The Eastern Bloc’s Disillusionment with Brussels Could Breathe New Life Into Defunct CBI Programs

Saahil Menon
Dubai


EU candidate countries are increasingly coming to terms with the improbability of making the cut anytime soon and, consequently, are less motivated to toe the EU line.

Anti-Establishment Sentiment Brewing

A number of European citizenship schemes have buckled during the past few years, thanks to pressure exerted on those countries by a superstate they wish to join someday – or simply remain a part of. A desire to remain on good terms with the EU played a prominent role in the decisions of Cyprus, Bulgaria, and Moldova to shelve their respective CBI offerings, while Malta alone has opted to let the courts settle its CBI argument with the European Parliament. More often than not, Brussels has gotten its way. 

Recent events, however, have tested the sway Brussels holds over peripheral states. The war in Ukraine has not only shed light on the stark philosophical divergences between Western nations and their neighbors in the East but also given rise to heightened friction within the Union. With the harshest months of winter just around the corner, its members are already feeling the pinch of a poorly coordinated sanctions tirade against their biggest energy supplier – Russia.

As for the Western Balkans and Eastern Partnership (EaP) countries, they are only prepared to go so far in enacting the necessary reforms for EU accession. Mindful of the prospect of being hung out to dry despite doing their homework diligently, reticence among Southeastern European countries about aligning irreversibly with the EU – and thereby forgoing a number of other foreign policy interests – is growing.

The recent vote against admitting Romania and Bulgaria into Schengen (while letting in Croatia) serves as a case study of how nations on Europe’s fringes often do not, in the end, receive the rewards they sought after ticking all the boxes, despite having full-fledged membership status. 

The decision has sowed further discord between its constituents at a time when the EU can scarcely afford it. More importantly, it has alerted potential newcomers to the kind of second-tier treatment they can expect upon integration. 

In its latest Visa Suspension Report, the EU categorically outlined that “golden passports” pose internal security threats and that Annex II states risk losing their Schengen visa waiver if they entertain this practice. Interestingly, Montenegro hinted last month that, despite twice announcing an imminent end to its CBI program, it may yet “do what is best for the Montenegrin economy”. Albania, meanwhile, has thus far held firm with its plans to launch a similar scheme in the near future. 

Serbia continues playing host to high-net-worth Russians in open defiance of Brussels – many of whom will undoubtedly seek ways to remain in the country legally. The financial windfall Belgrade could potentially reap from establishing an expedited path to citizenship might prove far too lucrative for the government to forgo. 

At the same time, the Serbs maintain nuanced ties with China, another attractive target market for alternative nationality. North Macedonia has had a faltering start in the CBI market but may yet stage a comeback.

New kids on the Bloc

In many ways, what the Kremlin persists in referring to as a “special military operation” has put the European Union’s credibility on the line. National security and the availability of funds are arguably among the biggest incentives for any given third-country to vie for accession. That being absorbed into a larger entity shields smaller nations from external aggression while placing them in the path of freely flowing, no-strings-attached cheques is a misconceived notion. Brussels’ response to the invasion reveals that when push comes to shove, and the stakes are high, it will stop short of all-out support for non-members. Those on the outside are consequently charting out their own roadmap rather than hitching their stars to one particular bloc. Weaning themselves off excessive reliance on the West, the thinking goes, entails raising organic (and unconditional) capital from emerging markets.

COVID brought about a shift in perceptions of both East Bloc and EU-core countries. Recall that the Balkan countries were among the first to open up after pan-continental lockdowns. This phenomenon gave international visitors the chance to familiarize themselves with a region on the move that is widely overlooked because of its checkered past. 

In a twist of historic irony, countries that once propounded classical Western liberalism, like Germany, France, and the Benelux trio, now gravitate toward leftism,  centralization of political power, high taxes, and increasing government control, while the ex-Soviet republics and satellites are now characterized by free markets and limited state intervention.

The countries that but a generation ago languished behind the Iron Curtain have, in recent years, demonstrated resolve and determination to uphold European values while the traditional heavyweights struggle to cope with mass migration and military escalation at their doorstep. Breakaway subsets of the EU, such as the Visegràd Group and the Three Seas Initiative, are indicative of Central and Eastern Europe (CEE) distancing itself from Western-led policies that have failed to preserve social harmony and deliver economic prosperity. 

Digital nomad visas appear to be the next big thing in investment migration as remote working goes mainstream. From Estonia to Hungary to Georgia, it is by and large the erstwhile Warsaw Pact countries that have been the trendsetters insofar as attracting foreign specialists and start-up entrepreneurs via this route is concerned. 

By virtue of their competitive price points and streamlined application process, these visas could give the more popular Mediterranean residency options a run for their money. Greece is doubling the minimum real estate investment for its golden visa to EUR 500,00 next year, and the Portuguese Prime Minister has hinted that his country’s program could be on its way out. For those exploring resettlement somewhere in Europe, it makes sense to set sights on the East, where fiscal terms are more relaxed, living expenses considerably lower, and investment opportunities more abundant. 

The latest corruption scandal involving prominent EU figures will likely motivate the European Commission to dial back their anti-CBI rhetoric. It is incumbent on the bloc to clean up its own act before they take aim at an endeavor that is perfectly above board and enables cash-strapped governments to raise billions worth of sovereign equity.