Managing globalization by managing Central and Eastern Europe: the EU’s backyard as threat and opportunity

As European voters and politicians increasingly demanded in the 1990s that the European Union (EU) 'manage' globalization, managing the new member states of Central and Eastern Europe (CE) emerged as an important precursor. To richer areas like the old EU-15, poor areas next door often appear as both threat and opportunity. Some EU-15 actors - mostly corporations, but also many European liberals - saw in CE a chance for new markets, new workers and new investment opportunities for the core EU-15 economies. They tried to codify new conditions of production and sale that they thought beneficial, but other EU-15 actors worried about competition from CE on capital, labor and product markets. The fearful - mostly EU-15 states and the EU itself but sometimes firms headquartered in the EU-15 - acted to try to minimize these potential threats. I show that, as a broad proposition, actors motivated by the threats seem to have shaped conditions more than those motivated by opportunity. Data from financial flows, trade in goods and services, and labor migration illustrate this central point. I conclude with speculations on how this pattern is affected by the economic downturn after 2008.

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