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. Last Updated: 07/27/2016

The Cloud on Europe's New Horizon

If enlargement is the European Union's most successful policy for the way it creates and underpins reform in new member states, then the admittance of 10 new countries a year ago ought to rank as its crowning achievement to date. For eight of the 10 had languished 45 years on the wrong side of the Iron Curtain, and their EU entry reunited the continent in market-based democracy.

But there is a black cloud on Europe's enlarged horizon, with the prospect that France, irked by enlargement and the eastward shift in the EU's center of gravity, may vote "no" in its referendum on the EU constitution. This hardly increases integration on the scale of some past treaties, seeking just to streamline and democratize EU decision-making. But rejection of the constitution would be the first time the EU has failed to deepen as it has widened. It would not actually undo last year's enlargement, but it would darken the outlook for expansion.

In fact, last year's big bang accession has gone remarkably well. Nightmare scenarios of goods flooding east and people flooding west never materialized. Growth in the Eastern European members last year exceeded that of other EU states, with increased exports and foreign investment. The jury is still out on overall migration flows because most EU-15 states maintain transitional limits on workers from the accession states. But countries dispensing with limits have found that Eastern Europeans have usefully filled gaps and skill shortages.

It was also said that accession came politically too late, and institutionally too soon, for many incoming states. But the real sourness about enlargement has been among Western European governments finding themselves forced into tax competition with neighboring accession states, and unions clamoring about social dumping. But this is precisely the liberalizing shot in the arm the EU needs.

The idea that accession states would be disruptive Trojan horses for the United States was equally overplayed. Eastern Europe's most welcome impact has been to stiffen the sinews of EU policy toward Russia, a stance amply vindicated in Ukraine where the EU's eastern newcomers led the move to face down Russia's undue influence. In doing so, the accession states have effectively added Ukraine to a list of would-be EU states. Yet that may only increase the French allergy to expansion. The risk is that the next small enlargement could be the last.

A longer version of this comment appeared as an editorial in the Financial Times.