The Diluition of the European Social Model after the Enlargment

ABSTRACT The Central-Eastern European countries that have recently joined the European Union, on the rebound from the old centralized economic order to the new market system and as a result of the strong pressures of Bretton Woods institutions and those of the European Union, have embraced a hyper-liberal version of the market economy, very different from the dominant model of other European countries both within and outside the Union. This significant divergence between the model typical of transition countries and the European model – albeit within a common system of an open market economy with dominant private property and enterprise – has not been considered at all in the various analyses and determining of criteria for convergence between the two groups of new and extant member countries. It is possible that the economic integration of new EU members might result in diluting the traditional European socio-economic model. This essay documents the characteristics of post-socialist hyper-liberalism, contrasts them with the predominant European Union socio-economic model, and draws implications for the sustainability of this unexpected divergence.