Central European Review – April 2013 (Part 1)

The countries of the Visegrad Four – the Czech Republic, Hungary, Poland and Slovakia – have confirmed their intention to form a joint military force within the EU Battlegroups, to be operational by 2016.  This was announced during the common meeting of the V4 and of the Weimar Triangle (Poland, Germany, France) in March.  According to the plans, the force would have about 2500 troops, and would be built on the existing Polish infrastructure, given that this country has the largest military (and corresponding investments) of the four. The battlegroup would serve the purposes of the EU’s Common Security and Defence Policy (CSDP) and of NATO, of which these countries are members. Chancellor Merkel and President Hollande expressed their satisfaction; there are separate plans for a Weimar Triangle battlegroup, but the preparations have currently been put on hold. It is in these V4 countries’ interests to prove and to strengthen their capabilities, as parts of NATO (and at its behest), and also as a platform for their own regional cooperation efforts. There are questions marks regarding the success of the venture, given the differences between their policies regarding the development of the armed forces (or, rather, their reduction); others, however, see in this a response to a new and different geostrategic era.

SLOVENIA: New Government – Ongoing Crises

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Triglav – national symbol of Slovenia

On March 20, 2013 the Parliament of Slovenia elected a new Government, led by Prime Minister Alenka Bratušek. This came one month after the vote of no confidence that removed Janez Janša’s cabinet, which had been in office for only one year. But these most recent changes were but a response to a larger crisis – perhaps the most severe one since Slovenia obtained its independence – in which a dangerous economic situation meets with extensive popular dissatisfaction with the Slovenian political elite. The economic crisis began in 2009 and intensified in 2011, and the austerity measures passed by the Janša government in 2012 did not improve the public sentiment soured by the previous (center-left) government’s perceived mismanagement of the economy.  Furthermore, there is a general feeling of disaffection with the entire political class, within the Slovenian population – and it does not matter if it is left or right, if we are talking local or national government. This public sentiment was expressed very poignantly during a long series of public manifestations that took place at the end of 2012 and the beginning of 2013, which started as local protests against Maribor Mayor Franc Kangler. This series of manifestations peaked in February, when more than 20,000 gathered after the report of the Commission for the Prevention of Corruption became public, revealing that both the Prime Minister, Janez Janša, and the leader of the largest opposition party,  Zoran Janković (Positive Slovenia), had been found with large sums of money that they could not account for.

At that point Janša had been in power for about a year; after the elections of December 2011 (see related post) it took about two months to form a new government that, contrary to expectations, did not put in power the nominal “winners”  (the party with the plurality of seats, center-left Positive Slovenia), but the political force that came in second (Janez Janša’s Slovenian Democratic Party – SDS, of the center-right). The reason for this was that only they could put together a working coalition, together with the conservative People’s Party (SLS), the Christian-democratic New Slovenia (Nsi), the liberal Civic List of Gregor Virant, and the center-left Democratic Party of Slovenian Pensioners (DESUS). After becoming prime minister again (he’s held that position between 2004-08), Janša started implementing a set of austerity measures, to deal with the threatening economic situation. However, these economic measures did not help to improve the general fatigue with the ruling political-economic class – fatigue that transcended party lines. In consequence, on February 27, 2013, after months of protests and revelations of misdoing about many politicians, three of the governing coalition parties withdrew their support from Janša’s cabinet.

A new governing coalition was formed a few weeks later, containing the two more left-leaning, formerly governing parties (Civic List and the Pensioners’s Party), the 10% of the Social Democrats, and the largest party in Parliament, center-left Positive  Slovenia. Given the demise of PS’s previous leader, Zoran Janković, the parties chose as Prime Minister the new leader of Positive Slovenia, the relatively untainted Alenka Bratušek.

