Three decades after the fall of communism, Eastern Europe’s democratic development is seen in increasingly gloomy terms. However, we may need to find a more pragmatic, middle way in assessing the region, argues Seán Hanley.

The region termed Central Europe or Central and Eastern Europe – the body of small and medium-sized states between the former USSR and the established democracies of Western Europe – was once seen as the great success story of post-communist democratisation:  rapid and peaceful political transition in 1989-90; a quick return to economic growth; flawed but functional liberal democracy; relatively rapid integration into the EU; political elites who seemed, whether out of conviction or pragmatism, willing and able to imitate West European political, economic and ideological models – although these were (and are) diverse, ranging from Nordic style welfare capitalism to British-style deregulation and neo-liberalism.

Since mid-2000s, however, the intellectual climate  among both commentators and political scientists the agenda has shifted from one of understanding consolidation, integration and consolidation or remedying the flaws of stable, but weakly performing post-communist democracy to one of deep gloom.

Now, compared to early hopes of the liberal project, the narrative has become a pessimistic one. Of democratic decline or even backsliding toward authoritarianism. The rejection by voters and elites in Central and Eastern Europe of Western European models – and the EU status quo – as too socially and economically political for their traditions and societies. And of constitutional liberalism as constraining the democratic will of the people, or holding back the emergence of a capable modernising state.  Economic catch-up with Western Europe, especially in terms of the living standards of poorer, older, less educated, seems a chimera.

Populist critics now decry the locking in of Central and Eastern Europe as, once again, an exploited peripheral Europe (including Mediterranean democracies of Southern Europe and the Balkans) – analogous, but on a much bigger scale to the “left behind” marginalised regions within Western European countries, which have fuelled populist electoral insurgencies.

Given ineffective and cumbersome procedures for enforcing the rule-of-law – in what was supposed to a club of liberal-democratic nations – the EU, as R. Daniel Kelemen has suggested, is becoming a patchwork of  regimes encompassing democracies, semi-democracies and downright authoritarian states, hamstrung by North-South and East-West splits.

What is especially jarring is that some of the supposed frontrunners democratisation in the region – Hungary and Poland – are now the vanguard of “democratic backsliding”, conservative counter-revolution and experiments in liberal governance. Some prominent governance indices, such as Freedom House’s ‘Freedom In the World’, now classify Hungary as having slipped below out of the zone of fully liberal democratic ‘Free’ societies. Poland is rapidly heading the same way.

Worse still, some of the treasured mechanisms of building democracy such as civil society development and grassroots activism have turned out work in ways quite opposite to that  envisaged in 1990s. In Hungary and Poland, the electoral breakthroughs of the Fidesz and Law and Justice (PiS) parties were prefigured years before through the development of networks of conservative civil organisations and right-wing civic initiative at grassroots level.

Moreover, the main vehicles for illiberalism have not been ‘red-brown’ alliances of ex-communists and fringe nationalists, but parties and politicians with often impeccable roots in the anti-communist opposition, accepted by West European centre-right as mainstream conservative parties and political allies.

That said, there are many varieties of populism and democratic decline, ranging from the conservative electoral revolutions of Hungary and Poland, to the longstanding weak, but oddly stable corrupt democracies of Bulgaria and Romania, to the fragmented and feverish political landscapes of  Slovakia and Czechia – and the strange “technocratic populism” of Czechia’s billionaire prime minister Andrej Babiš ,who still unsure if he wants to be the Czech Macron or the Czech Trump.

George Orwell’s dictum that “All revolutions are failures, but they are not the same failure” is, unsurprisingly, often quoted these days in relation to East Europe. We could also paraphrase Tolstoy and say that all unhappy democracies are unhappy in their own way. Or we might remember the historians Joseph Rothchild and Nancy  M. Wingfield’s characterisation of the region – made originally after the decline and fall of communism in late 1980s – about Eastern Europe’s “return to diversity”. (more…)

East Central Europe’s democratic deterioration is as much  about the limitations of mainstream liberal forces as the rise of illiberal populists argue James Dawson and Sean Hanley.

