Next May, 10 new countries are scheduled to join the EU, stretching its borders from the Russian frontier to the west coast of Ireland. But beware. The last time the Union blew itself up like this, in the 1980s, wealthy hordes from the old world descended on the newcomers, snapping up land and properties from Greece to Portugal and Spain. Will the same happen this time? Estonians and the other Balts might hope so, but they’re largely alone. Across the swathe of Central Europe–and even in tourist-friendly Malta and Cyprus–the worry is that rich Dutch, Germans and Austrians will flood in to buy (for them) cheap farms and holiday homes and force locals out. “It’s part of a general concern about identity,” says Heather Grabbe of the Centre for European Reform in London. “People are asking, ‘What kind of country are we?’ and ‘Can we really trust our neighbors?’ "
It should be noted that, for the Mediterranean members of Europe’s club, the “invasion” (modest as it turned out to be) was often an economic boon. Still, well-founded or not, the fears of today’s newbies are real. The EU’s insistence on the free movement of capital collides with ancient passions. “In Central and Eastern Europe,” Grabbe explains, “land is always a big issue, partly because it’s been fought over for such a long time.” Foreign capital is welcome when it means new jobs and factories, unwelcome when it means ceding control of the soil. To the region’s hardy crop of populist politicians, nothing less than the national soul is at stake. “Land is different,” says Janos Drabik, a spokesman for the Movement for a Free Hungary, which campaigned unsuccessfully against EU membership in April’s national referendum. “Without the land there can be no Hungarian nation.”
With few exceptions, the incoming countries have won concessions from Brussels that preserve farms and woodlands–and sometimes holiday homes as well–from foreign buyers for “transition periods” up to 12 years. In theory, those Art Nouveau apartments in downtown Prague will be reserved for Czech buyers until 2009. West Europeans pining for a patch of forest in –Slovakia’s Tatra mountains should also forget it; sales won’t officially be permitted for seven years. The tiny and crowded island of Malta (with a population density among the highest in the world) has negotiated an indefinite and near-absolute ban on selling properties to overseas second-homers.
The EU considers such concessions to be the price of public acceptance. In fact, however, they may offer almost no protection. Existing restrictions have been easily sidestepped. The Czech Republic may bar foreigners from buying homes, for example, but it takes no more than $1,500 to set up your own Czech company to do the deal. For a smaller sum, the property can also be registered in the name of a Czech citizen, while the real buyer retains the deed. “The law didn’t put me off investing,” says Mike Bryan, a Brit buying his second apartment in Prague. Prices have risen 25 percent in the past year, thanks in large measure to foreigners. Helena Novakova, a Czech teacher, notes that her weekend cottage in the northern ski resort of Krkonose is surrounded by those owned by Dutch and Germans. “Things will only get worse when we are in the EU,” she says.
Foreigners buying up farmland have found similar wiggle room around the regulations. Belgian estate agents advertise such properties in the Czech Republic, banned or not. A plotline in Britain’s best-loved radio soap features a rich farmer investing in Hungary, where he’d find plenty of foreign company. Imre Fazekas farms a few hundred hectares in the flatlands of western Hungary, in sight of the Austrian border and the line of the dismantled Iron Curtain. Already, he reckons, half the land in the district is under Austrian control, whether owned or leased. Inevitably, he says, the pace will quicken. “The big fish will eat the small fish.”
Feelings run especially high in Poland, where some undeveloped land sells for less than 3 percent of the average price in the EU. A huge peasantry–25 percent of the population still lives in the country–harbors longstanding suspicions of its richer German neighbors. Thousands occupy land that was German until World War II. Right-wingers warn darkly of German foundations raising money to buy back control. “They are not planning to farm there,” says Roman Giertych of the League of Polish Families. “It is part of their imperialistic policy.” Stanislaw Kaliszewski owns a 10-hectare farm near Biala-Podlaska in eastern Poland. “Land can’t be multiplied like TV sets or computers,” he says. “Once it gets into foreigners’ hands you won’t get it back.” He’ll vote “no” in this week’s referendum on EU membership.
In the end, the forward-looking Balts probably have it right. Rather than succumb to traditionalist fears for the future, they’ve undertaken the most sweeping economic reforms in the region and, despite some restrictions of their own, see foreign investment and land purchases as the surest path to prosperity and European integration. They know that similar scares in the past have been overblown, as in Portugal and Greece, and that’s even more likely to be true in the East. Poland’s Baltic coast rivaling Tuscany or the sunny Mediterranean for the charms that tourists and retirees tend to seek? Nah.
Money may be the ultimate trump card. In Prague, for instance, foreign-owned buildings are easily identifiable by their repainted pastel-colored facades and refurbished interiors. And so it is among all of the EU’s impoverished aspirants. “People you employ are happy to have employment,” says Nevil Hewitt, a British businessman who’s bought a large dairy farm in northern Estonia. “People who own land are usually pleased to find someone ready to pay them for it.” In the new Europe, does it really matter who owns it?