But the formation of a new government can not make the problems go away magically, overnight. After the recent Cyprus crisis, there has been talk about Slovenia, whether it would become the next country (after Spain, Portugal, Ireland) to be hit by a financial crisis and necessitate a bailout. The governments of Slovenia, past and present, have been arguing quite fiercely that that is not the case – and not without reason. Slovenia’s situation is indeed different. Unlike in the cases of Cyprus or Iceland, the size of its debt is much smaller: 53.8% relative to its economy, instead of Spain’s 84% or  Cyprus’s 80%. Similarly, its (mostly state-owned) banking sector is much smaller, representing 135% of the GDP;  compare that with 800% in Cyprus’s case. The major problem however with the banks is the quality of a part of their assets: they currently own about €7 billion in bad debt, which represents about 20% of the GDP. While measures in this sense have already been taken by the Janša cabinet – such as the establishment of a bad bank, and several austerity measures – the state still needs to recapitalize the banks. It also does not help that unemployment is still at a multi-year high.

And here is where the relative political instability has an important role to play. The new Prime Minister, Alenka Bratušek, came to power under a limited mandate: she received a 12 months period, with a possible extension until the elections of 2015. Her main task – as she herself has declared – is to guide the country to these elections; meanwhile, however, she intends to focus on economic growth and on balancing the books, without an undue emphasis on austerity measures (as the previous government did); cutting spending is not in itself the solution, according to Bratušek. This of course has immediately been criticized by the center-right, with warnings that removing the austerity measure might mean repeating the mistakes of the recent past – namely, of the center left government under which Slovenia went in a downward direction, after the years of growth (or bubble?) under Janša’s leadership.

While the economy does represent the urgent challenge, the deeper crisis of public confidence can not and should not be neglected. Just like in the rest of the region, Slovenia seems to be going through what I would define as the post-1989 malaise: democracy and market economy have been taken to task, and they have both failed to live up to the very high expectations of those heady beginnings. But the two – economy and politics  – cannot be separated. It might be the case that surviving the economic crisis will solve the political confidence gap – economic security is, after all, one of the foundations of political legitimacy. But it might also be the case that the very resolution of the economic crisis might necessitate a rethinking and reorganization of politics – the way Iceland did it (as mentioned in a previous post).

AUSTRIA: Taxes & Guns

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Parliament of Austria (360° view)

At the recent reunion of the finance ministers of the EU countries in Dublin, Austria’s Maria Fekter dominated the debate and shaped the agenda with her fierce defense of Austria’s constitutionally-guaranteed right to banking privacy. This, however, clashed with the growing concerns, and rising impetus for decisive action, about tax havens and offshore schemes in Europe and the world. Fekter, on the other hand, was adamant that this can only be done based on reciprocity, and she brought up the issue of the many territories under British legal responsibility, such as the Channel Islands, Gibraltar, Cayman Islands, and Virgin Islands, which function as offshore “tax paradises”. The Austrian finance minister’s position , however, was weakened by the fact that the other country that has been holding out, Luxembourg, has meanwhile agreed to share banking information with the German authorities. Furthermore, while Maria Fekter might be able to put up a tough act abroad, at home she has to function in a government that is based on a grand coalition between the two largest parties, the Social Democratic Party of Austria (SPÖ) and the Austrian People’s Party (ÖVP), which are on the opposite sides of the political spectrum (see elections 2008). Given that the next legislative elections will take place in September 2013, her attempt to score points will not go unanswered. Unsurprisingly, therefore, Chancellor Werner Faymann, who belongs to the other party (SPÖ), has used a more nuanced language, and did not exclude the possibility of reaching an agreement on the issue.

Earlier this year, in January, Austrian citizens were called to a referendum about moving from a conscription-based military, to a professional one. Referenda (Volksbefragung) represent one of the constitutionally-defined means of democratic control in Austria; while they are not binding, the parties in power can only ignore them at their own peril. In the lead-up to this referendum, the center-left Social Democrats argued that the current system is outdated, given the foreseeable security challenges of the 21st century; the center-right People’s Party, however, made the point that the existing make-up fits Austria’s neutral status, and that a move to a paid army would only reduce the size and professionalism of the military, while elevating the costs, in the conditions of a worldwide economic crisis.  At this point, all Austrian men reaching 18 years of age must serve six months in the army or nine months in civilian service. In the referendum, a decisive 59.7% of the voters went against the changes (results).