Less than a decade ago the newer EU member states of East Central Europe (ECE) were considered the great success story of post-communist democratisation. This success was held up by scholars as a textbook illustration of how the EU, through the attractiveness of its political and economic model, and the toughness of accession conditions, could make a decisive difference by empowering pro-European liberals in the region’s shakier democracies to push their countries firmly on track to liberal democracy (and EU membership).

While poorer and more corrupt than the EU’s West European core, ECE was assumed to be a region safe for democracy with good long-term prospects for economic and political catch-up. Today this narrative of democratic progress is dead, replaced by one of democratic backsliding – and even sliding into authoritarianism – under the auspices of populist and nationalist politicians.

What has been especially disconcerting is that it has been the early frontrunners of democratization – Hungary and Poland – where such democratic backsliding has gone farthest and fastest: after winning decisive election victories (Fidesz in Hungary in 2010, Law and Justice (PiS) in Poland in 2015) conservative-nationalist governing parties have moved rapidly to dismantle liberal checks and balances, capturing or neutralising constitutional courts, state agencies, public (and in Hungary private) media and NGOs.

More strikingly still, Fidesz and PiS were not radical outsiders emerging from the fringes, but large right-wing parties once considered part of a pro-Western centre-right mainstream, whose representatives still sit with German Christian Democrats and British Conservatives in the European Parliament. (more…)

Dr Nevila Pahumi,  Alexander Nash Fellowship in Albanian Studies

Over the past year, a group of us SSEES researchers have actively engaged questions of reproductive justice and discourses of childbearing in Eastern and Western Europe. Given the commonality of challenges women face in both ends of the continent to practice reproductive choice over their bodies, we have joined forces to give voice to some of the key concerns behind pro-choice and reproductive justice abortion debates now raging across the continent and beyond.

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Chiara Amini – Teaching Fellow in Economics and Business and Raphael Espinoza – Lecturer in Economics
UCL SSEES Centre for Comparative Studies of Emerging Economies

It is a common view that a UK exit from the European Union would cause significant damage to the UK and to the EU.  The Treasury claims that Brexit would make Britain significantly poorer and could result in GDP contracting by as much as 6%. Such a significant impact would not be so surprising, given that trade and investment between the UK and Europe has grown significantly in the last 40 years. In 2014 a study by Ottaviano et al showed that Brexit trade losses would amount to 3.6% of UK GDP, as a result of an increase in taxes, quotas and regulatory legislation. What’s really striking is the fact that these losses have the potential of reaching 10% of GDP, if we consider the dynamic effect of trade on innovation and competition. Earlier this year, JPMorgan estimated that Brexit could reduce GDP growth by as much as 1% between 2016-17. At the same time the bank also warned that Brexit could decrease Eurozone GDP by 0.2-0.3%.

Policymakers in the EU countries of Central and Eastern Europe have been vocal in expressing their concerns about Brexit. The countries this specifically refers to are: The Czech Republic, Estonia, Hungary, Lithuania, Latvia, Poland, Slovakia and Slovenia.  Recently Poland’s President, Andrzej Duda, warned that Brexit could have dramatic consequences for the Polish economy. However, formal analyses estimating the impact of Brexit on the region number on the fingers of one hand. Erste Bank argues that direct economic consequences on the region would be relatively minor as UK trade amounts to only 3-6% of total trade. However, countries such as Poland, Czech Republic, Hungary, Latvia, Lithuania and Slovakia, that run trade surpluses with the UK, are predicted to be most affected. After looking at the macro data, we can argue that Central and Eastern Europe would not only be affected by Brexit directly via a fall in flows from the UK, in terms of migration and remittances, trade and financial flow, but also indirectly through its effect on the Eurozone. As economic shocks spread easily from one country to another, a phenomenon known as ‘financial contagion,’ the impact of Brexit on the Eurozone would further reduce inflows to Central and Eastern Europe.

 

Financial flows from the UK to Central and Eastern Europe appear moderate (see Figure 1).  The median of UK financial flows to GDP is less than 1%.  Trade flows (import and export) are much more important, and they represent around 2.5% of GDP in Central and Eastern Europe.

