Shameful self-promotion

Just a link for those who can read French. The topic is quite fitting, although the story of this piece is still a bit strange for me.
Lost in Transition? Here is the pdf version.

Revival - shallow thoughts and campaign unleashed

I mean maybe this blog will revive. I'm not proud of neglecting it - although not deliberately - but sometimes there is no time, or if there is still some, than energy lacks. Anyway I made promises that remained unfulfilled, however, I didn't really find suitable topics to deal with as I was not convinced that apart banalities I could be able to express anything half-original. And only repeating what others already explained - I would spare myself from this kind of self-promotion.
Nevertheless, at the moment I'm in the middle of a savage electoral capmaign, the prize is the seat of the president of Romania, among the contenders we can find Mr. Basescu, whose economic talent was many times highligted at these pages, the president of a the so-called social democratic party, Mircea Geoana, a liberal candidate, Crin Antonescu, the eternal challanger, Vadim Tudor, the extreme nationalist, a literate Hungarian, a poet, Hunor Kelemen. The first three are the serious candidates, the others can influence the result but has no real chance to become head of state. Not that it would be a welcome job, I suspect. Romania, even half a year ago portrayed in Hungary as a rapidly emerging country that will overtake its western neigbor in three or four years, is now on the verge of collapse. Not only had the budget deficit soared - it is predicted to reach 8% of the GDP - and the economy declined, but at the moment the favorite theme of politicians is the lack of the necessary revenues to pay public officials, teachers, justices, nurses, medical doctors etc. The IMF delayed the next part of its credit until a new and stable government will be established.
One reason beind is the campaign itself. I'm even not convinced that the situation is really so dire as it is portrayed, because politicians are clearly seeking the way to put the responsibility for the failure on their rivals. Therefor everyone maneouvers, tries to snooker its opponent(s) and somehow convey the image that if the salaries for next month really won't be paid out it will be their opponent's fault somehow. And as the president - whose party was left alone a month ago by the social democrats as sole government party - can not easily distance himself from the problems, he clearly tried to frame the situation as if only the IMF money would be available for the state. And the objection of the social emocrats to install a knew - minority - government of the presidents party is the only objection in the wy ofn this part of the credit.(It is evidently cheaper, but the Romanian government borrowed continously in this year from local banks huge sums and with a growing risk apettite at the markets even the doubious CCC credit rating wont easily deter "investors" from buying Romanian government bonds.)
But this is only a minor aspect of the crisis and I fear none of the candidates - and no one from the economic elite - is ready to drew the very sober conclusions from the crisis: the model of the recent years at last failed to delver a sustainable growth and it is not easy to imagine that it will in the future. However, every proposal is somehow a repetition of this earlier economic policy. (The social democrats try to mix it with some populist measures, higher salaries, lower prices fro public services etc.) Romania, a realtively poor country with a huge population depending on social assistance due to the lack of employment lived primarily on the remittances of a large guest worker population (at its peak they sent almost 10 billion euros to home in a year) and made it easier for its population to take credit with the help of lower tax rates. (Nevertheless, Romania's tax system was neither simple, nor really low, but the rational and efficient and etc. markets and their even more rational and efficient actors was simply not capable to grasp it, because they only had some very superficial informations...) Although the country attracted some investment, a large part of it went to the real estate sector and real estate prices skyroceted. Just as consumption with them. (Bucharest is quite similar to Latvia in the outlok of its cars and it is striking how many prestigious companies have a shop somewhere in the city. For example Cristophle closed its shop in Budapest after a year, while the Bucharest branch still exists...)
Anyway, it stopped with the crisis, and now people began to feel the harder times. The proposals for reviving the economy do not seem to be far reaching enough: austerity, cutting of social spending (it is usually called better targeting but please, don't tell me, that someone with 200 euros in a month as regular income not deserves some social assistance...) and cutting jobs in the public sector. The latter can be reasonable but the country was never really capable to create jobs, the record low unemployment was simply a result of the emigration. Now the migrants are returning and public officials will be laid out... The problem, unfortunately is the poverty that do not allow domestic consumption to be the driving force of growth. Even not with tax cuts - a liberal proposal - when they would deliver people 20-30-40 euros per month. (This is one of the weakest points of every tax cut ideas in ECE: with a realtively low wage level local SMEs orieted towards the domestic consumers can not raise their prices for services too much. People simply do not have enough money to pay 15 euros for a hair cut after spending the lions share of their income on houshold costs and food.) But the perspectives are not bright, with a rapidly shrinking and ageing population and with the necessity to export more... Romania faces either a very long and protracted struggle alone, offering low wages in order to attract investment in export oriented sector or ... don't really know. With the strain of the crisis slowly withdrawn the chances of a profound change - a turn from a state level regulatory and social system combined with supranational free market towards a supranational level regulatory and social system combined with supranational free markets - seems less and les probable. The aging and poor ECE countries will remain entrapped.
Otherwise the non-political proposals are sometimes even worse. "Economists" analyzing the region from a macro perspective - I'm still stounded seeing how easily they preceive that they are omniscient after putting some basic data in their models - can not really tell what would be the way out. The language and discourse of these actors is shallow and contentless, full of empty signifiers and not a single world with real content. They simply repeat phrases, like structural reforms, tax reforms but at the moment they even not dare to give details. Just phrases. And it is always hard to get rid of the feeling that it is completely immoral: to make such unelaborate proposals (while only onething is certain: in essence they mean the worsening of the situation of the social groups at the bottom of the society) from well-paid positions... Even if it is demagoguery, I can't help to think of it.

