November 21, 2013
The Cold War split Europe into two camps: a liberal, capitalist western half of the Continent and an authoritarian, communist eastern half. The violent dissolution of Yugoslavia, along with concomitant political and economic stagnation in Romania and Bulgaria, redivided the Continent in the 1990s between a stable, democratic Northern and Central Europe and a chaotic Balkans, the latter with Near Eastern-levels of underdevelopment. The accessions of Slovenia into the European Union in 2004, of Romania and Bulgaria in 2007, and now of Croatia in the summer of 2013 seemingly help to unite Europe at last, but in reality hint at new, albeit more subtle, divisions.
First of all, the European Union's economic core has itself been undergoing serious divisions between a relatively healthy north (Scandinavia, Germany and the Low Countries) and a crisis-ridden south (Italy, Spain and Portugal) with almost Depression-levels of unemployment and staggering debt crises. Meanwhile, Greece in the extreme southeast of the eurozone is experiencing the equivalent of a Great Depression, even as France threatens to move in the direction of Southern European standards of economic agony.
Atop these divisions within the Eurozone itself are more divisions within the larger European Union. Romania and Bulgaria may be in the European Union, but they are not in the eurozone: nor, more crucially, are they parties to the Schengen treaty, which allows the citizens of more than two dozen European countries to cross each other's borders without passport and immigration controls. In other words, there are still divisions between these former communist Balkan countries and Central Europe, albeit less profound than during the 1990s.
Now let's look at Croatia. Croatia has become the newest member of the European Union, bringing the number of countries within the organization to 28. Some EU officials have hailed the latest expansion as a sign of continued European vitality. Hardly. Croatia merely becomes a new, sick member of Europe. It has more than 50 percent youth unemployment, helping to give it the third-highest unemployment rate within the European Union after Greece and Spain. It has been in recession for half a decade, with an economy smaller than it was five years ago. It will be neither in the eurozone nor a party to the Schengen Agreement in the foreseeable future.
As for its politics, Croatia has an unstable center-left coalition with an abysmal approval rating of 24 percent. One should add that Croatia is among the most corrupt states in Europe, riddled with organized crime and inefficient state companies difficult to privatize. With 4.4 million people, it will be a relatively minor problematic addition to the already-fragile alliance. The biggest practical effect of Croatia's accession will be -- on account of Croatia's relative poverty -- its access to EU development funds, constituting a further drain on Brussels.
Of course, the fact that Croatia will not be in the eurozone makes its stunningly beautiful Dalmatian Coast affordable to many tourists. So there is admittedly one bright spot. Another bright spot may be that with high unemployment and a relatively weak currency, Croatia may create opportunities for entrepreneurs from within the eurozone to relocate some manufacturing and other forms of business there. This is not to be underestimated.
Croatia has been trying to escape its Balkan geography by seeking to build an import terminal for liquefied natural gas in order to service its own energy needs and those of the region around it. Croatia is attempting to interest natural gas-rich Qatar (in the Persian Gulf) in the project. Under this plan, Qatar would help finance the terminal as a hub for its own energy exports to Central and southeastern Europe. But with Europe's continued economic downturn, and with Russia planning to use neighboring Hungary and other countries in the region as a hub for its own "South Stream" energy pipeline, it is uncertain how interested the Qataris are in the Croatian offer.