A A A

Archive for the 'Uncategorized' Category

Brexit and FDI: Facts Checked

By Lisa J Walters, on 7 June 2017

Dr Randolph Bruno, Senior Lecturer in Economics

The BREXIT debate, that we see unfolding within the UK parliament, the European Parliament, the media, British as well as international news outlets and more generally in public speeches on the campaign trail, is in many ways bewildering. It is in particular surprising that despite its importance it is very difficult to understand where each and every politician really stands on the issue of Brexit (e.g. http://www.bbc.co.uk/news/av/uk-politics-40088892/jeremy-paxman-grills-theresa-may-and-jeremy-corbyn). Negotiations strategies and possible outcomes remains very difficult to predict, as do the impact of the process on future relations with the EU . The confusion is further worsened by the circulation of alternative facts on social media, which may be contributing to a polarisation of views in society. The recent increase in hate crimes after the referendum is possibly one of the most worrying symptoms of these exacerbated social tensions.

Hate Letter

A Polish family in Plymouth received what police described as a “hate-filled” letter.

(more…)

Post-Crisis Perspectives on Foreign Direct Investment in Central and Eastern Europe

By Lisa J Walters, on 26 May 2017

Balázs Szent-Iványi (Aston, Centre for Europe)

The Centre for the Comparative Studies of Emerging Economies  organised an afternoon round-table at UCL’s School of Slavonic and East European Studies on 25 April 2017 to launch a book, FDI in Central and Eastern Europe – Post-Crisis Perspectives (Palgrave 2017), edited by Balazs Szent-Ivanyi, Aston University in Birmingham. The event was organised with financial support from SSEES, the UCL European Institute and the Centre for Europe, Aston University. Professor Tomasz Mickiewicz (Aston Business School, previous SSEES), Professor Slavo Radosevic (UCL, SSEES) and Dr Randolph Bruno (UCL, SSEES) took part in this event.

FDI

(more…)

Why did the Soviet Union collapse?

By Lisa J Walters, on 20 April 2017

Prof Alena Ledeneva, Professor of Politics and Society

The Soviet Union collapsed more than quarter of a century ago and since then many people have offered their own interpretations of the event. Most of them are valid, but none of them could fully embrace the complexity of the phenomenon and we still do not have a comprehensive account of why the largest country in the world disintegrated, and what the consequences of this were.

Political Mythologies_IMG_6523

(more…)

Belarus: Fraying Social Contract Puts Protestors on the Streets

By Lisa J Walters, on 5 April 2017

Prof Andrew Wilson, Professor of Ukrainian Studies

I have just got back from a few days in Minsk, where events are moving fast. First was an unprecedented wave of demonstrations that began on 17 February. Belarus is used to a largely ritualistic cycle of impotent political protest from the ‘traditional opposition’ against longstanding dictator Aliaksandr Lukashenka, who has been in power since 1994. These demonstrations were different, however, involving thousands of ordinary Belarusians, in provincial towns as well as Minsk, demanding the repeal of an ill-judged ‘social parasite’ tax, and protesting at the fraying of the social contract that has kept Lukashenka in power for so long.

Belarus is in its third year of grinding recession, with no end in sight. Real wages have halved and investment has collapsed; unemployment has soared and prices are higher than in supposedly chaotic Ukraine. Russian subsidies have been cut, the Russian market for Belarusian exports is in recession (until recently, so was the Ukrainian market), the Eurasian Economic Union is not providing the promised benefits, and the low price of oil has cut into Belarus’s life-blood; its earnings from refining cheap crude. GDP fell by 3.9% in 2015 and 2.7% in 2016. Russia has also been pressing Belarus hard, to end its ‘situational neutrality’ over the war in Ukraine. Belarus has been resisting hard, as it doesn’t want to see its sovereignty undermined in the same way.

(more…)

Europe, keep an eye on Minsk

By Lisa J Walters, on 29 March 2017

If the Belarus president is to survive, he will have to walk a narrow path between pressure from demonstrators and the Kremlin.

Prof Andrew Wilson, Professor of Ukrainian Studies

This opinion piece was originally posted on Politico on 17th March 2017

When Belarus President Alexander Lukashenko imposed a “social parasite” tax in 2015, he assumed — in normal populist dictatorial fashion — that a $245 fine on those who worked for less than six months a year would be a popular move.

