A new Iron Curtain descends: A Community that calls itself 'European' still represents only the western half of the continent - and means to keep it that way, says Jonathan Eyal

After years of cliches about European trains that travel in only one direction, the idea of a 'two-speed' Europe is back in vogue. But if a Franco-German core emerges from the current dispute, Europe will be divided into three zones, not two, with the former Communist nations of the East condemned to the periphery.

Since the collapse of Communism in 1989, Eastern Europe's 'integration' has been an article of faith, ritually repeated at every European gathering. In reality, the West is too preoccupied with its own problems to deal with those in the East; and soon it may be confronted by such instability that a new Iron Curtain will be required.

The West's mistake was to assume that the end of the Cold War affected only the East. In fact, the thaw may eventually dissolve all European institutions - from the Warsaw Pact to Nato, from Comecon to the European Community. At first this was not apparent, as Western governments argued about how to rearrange the continent's 'architecture'. But when the Eastern revolutions began to affect the West, most politicians simply fell silent.

No country has contributed more to this myopic attitude than France. France's fears were understandable: the end of the Cold War put paid to its policy of balancing East against West, while Germany's unification threatened the entire West European arrangement. President Francois Mitterrand concluded that Eastern Europe could be dealt with only after Maastricht had poured tons of concrete on the German giant. Thus the East Europeans were offered photo opportunities, ringing speeches, federations, 'partnerships' or any other temporary concoction as substitutes for full participation in institutions that really mattered. At every stage new reasons were advanced to explain why the process of integration should be slow.

Former Communist economies, still largely state-owned and mostly bankrupt, could hardly compete with highly developed industrial states. Poland, Czechoslovakia and Hungary were therefore offered association treaties designed to manage their transition to EC membership, perhaps by the turn of the century. Setting up such targets, it was suggested, would actually encourage democratic and economic reforms.

The argument was dangerous, precisely because it appeared so compelling. To meet the criteria for economic convergence with the EC, the countries of Eastern Europe need to double their gross national products by the end of the century. But because much of their capital stock is worthless, any sustained growth will require inward investment of at least dollars 100bn per year for the rest of the decade. Nothing of the kind is likely to happen: last year Hungary, the most successful East European investment proposition, managed to attract only dollars 1.6bn.

The East Europeans realised that beggars cannot be choosers, and accepted the association agreements - only to be met by the full force of EC protectionism. In the short term, agricultural products represent Eastern Europe's best export opportunities: Poland's grain output is second only to France in Europe, its potato crop is equal to that of all the EC put together, and Hungary is an efficient producer of meat. But the EC, whose Common Agricultural Policy still devours half its budget, had no intention of letting East Europeans sell cheaper produce to its consumers. Last year the French blocked a proposal that would have allowed Hungary to export an extra 550 tons of beef to the EC in the first year of association.

This cynical attitude continues. Since 1989 there has been a race to decide which institution will answer Europe's economic and security needs. The catastrophic effect of this Darwinian struggle is most evident in the Balkans.

Yugoslavia's civil war could not have been prevented by any Western power. Yet the handling of the conflict has been undermined by the EC's original insistence that it should have a primary role in the region. Little Luxembourg, as rotating president of the EC, had the effrontery to tell Croatia and Slovenia that they were too small to be 'viable' independent states. Brussels threatened dire consequences if the ceasefires negotiated by its envoys were not respected.

In the process the Council of Europe - the body best able to protect ethnic minorities - and the Conference for Security and Co-operation in Europe - the best forum for discussing possible territorial changes - were shunted to one side. Slobodan Milosevic concluded that the EC might bark but would not bite, and continued his war regardless.

The EC rushed into the Yugoslav conflict not because it had the capacity to resolve it but because it hoped to acquire a security dimension. The Balkans became its testing ground, and when its intervention failed the Community swiftly passed the responsibility to the United Nations.

Since its foundation, the Community has worked on the premise that closer economic ties will lead to growing political co-operation, thereby avoiding future European wars. In Eastern Europe, however, the two issues are inseparable and urgently need addressing. The first generation of post-Communist leaders, apart from Romania's Ion Iliescu, genuinely believed in a united Europe, just as much as Jean Monnet and the other founding fathers of the EC. With precious little to show for their efforts, they may soon be replaced by more sinister politicians.

Poland is paralysed by a fight between splinter parties; Czechoslovakia's break-up is almost accomplished; and Hungary's government faces a nationalist backlash because of its inability to safeguard the rights of Hungarians in neighbouring states. In Bulgaria the ruling coalition is coming apart and in Romania an array of former Communists and racists holds the balance of power after the elections at the weekend. Western governments, meanwhile, absorbed by their own problems, seem oblivious to the gathering storm.

The message for most East Europeans is clear. A Community that cheekily calls itself 'European' still represents only the Western half of the continent - and means to keep it that way. Whatever trains President Mitterrand and Chancellor Kohl may be manufacturing at the moment, no eastward journey is planned.

Democratic Eastern Europe needs immediate support, which can best be achieved by opening EC markets to its products. The aim of the Marshall Plan was not charity, but the promotion of free trade: the volume of West European trade doubled between 1948 and 1952; industrial output increased by a stupendous 40 per cent. Yet when Jacques Attali, the head of the European Bank, proposed a similar arrangement for Eastern Europe last month, he was met with polite indifference.

France and Germany's determination to create a tighter Community if other member states fail to ratify the Maastricht treaty may spell disaster for an entire continent. Germany cannot remain indifferent to Eastern Europe's collapse and France cannot compete with German economic might in the region. Both may ultimately agree to insulate Western Europe from the troubles in the East.

The Balkans are already in quarantine, and the Iron Curtain may well be extended further. If that happens a new power game may begin: former Communist countries, left in a buffer zone between a decaying Soviet empire and an inhospitable West, will make their own alliances and pursue their own disputes.

Twice this century similar arrangements ended in war, brought about by neglect of Eastern Europe. Those who talk today about 'constructing Europe' while saying nothing about the East should remember this lesson.

The writer is Director of Studies at the Royal United Services Institute.

(Photograph omitted)