<p>The paper includes speaking notes for the session on “Central-Eastern Europe’s Positioning and Perspectives of the European Union’s Transformation” of the conference “The EU, Central and Eastern Europe and Ukraine: Transformation, Prognosis and Perspectives,” conducted on 16 November 2012 in Kyiv, Ukraine. It addresses selected issues of the current status of the EU in the persisting financial and economic crisis, respective developments in Bulgaria and other countries in South Eastern Europe, and possible implications for Ukraine, with focus on security policies and governance.</p>
Starting in 2008, the financial crisis led first to a recession of most of the European economies, and then to stagnation. In the overwhelming majority of EU Member States, the crisis is accompanied by negative ‘domestic’ demographic trends, compensated to an extent by continuing immigration. When these two trends combine, the ‘newcomers’ to the EU cannot be smoothly integrated. Instead of the desired cohesion, one witnesses growing inequalities in European societies, leading to the spread of radical ideologies, be that Islamist or others. Among the examples for the latter is the bombing and mass shooting attacks by Anders Breivik on 22 July 2011. Conflict in regions neighbouring the European Union is not on decline as well, and the number of natural disasters seems to be on the rise.
Calls for increasing the role of the European Union as a financial and security player are paralleled by the challenges of building new European institutions and the full integration of the twelve states that joined the Union in the two waves of enlargement in 2004 and 2007.
Under the combined effects of these developments, the EU seems preoccupied with its internal problems, and calls for further expansion are, mildly said, ‘de-emphasised.’ Nevertheless, as will be shown below, enlargement is maintained and the process is maturing. A key question in this situation is whether the EU can continue to be a ‘role model’ and to use its soft power and influence to shape the economic and the security environment in the years to come, as well as to strengthen the governance in new and potential Member States.
To a significant extent, the answer to this question depends on the level of efficiency the EU can achieve as both financial-economic and security player. In both spheres, increased efficiency means cooperation, increased integration and, in some cases, transfer of responsibilities and authority to EU, i.e. supranational, bodies. But although logic clearly dictates so, calls for increased integration are often countered by nationalistic views, playing on people’s sentiments. For example, there is an obvious need for new banking and financial rules, but it is hard to find an agreement. When finally one is found, it is often at a level much below initial ambitions. With the difficulties in the Eurozone, plans to expand it, or the respective plans of a couple of Member States to join it, are currently on hold. Thus, it is becoming painfully clear, that for a long time to come we will witness a ‘Europe on several tiers.’
Nevertheless, progress is made in a number of areas, such as security. The Lisbon Treaty introduced the Common Foreign and Security Policy (CSDP) and created the European External Action Service (EEAS). The breakthrough has been made. Even in times of economic difficulties, CSDP is gaining traction with a few low key missions since the beginning of the crisis, relying mostly on soft civilian instruments. It is still to be seen whether the EU will turn into a security player on ‘harder’ issues in the future. At current, there are important disagreements among Member States, e.g. on the operation in Libya in 2011. Europe continuous to rely on the United States for certain types of military capabilities and seems to have no ambitions to turn into an autonomous defence player beyond its immediate neighbourhood.
Further, the European Union continues to invest in common crisis and emergency management capabilities, introduced a counter terrorism strategy  and, more recently, a new Internal Security Strategy  with a mechanism for reviewing and amending it, and is currently reviewing its critical infrastructure protection policy and programme.
These and other related processes, e.g. the cooperation within and the extension of the Shengen Agreement, will continue to evolve depending on perceptions and political will. Whether we will see ‘Europe at two speeds’ or other flexible configurations when it comes to specific policies depends not so much on economic conditions, as on shared values and trust and the level of governance at EU level and in Member States – an issue that is of particular importance for South Eastern Europe.