What he didn’t expect was that ordinary citizens would, instead, show solidarity with the roughly half a million people affected and take to the streets in rare public protests.

(more…)

Report on Panel Discussion ‘Decommunization and the Reshaping of National Memory in Ukraine’

By Blog Admin, on 8 November 2016

 

On 1 November 2016 UCL SSEES hosted a panel discussion on recent memory politics in Ukraine, organised in collaboration with the Ukrainian Institute in London. The speakers on the panel were Anne Applebaum, Pulitzer Prize-winning author and journalist, Andrii Portnov, a historian based at the Forum Transregionale Studien and Humboldt University in Berlin and a well-known commentator on Ukrainian memory politics, and Alina Shpak, Deputy Director of the Ukrainian Institute of National Remembrance (UINR).

Uilleam Blacker of SSEES, who chaired and co-organized the event, reports on it here for SSEES blog. Video excerpts can be seen here:

The focus of the discussion was a set of laws redefining state memory politics that were introduced in 2015. The four laws, known in the shorthand as the ‘decommunization’ laws, entail the following:

(more…)

Poland – Judicial independence in jeopardy? President Duda refuses appointment of ten further judges

By Blog Admin, on 25 July 2016

By Dr Philipp Koker, Honorary Research Fellow at UCL SSEES

This post originally appeared at http://presidential-power.com/ and is reproduced with kind permission.

The controversy over Poland’s constitutional court triggered by president Duda’s refusal to appoint judges nominated by the outgoing Sejm and passage of legislation to legitimise his and the new government’s behaviour has so far dominated the presidency of Andrzej Duda (for a summary see Aleks Szczerbiak’s post here). Now, Duda is once again in the line of fire following his refusal to appoint ten out of thirteen judges from lower-level courts to higher positions. Thus, although the individuals put forward by the National Judiciary Council (a committee formed of 17 judges, the minister of judges and 5 political nominees) are far from uncontroversial, the relatively unchecked power of the president in the area of judicial appointments and the government’s plan to reform the judiciary continue to be the most prominent battlefields of Polish politics today.

President Duda appoints ‘his’ nominee Julia Przyłębska as judge of the Constitutional Tribunal on 9 December 2015| © prezydent.pl 2015

The Polish constitution, like so many others (irrespective of this being intentional or not), remains vague on a number of presidential duties and prerogatives. Article 179 of the 1997 Constitution thus states with regard to appointments of judges that “judges are appointed by the president on the suggestion of the National Judiciary Council” but gives no further instructions on the procedures or an eventual right of the president to refuse such nominations. Constitutional scholars widely agree that presidents may refuse the nomination of any candidate for public office (irrespective of judge, professor or prime minister) on the grounds of a person’s lack of formal and legally required qualification or reasonable doubts about their loyalty to the constitution. While this generally follows from presidents’ inaugural oath to uphold and protect the constitution, the rejection of nominees for political or personal reasons arguably has no legal basis.

Duda’s refusal to appoint the judges met with particular opposition due to the lack of justification for his decision. Before being proposed candidates for judicial promotions are vetted by the National Judicial Council; if their application is denied they can appeal the decision in court. An additional vetting by the president beyond formalities thus appears not only unreasonable but also adds the complication that there is no prescribed legal way to appeal his refusal to appoint a nominee. Many conflicts over constitutional clauses along the lines of “the president appoints/signs/etc” fall into the category of conflict between two constitutional organs and can be adjudicated by the constitutional court by the ways of a standard procedure. Yet as both the National Judicial Council and the rejected nominees lack ‘organ quality’, neither of them can easily challenge the president’s decision. The latter became clear in the only other case judicial promotions at lower courts were refused by the president. In 2007 Duda’s pre-predecessor Lech Kaczynski (the deceased twin-brother of current Law and Justice party leader Jaroslaw Kaczynski), created a precedent for Duda’s actions by declining to appoint nine judges. The nominees’ constitutional complaints were eventually rejected after four years of deliberations as the justification was that the implementation of administrative law by the president does not fall within the remit of the Constitutional Court. The Supreme Administrative Court likewise rejected the complaints and subsequent further constitutional complaints were also rejected so that the case now (still) lies with the European Court of Human Rights (for a longer summary, see the report of the Helsinki foundation here).