Moldova reloaded

After the riots in the wake of the elections in April the parliament in Moldova was unable to elect a president (according to the constitutional provisions a candidate needs 61 votes in the 101 member parliament, the communist party had only 60 MPs) and as the constitution prescribes early elections were held at the end of July. The results - although the communists still retained their position as the far largest party - are different enough to modify the balance of power, but not different enough to resolve the deadlock. The outcome is highly improbable, even though adherents of so-called pro-European parties are in a cheerful mood, celebrating the fall of the last communist government. I do not want to discuss the options and possibilities as I have very limited expertise on the Moldavian politics. But the situation has some underlying characteristics worth to outline, more precisely the distorting effect and influence of the application of a very limited dichotomy - pro-Europeans and pro-Russians - regarding the political divisions in the area on the perception of external observes.

Crisis, but more than one? - Hungary

Well, on the one hand it is clear that at the moment the sense of crisis is receding (or only has receded?), "risk appetite" is growing, everyone is looking and seeing "green shoots" even though the data on real economy is at leats controversial and for more sober observers not really promising. (Just one example: the most prestigeous economic news and analysis website www.portfolio.hu published a news yesterday with the title: Incredibly good news from the real estate market in the USA. In reality although in a m-o-m comparison the data showed growth the level of new construction works was only the half of the same indicator a year ago and only at about a fifth three years ago. It suggests that there is a long way to a recovery and a similar GDP level...) But with the present mood hysteria is not so dominant as it was some weeks ago and it also means that there is not really much to write about. As if normality has been returned ...

Otherwise - at the field of politics - spectacular events happened, but they can hardly be called critical, except in Hungary. For the superficial eye a strong correlation between crisis and the astonishing appearance of a strong and neo-fascist party (in the sense the concept is used by Roger Griffin) and the collapse of the center-left governing or majority parties would be obvious. But to treat the phenomenon in a so simplistic way would be misleading and a self-delusion. It's rather a sign of a more profound problem - if one whises, crisis - the huge divides in a country and in a society, accentuated by an economic and social model that was - as it is clear after two decades - incapable to bridge this gap and give at least hope for a fifth or quarter of the country. Incapable, although the model was once implemeted in a very servile way and later with more reluctance as well, in order to cushion the measures. The consequence: means relying only on market and imagining the solution of social problems in a market oriented way failed to deliver the opportunities for well defined geographical regions, quite the contrary, it led to a deepening difference between those areas and the more developed regions of the country. For example as in the early '90s the per capita GDP of the Northern Hungarian county Borsod was at almost 75% of the national level, today it is well under the 50% percent treshold, although investment in a material sense was not scarce in the last decade.

