Tom Hundley
Chicago Tribune

Five years ago, a confident European Union added 10 new members in what was celebrated as the "Big Bang" expansion; a bold initiative that was supposed to spread prosperity across the continent. These days, there is growing alarm that the EU's Big Bang is on the brink of becoming the Big Bust.

Ferenc Gyurcsany, the Hungarian prime minister, warned that a "new Iron Curtain" could soon divide the wealthy states of Western Europe and their poorer neighbours to the east.

"At the beginning of the '90s, we reunified Europe. Now it is another challenge -- whether we can unify Europe in terms of its financing and economy," said Gyurcsany. Most of the new EU members, including Hungary, are former Soviet bloc states from the east.

As the global recession deepens and spreads, the economies of Hungary, Latvia, Bulgaria and Romania are teetering on the brink. And instead of rushing to the rescue, their rich neighbours to the west, most notably the Germans, appear to be averting their eyes.

"Is the Eastern European economic miracle in danger? Is the democratic transition in danger? No one is talking about it in public. But in private, people are scared," said Ron Asmus, executive director of the German Marshall Fund, which is host to a think-tank in Brussels.

"The whole idea of the EU is the pooling of sovereignty to take care of each other, especially economically. If the economic crisis fragments the EU, the whole progress of the project is up for grabs," he said.

The EU's economic woes do not occur in a vacuum. Just as the Lehman Brothers bankruptcy in September triggered the credit crisis that quickly spread from Wall Street to Europe, a fractured and protectionist Europe would act as a drag on U.S. hopes for recovery.

"The quicker the EU is able to solve its economic problems, the more able it will be to participate in the effort to restore the global economy," said Jean Pisani-Ferry, director of Bruegel, an economics research institute in the Belgian capital.

One of the first casualties of a fractured Europe would be the Obama administration's expectations for an enlarged NATO presence in Afghanistan.

"Committing troops and money and doing all those things for U.S. foreign policy -- it won't happen," Asmus said.

European analysts have warned that five million jobs could be lost if the strong economies don't help the weak. That, in turn, has raised the spectre of hordes of unemployed from the east migrating westward in search of work. The national borders that seemed to magically disappear over the past few years could suddenly reappear. Trade barriers could be stealthily resurrected and nationalist politicians could once again stir the festering rivalries that caused so much havoc in the 20th century.

In recent weeks, frustrated citizens have clashed with police in Latvia and Bulgaria, while protesting farmers in Greece temporarily closed the border. Things could get worse in the spring.

"I don't think EU itself is in danger. It's not a question of survival, but there could be a backlash against what has been accomplished over the last 20 years, and that is worrying," said Pisani-Ferry.

In times of economic stress, all eyes in Europe turn toward Germany, the continent's biggest and strongest economy.

"This is (German Chancellor Angela) Merkel's big test; this is her chance to prove her European credentials as well as her German credentials," the Marshall Fund's Asmus said.

Thus far, however, the German government has been cool to the idea of any big stimulus package. And Merkel shrugged off Hungary's warning about a new Iron Curtain, saying that the EU's stringent balanced budget rules must be observed and that individual bailouts should be considered on only a case-by-case basis.

We need your support so Novinite.com can keep delivering news and information about Bulgaria! Thank you!