Newspapers have speculated on the reasons which led the president to reject the nominations. In fact, some of the nominees are far from uncontroversial. One judge was prominently accused of bribery, another judge controversially dismissed a collective law suit against the financial services provider Amber Gold (which was liquidated following the discovery that is was based on a pyramid scheme), and a third was involved in the widely discussed case of restricting the “parents’ rights” of a couple accused of violence against their children. In addition, one judge was widely criticised for continuously extending the arrest of a football fan for alleged drug-dealing, yet without any verdict being issued over the course of three and a half years. Last, one of the judges whose promotion was denied judged on a case in which Law and Justice party Jaroslaw Kaczynski leader sued fellow legislator Janusz Palikot (then Civic Platform, later founder of ‘Palikot’s Movement’) for insulting him.

None of the above-mentioned controversies would generally justify denial of appointment or other presidential intervention. Thus, it is more likely that they are part of the Law and Justice government’s plan to reform and mould the judiciary in their image. Given that Duda is generally seen as little more than a vicarious agent of Law and Justice leader and Polish politics’ grey eminence (he does not hold any government office) Jaroslaw Kaczynski, it is not unreasonable to assume that the president is now helping to fulfil that plan (while at the same time extending the powers of his office). In a recent proposal made by the government (which was already widely criticised by the Human Rights Ombudsman and NGOs), the National Judiciary Council would have to propose two candidates per vacancy thus considerably increasing the president’s power over judicial nominations. This, together with the conflict over the constitutional court and the government’s decision to once again merge the position of general prosecutor with the minister of justice (the positions were separated by the predecessor government in 2008 and unsuccessfully vetoed by president Lech Kaczynski) highlights the great importance that Law and Justice attaches to judicial reform. Nevertheless, it also shows that judicial independence in Poland might increasingly come under threat – not only, but partially due to president Duda’s activism.

 

Please note: Views expressed are those of the author(s) and do not necessarily reflect those of UCL, SSEES or UCL SSEES Research Blog

 

SSEES RB logo

FYRUK? Ukoslovakia? Herceg-Engleska?

By Blog Admin, on 6 July 2016

by Eric Gordy – Senior Lecturer in Southeast European Politics

This post originally appeared on Eric’s personal blog and is reproduced with kind permission of the author.

 

It has become mildly popular, in the wake of the disastrous referendum in which a small majority of a deliberately misinformed public voted to advise the UK government to leave the European Union, to draw parallels between the future of the UK, which would certainly not survive such a dramatic move, and the recent past of the states of the former Yugoslavia.

There are a few similarities, which might as well be noted. The first of them is that decisions deeply affecting the fate of a great many people were decided after bitter, ethnocentric populist campaigns in a referendum. The second is that they led to the rise into prominence of bizarre and clownish figures from the political margins who would never have a chance if they had to face an informed public or oppose a responsible and engaged elite. And of course the third is that we were able to witness established parties and figures which gave every appearance of being established and cast in stone melt and dissipate as quickly as butter in a skillet awaiting the arrival of a fate-cursed egg.

But there are, after all, more differences. The chronological difference that matters is that in the case of the former Yugoslavia, referenda were demanded by outside actors, undertaken when conditions had already become unsustainable, and regarded as paths to resolution. In the case of the UK the referendum derived from the ongoing social crisis, but predated (by an hour or so) the political crisis. The practical difference that matters is that by the times referenda were held in the Southeast European states, there were already armed groups prepared to affirm or reject the outcome. In the UK, for better or worse, violence has been mostly restricted to small groups of people inspired by the rabble-rousers willing to engage in acts of heroic sacrifice like shooting an MP as she walked out of a library, painting vulgarities on a Polish cultural centre, and sending threatening notes to schoolchildren.

The interesting material is in the space between elements that are similar and elements that are different, where we can see a diverse set of political and social forces trying to push events in one or another direction. The loony right wing of the Conservative party, which Mr Cameron thought he would marginalise in his ham-libidoed miscalculation, is gearing itself up to claim a mandate to govern that it does not have even its own party. Conspirators in the Labour party are doing their best to assure that if the Conservatives go down they will not go down alone. Meanwhile both in London and in Bruxelles a chorus of voices is trying to affirm by repetition the claim that an advisory referendum carries with it inevitable legal finality.

