European Union

European Commission President Romano Prodi announced Jan. 27 that the European Commission had already adopted a 70-page document with three main points aimed at strengthening the EU's federal institutions. Prodi said that the changes must be agreed upon before December and be enacted before 2003, when the first of 13 countries hoping to join the EU could become members. Prodi's reforms include: faster integration for selected states; abolition of the national veto system, in which one country's objection effectively kills a proposal; and setting a limit on the number of commissioners. He added that the reform was urgently needed to ensure that the next round of EU expansion would not paralyze decision-making.

The European Commission is the executive branch of the European Union. It has three main functions: to make proposals for all new legislation, to ensure that EU legislation is applied equally in all member states and to implement and manage Union policy. It is composed of 20 commissioners, two from each of the larger member states - Germany, Spain, France, Italy and the United Kingdom - and one from each of the smaller ones - Belgium, Denmark, Greece, Ireland, Luxembourg, the Netherlands, Austria, Portugal, Finland and Sweden.

The European Parliament is elected by party list by each of the member states. It amends and adopts legislation, approves the Union's budget each year set forth by the Commission and exercises authority over the way in which policies are enacted. Representation in the European Parliament is proportional to the voting population.

The EU is a grossly inefficient institution. It functions as a government with a central bureaucracy but no central state. It is not even a confederation. While it has integrated its economic processes to the point of having a single currency - a situation that has yet to prove it can survive a recession - it has had few successes in integrating its political processes. Furthermore, there is nothing to keep a nation in the EU if it determines that it is in its interest to withdraw. EU legislation on topics ranging from accepting new members to farm subsidies to voting reform must be agreed to by each of the member countries. Prodi's proposals are engineered to reverse this trend and transform the EU into a more efficient federation of states.

Prodi's reforms would have the EU adopt a method of majority voting, reducing the right of member states to veto decisions. They would also limit the number of EU commissioners to the present level of 20, even after expansion, with membership rotating among the various members. Prodi's final recommendation would speed up the process of EU integration - which would also serve to add momentum to Prodi's reforms.

The first of the three proposals is the most significant. In enacting a majority rule, nations in the EU would lose the power to veto policies with which they alone disagree. Past vetoes have prevented the EU from extending candidacy to Turkey, all but halted the reform of the EU's agriculture subsidies and protracted budget negotiations during the Thatcher years due to British intransigence. Unfortunately for Prodi, all of his proposals must be approved under the EU's current voting regime - his reforms could simply be vetoed by, say, Luxembourg.

Prodi's commission reforms would prevent executive paralysis. Without Prodi's reforms, the commission will continue to grow. If all of the current applicants were admitted under the current structure, the commission's already bulky membership of 20 would expand to 34. Prodi's proposal simply prevents the executive process from becoming any more cumbersome than it already is.

The timing of these proposals is also significant. The EU is in the process of enlarging into Eastern Europe. Hungary, Poland, Estonia, the Czech Republic, Slovenia and Cyprus began ascension negotiations on Mar. 31, 1998. The Commission called for ascension negotiations with Romania, Slovakia, Latvia, Lithuania, Bulgaria and Malta to open early this year. Though ascension into the union is expected to take several years, the inclusion of more countries into the Union as it stands would lessen the power of existing union members, as these countries would expect proportional representation in the Parliament and equal representation in the Commission.

The potential ramifications of these proposals are extreme. Outside the EU the reforms would make Union membership much more attainable for potential candidate states, such as Poland and the Czech Republic who already are in the process of linking their economies and policies to the rest of Europe. Prodi's reforms, while primarily a rationalization of the EU's current processes, also deal with Eurasia's changing geopolitical realities. Russia has recently moved to strengthen and tighten the CIS and draw back much of the former Soviet Union. Pragmatic Prodi realizes that if the EU does not streamline and accelerate the expansion process, the EU could lose its opportunity to merge with much of Eastern Europe and the Baltics.

