Central Europe — Poland, the Czech Republic, Slovakia, Hungary, Romania and Bulgaria — is a region caught between Western Europe and a rising Russia, and it is of vital interest to the United States. Three major geopolitical trends are leading to shifts in the region: growing pressure on the European Union and within NATO, Russia's increasing influence in Europe, and a geopolitical battle between Russia and the United States. One of the most important countries within Central Europe is Romania. Located in the southeastern corner of Europe, and a member of both the European Union and NATO, Romania is a strategic country of 22 million people on the borders of several major powers. It therefore provides a case study of the three major unfolding trends shaping the region. The effects these trends have on Romania are important indicators of how the trends will progress in the wider region in the coming months and years.

Growing Pressures on the EU and NATO

The European Union's economy was one of the hardest hit by the global financial crisis in 2008 and has been one of the slowest to recover. The crisis exposed many weaknesses in the European system, and EU members remain mired in weak economic growth. The latest EU statistics reveal that Germany and France — Europe's leading economies — grew only 0.1 percent and 0.0 percent respectively in the second quarter of 2011. Romania depends heavily on other EU members for trade. It is particularly dependent on Germany, both as a market for its exports and for industrial machinery used to manufacture Romania's exported goods. Thus, Romania's growth is affected by Germany's growth, and a slowdown in Germany contributed to weak growth for Romania — only 0.2 percent in the second quarter. Economic challenges notwithstanding, the EU slowdown also presents for Romania increased risk of social and political instability due to declining remittances from workers abroad and higher borrowing costs. (click here to enlarge image) NATO is also coming under increasing pressure. At the heart of NATO's challenges are the diverging interests of its members, which have evolved significantly since the Cold War era. These growing differences were made evident in NATO's Strategic Concept. The largest divergence is between Western European countries that want to work with the Russians, like France and Germany, and countries that fear Moscow. Romania is firmly in the latter camp; it has a contentious relationship with Russia over Moldova, and particularly over Russia's military presence in the breakaway Moldovan region of Transdniestria. Bucharest is also concerned with Russia's military buildup in the Black Sea. In this context, NATO has been showing early signs of splitting into regional blocs. One of these emerging blocs is the Visegrad Group (V4), which recently declared its intention to form a battlegroup by 2016. Though the V4 does not currently include Romania, the country would be a logical extension of this nascent group in terms of needs and interests. Showing Romania's concern over the developments and prospects for both the EU and NATO, Romanian President Traian Basescu recently stated that European countries must cede their sovereignty and form a "United States of Europe" if Europe is to remain an economic and military power. Basescu added that the "European Union's future as a political structure is uncertain unless proper decisions regarding its functioning are taken." Basescu's views reflect Romania's attitude toward the European Union's future — an exasperation that leads to greater chances for regionalization. It is not that Romania and other Central European countries want regionalization, but it is one option, given the divergence between Central Europe's and Western Europe's interests.

Russia's Maneuvers in Europe

Russia is interested in exploiting the growing pressures on the European Union and within NATO. Russia has been building relationships with major Western European countries — such as France, Italy, Austria and especially Germany — in areas like energy, banking and security. These relationships have led to concrete deals that serve Russia's strategic interests, ranging from French Mistral sales to Russia to the joint Russo-German Nord Stream pipeline, scheduled to debut before the end of the year. Russia is using these relationships to build its presence and influence in Central Europe and aggravate the existing divisions within Europe. Russia and Germany are negotiating to make deals for Russia to acquire assets from German utility providers, particularly those with operations in Central Europe — a worrying prospect for Romania. Russia also has started taking over some of Austria's banking assets, and Austrian banks have a significant presence in Romania. Furthermore, Russian energy giant Gazprom is very close to Austria's OMV group, and Romanian energy firm Petrom is a part of this group.

The Emerging U.S.-Russian Competition in Central Europe

As Russia's relationship with the Western Europeans grows, the United States is interested in increasing cooperation with the Central Europeans. Romania has a unique role in this regard, as it is a committed security partner for the United States and already has a U.S. military presence in its territory in the form of four "lily-pad" bases. These bases house pre-positioned military equipment that can be set up quickly. U.S. troops frequently move in and out of these bases. The U.S. presence in Romania, particularly near Russia's Black Sea Fleet in Sevastopol, is a concern for Russia. (click here to enlarge image) The geopolitical battle between the United States and Russia will intensify in Central Europe, particularly as a result of the United States' plans for ballistic missile defense (BMD) in Central Europe. While the BMD system officially is supposed to counter threats from rogue states like Iran and North Korea, Russia knows these systems would come with an increased U.S. troop presence. Therefore, it adamantly opposes such a system being set up in Central Europe. Romania is a crucial part of this system, with ground-based SM-3 interceptors slated to be delivered to Romania in 2015. However, these BMD plans are long term and will be shaped by external factors, such as the United States' ability to extricate itself from the Middle East and Russia's success in resurging into its near abroad. Indeed, the United States has already altered its BMD plans due to Russian resistance, which has shown the Central Europeans that such U.S. plans and security commitments are not set in stone. Given that Romania already has a tangible U.S. security presence and commitment, it is in a different position from the other Central European countries. However, Bucharest is still deeply concerned about Russia, which is gaining power, making inroads with Western European countries and using its relationships with Western European powers to undermine the Central Europeans' confidence. All of these trends indicate uncertainty ahead for Romania, particularly since Bucharest has little control over these developments. The United States, Russia and the Western Europeans are shaping these trends, and Romania will be key to watch to gauge how Central Europe will be affected.