Much of the dispute about whether the outcome of the referendum has to be transformed into basic change – for the worse – in political structures derives from the UK’s idiosyncratic legal system. Its defenders decribe its functioning as an «unwritten constitution,» in which the absence of established rules is compensated by a tradition of interpretation. This contention depends in the first instance on the maintenance of basic stability and continuity in the system, but much more than that on the (invalid) assumption that all participants in the system share similar values and goals. A vocal plurality of EU officials are demanding that the UK government invoke Article 50 of the EU Charter, which would set the actual process of exit in motion. This demand is motivated by a fear of extended uncertainty and the perception that the referendum results reflect a public will that has been expressed and cannot be changed. Inside the country, there is debate over whether invoking Article 50 can be done by the prime minister or must be voted by Parliament, whether the move requires consent of all of the constituent units of the UK, and whether any parliamentary decision could be blocked by the unelected chamber of the parliament or by judicial review.

The principal dilemma here is one that existed in the former Yugoslav cases, but was resolved in those instances principally by force: that is that there are a number of ways of preventing the collapse of the system that are legal, but only one that is legitimate. The legitimate way is to dissolve the parliament and hold new elections, which IF they were won by a party or a coalition pledging a new referendum on the basic of new circumstances and risk, MIGHT result in a repeat of the referendum with a changed result (there are at least five preceedents for this in the short history of EU-related referenda). Vetoes of various types, whether from Scottish parliamentarians, judges or «lords,» are simply tricks that would not address fundamental issues. Legally it could be argued that in a representative system members of parliament have both the authority and the obligation not to follow public opinion when it threatens the integrity of the state, but the political risk of doing this is high enough, and the level of courage among parliamentarians low enough, that this is unlikely to happen. Assuming that the use of force does not shift from thug to systemic scale, this means either new elections or a drawn-out period of confusion, paralysis, weak legitimacy, and decay.

It may be that the most important similarity between the recent violent restructuring of the former Yugoslavia and the coming dissolution of the UK (which will be mostly non-violent, with the violence concentrated on marginalised populations who media and public opinion will systematically ignore) is the parallel set of causes. The earlier set of incidents took place in a part of the world where the managers of a hegemonic ideology had lost the trust of the public and the will to defend their ideas. The present events have their root in a clumsily expressed but similar type of public rejection, in which the greatest proportion of working class support for exit came from people who saw their vote as an act of «rebellion,» and who perceived their own interests as ignored in a political and economic system that over a long period disinvested in their livelihoods, withdrew support for their social needs, and symbolically treated them as marginal. In both instances high levels of social dissatisfaction resulted in the emergence of new political orders which would marginalise the people who supported them even further.

If people in our profession were cynical and self-seeking, they would be pleased with this course of events. Lots of jobs for Balkanologists and involuntary specialists in acquises communitaires and other such strange creatures! Mostly, though, we are not, because we know a little bit about the effects of manufactured disorder, socially approved violence, and recombinant structures of hatred.

 

Views expressed are those of the author(s) and do not necessarily reflect those of SSEES, UCL, or SSEES Research Blog.

 

 

SSEES RB logo

The price of solidarity: is Brexit worth it?

By Blog Admin, on 21 June 2016

by Professor Jan Kubik, Director of SSEES. This post originally appeared on OpenDemocracy  and is reproduced with kind permission of the Author.

 

A misunderstanding of history and of historical time has put European solidarity on the chopping block. Think carefully before allowing the axe to swing.

Marina Shemesh/publicdomainpictures.net. Public domain.

In his review of Niall Ferguson’s Kissinger, Graham Allison quotes from the book: “in researching the life and times of Henry Kissinger, I have come to realize that my approach was unsubtle. In particular, I had missed the crucial importance in American foreign policy of the history deficit: The fact that key decision-makers know almost nothing not just of other countries’ pasts but also of their own. Worse, they often do not see what is wrong with their ignorance”. Allison continues: “Ferguson’s observation reminded me of an occasion three years ago when, after an absence of four decades, Kissinger returned to Harvard. Asked by a student what someone hoping for a career like his should study, Kissinger answered: ‘history and philosophy’ – two subjects notable for their absence in most American schools of public policy”.

