<<  <  >  >>

country whose citizens felt government inter-

The EU May Make Future

ference the least, was 21 percentage points

Reform More Difficult

higher. Similarly, 70 percent of Estonians

favored free competition. (That was 5 percent-

age points more than in Slovakia, whose citi-

The road ahead will not be easy. To tackle

zens were the keenest supporters of free com-

corruption, Central European countries will

petition in Central Europe.) That may be

have to further deregulate their economies

because lower state interference in the

and reduce government spending. In doing

Estonian economy resulted in economic per-

so, they will face opposition from special

formance superior to the performance of the

interests at home. Unfortunately, those spe-

economies in Central Europe.83

cial interests will be aided by a powerful new

ally--the EU.

Yet another striking difference between

There are a number of areas where EU

Estonia and Central Europe concerns the

membership will have negative consequences

measure of people's contentment with their

on attempts to reduce the size of government

lives. As was shown above, Central Europeans

in Central Europe. First, the number of EU

tend to be very pessimistic about their lives.

rules regulating everything from environmen-

In contrast, only 28 percent of Estonians

EU membership

were found to be pessimistic.84

tal standards to labor relations shows no sign

is likely to

of lessening. In fact, despite EU Commission

Estonia's Corruption Perception Index has

president Jose Manuel Barroso's declared

improved from 5.7 in 1998 (the first year for

contribute to

intention to cut EU regulations by 25 percent,

which the data is available) to 6.3 in 2005. In

perpetuating

the flow of new regulations from Brussels is

2005, the Estonian level of corruption was the

the culture of

actually increasing. Of the 22,000 pieces of leg-

lowest in the post-communist world. It was

islation on the EU statute books, approxi-

also significantly lower than that of the runner

corruption in

up--Hungary--with 5 points out of 10.85 That

mately 12,000 have been added in the eight

Central Europe.

years between 1997 and 2005. In contrast,

finding is consistent with the argument

"only" 10,000 EU regulations were created

advanced in this paper, which is that the size

between the signing of the Treaty of Rome in

of government and corruption in the post-

1957 and 1997.88 In the words of John Egan,

communist world tend to be related.

The above contrast between post-commu-

the former president of the Confederation of

nist developments in Central Europe and

British Industries, "Look closely at what the

Estonia suggests that the real problem with

European Commission's `war on red tape'

the transition process in Central Europe is not

really means and the sad answer is: not very

much."89 He should know--EU regulations

that it was too fast, but that it was not fast

enough. For example, the level of expenditures

account for up to 80 percent of all regulations

adopted annually by the British Parliament.90

of Central European governments some 17

years after the fall of communism continues

Second, financial transfers from rich to

to astonish. On average, those governments

poor members of the EU will contribute to

spent about 44 percent of the region's GDP in

keeping government spending large in

2005.86 In comparison, Estonian government

Central Europe. Between 2007 and 2013, the

Czech Republic is scheduled to receive $30.8

spending was about 36 percent of GDP.

billion from Brussels. Hungary, Poland, and

Moreover, Estonia's regulatory burden was

Slovakia will receive $29.2 billion, $77.6 bil-

much lower than that in Central Europe.

lion, and $13.3 billion, respectively.91 The pri-

According to the 2006 Doing Business report,

Estonia had the world's 16th most welcoming

mary purpose of those financial transfers or

business environment.87 Simply put, the

"structural and cohesion funds" is to address

the unequal speed of economic growth in the

Central European economies are much freer

EU by financing various projects ranging

than they were under communism, but they

from roads and bridges to information tech-

have a long way to go.

18