South Eastern Europe (SEE) provides the most visible indication that the process of EU enlargement is not stalled. After Slovenia to the North-West of SEE joined the EU in 2004, followed in 2007 by Bulgaria and Romania to the East, in 2013 we will see the accession of Croatia to the West. Montenegro opened accession talks in June 2012, with hopes to join the Union in a decade. Earlier this year Serbia received a candidate status. Macedonia started “a high level accession dialogue” with the Commission intended “to help Macedonia meet the benchmarks in key areas such as judicial and public administration reform.”
SEE countries are often categorised as ‘transition countries,’ that need to catch up with developments that have been going on in Western Europe for decades and, in some cases, for centuries. The general anticipation is that this may happen much faster, in a number of years. And the European Union does provide incentives and support in the process.
In the economic sphere, EU is one of the biggest ‘investors’ in the current crisis. In Bulgaria, for example, EU funds for transport infrastructure currently far exceed the state budget for investments. Thus, the EU helps to bring infrastructure to a level that could not have been reached otherwise and creates incentives for further private investment.
Cooperation among SEE countries, however, lags behind. For example, for decades there has been only one bridge over the border section of 470 km between Bulgaria and Romania over the Danube river. Sufficient EU funds for a second bridge were allocated under the ISPA programme, 2000-2006, but were nearly lost after repeated extensions, and the bridge is not yet open. Likewise, in the 1990s SEE countries were very enthusiastic over the Pan-European transport corridors – a theme that at current is all but forgotten.
The EU impact is seen in the field of energy as well. Many observers argue that the EU has no coherent and effective energy policy. Other players have been very influential. Russia is the obvious example, along with Norway and recently Turkey as a transit country. Notwithstanding resource realities, EU has a leverage and can shape important features of the context for setting the energy policies of Members States. One example is the investigation, launched recently by the European Commission’s competitiveness watchdog against Gazprom. Recently Poland managed to reduce the price of gas delivered by Russia, and yesterday (15 November 2012) Bulgaria signed a new contract with Gazprom claiming over 20 percent reduction of gas prices.
Governance in SEE countries is another area of key importance for EU integration. Bulgaria and Montenegro, among the SEE countries, were designated in a recent Foreign Affairs article as ‘mafia states’—states where “national interest and the interests of organized crime are now inextricably intertwined.”
High on the EU governance agenda is the use of public office for private gain, designated for short as ‘corruption.’ With the accession of Bulgaria and Romania, remaining problems with corruption prompted the EU to introduce the Cooperation and Verification Mechanism to track progress in the fields of judicial reform, corruption and organised crime. This mechanism has a direct impact, e.g. interrupting the flow of EU funds, as is the case currently with Romania, as well as indirect impact. An example for the latter is the negative reaction of the European Commission when a majority in the Bulgarian parliament voted in favour of a controversial judge  for becoming member of the Constitutional Court. As a result, on 15 November 2012 the President of the Republic of Bulgaria took a unprecedented and very unusual move, walking out of the ceremony where that judge had to take an oath, thus blocking the procedure. In a better known case, the former Croatian Prime Minister Ivo Sanader received a ten years prison sentence on corruption charges.
One can speculate that that may not have been the case if not for the pressures of EU accession.
With or without membership in the European Union, there are fewer obstacles to travel, trade, cultural and educational exchanges. But on many occasions, security threats and challenges also do not recognise borders between Member States, as well as between the EU and neighbouring countries. There is an obvious necessity for cooperation between EU and its neighbours and a clear utility for both sides in border management, joint operations, and emergency management – to mention just a few of the numerous venues for potential cooperation in security maters and other fields.
How that cooperation will evolve depends to a significant extent on whether EU will remain a role model, attractive for people and countries around the world, and in particular for the countries in its immediate neighbourhood. Many of these countries have expressed their desire to join the European Union. The related question is: Will Ukraine sustain its desire, supported by a considerable majority of Ukrainian citizens, to join the EU?
On a more practical level, one needs to analyse carefully opportunities, constraints, and feasible approaches. Ukraine has a significant economic, technological, and human potential, and needs to make sure that EU partners are aware of it. Thus, EU and Ukraine could jointly develop it for the common benefit.