If one would like to sum up this process from a point of view of social history (or historical sociology?) it is quite similar to the process of spreading of capitalism into rural communities, at least in Hungary. The emergence of a capitalist economy in the 19th century was hardly a singular act, rather a long process, starting from certain centers and slowly diffusing into the countryside. Not only in a geographical sense, but in a social one as well. Even if one can detect a kind of enterprise or entrepreneurship in distant villages it is many times confined to individuals or a small fraction of the population. Meanwhile other models of the integration of localities in a capitalist market (world market) emerged and prevailed, like a strong cooperativist movement, wich were capable to preserve (though in many times in a transformed way) the earlier methods of running a local community and at the same time integrate this community as a whole into the broader framwork of a market. The socialst solution for this problem was surprisingly (or unsurprisingly?) similar. Integrate the rural communities around a heterogenous company, dealing with agricultural and some kind of industrial production and using extensively the labor of the villages in this process, while allowing some leeway for the individuals around their homesteads and imitating a kind of self-governance in this company (cooperative).

But after the change of regime - due to the reemergence of some political forces who's program contained the total restoration of agricultural property to those who owned it before the collectivization and due to ideological opposition to the socialist cooperatives as remnants of a failed system and compromised political power, a new model emerged, based on the gradual concentration of the landed property in the hands of a few who were capable to use state funds for investment in machinery, therefore reducing the demand for labor, and in remote areas even this kind of restructuring fell off, leaving there small communities with ageing populations and urban immigrants from the lower social strata at the fringes of capitalism, many of them belonging to the elargest ethnic minority, the rroma. (In many communities money is scarcely used, credit is given by the shopkeeper in forms of listed debts, work or commodities used as payment etc.) And in the last decades there was no sign of market mechanisms intruding in this space and transforming it... There is still a living memory of a rural countryside with opportunities and regular work and a sobering experience of present-day realities. (One can list other problems, unskilled workforce or people with obsolte skills, uneducated population, lack if iniciatives, ideas, capital etc.)

Quite telling is the fact, that under such circumstances no ideas of more active state policies were promoted, only the private initiative was emphasized and recently it took shape in the idea to implement the "bank for the poor" in some form, but not with state intervention, based solely on the finacial means provided by some charitable businessmen. And meanwhile public works are condemned as useless... Those are the regions, where radical opposition of the system as foreign and alien to Hungary scored good results and in some cases even electoral victory, revealing a more specifically Hungarian crisis, that is accentuated by the global one.

(P.S. It is no consolation that I fairly well foretold this political outcome, at least the collapse of the majority parties. Also I'm not relieved by the fact that I've found someone from Latvia who shares my concerns that the present policies can only lead to the abolishment of the state...;) )

"Read my lips, I'm lying" - electoral promises and harsh realities in Romania

Romania, until recently a beloved model country for "economists" and "experts" and "analysts" in Hungary, is getting nearer to social turmoil. Not that it is expected in the nearest future and as I was there recently there was no visible change compared to timexs of "normality", when the rapid growth generated by the supposedly very simple tax system - at least according to the above mentioned categories of human beings - made it one of the "threats" for Hungary's never existing frontrunner position.

But the crisis didn't let Romania unaffected and as the consuomtion is declining, the housing bubble is ended, the guest workers in the EU countries were laid off and try to live on unemployment "benefits" while the government, in order to control the budget deficit made cuts once again reducing consumption earlier fuelling the economy Romaina arrived into the next stage of the deathly spiral: more budget cuts are needed. The real problem - at least for the politicians at the moment governing the country - is that these cuts will affect some categories whose votes were almost literally bought at the last elections, first of all teachers, whom these parties not only promised 50% raise of their salries, but they even passed a law, against the will and objection of the incumbent minority government of the liberals and the Hungarian minority party. Now the country's president admited tht it was a "mistake", but he defended his earlier position and action with the argument that in last October, when the respective law were voted, he could not have foretell that the crisis will affect Romania and the state budget will be in so dire state as it is.

I wouldn't say that it is a refined position, especially the knew-nothing part, but maybe it will be somewhat effective in political and electoral terms. (Romania's parties are not only preparing themselves for the upcoming elections to the European parliament, the more important prize is the seat of the country's president,m up for grab this autumn.) Otherwise, if someone considers this statement, there is something more substantial behind it tha the usual "politicians are always lying, but they are rarely compelled to admit it" phenomenon. Romanian politicians were able to veil the sour reality relying on the refined nationalism of the "every ECE country is an individual case" approach for this aim. As Hungary was forced to apply for an IMF loan they could have pointed out the huge difference between that country - for a while treated as the sick man of ECE almost universally, that way reinforcing the attempts of the local politicians - and theirs, for a long period described as one of the new "miracles" in the region. As the Hungaians were portrayed as solely responsible for their own fate, denying any similarity - not to speak of structural sameness - to the situation of other ECE countries it was easy to fend off counterarguments warning of the dangers of such a move.

