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EU refugees: The West pays, the East obeys?

Does a nation have the right to preserve its cultural values, even if it means defying an EU policy? And can it do so while accepting EU money? Those questions are at the heart of a controversy that is now tearing the EU apart.

On Tuesday, June 13, the European Commission voted in favor of taking action against the Czech Republic, Hungary, and Poland for refusing to accept the number of refugees allotted as part of its relocation scheme. Among the penalties they are considering is suspending the EU funding these countries receive, which amounts to millions of euros.

European funds have long been a bone of contention between EU member states. Some, such as the French, blame newer EU members for consuming European money without solving European “problems” like massive immigration from Africa and Middle East, or for using EU funds to build their competitive labor market position. But these funds impose the will of powerful Western nations upon weaker Eastern societies, benefit well-connected EU constituents, suppress the democratic will of recipient nations, and drive a wedge between EU members.

The European Commission threatens Visegrad countries

While one person may say that “solidarity” is the fundamental guiding policy of the EU budget, others might see it as thinly disguised paternalism of richer, post-colonial Western Europe towards less affluent, post-Communist Eastern Europe. The leaders of the Western countries, as well as the non-democratic structures of the EU they dominate, are persuaded that the money invested in these less developed countries gives them the right to make the supreme decisions about the shape of overall EU policy and the internal affairs of each member state.

The most recent manifestation is the European Commission’s choice to target three of the four Visegrad Group countries that refuse to take part in the refugee relocation program. These actions are “not a punishment,” said EC Migration Commissioner Dimitris Avramopoulos. “If the governments reconsider their position,” the EC could “change our decision,” he offered. But his protests of innocence are belied by leaders in Brussels and Strasbourg who have advocated withholding European funds to nations deemed to lack “European solidarity.”

The West pays; the East obeys?

Since the beginning of the refugee crisis, the flow of funding from the EU has been used to blackmail more traditional countries. German Vice-Chancellor Sigmar Gabriel said in an interview for Bild in 2015 that “those countries which do not share German ‘values’ should not count on German financial help.” Almost simultaneously Thomas de Maizière, German federal minister of interior, agreed with EC President Jean-Claude Juncker that the EU needs to talk about limiting EU structural funds for the nations that fail to accept their quota of immigrants. On May 4, EU commissioners warned that countries that did not “show solidarity” by accepting refugees might lose access to EU funds Perhaps most pointedly, during an EU summit in March, former President of France François Hollande bluntly told Polish Prime Minister Beata Szydło, “You have your principles; we have structural funds.”

European Structural Funds: the bargaining chip of EU politics?

The European Structural Funds and the Cohesion Fund are a complex mechanism of international wealth distribution meant to reduce disparities between richer and poorer EU nations. The common European budget is funded by member states according to the size of their economy. These pooled resources are then divided to promote the priorities set out by the European Parliament and the Council of the European Union. The overall budget for the years 2001-2013 was €347 billion.

This creates a situation in which the best developed nations are net contributors – paying more money into the system than they receive – while poorer nations are net beneficiaries. In 2014, the biggest net contributor was Germany which, according to the European Commission’s calculations, paid €15.5 million more towards the EU’s budget than it received. Some of the other primary net contributors included France, which contributed €7.16 million more than it collected, and the UK which sustained a net loss of €4.9 million. In the same year the biggest net beneficiary was Poland, which netted €13.75 million in EU funding. (Although Poland is the largest net recipient of EU funds, on a per capita basis it receives less than Lithuania, Slovakia, Estonia, Hungary, and Malta.)

The question of democracy

The hard position of some European governments against admitting Islamic migrants stems from their sense of responsibility to protect their citizens. Unlike the European Commission, national governments are more accountable to the voters. A recent poll in Poland showed that 42 percent of the population supports the government’s policy, while only 30 percent is against. Clearly, EU policy would suppress the vox populi within Central European nations.

“Right now there is no possibility that refugees be relocated to Poland and without any doubt we will not agree impose any obligatory quotas to Poland, or any other country,” said Polish Prime Minister Beata Szydło last Tuesday. Szydło added that compulsory relocation of the migrants is an unwise solution as proven by the spate of terrorist activity perpetrated by refugees. “Humanitarian aid is our duty, and the Polish government will continue its efforts to help” people in their own region.

Witold Waszczykowski, Polish minister of external affairs, reminded the EU that Poles have experienced a traumatic history of being forced to move to special camps, and they will never doom other nations to that fate.

The EU’s solution – forcing refugees to settle permanently in a nation of the EU’s choosing – is dangerous to, and rejected by, the refugees. The open door policy encourages thousands of people to risk their lives in order to come to Europe. Most of the immigrants choose to settle in Northern and Western European countries, which offer more generous social programs, rather than post-Communist countries like Hungary or Slovakia. According to data from Lithuania, as of March nearly 80 percent of refugees that had been relocated to that country departed for other nations within a matter of months.

This puts two EU “values” in opposition to one another: Is it moral for the EU to promise free migration to EU nationals while simultaneously forcing migrants to remain in a place they do not want to live?

Who pays, who benefits?

Western European political leaders imply that nations should shudder at the thought of losing EU funds, since the new members could only develop economically due to foreign government aid. However, there’s more to these funds than meets the eye. Waszczykowski said that “the funds are a kind of indemnity for the weaker [EU] economies for opening their markets to strong competition from better developed countries.”

The fact is that the lion’s share of the structural funds received by Europe’s emerging markets goes back to the net contributors. The former minister of regional development of Poland, Elżbieta Bieńkowska from the opposition party of Civic Platform – who is currently a European commissioner – has pointed out that “out of every euro paid by Germany and received by Poland, 86 cents goes back to Germany, and out of each euro paid by Germany and received by the Visegrad Group, Germany receives back as much as 125 cents.”

EU Commissioner Günther Oettinger explained to the German Handelsbatt, “The Poles use the money to place orders with the German construction industry, to buy German machines and German trucks. So, net contributors such as Germany should be interested in the structural funds. From an economic perspective, Germany isn’t a net contributor but a net recipient.”

The road to freedom

Not only do EU funds benefit their net contributors, at least partially, but they may be used only to support specific projects chosen by the EU authorities. The process of choosing the priorities is entirely political and subject to lobbying by powerful interest groups. For instance, these EU funds reward solar and wind energy producers; however, both of these sources are less economically efficient than geothermal power in Poland. Solar and wind energy are a Western European export. What is more, those priorities are chosen for a six-year perspective which makes hard to modify the goals when it becomes clear that they are inadequate.

European funds were planned to lower inequalities between EU member states and boost growth in the smallest economies, but they have eventually became a robust and expensive mechanism of redistribution susceptible to the decisions of the bureaucratic structures of the European Union. As such, they constantly fail to meet their intended goal to expand economies. Instead, they have become an instrument to promote the ideology – and economic ends – of the European elites, sometimes ignoring rational signals from the market in the process.

Central and Eastern European governments must understand that, in order to be free from the menace of European intervention in their internal affairs – such as how best to assure cultural harmony – they need to reject EU funding. There are hopeful first signs that this understanding is beginning to take hold. Poland, for instance, launched some self-financed environmental programs.

Nations have an inherent moral duty to protect their citizens, to represent their interests in international tribunals, to preserve social cohesion, and to discourage vulnerable populations from risking their lives thanks to perverse incentives offered by the EU. Only by shunning EU funds can any nation be free from the coercion of EU leaders and fulfill its moral obligations.

(Photo credit: European Commission DG ECHO. This photo has been cropped. CC BY-SA 2.0.)


Marcin Rzegocki is a Ph.D. student at the Warsaw School of Economics.