Eastern Promises

With merciless ferocity, the credit crunch has taken its varying toll on each of the European Union’s 27 diverse nations, dashing many semblances of unity among member governments. The need to “stick it out in tough times” is easier said than done. The largest and most threatening fracture divides new EU countries from old and has caused Prime Minister Ferenc Gyurcsany of Hungary to warn against “a new Iron Curtain” that could once again divide the continent. A solution must be formulated to prevent that development.

Several Eastern European countries, including Hungary, Romania, and the Baltic states, are in a state of near meltdown, yet Western nations are prioritizing their own domestic difficulties. In the name of self-preservation, European solidarity, and long-term political strength, western EU countries have no option but to aid their neighbors. As severe recessions plague even the strongest economies in Europe, however, the cost of solidarity will undeniably be expensive.

Economic cooperation is the crown jewel of the EU and demands preservation if the EU is to endure. The Euro currency is used by 16 EU nations, which together constitute an economy the same size as the United States’s, and the fair-weather economic interdependence has been a lucrative source of prestige. The EU simply cannot afford to so accurately fulfill Euroskeptic predictions and allow its unity shatter in more turbulent economic conditions.

Indeed, the strife caused by the credit crunch only heightens the importance of economic unity. A shared currency, cross-national lending, and numerous Western investments in the East intrinsically link the welfares of European countries. Should one country go under, the detrimental effects felt across the whole of Europe would be monumental. To an even greater extent, the well-being of the European Union as a whole depends on the respectable performance of each constituent member. Failure to remain united may breed disillusionment with Western capitalism and leave Eastern Europe dangerously susceptible to Russian influences. Thus, for the sake of national interest and the endurance of the European Union, Western countries must find the means to create a bailout plan for failing countries in Eastern Europe.

Of course, given today’s universal economic problems, Western European countries will face both economic and political difficulties in sending money abroad. Even Europe’s strongest economy, Germany, is predicted to shrink by two to three percent this year, the worst performance since World War II. The recession has hit every country in Europe and has given rise to an upsurge in nationalist sentiments. Both the UK and Germany are due national elections in the next year or so, and leaders are astutely aware of the demands of their public. Nevertheless, politicians must do their utmost to explain the imperative need for an Eastern European bailout to their constituents. There will undeniably be short-term costs, but the long-term security that this plan ensures is in Europe’s best interest.

A bailout plan also presents an opportunity to improve several conditions within the European Union. The European Union allowed many Eastern European countries to amass unsustainable levels of debt in order to create a sense of prosperity—an act that has compounded the negative impacts of the current crisis. A bailout plan would generate more stringent economic regulations and could be used to promote unification of the national fiscal policies within Europe.

Furthermore, the partnership created in uniting to survive this crisis would likely increase social capital and improve relations between Eastern and Western Europeans. When the newly accepted Eastern European countries first joined the EU, Western Europeans initially reacted with hostility to the wave of immigrants that entered their society. Persistent unison and a shared economic venture may well reduce such antagonism.

Reality mandates that, even if the Western European countries dedicate maximum available effort and resources to support Eastern nations, there will still be a shortage of funds and instability will endure. Both Eastern and Western European countries should appeal to outside sources of aid and attempt to garner increased assistance from institutions such as the IMF. Only with a combined effort does the European Union have the credible means to pull through the economic crisis.

In troubled conditions, countries have a natural impulse to turn inward and focus on their own problems. However, the member states of the European Union are not isolated nations, but part of a larger political cooperation. Both for egotistic reasons and for the long-term well being of the EU, Western European countries must lend their support to Eastern European nations and attempt to retain a unified Europe.