

benefit the greater region of Europe, as well.

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In Chapter Four we analyzed the very pertinent crisis surrounding the viability of the

Euro. The Euro and, for that matter, the entire history toward monetary union has had

significant obstacles. One could certainly argue a reluctance to converge on the matter of

monetary union. It is due, quite simply and singularly, to this reluctance that has proven

complete monetary union elusive to the European Union. Members have chosen simply not to

cooperate; and to follow their own interests, even though it is at the expense of other members

and to the European Union as a whole. Their reluctance stems, not simply as a matter of

pursuing national interests, but also from a difference in economic ideals – the battle over which

presents the EU, in a way, as a microcosm of the very same battle that has gripped the world

since the early decades of last century. This is, of course, referring to the degree of state

intervention within market economies. As it has happened, the intervention that the EU has been

following has brought about questions towards the currency’s viability, as well as that of the

Union. These questions have sparked, and should continue to spark, thoughts toward its

alternatives, whether that be in the form of:

discipline, adherence to commodities, or exit. Whichever choice, the subregion could be heard

if bellowed from a single voice.

In Chapter Five, we began by acknowledging Europe’s innate security deficit.

Actually, the EU project had tried to originally get off the ground based on mutual defense, but

was unable to due to the inherent complications that surround other nations’ security. And after

decades of following a less direct route, security for the Union is little closer than it had been at

the outset. The reasons for this is simply the different viewpoints that are had amongst the

varied members, based on their own specific histories, based on their own specific geographies;

and Central Eastern Europe’s is a very precarious one on both accounts, as we have witnessed in

previous chapters. And this makes European security a very tenuous project. Failures were

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covered, such as the Balkans, after which the Europeans began getting serious about

constructing their own defense; however, Libya showed just how little has changed over the

decades. The EU remains divided, and in order to begin construction of European security

beyond that offered through the U.S., and beyond that which any singular state can gather is to

look at smaller, more cohesive groups; as these subregional security regimes promise to have

more shared threats, than those at the regional level. Considering the seriousness of the high-

politics involved in national security, it is worth mentioning again how surprising success has

been with the smaller regimes, across the EU, but particularly in Central Eastern Europe.

Certainly that this is advocated within EU treaties helps in making common defense acceptable

at this level, but it also makes sense in theory, as well. Members have missed this intermediary

step in the past, but have recently gathered together to rectify this. Visegrad’s battlegroup in

2016 is the example of such organization, and their determination shows the viability of even

fielding a larger, more capable force, with continued ‘pooling and sharing.’ Certainly, with

consideration to events in nearby Ukraine, the topic has likely earned increased popularity in the

subregion.

In Chapter Six we looked at some common origins of conflict, in analysis of their

applicability to the current and pertinent crisis surrounding Ukraine. Ukraine, being right next

door, if not even within Central Eastern Europe, could have a ripple effect upon its surrounding

neighbors and that is why attention must be paid to it. The conclusions found were that these

crises tend to originate in actions of large states vying for interest along their peripheries; and

Ukraine is but one of those pivotal areas. As Central Eastern European states look onto this

crisis and react to it, it is important to see the perceptions of multiple sides of the story. That is,

while the truth at present may not be at hand, the perspectives of the actors are. If even untrue

that Russia has reacted to possible coercive Western policies in Ukraine, it is, nevertheless, what

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Russian leaders believe; and, therefore, the crisis did not originate within this frontier state.

That is, onlookers should not see this crisis as simply problems inherent within this troubled

state, but rather as a direct result of external actors. It is because of this that when Visegrad and

other neighbors debate as to how best to arrange for their security, they should look towards

each other, their smaller and more immediate neighbors – as there is strength in their numbers.