But more importantly, Prodi's proposals will exacerbate tensions already existing within the EU. Pro-integration states such as the Belgium, the Netherlands, Spain, Greece, Finland and especially Germany will, with a few reservations, welcome Prodi's changes as efforts to streamline the EU processes. However, Eurosceptics such as Denmark, Sweden, and especially the United Kingdom, will react violently. The United Kingdom is the most serious concern. Many in the United Kingdom are already displeased with the amount of control their country has ceded to the EU. A row over outright federalization of the EU could be enough to convince the UK that not only is the Euro not in its best interests - but neither is EU membership.

Prodi's proposal is a crucial test for the future of the EU. If the proposals pass without a serious backlash, the EU will be well on its way to become a single, massive and proactive global player. However, if the proposal gets pigeonholed, then the current and future resolve of the EU's economic, institutional and defensive coordination would become so convoluted and protracted as to become almost counterproductive.

European Commission President Romano Prodi surprised his Latvian audience Feb. 10 by declaring that "any attack or aggression against an EU [European Union] member nation would be an attack or aggression against the whole EU, this is the highest guarantee." If implemented as stated, this marks a quantum shift in EU policies from the purely economic into the security realm - a change that Russia cannot afford to ignore. Now Russia will feel just as threatened by EU expansion as it has by NATO expansion. Prodi's announcement intensified the ever-escalating race to establish a new frontier between Russia and the West.

At the Jan. 24-25 Commonwealth of Independent States (CIS) Summit, [http://www.stratfor.com/SERVICES/giu2000/012100.ASP] Russia compelled its fellow CIS members to participate in tighter security measures [http://www.stratfor.com/CIS/commentary/c0001260125.htm] to combat terrorism and Islamic fundamentalism - Moscow's code names for Chechen militants.

Until now, the West has responded to Russia's new assertiveness with piecemeal measures. First, there was a tug-of-war for Georgia's loyalties [http://www.stratfor.com/CIS/commentary/c0002030025.htm] over joint Russian-Georgian border patrols. Then, the United States directly challenged Russian interests in the Persian Gulf [http://www.stratfor.com/MEAF/commentary/m0002040010.htm] by boarding a Russian tanker that was evading U.N. sanctions. Russia responded to these challenges by strengthening its ties with old Soviet client states [http://www.stratfor.com/SERVICES/giu2000/020800.ASP] such as Iraq, North Korea and Vietnam. Now, the West has seized the Russian gauntlet. High-level delegations are taking off to entice much of Central Europe to fully join the Western fold.

Russia cannot help but take this diplomatic blitz seriously. Among the delegations are the European Commission president, NATO's secretary-general and NATO's supreme commander. Their target audiences include an array of states traditionally within the Russian sphere of influence: Estonia, Latvia and Lithuania border Russia; and Christian Orthodox Romania and Moldova share religious ties. To underscore the completeness of the Western response, NATO even dispatched a delegation Feb. 9 to Russia's Caucasus neighbor, Georgia.

But it is Prodi's statement that will truly shock Russia. The fact that the proclamation came from the European Commission's president - the highest non-rotating position within the EU superstructure - indicates that the intent to implement security guarantees is no mere trial balloon, but new EU policy.

However, Prodi's promise of an explicit security guarantee cannot be supported by current EU capabilities. Even if the Eurocorps functions as Prodi envisions, it will have a scant 60,000 troops at its command. This is just barely enough to handle a Kosovo-style operation; it would do little to deter a large-scale attack from a hostile power. Even the defense establishments of Europe's larger countries would be hard-pressed to project sufficient power to Europe's eastern fringes in times of crisis.

Only the United States could possibly provide the level of force that Prodi envisions. Prodi's wording itself sounds remarkably similar to NATO's Article V security guarantee: "that an armed attack against one or more of them shall be considered an attack against them all." This indicates that Prodi - the steamroller of EU reform [http://www.stratfor.com/services/giu2000/012800.asp] - is either bluffing his way through Central Europe or has plans to integrate NATO into the EU in order to produce a militarily credible Europe. Prodi's assurance of security to all EU members extends NATO guarantees to the countries that will be on the EU's new eastern border. Suddenly, Russia's perception of the EU becomes much less benign.

What makes the announcement more dramatic is Prodi's choice of audiences - Latvia. Of all the former communist states, this small Baltic country has had the most venomous relations with its former master. Prodi's statement and the locale in which he made it indicate Prodi's willingness - even enthusiasm - to stare down Russia over issues of importance to Europe.