But the necesity to admit this political lie and the reaction of the teachers - a strike in order to impede pupils to write their baccalaureate - reveals something else as well. Many people in these countries - always unobjected by those influencing the public discourse - percieved the process of European integration and europeanization as a well deserved reward for their transition from a "communism" to "freedom" and identified it with a fast catch up in material terms as well. It was reinforced by the mass migration and travel, as a result of wich more and more people knew the difference of the standard of living in "Europe" and in their countries, perceived as "Europeans". The perception of being European was accompanied with the idea that being European means material well being as well. The visible and sensible tension between this consciousness and the lack of its material elements (or at least the feeling that those are insecure), this duality of officially being recognized as "Europeans" and having very limited possibility to live as "European" is another common phenomenon shared by many in ECE, that makes it easier to be manipulated by financial promises, but easily backlashing on politicians as it makes it harder to make budget austerity accepted by the population.

A week later - today's world as seen from Bratislava

Things are changing with an aunexpected pace in Slovakia as weel. Only a week after the serious lecturing delivered at the adress of Hungary the SME begin to relize that the problems looming over Slovakia are in fact larger than expected. Today they published an article with the title "The budget in state of an heart attack". The tone of the piece is substantially different from earlier one and it prophesizes that without major modifications (that means cuts on expenses) the deficit can reach a level the dubble of the forecasted. The resons: the collapse of VAT incomes, the loss of revenue from corporate taxes, the relatively high sums paid out for "stimulus pacakges". The danger: with a higher deficit Slovakia won't be recieve financing and investment from abroad, as the example of Hungary shows. The conbclusion: Slovakia need to adjust its udget to the circumstances and cease with the practice to give for everybody who raies his hands.

But the SME was not deviating too far from its earlier opinion. Although one could think that it is a profound change, there are signs contrary. The perceptible intention is to attack Fico, who is fra from being beloved by the liberal newspaper and as we can see the usual "Hungary-complex" remained, only to be reversed, this time put forward as a threatening example of collapse. But as things are going forward we can expect further changes as well.

The black hole called Hungary - Notes on exceptionalism VI.

After more than a week of frantic selectionary work (vetting a lá Hongrois) a new candidate for the position of the prime minister emerged. The twists and turns of last week were certainly fascinating for observers and outsiders and I wouldn't even astonished to attend once a theater play or a movie using the story as a basis. (Conmedy or tragedy, I don't really know.) But as the sun rose to it's dull and boring daily road to be accomplished, the scene was taken over by our "experts" and "analysts" conveying the judgement of the markets on the events. Many of them was eagerly and happily sharing with us their wisdom and it is conceivable that they hadn't omitted the effect of the recent political events on the exchange rate of the forint. And once again their majority saw clear and undoubtable signs of a strong causal realtionship. The fall of the forint againts euro at dawn was a message, expressing negative expectations and so on. And once again the story was completely dead half an hour later. The zloty, tha Czech koruna similarly fell even at dawn.

Not only the incompetence of these guys, perceivedly having the necessary qualifications for and being entitled to make more money with the use of that of others is a sad picture but their whole construction of the world so nicely expressed by these small episodes. Even though the resignation of a prime minister, the deterioration of the process of finding a new candidate to a farce and a stalemate at the weekend, when the early elections seemed inevitable was not able to influence the markets, they are sticking to the idea that Hungary has its own significance. As the once land of promise in ECE and now the sick man of the region, the adhorring example to where incompetence could lead. Either as the best or as the worst in the region, but Hungary stands out. They are clearly not disturbed by the fact that this is not the case. Their beloved and adored markets are making not much difference and as long as the most important concern on those markets is whether to buy US bonds or not, it will remain so.

Knee deep in the mud - a resignation leading to nowhere?

