A Nationalist Eastern Europe Could Reshape the EU

Poland and Hungary are forming one axis that has a very different view of what the union should be.

They want a different kind of Europe.

Photographer: Alexei VitvitskyTASS via Getty Images

The European Union has never been homogeneous, but recent policy clashes and particularly the immigration issue are making its split into three sub-blocs -- the North, the South and the East -- increasingly visible. Two strongmen, Hungarian Prime Minister Viktor Orban and Jaroslaw Kaczynski, leader of Poland's ruling party, make no secret of trying to create an axis for the East, which would begin a "cultural counter-revolution" in the EU.

As the U.K. with its perennially different opinions about everything heading out the door, the EU is essentially three caucuses. One is centered around Germany and includes the Benelux, Nordic and Baltic countries. German Chancellor Angela Merkel isn't doing anything to build this bloc: rather, the countries are united by similar economic policies, a belief in tighter budgets and, until very recently, by a relative inclusiveness and tolerance toward immigrants (there is now a backlash against it). 

The southern caucus was, until recently, amorphous and defined by similar economic problems rather than common approaches, except perhaps a desire for a relaxation in the debt and deficit rules for the EU. Now, attempts are being made to turn southern Europe into a political entity. Greek Prime Minister Alexis Tsipras has invited the leaders of six southern European countries -- France, Italy, Spain, Portugal, Cyprus and Malta -- to Athens for a conference that will start on Friday. Tsipras is probably too weak to serve as the central figure for an alliance that would stress "growth-oriented" economic policies as an alternative to northern stinginess. His hard-left party, Syriza, is behind in the polls and the center-right party is likely to return to power at the next election. Yet French President Francois Hollande is attending the meeting, and Italian Prime Minister Matteo Renzi may emerge as the informal spokesman for the group.

The assertiveness of the eastern caucus is a relatively recent development: The post-Communist nations that comprise it have been viewed with a certain condescension because they're poorer and because they had to apply to the club, submitting themselves to founding members' scrutiny. Orban and Kaczynski have cast all shyness aside though. During a meeting on Tuesday at an economic forum in Krynica, Poland, they flattered each other for standing up to the EU, particularly to Germany. "Politicians are short-sighted in Europe, but we are not," Orban said of the pair.

Orban described Brexit as an opportunity for "cultural counter-revolution." Kaczynski agreed and talked about "taking the initiative." They argued a little about which of them led and which followed -- in strengthening their governments' role in the economy at the expense of multinationals, in pouring scorn on liberal ideas, in standing up for national identities supposedly diluted by immigration.

Their vision for the EU is as powerful an ideological program as that of the union's founding fathers. It is for a bigger union (it needs more Eastern Europeans, such as Serbs), and for a joint military and strongly guarded external borders, but also one where more power would be devolved to national parliaments, and Brussels wouldn't interfere much in members states' domestic affairs. Such a set-up would give a strong, distinct voice for the former Communist countries in the EU, with much less sophisticated democracies and more populist voters than in "old" member states. It's a nationalist, conservative voice that sings in unison with those coming from Moscow, Kiev and, most recently, the capitals of the former Yugoslav countries -- Croatia, Serbia and Bosnia. 

Post-Communist nations have taken two decades to decide what they are, and the decision is almost unanimous: They are countries based on strong national traditions and interests. The nationalisms may have different vectors -- Poland is fiercely anti-Russian, Hungary and Slovakia are relatively pro-Russian -- but they have more uniting features than differences. They are all about a decentralized Europe that is not particularly welcoming to outsiders.

Orban and Kaczynski are betting that after Brexit -- the great opportunity! -- older and economically stronger EU members won't dare slap them on the wrist, whatever they do. So far, neither country has incurred any EU sanctions, despite all kinds of ominous noises from Brussels concerning their unorthodox views of democracy. In the kind of EU they want, it's not important to have enough power to drive policy: All that matters is the power to run their countries more or less as they please.

They don't mind, however, if others play the unity and federalism game, though, because they benefit from it. In 2015, Poland was the third biggest recipient of EU funding after France and Spain, spending 13.3 billion euros ($15 billion). Tiny Hungary received 5.6 billion euros in funding, more than twice as much as the Netherlands. A recent investigation revealed that one of Orban's two brothers co-owns a company that regularly receives EU grants through a system administered by the Hungarian government. Other Orban allies have also received government contracts funded by the EU. The union's investments in infrastructure have propped up both Hungary and Poland when other countries saw serious drops in living standards, so neither strongman wants to follow the U.K. out the door.

If the north-south division in the EU is long-standing and probably justified, given the different traditions and lifestyles of the two groups of countries, the emergence of the populist east is a new challenge. It's not clear whether the nationalism and the contempt for old EU values and institutions is really here to stay or if it only runs skin-deep. The sheer post-Communist brashness of the Orban-Kaczynski axis is not to be discounted, though. It may make more mainstream European pols wonder whether the club they formed can be stretched to accommodate the more radical vision of its newest members.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

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