There is a very similar deficit in the Brexit debate. It has come to be dominated by economic and immigration questions. Moreover, it is not easy to find clear answers in the flood of simplistically and often erroneously argued debates. The only thing we know for sure is that most economists argue against Brexit while most Brexiters argue against immigrants. So, what wisdom is to be found away from economics (where the majority of practitioners argue against Brexit) and the emotionally draining albeit facts-deprived immigration debates? Is there any “Brexit wisdom” to be gained from peeking into history and philosophy?

Where history meets philosophy

At an intersection of philosophy and history one can hunt for some useful clues. Among the most promising are those that lead toward the concept of solidarity. I have no doubt that Brexit constitutes a powerful threat to continental solidarity. I do not have space here to explicate a full argument about the value of such solidarity. It is sufficient to realise that Brexit will send all the wrong signals to the enemies of the liberal democratic order that is the foundation of the peaceful, prosperous, and increasingly solidary post-WWII Europe.

Brexit may mean the beginning of the end of the most successful transnational organisation ever attempted by human beings without conquest.

It will embolden those who work to restore strong nation states built around excessively overblown, exclusivist nationalist identities. After Brexit, the next Austrian election will go the other way, most likely. I wish the Brits would pause their increasingly myopic, inward-directed debates on the narrow economic or political benefits of leaving the EU and consider the fate of Europe, a continent that for a while has been on the track of healing old wounds and consolidating itself. A continent they helped to save so valiantly in world war two and in whose post-war reconstruction they participated so ably.

What is the cost of this solidarity? We know that British insistence on special treatment has already been acknowledged and amply rewarded. Consider the rebate, the exclusion from Schengen, and the retention of pound sterling. Consider that the Brits arecontributing less to the common European pot of funds than almost every other country, if you measure contributions as percentages of Gross National Income. This is not to say that membership is costless, but to ask whether a relatively modest cost of remaining is worth it, particularly if you are able to think beyond the important though somewhat narrow concern of access to the common market.

It is worth it if you believe – as I do – that Brexit may mean the beginning of the end of the most successful transnational organisation ever attempted by human beings without conquest. A voluntary union forged to diminish the chances of conflicts, lower the level of antagonism, facilitate exchanges, build mutual understand and friendship, and improve security by providing a solid social and cultural platform for a military alliance (NATO). The EU has never been only or predominantly about trade and economic efficiency. Its overarching goal has always been to serve as a platform for building piece and stability. Indeed, even as severe a critic of EU’s economic policy as Yanis Varoufakis understands this and warns against Brexit.

The Pyrrhic victory of a Brexit

As much as I can see, the proponents of Brexit see five types of benefits from leaving the EU, beyond the putative economic gains: (1) recovered sovereignty, (2) improved security, (3) better democracy, (4) less bureaucracy, and (5) fewer immigrants.

I understand the argument about ‘recovered sovereignty’ in as much as it is emotionally satisfying to quite a few people. But, upon a moment of reflection, it should strike everybody as a folly to opt for ‘isolated’ sovereignty in the world of pooled sovereignties, designed to increase the security of partners at the cost of relatively trivial diminishment of sovereignty (Britain has a veto power over many EU decisions). Why would a reasonable public favor an infinitesimal gain in sovereignty (Britain intends to remain in NATO) over better security? There is no doubt that the EU suffers from democratic deficit, but listening to Boris Johnson one could think that the bloc is an authoritarian madhouse run exclusively by unaccountable bureaucrats. How on earth did Britain manage to win all those special privileges in such a hostile and unresponsive environment?

I also do not buy the argument that Brexit will help to reduce bureaucracy. The Brits are more than capable of producing their own bureaucratic shackles. Complaining about bureaucratic excesses has become my favorite pastime since I have moved to London from the US. And I have yet to meet a Euro-bureaucrat. And finally immigration. It has been shown time and time again that immigrants, by and large, are beneficial for the British economy. The arguments against them are based on observing difficult situations in some “overcrowded” communities. It is not wise to deny that such problems exist, but it is imperative to warn against hysterical exaggerations of the scale of such problems. Excessively emotional and factually erroneous presentations of the immigration dilemma help to solve few real problems, but for sure fuel anti-foreigner sentiments underpinning more extreme forms of nationalism.