Figure 1– Median Flows UK- Central and Eastern Europe

 

 

 

 

 

 

 

 

 

 

 

However, taken together, UK trade and financial flows make up a sizeable share of the total flows to the region.  The proportion of UK remittances to total remittances in Central and Eastern Europe is as high as 8%. As far as trade is concerned, this ratio is 4%. Inevitably, some countries in the region have even stronger links with the UK; for instance, in the Czech Republic, foreign direct investment from the UK constitutes 14% of its total foreign direct investment.  Also in the Czech Republic, bank loans from the UK represent 2.5% of GDP. UK remittances also constitute an important part of total remittances sent to Latvia and Lithuania, over 20% of the total.

Moreover there has been a high degree of correlation in the economic growth between Central and Eastern Europe and the UK. This could be the result of financial contagion via other, third party countries. Alternatively, it could stem from both regions’ high integration with the two largest world economies, the US and the Eurozone.  However, the correlation between growth in Central and Eastern Europe and the UK (at 0.56) is higher than that between the US and Central and Eastern Europe. (0.43, see Figure 2) Disentangling such correlations so as to understand how economic shocks are transmitted between countries has been done in a variety of models.

 

Figure 2 – Real GDP growth (Year-on-Year; source: OECD and IMF)

 

 

 

 

 

 

 

 

 

 

Our analysis shows that the UK is a significant source of financial contagion for Central and Eastern Europe. If, as a pessimistic example, estimated by PwC earlier this year, UK GDP fell by 5% as a consequence of Brexit, this would reduce GDP growth in Central and Eastern Europe by no less than 2.5%, as a consequence of third party financial contagion. Since the model is linear, if the fall in UK GDP was only 1%, the impact on Central and Eastern Europe would be only 0.5%.

 

Historically, shocks to UK GDP have contributed around 20 % of the variance in growth in Central and Eastern Europe. In our research for this piece, we employed a well-known statistical methodology, Vector Auto Regression, to examine how growth in Central and Eastern Europe relates to the economic performance of the UK, US and Europe. The historical decomposition of growth in Central and Eastern Europe (Figure 3) attributes the good performance of Central and Eastern Europe in the first decade of this century to strong growth in the UK. This occurred at a time when growth in the Eurozone was disappointing.   

Figure 3. Historical decomposition on GDP growth in Central and Eastern Europe (YoY)

 

 

 

 

 

 

 

We have come to the conclusion that, although it is uncertain what the short-term impact of Brexit on the UK will be, there are good reasons to think that it will have negative repercussions on Central and Eastern Europe.

 

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

 

 

 

As a result of the electoral successes of Viktor Orban’s governing FIDESZ-KDNP coalition in 2010 and 2014, Hungarian politics has experienced a dramatic shift to the Right.  One beneficiary of this rightward shift is Jobbik, the Movement for a Better Hungary, which is now the leading opposition party with the support (according to opinion polls) of about one-fifth of the probable Hungarian electorate.

Formed in 2003 by university students in Budapest, Jobbik can be placed in a long tradition of right radical parties in Hungary that stretches back to the Hungary Justice and Life Party (MIÉP) that obtained parliamentary representation in the 1990s, to the interwar Party of Hungarian Life (Magyar Élet Pártja) and to the pre-First World War Catholic and Nationalist Parties such as the Catholic People’s Party, The Slovak People’s Party, as well as Europe’s first antisemitic party, the Országos Antiszemita Párt, founded in the 1880s. Jobbik has also been compared to Ferenc Szálasi’s ‘Arrow Cross Movement’, which briefly seized power in October 1944, even though the ideological differences between these two parties are substantial. Certainly, all of these parties, including Jobbik, can be seen as recurring examples of the enduring clash between populist/rural/antisemitic nationalists and an allegedly cosmopolitan/urban/liberal elite sometimes referred to as the népi-urbánus debate. This debate has been an important fault line in Hungarian politics since at least the middle of the nineteenth century.

On Wednesday, 24 February, five young academics from Britain, Hungary and Romania presented short papers at a well-attended roundtable organized by SSEES’s Centre for the Study of Central Europe, held at SSEES and chaired by myself (Thomas Lorman), which shed some light on the ideological roots and future prospects of Hungarian right radicalism in general and Jobbik in particular.

