Transitional Success USSR to EU — страница 9

NATO membership. This creates an interesting foreign policy situation for the Czechs. It is not contradictory, but perhaps a bit dispersed in terms of goals and objectives. Originally, NATO was created as a response to the communist threat. Recent discussions between NATO and Russia suggest this threat no longer exists. So what is NATO’s role today? For the time being, NATO has a very powerful, though perhaps indirect role in the continuation of EU expansion. EU membership would bring long term economic and political stability to the CEE (a NATO objective as well). NATO must continue to work in association with the EU to bring stability throughout the region to insure that the “communist threat” is indeed diffused indefinitely. It is not out of the question that massive

economic and political upheaval in the FSU could result in some nationalist power rising up and posing a serious threat to European interests. It is in this sense that NATO and EU have a very common, and perhaps final goal. Recently while in Detroit campaigning, President Clinton set a date for NATO expansion. He did not specifically mention which countries he was referring to, however, he did say that ‘their’ inclusion into NATO is expected by 1999 (by ‘their’ most experts assume, Poland, Czech and Hungary). If the Czech Republic becomes a NATO member by the year 2000, EU membership could come as early as 2003 or 2004. Therefore, politically, the Czech Republic needs to satisfy the goals of both EU and NATO. Economically, they need to address the EU a bit more thoroughly

then the US as the EU will be their main trading partner, but the US will remain a powerful ally, investor and trade partner. Although membership in either of these prestigious world powers would be remarkable for a country just a decade after socialist rule, the Czechs need to proceed carefully. In joining the EU, the Czech Republic will face a somewhat unpleasant reality. After years of being the political and economic leader of the transitional Warsaw Pact countries, they would be immediately subverted to the lowest status in EU member countries, lower than Portugal. Though this would enable them to receive EU assistance, both technical and financial, it would also require them to adapt possibly painful domestic policies involving increased environmental standards, increased

costs and drastically high competition in terms of quality and markets. It would also find them having to compete with Hungary and perhaps the most important country from the EU perspective, Poland. If Czech is forced to split benefits and favors with Poland and its huge 40 million person markets, they will indeed have their work cut out for them. Another major problem are the EU legal requirements for issues like consumer protection. The benefits to EU membership, of course are many. The Czech Republic currently meets four of the five requirements for EU membership under the recent Maastricht Treaty. The Czechs reached EU membership levels for currency stability, interest rates, debt as a percentage of GDP and public expenditures as a GDP percentage. They still fall short on the

inflation determinant. 1996 inflation is still at 9.1 percent. This would have to be lowered to 3.8 percent to conform to EU standards, a daunting task. The country will continue to reduce taxes wherever possible to stimulate the economy, but this is increasingly difficult as the Czechs are now in a relatively comfortable position where increased reductions in taxes would seriously hurt social benefits. The EU is currently in the process of implementing their monetary union. Though this is a fantastic goal for the Czech Republic, they are not yet in a position to completely abandon their own monetary policy and rely entirely on fiscal policy. Even though they could not be permitted to join the EMU upon their EU membership (it has much stricter requirements than general

membership), it would be strange for the Czech Republic to enter the EU knowing that they are a far cry from EMU membership. This is not to say it is inadvisable. The Czechs must join the EU at almost any cost. It is simply a concern worthy of mention. As the EU expands, the core states will be able to continue a favored status or elite power center, revolving around EMU involvement and not simply EU membership. This could be an important strategic leveraging issue for the core states (and a major point of contention for the Czech Republic as a new member). There are many concerns and areas for excitement both politically and economically for the Czech Republic. They are in a very good position to come out far ahead of anyone’s expectations. Perhaps even their own. EU and NATO