In fact, that is the message of this work: for wedged-states, such as those between

Europe’s East and West, to find solace and power within their combined numbers. No, they are

not as numerous as that of the EU, but EU’s own failures come from its size and diversity. In

this case, what has been learned can be expressed in this popular phrase: less is more. It is not

so much a cliché, but a truism, in the case of political, social, economic, and even securital

organization. Nay-sayers have an argument, yes, it is acknowledged. Numerous times

throughout history, even though the desire may have been present among some disparate Central

Eastern European states to return to a greater level of autonomy, either the lack of will,

intrasubregional bickering, or the influence of larger neighbors dissuaded the smaller states from

coming together. Times have changed. Already Visegrad states have united toward defense,

with a wealth of other opportunity before them.

Much of the literature regarding Visegrad cooperation has been addressed, if not

presented, in this work. This study has the benefit of taking the wealth of history behind Central

Eastern Europe and applying it to their cooperation today. Seeing the links of the medieval

Commonwealth’s independence, and the social dissatisfaction with institutionalism of the

European Union is almost reminiscent of the early dissatisfied sentiments of Bohemia, prior to

the defenestrations now centuries past, as western administrators were increasingly seen for their

illegitimacy. The same can be said of history’s relation to Central Eastern Europe’s economic

development: parallel in its subaltern relationship with its west, in that it remains dependent

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upon it; and of Central Eastern Europe’s physical position in Europe, itself, forever insecure as a

small nation. Tomorrow is unlikely to bring about the same climax, but Central Eastern

Europe’s greater autonomy may be in the offing.

But more than this, what has also been learned is that rather than presenting the quiet

attempts of subregionalism and the convenience if not predictability of it, within a decade of

‘Europe’s [fumbled] Hour’ it had already been concluded that the Union had simply grown too

large to adequately answer to the needs of such a diversified group, stretching the continent of

Europe. Not only had it been found to be so, but the Union has since set aside space for mixed

administration to blossom at the subregional level; and further, that this sanction could find

support in the Union’s neo-functional theory itself: in that great things can come from small

beginnings and their wellsprings.

This studies helps to show that the Central Eastern European subregion along the

EastWest faultline has the capability to become more stable and better integrated between its

regions, as well as a better partner in the world of globalization, as they consolidate from within.

The means to do so lies in constructing locally clustered interdependencies. Clustered

interrelated industries, for example, would provide finance for economic growth and a positive

incentive for its continuation. Cross-border social programs would provide a supportive

foundation. And expanding the already present subregional security regime, while pooling their

resources, can provide the backbone to the security forever sought.

And as the subregion is to grow with greater development and stability, or merely as a

means to underwrite its long-term legitimacy, local stakeholders would necessarily allow for

outside participation of its larger neighbors to Central Eastern Europe’s east and west. A central

goal would be for local mending, or deconstruction, to be met with external consultancy instead

of intervention. That is, major powers would need to reduce direct interference though maintain

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a role of consultation, with moderate assistance in return for modest gains. Aid would have to

be limited so that decision-making and ownership of economic or military ventures would be

kept at the subregional level, and available balance so that not one major regional actor is

excluded from equal opportunity. Success of this breadth can create a favorable win-set for all

participants towards international diffusion.

Indeed, major powers will be hesitant or even apprehensive at the outset of faultline

deconstruction. Bear in mind that when we speak of greater interdependence even within this

subregion, but particularly across this “line,” it is easy to be met with discouragement. From a

‘western’ point of view, it could be associated with Russian and Soviet imperial policy; and,

therefore, any consolidation across this line may then be associated with a possible neo-Russian

return to Soviet times. Alternatively, from Russia’s point of view, it could be seen as a Western

attempt at further expansion toward Russia’s borders. It should, therefore, be noted at the outset

that any meaningful convergence across this divide would have to avoid these perceptions.

Even though history lingers, it is very important for both great powers and local stakeholder

states not to repeat the mistakes of history. The transition of lands so long dependent to or

subjected by those more stable and independent presents a learning curve that history would

suggest to be quite long. However, as increasing subregional cooperation begins to yield

benefits, it stands to reason that in short order influential states would become increasingly

willing to take part in

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