Russia may have the advantage in the race for Caspian oil routes [ http://www.stratfor.com/CIS/specialreports/special20.htm] and in the contest for Central Asia [http://www.stratfor.com/CIS/specialreports/special13.htm], but Prodi has firmly set his mind on the EU fully absorbing all of Eastern Europe - Baltics included. Now he has shown a unique willingness to use NATO to achieve that goal. It remains to be seen how the rest of the Union will respond to this sudden policy shift. Prodi will have his plate full convincing the EU's four neutral states to militarize under any common banner. Persuading France to allow the United States an even more prominent position in Europe will prove thorny as well.

If the EU fully adopts Prodi's plans, it would conjure a nightmare scenario for Russia. A soft-power EU and hard-power NATO would become formal partners in Western expansion. Traditionally neutral countries such as Austria, Finland, Ireland and Sweden would be co- opted into a NATO-EU military structure. An economically powerful EU, backed by a militarily powerful NATO, would dig in along vast lengths of Russia's eastern border. Russia's acquiescence to EU expansion will rapidly come to an end, and what little is left of the Russia-West "friendship" may be completely gone.

British Foreign Secretary Robin Cook, speaking about Austria in advance of a European Union (EU) accession meeting Feb. 14, warned against the spread of nationalist sentiment in Europe, adding that such moves were not conducive to European enlargement. His comments came one day ahead of membership talks with Bulgaria, Latvia, Lithuania, Romania and Slovakia.

Cook's statement, however, ignores the fact that Central Eastern European countries are already far more deeply nationalistic than Austria could ever be. One example is Hungary, whose far-right Hungarian Justice and Life Party (MIEP) announced plans Feb. 10 to join forces with one of the ruling coalition's parties. Cook's statement was more of a warning to the EU concerning the weakness of its position on Austrian nationalism. That position could actually undermine attempts to lessen a nationalist backlash in already highly nationalistic candidate states.

Central and Eastern Europe developed their own nationalism as a direct response to Russian communist domination. The Soviet Union suppressed nationalism - with violent commonality - as a matter of necessity. When Czechs and Estonians sought to express themselves as Czechs and Estonians, instead of comrade-citizens of the Soviet socialist world, Moscow saw this as a direct challenge to its rule. Ironically, the only rejoinder to continued Russian suppression was increased nationalism. There are parallels between the Soviet Union and the EU, as Europe becomes more "European" and less French, Greek or Italian.

Therefore, nationalist sentiment in Eastern Europe will naturally increase as these candidates consider joining yet another European union of states. In Hungary, in particular, 65 to 70 percent of Hungarians still support EU membership, according to the head of the Hungarian negotiating team to the EU, Peter Gottfried. However, despite the fact that the government officially condemned the Freedom Party's rise to power in Austria, public opinion polls have shown most Hungarians are becoming more supportive of Austria's nationalistic rebellion and more critical of the EU. Despite Hungary's close historical, political and economic ties with Austria; the focus on Hungarian nationalism only came to the foreground after Austrian nationalism became news.

A further irony of the European position on Austria is that Austria is only the most vocal of the nationalists. Nationalist sentiment, already simmering in many of the existing European states, is expected to intensify. In this way, Europe is teetering on the edge. One of the only ways for the union to counter this nationalist sentiment is to impose more federal types of constitutional reform. However, the paradox in that situation is clear, that is, moves toward federalization will only cause existing and potential members to react by becoming more nationalistic.

Europe is at a critical decision point. European expansion is no longer solely designed to bolster Central and Eastern Europe's economy. Instead, the purpose of expansion has changed to include securing its eastern border before Russia can regroup and begin to assert more influence in its former republics and Warsaw Pact partners. In order to expand, however, the union must adopt more federalist policies without enhancing nationalist reaction from existing members and alienating already deeply nationalistic candidates. It all boils down to the EU weighing the need to quell nationalist sentiment against its security needs. Based on the EU's strong condemnation of Austria's Haider, Europe's ability to effectively bring Eastern Europe into the fold does not look promising.