The Hungarian prime minister announced yesterday that he is willing to give way to another cabinet with another premier heading it and as this blog admittedly has a bias towards Hungary I can't evade making my point regarding the events. At the moment, only a day after the announcement causing confusement, the outcome is very obscured, only one thing seems certain: there is hardly any short term possibility for Gyurcsány returning to his post. Although theoretically exists the chance that the parties won't find a person whom everyone accepts and that way at least the assumption Gyurcsány has no alternative as the head of government during the electoral cycle of the present parliament would be proven, but as he admitted that he is a liability of the handling of the crisis, it is hard to imagine that even in this case he can continue working.

Anything else lies obscured in the future, and even the motives of the premier are very uncertain for the public. Moreover, he left the country in a very precarious position, as he didn't present any coherent program for handling the crisis and the transitional period won't be really suitable to come up with one. This state of affairs is coherent with one possible interpretation of the move as well, that Gyurcsány intended to realize the program of the so-called Reform Alliance, but he had to face that he had lost the confidence of the businessmen and his party is not willing to support measures intended to spare on social spending and benefits in the magnitude it is proposed. With his will for resignation he gave away the only trump the socialists had, the fact that even a minority government was impossible to bring down with a no-confidence vote because no earlier agreement on the person of the next prime minister was possible to be achieved as a result of the very divergent views of the parties on necessary and opportune measures. After this move the socialists can either accept anybody the minor parties will impose on them and a program they are not sympathetic with and in exchange they can preserve some influence in the ministries, or move on and dissolve the parliament, fight an electoral campaign with a disoriented party, a highly unpopular party chairman and without any coherent program. The more because if this line of reasoning would be true it would be hard to imagine a socialist party putting forward a program very different from that despised one, presented by the Reform Alliance. In this case Gyurcsány is simply blackmailing his party because he is convinced that Hungary needs the same reforms in the middle of the crisis and as a solution for it, as it needed one year ago.

This last point is all the more important, because the reasoning and motives behind the surprise move are very well connected to this problem. Gyurcsány obviously lost his credibility in the eyes of the main protagonists of business interest, although his whole strategy was aimed at winning their alliance and support for his government in exchange for reforms and "reforms". In return he hoped for their support against his opponent, Viktor Orbán, whom he intended to depict - not without basis - as an irresponsible person, playing politics with populist promises even amidst a serious crisis. As Gyurcsány was not able to convince his hoped for allies of his ability to implement the promised measures, he became under attack from every side. (See my earlier post "A very Hungarian coup?") and he oscillated between refusal of the Reform Alliance's plans and not only acceptance but even declaring those measures insufficient.

For some weeks "political scientists" and "analysts" were flooding the media with an idea of a coalition consisting the socialists, their former junior partner, the liberals and the Hungarian Democratic Forum, a small rightist party, but clearly in conflict with the large opposition party, Fidesz, and envisaged this imaginary coalition having as a program the proposals of the Reform Alliance. (These are focused on lower, flat tax, cuts in social benefits, dismissal of 70000 state employees, irrealistic cuts in state expenses in order to reduce budget deficit under 3% of this years GDP and drive economic growth amidst the crisis.) Although the socialist party remained reluctant to this idea, it is possible retrospectively, that it was a test of the vision, initiated by the staff of the prime minister, who is obssessed with the idea that Orbán can return and destroy the constitutional system of the republic and that Hungary needs reforms either to make budget spending sustainable or focusing on competitivity. From this point of view, for the greater public interest, not only the Reform Alliance proposals can be justified, but a coalition in the above mentioned form as well.

But this is not the only possible motive behind the unexpected action. Gyurcsány really was not able to forge the minimal necessary consensus around a program for handling the crisis, and it clearly paralyzed the government, not acting decisively and with strong hands. There was a growing discontent among the ranks of the party as well, he lost support among intellectuals, the air was slowly dissipated from him. But the fact that this move was once again a surprise for his cabinet and his party, he didn't try to find a concerted solution not bringing the socialists into this trap, suggests that his personal conviction played a more important role than his concerns about the socialist's future.

