The defeat of the EU’s Constitutional Treaty in referendums in France and the Netherlands has, it seems, given rise to a new consensus that further enlargement of the Union should be slowed down, or even stopped. Advocates of this position see EU voters as terrified by the consequences of the May 2004 enlargement of the EU, when eight formerly communist states joined, and angry that they were not consulted about it.

One set of fears concerns the labor market – the so-called “Polish plumber” question. In this interpretation, wages were eroded and jobs were lost because of the inflow of poorly qualified and cheap central Europeans. Particular cases, such as the elimination of German meat processing and packing jobs, or casual workers in France, were widely discussed as evidence of a new threat.

But the “Polish plumber” is actually a weak bogeyman. First, there had already been a substantial flow of workers before enlargement. Poles had worked in some agricultural jobs – in sugar beet and wine harvesting – even during the communist era. With the fall of the Iron Curtain in 1989, labor flows, both legal and illegal, became much greater.

Second, inflows of new workers bring substantial benefits as well as losses: in France, which suffers a shortage of some 6,000 plumbers, there must be plenty of households that would be pleased to find someone qualified to do repair work.

Finally, the enlargements of the 1980’s, when Greece and then Spain and Portugal joined the then European Community, were not very disruptive. By themselves, the labor-market implications of poor countries’ accession to the EU simply are not very dislocating. 

What makes the debate so passionate in 2005 is a new fear that did not exist in the 1980’s: that the new members have a different social model, in which workers’ rights and the welfare state will be eroded. It is not so much the Polish plumber as it is the Slovak 19% flat tax that is the challenge to the older West European social model and welfare state.

The EU’s large states feel particularly vulnerable, and it is there that the biggest shock to expectations has occurred. In the past, France and Germany were the motors of European integration. Now they are the countries that feel most threatened, and bookshops in both countries are full of alarmist and sensational accounts of national decline.

Germany’s post-1949 Federal Republic was accustomed to being regarded as Europe’s great economic success story, but it never really recovered from the post-unification recession of the early 1990’s, with growth sluggish to non-existent. The consensual society that was at the center of the Federal Republic’s Wirtschaftswunder now looks inflexible, throwing up obstacles to change. 

Germany is surrounded by small states that all seem to be prospering more in today’s geo-political and geo-economic environment. These include not only the rapidly growing formerly communist countries to the east, Poland and the Czech Republic, but also Denmark, the Netherlands, Austria, and Switzerland, upon which Germans traditionally looked down. Now, as one mordant and widespread slogan puts it, Austria is “the better Germany.”

Many French writers also express a vivid feeling of national decline, and many ordinary citizens believe that the rules of the global economy work against French national interests.

In short, the large states still have illusions, encouraged by their political elites, about what the state can do to guide economic development. By contrast, the small European states – whether in Eastern or Western Europe – have been much more flexible in responding to the challenges of the modern globalized economy.

Politics can offer all kinds of goods that voters find very attractive: tax breaks, subsidies, and social benefits. But small states are less likely to think that they can create the rules of the game, and accordingly they are more willing and able to make adjustments. They are more keenly aware that if they try to redistribute too much, they will simply drive away the factors of production: capital will flow elsewhere, and labor will likewise migrate.

The same sort of logic applies to the large states: France and Germany are losing skilled labor at the same time as they are drawing in cheaper labor from Eastern Europe. The result is that they are feeling less French or German, creating greater political room, on both the left and the right, for nationalist ressentiment.

In the earlier rounds of European integration, from the 1950’s to the 1980’s, the big states received very obvious gains, which their politicians could easily present as such to voters. But since 1989 – or since the Maastricht Treaty came into force in 1992 – the political dynamic has changed. It is now the EU’s smaller states that gain the most from wider and deeper European integration. If the large states are to obtain similar gains, and their politicians are to recover voters’ respect, their governments will have to accept the small-state logic and abandon the Great Power posturing of the past.