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This year, 2-13 June, SSEES is running the second UCL Global Citizenship ‘Danube’ Summer School on Intercultural Interaction. This is one of the four summer schools that make up the first year of UCL’s Global Citizenship Programme. The Danube Summer School brings together nearly one hundred students from across the University to learn about the Danube and the people that live along its banks. Coordinated by Tim Beasley-Murray and Eszter Tarsoly, the Summer School draws on the expertise of a wide range of SSEES academic staff, language teachers, and PhD students.

Below is a text from the Danube Summer School’s blog that explains the rationale for the Danube-on-Thames project, one of the Summer School’s outputs.

Historically, the region through which the Danube flows has been a region of extraordinary cultural, ethnic and linguistic diversity. The realm of Empires (the Ottoman and Habsburg) that were multi-, rather than mono- ethnic, this was a region that did not care much for neat borders that separated one group of people from another. Here, you used to be able to find Serbian villages dotted in what was otherwise Slovak countryside, German- and Yiddish-speaking towns wedged between Romanian and Hungarian villages, pockets of Turks and other Muslims, Christians of all denominations (Orthodox, Catholic and varieties of Protestants) living across the region, and everywhere settlements of Germans (the so-called Danube Swabians or Saxons) as well those Danubian cosmopolitans, Jews, both Sephardim and Ashkenazim, and different groups of Roma.

A good, even clichéd image, of this cultural and ethnic plurality, as drawn, for example, by the Austrian writer, Joseph Roth, could be found in the classic Danubian café with its hubbub and chatter in many languages, its newspapers on sticks in German, Hungarian and Romanian, its Romany band playing music that draww on a complex fusion of musical traditions, its Jewish doctor playing chess with a Christian lawyer.

Today, much of this diversity has gone. The collapse of the multi-ethnic empires and the endeavour to create single-nation states, particularly following the First World War, started to tidy up the region and sorted people into national boxes. This process was continued in a much more violent way with the murder of most of the Danube’s Jews and a significant part of its Romany communities in the horrors of the Second World War. After the Second World War, this violence continued with the expulsion of the bulk of Germans from ‘non-German’ national territory – and also, to an extent, the removal of Hungarians from the more-spread out territories that they had previously occupied.

The raising of the Iron Curtain along the banks of the Danube, between Communist (Czecho)Slovakia and Hungary and capitalist Austria and between Communist Romania and non-aligned Yugoslavia, dealt another serious blow to the Danube as a site of intercultural flow. Most recently, the ‘ethnic cleansing’ that accompanied the Balkan Wars of the 1990s was a further step in the homogenization of the Danubian region.

The result is that the Danubian interculturality that this Summer School seeks to explore is not necessarily best explored on the banks of the Danube itself. Where then to look for it? (more…)

Storming the Winter Palace, a SSEES languages and culture photo competition on the theme of Russian and East European London, led students and staff to contemplate cultural resonances, contemporary identities and stereotypes – and language-learning opportunities! In the final post of the year on the SSEES Research Blog, Sarah Young introduces a selection of entries. Commentaries are by the photographers, unless otherwise stated.

Harbry Ellerby’s photograph of the Hungarian stall in Camden reminds Eszter Tarsoly that every encounter with Eastern European food in London invites us to reflect on cultural exchange, language, and translation:

The photographer took this shot in front of the Hungarian stall in Camden Town. The food on sale here, instead of the grilled sausages more usual on Polish and other East European stands, is lángos, a deep-fried flat bread whose dough is similar to that of pizza. It is traditionally seasoned with garlic and tejföl, a wide-spread diary product in Eastern Europe known in various guises in the region (e.g. Romanian smântână and Czech smetana) and most similar perhaps to soured-cream. How much a simple, hearty food – particularly recommended after a long, hearty night – can teach us about translation! The man’s silouette in front of the stall and the hanging flower baskets are revealing: the image, while entirely authentic, could have been taken only on a somewhat manicured market. This video clip of the song ’Lángos, tejföl’ by the band Kaukázus shows how lángos is enjoyed in Hungary.

