While the current financial crisis continues to devastate global markets, the European Union is faced with its greatest challenge in its relatively short history – as the division between West and East, rich and poor, threatens to split the union along the seams.
Instead of uniting behind a common banner of an amalgamated Europe in the face of adversity, as the nature of the EU would suggest, many of the coalition’s original members have shown signs of reluctance to come to the aid of those nations who are on the brink of collapse.
This feeling of disunity between the east and west was only exacerbated at the recent EU summit in Brussels, where a €190 billion universal relief fund for Eastern Europe’s hardest hit countries was proposed by Hungary and subsequently shot down by Germany.
In fairness, the pinch of the current economic climate is being felt universally across the continent, and while the protectionist instincts for each country to look after their own rational self-interest are to be expected, the collapse of Eastern Europe would be catastrophic for Europe as a whole.
If Eastern Europe were to fail, the migration of millions of unemployed workers heading west is very easy to fathom. Political tensions would also rise as countries scramble to pick up the pieces of the broken nations.
So far, Latvia’s government has been the only one to have failed, but countries like Hungary, Lithuania, and Estonia will need to severely cut spending in order to maintain financial stability.
The United Kingdom’s Prime Minister Gordon Brown has been a leading advocate among the EU’s original members for establishing further relief funds through the International Monetary Fund. His country, however, has been hit hard by the current crisis and it is unclear whether they will be able to provide the financial support needed to ameliorate the current hardships facing the East.
No doubt this divide in Europe will be brought up at the Group of 20 meeting next month where the United Kingdom, France, Germany, Italy, and the EU hold seats.