The EU’s New Members


Note: This article contains brief descriptions of the ten countries that joined the EU in 2005.

Malta
Population – 396,851
This small Mediterranean island nation has now displaced Luxembourg as the EU's tiniest member. Throughout its history it has been famous as a fortress island, successfully resisting sieges by the Ottoman Turks in 1565 and bombardment by the Luftwaffe during WWII. Since independence from the UK in 1964, it has become a popular tourist destination and important freight transshipment point.

Cyprus
Population – 775,927
Attempts are still being made to bring the two halves – the Turkish North and the Greek South – together. Although only the internationally recognized Greek Cypriot-controlled "Republic of Cyprus" joined the EU, every Cypriot carrying a Cyprus passport now has the status of a European citizen. The divisions, however, continue to have economic repercussions with the "Turkish Republic of Northern Cyprus" experiencing great difficultly raising loans from the international community and forced to rely on subsidies from Turkey, the only country that recognizes it. Like Malta, this is a former British possession that relies heavily on tourism.

Poland
Population – 38,626,349
The largest of the new member states, Poland has a long and turbulent history. A great European power in the 16th century, it suffered from a powerful and quarrelsome aristocracy that gradually weakened the state so that it was partitioned in the 18th century by its more centralized neighbors. Following WWI, it emerged once more on the map of Europe but became a satellite of the Soviet Union after WWII. As a staunchly Catholic country with a long history of revolt against Czarist Russia, it was perhaps the most unwilling member of the Soviet Bloc. During the early 1990s, the new democratic government instituted a "shock therapy" program that made substantial, though limited, progress. Poland's agricultural sector remains backward, while restructuring and privatization of politically sensitive sectors, like coal, steel, railroads, and energy, have stalled. Reforms in health care, education, the pension system, and state administration have also led to heavy fiscal pressures.

Estonia
Population – 1,341,664
After centuries of Danish, Swedish, German, and Russian rule, Estonia first attained independence in 1918, but was swallowed up by the Soviet Union during WWII. Since its second independence in 1991 it has promoted economic and political ties with Western Europe, joining NATO as well as the EU. It is steadily moving towards a modern market economy and has pegged its currency to the euro. The economy benefits from strong electronics and telecommunications sectors and good relations with Finland, with whom the Estonians are ethnically related.

Latvia
Population – 2,306,306
Latvia's history is similar to Estonia's. After centuries of foreign domination it attained brief independence between the two World Wars, and achieved independence again following the breakup of the Soviet Union in 1991. Like its Northern neighbor it has also become a member of NATO. A large Russian minority of 30% of the population, however, means that Moscow continues to take an interest in Latvian affairs. Latvia's transitional economy suffered heavily from the 1998 Russian financial crisis, but has continued to modernize and privatize.

Lithuania
Population – 3,607,899
This small Baltic nation to the South of Latvia was once a great European power whose territory stretched across much of Western Russia and the Ukraine. After union with Poland in 1569, its fate largely followed that of Poland. After securing independence from the Soviet Union in 1991, it restructured its economy for integration into Western European institutions, also joining NATO in 2004. With strong economic ties to Russia it suffered deeply form the 1998 Russian financial crisis and has recovered slowly. In 2003 unemployment was still high at 10.7%. The transition to a Western style economy continues, however, with more than 80% of enterprises now privatized.

The Czech Republic
Population – 10,246,178
Formerly one of the most prosperous parts of the Soviet Bloc, the Czech Republic is now one of the most stable and prosperous of the post-Communist states. It has strong liberal traditions that even surfaced during the period of Soviet control, with the famous "Prague Spring" of 1968 that was ended by an invasion of Warsaw Pact troops. United with Slovakia in 1918 in the state of Czechoslovakia, the two states agreed on a "velvet divorce" in 1993. Its broad-based economy underwent recession in 1999, but has since been recovering and developing, with increasing exports to the EU, rising foreign investment, and growing tourism. However, high current account deficits – averaging around 5% of GDP in the last several years – are a problem.

Slovakia
Population – 5,423,567
The Slovaks are closely related to the neighboring Czechs with whom they share much of their history. In 1993 the two peoples, who made up the state of Czechoslovakia, agreed to go their separate ways, forming two states. Slovakia also has large Roma (Gypsy) and Hungarian minorities. Like many of the post-Communist states, the major challenge has been the transition from a centrally planned economy to a modern market economy. Recently the government has been making excellent progress in macroeconomic stabilization and structural reform. Major privatization and foreign investment has seen key sectors, like banking, pass almost completely into foreign hands. Unemployment remains high – 15% in 2003 – but many of those affected are now expected to seek their living in other EU countries.

Hungary
Population – 10,032,375
In many ways Hungary is similar to the Czech Republic: it was an even more important part of the Hapsburg Empire, achieving independence after World War One, and was a relatively well off part of the Soviet Empire with strong liberal tendencies. The freer style of Communism practiced here, termed "goulash Communism," gave it a head start in transforming its economy from a centrally planned to a market economy following the fall of Communism, so that it now has a per capita income one-half that of the Big Four European nations. 80% of GDP is from the private sector and foreign investment and ownership are widespread, with Germany by far Hungary's largest economic partner.

Slovenia
  Population – 2,011,473
The Slovenes were deeply connected to the Hapsburg Empire before joining Yugoslavia in the aftermath of WWI. Close economic links with the West and dissatisfaction with Serbian domination led them to declare independence in 1991. With its relatively advanced economy, Slovenia enjoys a GDP per capita substantially higher than that of the other transitional post-Communist economies. The fiscal picture is also healthy: the budget deficit dropped to 1.6% in 2003; while in March 2004, Slovenia became the first transitional post-Communist economy to graduate from borrower status to donor partner at the World Bank.


Club Life
February 2005

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