Democracy victorious

Our Moldavian very European democrats are in action. Instead of complying with the current constitution and dissolve parliament after the failure of electing a new president, they decided to create a new one. Not that I had any illusion and I'm sure that for those who thought of them as the champions of democracy it will even be a  reassurance in their blind faith. However, the nasty communist did not attempt this move. Maybe they were so rotten in their souls that they couldn't even think of this  extraordinary democratic solution for a constitutional impasse and went to the polls (to the polls, oh, what a dictatorship!) again instead.

Lost in Space and Time

Decisive second round of presidential elections in Romania. Some TV stations has an all-day program covering the events - funny and sad, comical and tragic - with the indispensable talking heads, intellectuals analyzing. An economist - former minister of finance -, a historian - former minister of foreign affairs, - and a political scientist - not a former minister at all - shares their views on Romania. The country is seriously and dangerously divided, as the unexpectedly succesful mobilization shows. The political debate in the capmpaign was on superficial issues instead of programs. The Romanians are dependent on the state. Romania is situated as the last country in the EU in every respect. The governments of the last few years were irresponsible. The country is seen as similar to the Ukrain. (!) As if I would be in Hungary. Maybe some of the Hungarian intellectuals has lrearned Romanian and asked to participate in Romanian TV programs? I don't think so, it would be ruinous to they conviction that Hungary is alone as the only divided country with a population hoping for help from the state, with superficial debates, irresponsible governments and at the bottom of the EU.

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.

Birth of a dangerous populist

One of the favorite way to conceptualize the present tensions between Slovakia and Hungary is to emphasize the populist politics and the according personality of Robert Fico, the Slovak prime minister. (Ironically, Mr. Fico almost never forget to portray the present Hungarian opposition and quite probable governing party after next spring, and its leader Viktor Orbán as dangerous populist and nationalist.) This line of reasoning has as its starting point the economic problems caused by the crisis and its consequences and as a consequence sees in the nationalist political measures and manoeuvers an attempt to preserve electoral support by way of diverting the public's attention.