In one sense, important even in the outcome of the recent events, Gyurcsány was a typical ECE politician. Even if he shared concerns about the division among ECE countries or between East and West, he accepted the idea of the everlasting competition for convergence, the role assigned to these countries in the EU economy and organization and tried to realize a policy according to these presumptions. Therefore, not seeing or accepting, that the crisis has common roots and underlying factors in ECE and no economic policy, however neo-liberal it was, was able to contain it, it was very easy to place every responsibility on him, as if his failed policies would have led to the crisis. Logically everyone was eager and unopposed in pointing out his resignation and the implementation of policies, being questioned in their usefullness at the very moment, as the simple solution for the crisis. In this sense Gyurcsány's fall was a consequence of the non-existence of ECE as a politically conscious region, as this fact is blocking the way of any proposal or plan seeking a new balance inside the EU and a systemic solution instead of the "every country is an individual case" approach so beloved by Europe's leader even today.

This fact is making the situation even more dire. One can expect triumphant "experts" and politicians rushing forward in the next few days (Lajos Bokros already proudly announced his willingness to accept a possible request), self-confidently speaking of their 100% certain solutions, in concordance with the already "proven" models of he Baltics or Slovakia, that means solutions aimed at the earlier state of affairs in the world economy. As Gyurcsány left no coherent program behind (although as party chairman he will be among those who will influence the proposalas of the incoming government) the talks and negotiations won't evolve around this basic program, highliting who is ready to accept an already formulated series of measures as a basis for a new cabinet or who can contest it's presumptions with real arguments, instead the parties will possibly seek a well known person acceptable for every one of them, with well known ideas and as not too much program for sale at the moment, it will almost certainly means one program with dubious moral basis (harsh measures for the poor and large tax cuts for the highest 5%) and dubious possible effects (it is hardly any chance that tax cuts will ignite any kind of aditional growth until Germany is in recesion, while it is quite possible that budget incomes will collapse). The socialists are clearly demoralized without the necessary intellectual background to counterbalance such ideas and the triumphant "experts" will simply give way their rage against the otherwise contepmtously seen party supposed to have been the main obstacle in the way leading to the complete reforming of the country according to they beloved Slovak model. In this process the socialists very likely will lose the remnants of their backbone, they will be relegated to the position of a herds of votes in the parliament and as the measures will not be too popular their popularity will crumble continously. And nobody, even our super self-confident "experts", can assure us that their recipe is the long term solution for our problems, especially as they are so self-puffed that it even didn't cross their mind that their models can be flawed in the light of the fact that every ECE country is in a very serious situation. (And an additional point: as the public will be fed by the search for the new premier in the coming weeks the discussion on the real problems will once again be avoided.)

Or the socialists can revolt, stick to their revulsion regarding the Reform Alliance's ideas (anyway, even a governemnt of experts needs someone to vote for their bills) and bring down the whole construction and march forward towards the early elections. But in order to have at least a slight chance they would need not the oscillating Gyurcsány, but the Hungarian bulldozer, their own Paroubek.

How to betray something non-existent?

At the weekend a prominent Hungarian politician, as he was attending a public discussion in Vienna, made a harsh remark on the present situation in ECE. According to reports in the press he accused Western Europe for betraying Central-Europe in the crises. He argued that banks from the western part of the continent were eager to buy financial institutions in the region following the regime change and in the process of transformation, but they are seemingly reluctant to provide them with the necessary means to keep their solvency among the present circumstances. Even governments can be accused with betrayal - followed this politician - as they are bailing out the mother institutions in their home countries, that way making the difficulties in ECE more apparent, and putting more pressure on the financial systems of the region, instead of helping where it would be necessary. "Western Europe denounced its agreement with Central Europe."

It is arguable that those remarks were not quite important (there is an abundance of critic on the governments of the EU these days, moreover even the daily Der Standard, co-organizer of the event was not generous with details, the report on the event was soon substitued by others at its website) but the problem is a significant one. Not the politician's opinion - I would like to avoid the bit too widespread practice of taking quotes out of context and making a devastating critique of them -, rather the sudden emergence of the idea of ECE as an existing region. As I can recall the last two decades, only a handful of politicians and intellectuals were keen on the idea of ECE as something real or at least something to be constructed necessarily, and our hero from yesterday was not among them. ECE was forgotten for a long time and noticing this sudden change I would like to pose the question how was the region perceived and whether this event is a signal of a significant change?