You can’t roll back the clock

The arguments Brexiters often repeat, that Britain will be able to return to a better, pre-EU position or situation is based on a complete misunderstanding of the nature of historical time. “You cannot step twice into the same river”, Heraclitus wrote famously. Each period or moment in history has its own constellation of political power, interdependencies of economic interests, and specific cultural dynamics. Human societies are products of accumulations of habits, rules, and predilections that are difficult to reverse. Social scientists talk about path dependence and sunken costs. There are no reversals and abrupt changes of direction that are without costs, as whole societies need to retool themselves.

Self-determination is not the same as democracy.

Since most economists do not see any economic gains in leaving the EU and other arguments do not seem to be convincing why would you leave? Why would you risk taking what will most likely amount to the first step in the unraveling of European solidarity, which was so costly to create in terms of time and treasure?

People argue that Brits will be able to rule themselves and thus have more democracy. Perhaps. But self-determination is not the same as democracy. Since Brexit will almost certainly destabilise the situation in Europe and beyond for quite a while, more self-rule may not turn out to mean stronger, safer, and more stable democracy. Democracy is a delicate institutional system that thrives in stable, predictable environments, both internal and external. If Brexit emboldens radical populist and largely anti-liberal forces, as it almost certainly will, the liberal foundation of the rule of law and tolerance, so indispensable for modern democracy to thrive, will come under attack. Moderation, the chief virtue of democracy – as we know since Aristotle – will be hard to obtain and practice.

British democracy will survive but it will take political energy to defend it. Another cost. So, why? I still do not understand. I am writing these words horrified by Jo Cox’s murder by a madman screaming “Britain First”. Of course Nigel Farage and bellicose Brexiters are not directly responsible for this tragedy. He is, however, responsible for helping to create a cultural climate in which sick minds go beyond their ‘breaking points’.

Please note: Views expressed are those of the Author(s) and do not necessarily reflect the organisational views of UCL, SSEES or UCL SSEES Research Blog. 

 

 

SSEES RB logo

Brexit, Hungary and EU Funding

By Claudia S Roland, on 8 June 2016

by Dr Thomas Lorman, Teaching Fellow in Central European History, SSEES 

Any journey through Hungary is marked by the sight of posters promoting various government infrastructure projects which are being carried out according to the government’s ‘New Széchenyi Plan’ (Új Széchenyi Terv) named in honour of Count István Széchenyi, one of Hungary’s great nineteenth century statesmen and a tremendous anglophile. Each poster is appropriately adorned with both a Hungarian and an EU flag, a visible demonstration of how Hungary is benefitting from EU funding. This funding is substantial. In the funding cycle 2007-2013, Hungary paid 8 billion euros into the EU budget and received 33 billion euros. In the current funding cycle up to 2020 Hungary is expected to be the net beneficiary of a further 32 billion euros. Per head of population, Hungary is receiving more EU funds than any other member state apart from Lithuania. As a result, over 90 percent of the funding for state infrastructure projects is provided by the EU. The result of such largesse is evident in, among other things, the new metro (tube) and tram lines, better roads and railways, cleaner air and beautified city centres. The posters promoting the EU’s support for various government projects serve, therefore, as tangible proof that the EU is helping to close the gap between Central and Western Europe, healing divisions that were exacerbated by the maladministration that characterized over four decades of Communist rule, and ensuring that the call for a ‘return to Europe’ in 1989 was not just empty rhetoric. Britain has had a long-standing view that the creation of a free and prosperous Central Europe is in this country’s best interest. EU funding appears to be an effective way of achieving that objective.

hungary

The direct benefits to Britain of the EU’s financial support for Hungary should not be overlooked. Tourists benefit from the Hungary’s gradual reconstruction and modernization; EU funds have helped raise the quality and price of Hungarian agriculture and curbed the amount of cheap, low-quality produce that would otherwise have been ‘dumped’ on the British market. The dramatic improvements in the quality and accessibility of Hungarian wine are a case in point. EU funding has also helped grow the Hungarian economy. About 5-6% of the country’s GDP is directly dependent on EU funding, and that in turn has made Hungary a growing market for British exporters. Moreover, for those concerned about the negative impact of migration into Britain, EU funding has provided more jobs for the Hungarian labour force and thereby limited the number of Hungarians who have tried their luck in the British labour market.

