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May 17, 2013 | 16:42 GMT

3 mins read

Amid the Crisis, the EU Adds Another Member

Amid the Crisis, the EU Adds Another Member
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Summary

Despite the European Union's ongoing difficulties, some countries remain committed to joining its ranks. In fact, the bloc all but added its newest member, Croatia, on May 16, when the German parliament approved the Balkan country's accession. Croatia will not become an official member until July 1, but its membership is virtually assured.

Croatia is joining the bloc at an inopportune time. Western European countries, which are struggling with domestic stagnation and with currency union reforms, may be less motivated and less equipped in the coming years to aid peripheral European countries. Croatia thus will likely be the last country to join the European Union for several years. And considering the growing pressures for the bloc to reform its currency union and its institutional framework, Croatia probably will be the last country to join the European Union in its current incarnation.

The EU Commission, which assesses new membership bids, presented its final progress report on Croatia in March, stating that the country was ready to join the union. Most EU countries already approved Croatia's EU accession before the report was released. However, by being the last country to give its approval, Germany signaled to Croatia that it should not relax in implementing its EU-mandated economic and political reforms. Even after Croatia accedes, Germany and other northern European countries continue to pressure Zagreb to implement further reforms, especially since many in Europe view expedited accession as a source of Europe's current problems.

Trends of Expansion

The largest EU expansion took place between 2004 and 2007, during which the bloc added Cyprus, Malta, the three Baltic countries and seven Eastern and Central European countries. Between 2000 and 2007, the economies of the EU 15 (later the EU 25) grew annually by an average of 2.4 percent, according to Eurostat. Every country save Malta showed positive growth the year it joined.

Now the situation is different. The European Union and the eurozone are stagnating economically. Europe's core economies, particularly France, the Netherlands and Germany, are in recession or have very low growth rates. Facing unemployment and increased migration flows, northern countries are seeing growing opposition to the free movement of labor, especially regarding Eastern Europe. The last two members to join the European Union, Romania and Bulgaria, will only profit from full free movement of labor in 2014 — they have not yet been granted access to the Schengen zone. And after Croatia joins the bloc, Croatian workers will face years of labor mobility restrictions as other Eastern and Central European countries did when they joined.

With EU accession, Croatia will profit from additional EU funds that should help its struggling economy somewhat. It also means there will be less EU funds to be shared among the other members. The fact that Croatia's main export partner, Italy, is experiencing low growth will limit the effectiveness of these funds.

This could be foreboding for the country's already fragile economy. According to Eurostat data, the Croatian economy will contract in 2013 for the fifth consecutive year. In March, the unemployment rate was 18.5 percent — twice as high as in mid-2009 (youth unemployment, peaking at 51.6 percent, doubled over the same time frame).

Croatia's economic maladies seem to have tempered the joy expected to accompany EU accession. This was especially true as the country had to implement public sector reforms and push through controversial privatizations of state-owned companies.

Redefining Foundations

Despite the European Union's dwindling popularity, Europe's leaders still intend to further integrate the Continent. Croatia's accession — and Latvia's bid to join the currency union — shows that poorer European countries are still trying to profit economically and enhance security through ties with Western Europe. Among these countries are Serbia, Montenegro and Macedonia, which are candidate countries, and Bosnia-Herzegovina and Kosovo, which hope to become candidate countries. Croatia's accession helped Croatia and Slovenia solve their bilateral disputes. In turn, Croatia and Serbia have also become closer, showing that to some degree the prospect of EU integration is helping former Yugoslavian nations find some common ground.

Bilateral disputes and difficult institutional reforms are slowing their respective integration efforts. But even if these countries implement reforms sufficiently, Western Europe's interest in integrating the rest of the Balkans is not as strong as it was during previous phases of EU expansion — Croatia's admittance notwithstanding. The core of Europe is simply too preoccupied with redefining the foundations of the European Union. 

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