I would admit that it is not easy for a superficial observer to accept that notwithstanding the almost obligatory rethorical invoking of ECE in the last two decades by politicians and intellectuals, its content never was to accept the existence of the region as a specific entity, rather an exercise to be fulfilled in order to be let in to the good company of Europe. ECE or Eastern Europe or Central Europe - synonymous for many - has a long story as an idea but much shorter as a real entity. I won't say that it was non-existent in a geographical sense (from a political, geopolitical point of view), as a distinct zone identified by processes of economic and social history, but it rarely has a coherent history as a region conscious of its own existence. Even though common fate in the period between the end of the WWII and the fall of the Berlin Wall seems a possible constituent element, the countries belonging to the COMECON never constituted an area of free movement and a common market. Quite the contrary, frontiers and administrative restrictions limited the visits to other (so-called) socialist countries significantly and the ruling parties often effectively used age old techniques to depict “friendly” nations as inferiors in order to strengthen their position at home. (An example and a kind of self-critique: after the introduction of martial law in Poland the official propaganda in Hungary tactfully used the well known lamentable situation in that country – lack of elementary consumable goods while those were relatively in abundance on the shelves of Hungarian shops – to develop an image of the Poles as lazy people. The contrast, of course, served the political aims of the Hungarian party as well.) Although small groups of the opposition in the different countries were aware of the existence of each other, the process of the regime change was neither a result of their cooperation, nor were their efforts coordinated, the individual transformations run simultaneously, sometimes influencing each other and the former one strengthening the later, but every country has its own, separate story, regardless of the others. Therefore on January 1, 1990, when the collapse of the regimes was clearly irreversible, no united ECE emerged as an entity. A post on a web log is not the most appropriate place for an in depth analysis, my point is only to emphasize: even if the simultaneity and the identical substance of the events conveyed some coherence to the region, it was only momentary and rather a result of the perspective from outside.

Nothing really changed in the next two decades. While a handful of intellectuals were searching for ECE, they had no real influence on the events. Although dominant parts of the elites in almost every states that regained their sovereignty were speaking of a “return to Europe” or a “reunification with Europe”. Plans of the transformation process, later proved to be illusory, expected an early accession to the EEC (later EU), but in every country this process meant a separate, individual integration, regardless of the other states. It was really paradoxical, as the “West” set the same preconditions for the accession and the transformation required the same policies: adaptation of the legal and institutional frameworks of market economy and liberal democracy, according to models proposed by experts from the “West” and later according to the aquis communautaire. Once again the outer world bound these countries together (although not based on substantial similarities in the societies, only because of the identical program of change), but their respective elites were conceiving of the situation differently. Even though some initiatives of regional cooperation (most notably the so-called Visegrád Countries – today V4) existed, the societies in ECE were living in a permanent competition with their neighbors for the integration. It is hard to tell whether it was a concept really accepted in broad parts of the societies or large groups remained simply indifferent, but it dominated the public discourse. The integration of the own country was represented as an individual process, independent from the other countries, or, even worse, as something to be achieved on the expense of those. (In Hungary there were calls for blocking the accession of some neighbors, because of conflicts regarding Hungarian minorities, in case Hungary would have been joined the EU earlier than those countries.)

ECE soon turned into a bunch of front-runners and laggers. Politicians, experts, articles and studies measured progress as compared to the results of the other countries. Prime ministers, presidents requested from the EU not to stall the accession of countries supposedly having advantage because of some obscure principles and let them in as soon as they fulfill the accession criteria or, quite the contrary, called for the equal treatment of every state in the region. (Obviously in order to avoid being left out from the first round of accession.) Czech politicians glady get rid of Slovakia in the hope to reach the safe harbor of Europe easier without that ballast. Romanian leaders saw their country doomed if Hungary would have become EU or NATO member earlier. Polish governments were fighting for farmers of their own, ready to make compromise on the expense of the others. To make things worse, at least from the perspective of the existence of ECE as a region, the evaluation of the state of the competition was usually based on very peculiar criteria. Which country was more successful in privatization, which country attracted more FDI, which country has more car making plants? Later other elements were added: adaptation of certain tax systems (flat tax), and fiscal policies (low redistribution rate measured with a ratio of GDP, cutting of social expenditures in the budget). Moreover, the whole process was conceived as synchronic, linear with one stage and a clear target: catch up with the EU. It is not allowed to assume the possibility of distinct stages in the transformation, transitional periods with new challenges. According to the dominant opinion the application of a model free market economy is the only necessity and will automatically lead, without interruption, to the desired result. Therefore problems with the economic performance while other countries seem to have a perfect development can only be a signal of imperfect realization of the theories.