On closer inspection, however, the posters that record the EU’s contribution to Hungary’s development promote, first and foremost, the Hungarian government’s own efforts to transform the country. Although the full sum of money devoted to each project is listed on every poster, no effort is made to spell out precisely how much of the total budget has been contributed by the EU, while the obligatory inclusion of the EU flag is dwarfed by the slogan that ‘Hungary is being renewed’ which is emblazoned on an orange background associated with the governing FIDESZ party.  As the vast majority of EU funding is spent by the government, either at the state or local level, the overall impression is that the transformation of the country is primarily the result of the government’s efforts and finances. Put simply, the EU pays and the Hungarian government reaps the benefits.

Hungarian private businesses and NGO’s do have some access to EU funds. Even businesses linked to opposition figures have obtained some crumbs from the table. Nevertheless, the dispersal of EU funding is mired in constant allegations of corruption, a woefully inefficient bureaucracy, and an overwhelming stench of nepotism. On occasion the EU has withdrawn funding from Hungary over concerns about the misuse of funds and has had some success in demanding greater transparency and imposing realistic targets and timetables. Such efforts have gone some way to curbing the most egregious cases when EU money was misused. Nevertheless, Transparency International asserts that almost every project funded by the EU in Hungary continues to be afflicted by some level of corruption.  Indeed, such is the scale of the inflow of EU money into Hungary that the government is struggling to spend all of the money allocated. It is, therefore, not overly concerned with spending the money in the most efficient manner possible with one estimate suggesting that it is spending EU money, on average, at about 25 percent over the market rate.

Moreover, the EU has proved entirely impotent as regards the rampant politicization of the Hungarian bureaucracy which oversees the actual dispersal of most EU funding. The politicization of the Hungarian bureaucracy is, it should be noted, a long-standing, phenomenon. Each change of government has been accompanied by the wholesale sacking of senior civil servants and senior figures in various state organizations such as the post office, the railways, the television and radio. Critics contend that this malign state of affairs has been exacerbated by the current FIDESZ government, in power since 2010, it has certainly not diminished. Thus the government’s own favoured persons, organizations and businesses continue to receive the lion’s share of government funding, including most of the funds provided by the EU.

Individual members of the government have adopted an old tactic of warning the electorate in specific constituencies that their future prosperity is dependent on voting for the right party. The implicit threat is that a vote for the opposition will mean that they will receive less funding from the government, including less EU funds.  As a result of such shenanigans, Hungarian analysts from across the political spectrum have voiced concerns about how civil society and the democratic process is being squeezed and distorted by the government’s control and manipulation of the flow of EU funds. Britain, as one of the EU’s wealthier member states, is helping to fund this manipulation.

In addition, EU largesse has ensured that it has been far easier for successive Hungarian governments to rely on EU funding rather than carry out a comprehensive economic reform program that would put the country on a track towards rapid economic progress. The initial wave of reforms that were enacted in the 1990s to empower the free market have given way to tinkering, lethargy, and even creeping re-nationalization. As a result, Hungary’s economic growth in the past decade, precisely when the lion’s share of the EU funds has arrived, has been anaemic.  In the past decade its GDP growth rate has consistently fallen below 4% per annum, ensuring that Hungary cannot meaningfully close the gap in living standards between Central and Western Europe. Thus, eastern Hungary comprises three of the ten poorest regions in the entire EU and a significant proportion of the Hungarian workforce is motivated to look for employment prospects elsewhere including Britain. Indeed, there is a case to be made that the governing clique in Hungary has a vested interest in preserving the relative impoverishment of Hungary as it allows them to cream off the EU’s largesse while bolstering their own grip on the country.

EU funding is, of course, only one example of the impact that EU accession has had on Hungary but it is a revealing one that illuminates larger problems with the entire EU project. Clearly, EU funds are bringing tangible benefits to Hungary, and to Britain, but they have also encouraged successive Hungarian governments to dodge reforms, exacerbate nepotism, weaken civil society, and obscure their own malfeasance. Proponents of Brexit should acknowledge the negative impact that this will have on Hungary if the inflow of EU money is reduced by ending Britain’s contribution, but opponents of Brexit should also acknowledge the negative impacts that this inflow of funds is having right now.

 

Please note: Views expressed are those of the Author(s) and do not necessarily reflect the organisational views of UCL, SSEES or UCL SSEES Research Blog

 

SSEES RB logo