An Expanded Union -- One Year Later

On May 1, 2004, Estonians, Lithuanians, Latvians, Poles, Slovenians, Slovakians, Czechs, Hungarians, Maltese and Cypriots woke up to a new flag flying alongside their national colors -- the yellow circle of stars on a blue background. They were now EU citizens.

But those newcomers in this "EU of 25" have experienced their first year of membership in very different ways. According to recent surveys, the report card from the first year is pretty positive. Their economies are growing; EU monies are flowing; new travels freedoms are being taken advantage of; and among young people, educational exchanges are booming.

Low-wage worries

However, people in the older EU countries are somewhat less reserved about the expansion. Many western Europeans are worried, since they feel their jobs could be in danger if cheap labor from the new member states puts strong downward pressure on wages or simply deprives western Europeans of work.

Because of this, Swedish Economics Minister Thomas Östros is against the EU Commission's planned services deregulation directive meant to throw open businesses to cross-border competition.

"Our strategy is to discuss every aspect of the directive and find a solution that would protect against wage dumping but enable free trade," he said. "If we don't achieve that, we want to put through some changes, as Germany does."

Until wage levels across the EU have become more harmonized, Germany and France have said that in order to prevent wages from falling to a few euros per hour, transition regulations are important. Many caregivers, construction workers, craftsmen and farmers see their very existence threatened if eastern European competition is given free reign.

"As a young farmer, I can say that we are very worried about Europe," said one Frenchman.

The potential flood of cheap labor and the continued emigration of companies to lower-wage countries in eastern Europe has turned the mood sour for more than a few. That's reflected in the success of the 'No' campaign in France regarding that country's upcoming referendum on the EU constitution.

Open market

As opposed to their continental neighbors, Britain is leaving its labor market open. However, in order to prevent jobs from drifting into black market, people from new EU states have to register with the authorities. In this way, the government can keep an eye on the labor situation, collect taxes and ensure that minimum wage regulations are being followed.

According to Jan Mokschitzki, president of the Polish Association in Great Britain, there are three groups of people seeking work in the UK. The first group is made up of highly qualified bankers, doctors, and IT professionals who are recruited from, for example, Poland and lured to Britain with limited-term contracts and apartments. The second are skilled workers with a good knowledge of English, such as plumbers, electricians and locksmiths.

"The third, well, that's the problem group," he said. "They are those who hardly speak a word of English, have no money in their pockets and see London as a kind of El Dorado where money grows on trees."

They'll soon be bitterly disappointed, he added.

But more than 60 percent of Poles are flexible, well-educated and satisfied with EU membership thus far, largely because economic growth in the country has doubled.

Optimistic looks forward

To the south, Hungarians would rather work at home or in neighboring Austria. That doesn't mean, however, that they haven't found their place in the EU, as has the Czech Republic, whose former prime minister, Vladimir Spidla, sees the future positively.

"I'm optimistic because the polls show people in the Czech Republic wants more European integration," he said. "They want a common foreign and security policy."

The situation in Slovakia next door is somewhat different, in that, since membership a year ago, rent and food prices have skyrocketed. At the same time, government child support levels have been cut. But the Slovakians chalk that up to rises in domestic taxes rather than to EU membership. And with corporate tax rates of under 20 percent, many companies from the old EU countries are setting up shop there, which provides Slovaks jobs.

Slovenia, the most developed of the new member states, has long felt itself part of the EU. Its primary goal now is to introduce the euro in 2007. But achieve this, it will have to put itself on a strict economic diet and privatize part some government-own assets.

The economies in the Baltic States -- Estonia, Latvia and Lithuania -- are booming. Their problems lie in the social sector, with health care and education, where more investment is needed.

Malta, with its 400,000 residents, is the smallest EU country. This Mediterranean island was the driving force behind a Brussels initiative that put into place new anchoring regulations for tankers.

Another island member, Cyprus, was also involved in the issue. The average income on Cyprus is about 80 percent of the average of the old EU countries and the country's unemployment rate is under 2.5 percent. The southern part of the country is booming, but it is not without its problems, primarily of a political nature. The island remains divided into a Greek-Cypriot south and a Turkish-Cypriot north.