The competition was perhaps inevitable, but the way the elites handled the situation was far from helping the emergence of a kind of coherent ECE. There was not much eagerness to know the realities and similarities of these societies, the social processes accompanying the transformation, the very similar role in and the almost identical ways and models of integration into the European economy, the similar demographic changes and challenges and the negative effects (for example mass emigration of the workforce from some countries with rapidly aging populations) of supposed and real successes. Instead the public discourse was and is full of news of differences presented as factors behind the perceived success of the other country and proposed as the only possible solutions for problems in the own. Success is almost always conceived as a front runner position in this strange competition, continuing even after the EU accession, and the aim of the proposed changes at home is to retain this role. The reward? More car making plants, more praise from the EU Commission for budget cuts even if the respective government has surplus, more mortgage denominated in foreign currency, widening social differences … The image of other countries and societies? Slovaks are those rapidly developing guys with flat tax and the highest per capita production of cars. Profound knowledge of a country only fifty kilometers far from the Hungarian capital, isn't it?

One should mention, at least in the case of Hungary, another important element of this discourse, clearly in opposition to the existence of a coherent ECE: the use of national prejudices. Those, who are familiar with the history of the region know that in the course of the last century many tension arose between Hungary and its neighbors. Although today it is not a major driving force of politics and not a significant factor, it has its remnants in the public perception of the other nations in the region. Based on traditional elements of the Hungarian national consciousness the image of Slovaks or Romanians consist many negative characteristics. Like Romanians are considered to be lazy, deceitful, thief by many Hungarians, Slovaks are perceived as backward people, their culture inferior to the Hungarian. (This view is not unanimously shared, but prevalent in broad parts of the Hungarian society.) Therefore if a politician cries out that Hungary is lagging behind Slovakia or Romania it not only means that we have to work harder. There is an underlying message to understand: those inferior people are overtaking us, it is impossible, a national disaster, the highest injustice. Maybe it is a useful political tool (the actual government has to bear the full responsibility for this catastrophe), but many politicians (among them the one invoked in this post) honestly share this view. (Every new car making plant in Hungary was an subject of national pride and proof of Hungary's grandeur, every new plant in other countries an opportunity for national shame and lamentation.) It is not hard to see that this perception of the competition of countries in ECE is far from supporting the idea of an existing and coherent region. It would be relieving to say that this practices are confined to the periphery of the Hungarian political spectrum. Sadly, it is not only prevalent in the non- or not-so- nationalistic circles, but even accompanied by another peculiar view and construct: self-stigmatization. For many liberals and leftists, who think of themselves as flag bearers of progress, the presumed advantages of the other countries serve as proofs of their conviction that Hungary's historical development run into a dead end sometime in the 19^th or 20^th century, that we should overcome semi-feudal remnants of the Kádár-era (the period between 1956 and 1989), or that Hungarians are natural losers, unable to understand their real interests and give up social security. Supposedly lagging behind is only the result of those deficiencies in the history and/or in the national character, once again neglecting the transformation of ECE as a regional phenomenon and possible subject of analyzes.

To sum up the mental map of ECE, both seen from the “West” and from the region itself, the result is a very peculiar one. While those countries seen from outside has something coherent (the EU even made pressure on the accession countries to institutionalize ECE in the form of CEFTA), for most of the inside observers not only ECE dose not exist, but even the individual countries lack any coherent image. Their own country has a special, privileged position in the middle of nowhere, connected only to the “West”. Although there are other states around them, those are again individually connected to the “West” and not to each other and they are only important as threats to the privileged position. Therefore the “competitors” has only very obscure images, always focusing on differences. ECE is not a result of its inner coherence (perhaps existing as similarity of its societies and their social processes), but a construct of the outside world.

Otherwise, I'm a supporter of the idea that the EU has its responsibility in saving ECE from disaster. But as long as we do not construct our own region, we can not be betrayed.