CROATIA: The New EU Membership & the Old Rivalry with Serbia

On April 14 Croatia voted for the first time to send representatives to the European Parliament.  For the first time, because it was only on March 27 of this year that the European Commission announced the end of the long accession process; in consequence, Croatia will become a full-fledged member of the EU on July 1, 2013. As a member of the EU, it needs to have  representatives in all its institutions of decision-making, including the EP, where it has allotted 12 seats (according to an apportionment system based on population size). Although 43.5% of Croatians participated in the 2012 referendum on joining the EU, and 66%  voted in favor, these first EP elections saw a very low turnout (by Croatian and European standards) of only 20.84%. According to analysts, the main reason for this is a general sentiment that these elections do not matter that much (which might have to do with the complexity of the EU’s governing structures and the so-called democratic deficit connected with that), and also a relatively lower enthusiasm about the EU, because of the current economic crisis.

Be it as it may, the results of the elections are somewhat interesting, as 6 of the 12  seats went to the center-right coalition led by the Croatian Democratic Union (HDZ), 5 seats to the center-left coalition formed around the Social Democratic Party (SDP), and 1 to the populist Croatian Labourists party.  Overall, the HDZ-led coalition obtained 32.86% of the votes, the center-left 32.07%, the Labourists 5.77%,  with other parliamentary parties obtaining less that 4% (official resultsdetails). These results are interesting because the “winning” coalition (center-right HDZ & allies) is currently in the opposition in the Croatian Parliament, while the Social Democrats-led coalition is currently in power, possessing 80 of the 151 seats of the Parliament. This may or may not be a harbinger of things to come. Another interesting fact is that, unlike in the national elections, in which the citizens vote for closed party lists based on a proportional system, in the EP elections Croatia used open party lists,  with the voters having the ability to rank the individual candidates.

The last national elections took place in 2011 (outcome), and marked the transition of the reins of power from the long-reigning center-right (which had been in power between 1990-2000 and 2003-11), to the center-left Kukuriku coalition (the name means what you think it means) led by the Social Democrats – in the context of a 17.4% rate of unemployment, a 4.9% budget deficit and with some major corruption scandals going on. 

Also in March, the Croatian national football team hosted Serbia, for a game counting for the qualification for the 2014 World Cup in Brazil. This was the first time that these two teams met, since the Yugoslav wars of the 1990s, and accordingly the authorities were on high alert, and measures were taken to avoid any serious incidents. Even more so, since in 1991 it was a football game between a Serbian team (Red Star Belgrade) and a Croatian one (Dinamo Zagreb), which was credited with igniting the simmering Serbian-Croatian conflict. Of course, that game did not “start” the conflict; sports, however, represent today one of the key ways through which ethnic, regional or national identities are affirmed and “fought for“; correspondingly, long-standing historical rivalries are very often played out on the pitch and around it, and very often around the soccer pitch, given the sports’ immense popularity and the large number of people who are invested in it (see the Netherlands-Germany rivalry). The March game between Croatia and Serbia, however, which ended with a clear Croatian victory, was not accompanied by any acts of violence; however, it is also true  that, as a precautionary measure, neither at this game nor at the away game in Serbia will supporters for the visiting team be allowed in the stadium (which is otherwise customary). While the Serbian anthem was whistled at and booed, and while the Croatians fans did chant anti-Serbian songs, on the pitch and immediately around it the competition was characterized by fair play; in a very nice gesture, the coaches of the two teams set a good example, making a point of sharing a hug before the game.

[Note: Part two of Central European Review – April 2013 will examine the recent political developments in Slovakia, Hungary, the Czech Republic and Poland. These posts replace the Biweekly Roundups of April 20 and May4; the next edition of our review of international events is due May 18.]

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