Seeing a street sign commemorating one of the many Eastern European revolutionaries who lived in London during the nineteenth century, Eszter Tarsoly‘s thoughts turn to today’s immigrants:

In a quiet, respectable, yet exhilarating corner of Greenwich stretches a modest Cul-de-Sac called Kossuth Street, named after Hungary’s larger-than-life revolutionary hero, one of the driving forces behind the 1848-49 Revolution and War of Independence. Lajos Kossuth, after the demise of that Revolution, resided briefly in Britain, and legend has it that he stunned English-speaking audiences with his knowledge of English acquired in prison, or rather, with the kind of English he had acquired (only from written texts) in prison. We do not know exactly what Kossuth’s English was like. But not far from Kossuth Street, just across the Thames near Limehouse basin, there are entire blocks of flats inhabited almost exclusively by Kossuth’s contemporary compatriots, sharing overcrowded accommodation, having little hope – in the absence of knowing good English or who knows what other skills – to move on. A dead end…?

The reality of contemporary immigration from Eastern Europe is the subject of the first of two photographs by Ger Duijzings:

This image was taken during a cold night in February 2012 at just after 3 in the morning, at a bank branch opposite Victoria Station. Together with my research student Cezar Macarie I was doing a night walk around the area. Underneath a row of ‘fast, easy, and convenient’ cashpoints, in the glass protected bank area, a dozen or so Poles and Romanians are sleeping rough. As it is outside of official opening hours, the automatic door is kept open by a traffic cone. A Pole smoking a cigarette in front told us that he had been working in London for seven years, the first five years on a contract, but the last two working on-and-off.

Ger Duijzings’ second entry confronts insular British views of Europe and the question of what ‘Eastern Europe’ means in this country:

A quick snap shot taken at the end of November 2007 at Luton Airport which shows how outdoor advertising at UK airports targets low-budget travellers from East Europe. I had just returned from one of my frequent commutes to so-called ‘Eastern’ Europe which for some natives in the British isles apparently starts just across the North Sea. I took the photo from the inside of a bus waiting to take me into Central London. A lone individual is about to put his luggage into the belly of a bus: it may have been an East European guest worker or student, perhaps. The cold and grey image has the impersonal and slightly gloomy quality of what Marc Augé would call a ‘non-place’.

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Economic reform in Eastern Europe and the former USSR is stagnating suggests the latest Transition Report from the European Bank for Reconstruction and Development (EBRD).  However, as debates at a joint EBRD/UCL-SSEES launch event highlight, the responses needed may not be straightforward, reports Randolph Bruno. 

The idea that some countries are Stuck in Transition – to take the title of the EBRD’s 2013 Transition Report – has resonated for some time in the literature. It is now it is time to take stock and ask whether transition is really over – at least for some countries.

The 2013 EBRD Transition report tries to address this by asking two main questions. Firstly, why has convergence slowed? The standard of living of the best performing countries in Eastern Europe is still around 60-70% of the average for rich Western European countries. Secondly, can economic institutions be improved if there are constraints on political reform– a question which could also be asked in a very similar fashion of Western European countries. As far as the first question is concerned, the data clearly shows an end to the productivity catch-up (moving closer to the EU average) observed at the turn of the millennium.

Why should this be the case? One possible answer is stalled political reform. The up-to- EBRD transition indicators in the Report show political reforms plateau-ing and this is worrying. The attitude of the citizens in transition states shifted in 2006-2010, basically dropping the consensus that the market economy is a good mechanism for allocating resources.

Reforms matter

However, the main element is the increase in the so called Total Factor Productivity – productivity derived from the increase in efficiency not accounted by factors of production such capital and labour. In other words, the injection of new capital or new labour has a very limited impact on productivity whereas new technology and innovation play a major role.

The EBRD downgrades of the top reformers’ rankings are concentrated in the EU countries and with the current policy convergence will slow. However, the other side of the coin is that if economic reforms are improved convergence will improve. On this point the EBRD Transition Report is very clear: keep going with reform –or re-start reform- and this can make a substantial difference. Still more worryingly, in some cases (for example in Belarus) reforms have been reversed. (more…)