July 9, 2014 | by CRAIG J. WILLY
Ten years after their accession to the European Union, Poland is seen as a model of development while Hungary is turning to a populist, in some ways illiberal, nationalism. These diverging trends highlight how fragile attachment to Western orientation and institutions potentially is.
The nations of Central-Eastern Europe provide an interesting case study of the resilience of Europeanist and liberal-democratic institutions and values in the face of economic crisis. Inevitably it is difficult to generalize about such a diverse group of nations – whether it be the Baltic states, the Visegrád countries or the Balkan countries. Overall trends are, however, somewhat negative.
As the Bertelsmann Stiftung’s Transformation Index (BTI) 2014 analyzes, in East-Central and Southeast Europe “political and economic transformation have been rolled back somewhat, with the quality of governance diminishing further in many countries. This state of affairs is closely linked to the crisis within the EU that followed on from the global financial crisis."
For example, since 2006 most countries in the region declined in the BTI Management Index which captures the quality of political leadership in areas such as consensus-building and international cooperation. There have also been declines in many countries’ Status Index scores reflecting the falling quality of their democracy and/or market economy. There are, however, significant divergences between countries, the most striking perhaps being that between Poland under the self-consciously liberal-Europeanist Donald Tusk and Hungary under the conservative-nationalist Viktor Orbán.
Poland is a rare European country that has not suffered a recession during the financial and eurozone crises. The ruling Civic Platform (PO) was able to win re-election in 2011, a first in Polish politics since 1989, in the face of a Law & Justice party (PiS) whose conservatism and nationalism in some ways are similar to that of Hungary's ruling party, Fidesz.
“Poland plays a trendsetting role among the East and Central European countries,” the latest edition of the Bertelsmann Stiftung’s Sustainable Governance Indicators (SGI) concludes. On democratic quality the study ranks Poland at eighth place out of 41 countries in the OECD and European Union. This is particularly due to advancements in the areas of media freedom, legal certainty, judicial oversight and electoral processes.
Poland also boasts a very high level of reform capacity, reflecting significant progress in planning and implementing strategic reforms – a feature which naturally helps overcoming times of economic and political crisis.
Hungary in contrast occupies the second to last place in SGI’s democracy ranking. Moreover, the economic crisis led to the Hungarian economy shrinking 6.8 percent in 2009 and many citizens saw their wealth wiped out: the cost of mortgages (often held in foreign currency whose value rose relative to the Hungarian forint) skyrocketed, the number of people enjoying middle class incomes shrank by about a third, and the unemployment rate exploded from 7 to 12 percent.
The risk of excessive boom and bust cycles
The causes of economic success and failure are always complicated, but the Hungarian example shows again the risk of excessive boom and bust cycles. When standards of living are unsustainably high – based on malinvestment or visible/invisible debt – the fall invariably fuels anger and resentment. Indeed, several Communist regimes fell in part because their consumption levels were based on Western debt. The fall of economic well-being typically accentuates ethnocentrism and ethnic conflicts, each community looking for its own members to get as big a part of a shrinking pie, a pattern seen in Central-Eastern Europe as recently as the collapse of Yugoslavia and as far back as the Middle Ages.
Fidesz has used its power to pass a new Constitution, to appoint their people to formally independent institutions, and to try to “lock in” conservative-nationalist policies by requiring a two-thirds majority for all changes. While this has attracted condemnation from many international observers and particularly from the European Union – which has specifically criticized the Hungarian government's action on retiring judges, the independence of the central bank and on budget deficits – nationalist parties remain extremely popular there: Fidesz attracted 44.5 percent of the vote in parliamentary elections last April, while the even more nationalist Jobbik won 20.5 percent. Outsiders seeking to help liberal allies face a difficult dilemma: In trying to help local liberals, they risk accusations of “foreign meddling” and of stoking “rally-around-the-flag” nationalism.
Europeanism as not an end in itself
For many citizens, Europeanism is more a means to an end – access to Western-style standards of living and quality of government – than an end in itself. And when these hopes do not materialize, corruption in particular remains a severe problem in many countries almost 25 years after the fall of Communism, disappointed citizens may turn to other political options, both ideologically (nationalism) and geopolitically (many nationalists have grown increasingly attracted to Russia as an alternative to the EU). The often exceedingly low turnout for European parliamentary elections across Central-Eastern Europe – Slovakia set a new record at 13 percent this year – suggests that the attachment to EU politics is weak indeed.
Perhaps the lesson is for politicians and citizens to have realistic ambitions and not make promises which may not be met. It is critical that citizens do not become accustomed to unsustainably high consumption based on financial speculation or public and private debt, for the “correction” will inevitably entail a backlash. These countries must also not assume that membership in Western European institutions will automatically lead to Western European outcomes: most Central-Eastern European nations have little indigenous history of civil society and liberal democracy (interwar Czechoslovakia was a notable exception) and participatory national development has often been warped if not outright ruined by decades or centuries of imperial and Communist rule. The exceptional outcomes in terms of good government and transparency of, say, Sweden or Germany, may well stay exceptional for a long time.
In other ways however, Central-Eastern European countries are growing more similar to Western ones. In particular, active adherence to mainstream parties is often very low and shrinking. In most countries, a passive majority is implicitly Europeanist and anti-nationalist, but with little passion or desire to defend the establishment. In contrast, protest parties, particularly nationalist ones, often have a strong minority of motivated supporters who are positively convinced of their political vision. In light of populists’ progress in the recent EU elections, Europeanists will have to, more than ever, move towards a new consensus offering a positive political vision which can show that the EU and the West can still deliver on peace, democracy and prosperity.
Craig James Willy is an EU affairs writer. His French-English blog is available here.