On the other hand, just like other new EU Member States, Ukraine is a country in transition, still lacking effective democratic institutions. Ukraine is also on the short list of ‘mafia states’ in the recent Foreign Affairs’ article. Therefore, while Ukraine demonstrates its economic, technological, and other capacities, it also needs to provide for effective transfer of norms. Progress in incorporating governance norms needs to be tested in practice – both internally and in the process of cooperation with the EU. And this is an area, where organisations of the Ukrainian civil society—like the Centre for European and Transatlantic Studies—can and should have an important impact.
In conclusion, even in the aftermath of the current crisis, the EU will continue to be a key player in the global economy and a global security player. It will maintain its attractiveness as a role model with significant normative power. Any country, willing to join the EU in the future, is encouraged to incorporate respective norms, so that it can strengthen the Union upon accession.
 An earlier example for the spread of fundamentalist ideologies is provided by the assassination of Pim Fortuyn during the 2002 Dutch national election campaign.
 For an exploratory analysis of the options see Valeri Ratchev, Uwe Nerlich and Todor Tagarev, Context Scenarios and Alternative Future EU Roles as a Global Security Actor, IT4Sec Reports 100 (Sofia: Institute of Information and Communication Technologies, June 2012), www.it4sec.org/node/4220; and Uwe Nerlich, “Challenges in a 2035 perspective: Roles for the EU as a global security provider?” Information & Security: An International Journal 29 (2012), - under print.
 Council of the European Union, The European Counter-Terrorism Strategy, 14469/4/05 Rev. 4 (2005), http://register.consilium.eu.int/pdf/en/05/st14/st14469-re04.en05.pdf.
 European Commission, The EU Internal Security Strategy in Action: Five Steps Towards a More Secure Europe, COM 673 final (Brussels, 22 November 2010), http://ec.europa.eu/commission_2010-2014/malmstrom/archive/internal_security_strategy_in_action_en.pdf.
 European Commission, First Annual Report on the Implementation of the EU Internal Security Strategy, COM(2011) 790 final (Brussels, 25 November 2011),
 See, for example, “The Schengen area and cooperation,” Summaries of EU Legislation, http://europa.eu/legislation_summaries/justice_freedom_security/free_movement_of_persons_asylum_immigration/l33020_en.htm.
 Dimitar Bechev, “The Periphery of the Periphery: the Western Balkans and the Euro Crisis,” European Council of Foreign Relations Brief, 20 September 2012,
 See “Bulgaria to get price cut in Gazprom deal,” Daily Briefing, United Press International, 19 November 2012, www.upi.com/Business_News/Energy-Resources/2012/11/19/Bulgaria-to-get-price-cut-in-Gazprom-deal/UPI-21511353301500.
 Moisés Naím, “Mafia States,” Foreign Affairs 91, no. 3 (May/June 2012), quote on p. 101.
 Implicated for corruption in a series of articles published by investigative journalists in 2010.
 Former Croatian Prime Minister Ivo Sanader sentenced to 10 years on corruption charges, Croatian Anti-Corruption Portal, as reported by Associated Press, 20 November 2012, www.anticorruption-croatia.org/home/news-from-croatia/175-former-croatian-prime-minister-ivo-sanader-sentenced-to-10-years-on-corruption-charges.
 For additional venues refer to European Commission & High Representative of the European Union for Foreign Affairs and Security Policy, Eastern Partnership: A Rodmap to the autumn 2013 Summit, SWD(2012) 108 final (Brussels, 15 May 2012),
 For an example related to Ukraine’s security environment see Ariella Huff, “The role of EU defence policy in the Eastern neighbourhood,” Occasional Paper no. 91 (Paris: EU Institute for Security Studies, May 2011), www.iss.europa.eu/publications/detail/article/the-role-of-eu-defence-policy-in-the-eastern-neighbourhood.