Monday, May 11, 2009

Divide and rule - is still the European credo

After several wars and a lot of economic distress it looks like Europe's divide-and-rule policy in the ex-Yugoslav territory has passed its top. In the territory of that other former federation (the Soviet Union) however, the policy is alive and kicking. The EU is starting an Eastern Partnership of most former Soviet states, but excluding Russia.

In former Yugoslavia CEFTA has taken some of the pain away, but for the former Soviet Union I am still waiting for a similar initiative. Just as Norway (oil) and Iceland (fish) Russia (oil and gas) is a country with a resource dependent economy that would have to give up much control of those resources with an EU entry - too much for the taste of many.

Offering these countries a kind of "CEFTA light" - that possibly later could be converted in a full CEFTA membership would go a long way to stabilize their economies. Yet instead the EU is only bickering about possible EU memberships (not very probable for the next decade) and giving minuscule amounts of aid.

The Soviet economies were connected with the other COMECON countries. Breaking that connection was harmful to both sides and the connection should be restored.


Anonymous said...

COMECON was just another instrument of Soviet imperialism. It was necessary to get rid of it, and beneficial. Something new to replace it should be built on the equality of the nations involved, not to enforce the old imperial order.

As for the Eastern Partnership, what is stopping Russia from joining?

Wim Roffel said...

This post was about efficiency and damage. Much of the "transition costs" had nothing to do with communism and capitalism but were a consequence of all the new borders created - with the border at the East side of the EU the most damaging. It now looks like the EU wants to build yet another border - between Russia and the other former Soviet states.

When you create a border that is difficult to pass countries will often buy there goods from elsewhere. That means that in one country a factory will be destroyed and in another a new factory will be built. That may be efficient when it is caused by a real difference in competitiveness. But when it is just a consequence of arbitrary rules it is a pure waste of money.

Why do you think the former communist countries have done so disappointingly economically?