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25 May 2018

Elected Affinities and Desire for Recognition – Two Books on Europe since 1989


Two Books on Europe since 1989*


Living in a time warp at the periphery simply means you are a second class citizen of Europe. One sees that [...] in the fish fingers in the supermarket: they look the same and have the same branding; but for the customers in Austria they contain 65% fish, for those in Slovakia only 59%. That’s known as “market alignment.

Croatian writer Slavenka Drakulić1


Ever since the collapse of the Austro-Hungarian Monarchy in 1918, Eastern Europe has been an economic and power vacuum waiting to be filled, formerly by Germany and/or Russia, but since 1989 by Germany and/or the EU. This is almost a law of physics. Nature abhors a vacuum. The most likely outcome is German domination under EU auspices.

Jacques Le Rider2


Philipp Ther’s book, first published in German in 2014 and then in an English translation with a new Preface in 2016, is one of only handful of works that analyse in detail the development economic, social and democratic of the “new democracies” in East Central Europe since 1989. Its main premise is clear from the outset: following the triumph of neoliberalism in the West, which happened to coincide with the collapse of the Soviet Union, the subsequent application of neoliberal doctrine to the post-Communist countries had mixed (occasionally catastrophic) effects on their economies, and hence on their political trajectories. Partly this was because of the assumption (always dangerous) that correlation or synchronicity is the same as cause (cum hoc ergo propter hoc); or in other words, the collapse of the Soviet Union and the consequent liberation of the Soviet satellites was directly or indirectly to be explained by the economic and political triumph of Chicago School Neoliberal policies. Ronald Reagan and Margaret Thatcher, on this reading, were the fortunate beneficiaries of such policies, which became the new orthodoxy enshrined in the so-called Washington Consensus. It did not necessarily follow that those emerging from command economies would benefit commensurately.

But partly also it was sheer hubris, perhaps most bitterly resented in East Germany, whose inhabitants were by no means reconciled to being treated as some sort of backward client state of West Germany, or patronised by overbearing “Wessie” managers and financiers. Ther goes so far as to say that “post-communist countries served as experimentation sites for Neoliberal policy”,3 a remark that has two probably unconscious but highly ironic echoes: Francis Fukuyama’s proclamation of “the end of history”4 that turned out not to be, and Karl Kraus’s blistering description of Austria in the early twentieth century as “an experimental laboratory for the end of the world”.5 Fukuyama’s prophecy seemed to endorse the slogan of Neoliberalism’s onward march, namely that “there is no alternative” (popularly TINA), something to which Ther frequently refers. Kraus on the other hand was (correctly) prophesying the end of Habsburg Empire and the fall-out therefrom when writing in 1914: the neoliberal exploitation of hollowed out former “East Bloc” economies with concomitant ceding of sovereign powers to Brussels also had its apocalyptic aspects and moments. Brix and Busek (p. 203) pose the question as to whether the reluctance of certain new members of the EU to adhere to the EU template of economic and socio-political norms, despite well-meaning input from the Western countries, may be explained by the perception (true or false) the inequality gap within Europe has actually intensified.

The resentment of the East Germans, meeting with little sympathy in the west of the country, was arguably even less understood by the often tin-eared bureaucrats and politicians of Brussels when it arose in the other countries of East Central Europe. This was particularly the case with Poland and Hungary, whose long state-building national histories preceded by many centuries (for example) the creation of Belgium – or even the unitary statehood of Germany and Italy achieved in the mid-19th century. Although the Central European countries enthusiastically joined NATO for security reasons and the EU for economic and security reasons, they were not about to exchange Soviet hegemony for an overbearing Brussels bureaucracy. The Austrian Broadcasting (ORF) news reports regularly referred to pre-Orbán Hungary as a Musterschüler of Brussels, apparently quite oblivious to the patronising acoustic of such a description. Hegel spoke of the desire for recognition” as a fundamental human trait which is also expressed through nationhood; but one of the troubles with the European Union is that it is deliberately chipping away at the nation state, which many of its influential protagonists regard as outmoded and undesirable. Newly liberated nation states naturally regarded the regaining of sovereignty as arguably their most important dividend from the collapse of Communism.

Before examining Ther’s interesting and rewarding text more closely and in respect of individual countries, it is worth glancing at an up-to-date blog by Thomas Piketty, the star economist who has electrified the debate over global inequality and the alleged failure of neoliberal nostrums to tackle it. In dealing with the former Soviet satellites, the West decided not to go the route of the Marshall Plan after World War II, which provided substantial grants and loans for recovery, not least so that American industry should be a beneficiary of re-emergent European economies. Instead it relied on “creative destruction” and the economics of the free market, although of course much EU investment (too much of it embezzled) was subsequently forthcoming for new members. Theoretically the neoliberal approach would involve a greater or lesser extent of “shock treatment”, following which it was assumed viable industries would emerge and living standards would improve. Democracy would become firmly anchored. Ther makes the point (p. 79) that neoliberal prescriptions were dished out by those safely ensconced in positions where they were not themselves affected by their consequences, a remark that recalls frequently voiced complaints about the way the IMF has sometimes dealt with failing economies round the world.

But did these policies achieve their aim, or hinder it? And if the latter, can we say that alternative policies, or at least a less red-blooded neoliberalism, would have produced better outcomes? Ther sensibly limits himself to describing what actually occurred, cautioning however that significant actors (notably Václav Klaus as Czech Prime Minister, then President) preached the gospel of neoliberalism, but were pragmatic in its application. In view of all this, Piketty’s recent statistical cross-checking is valuable. “Between 2010 and 2016”, he writes, “the annual outflow of profits and incomes from property (net of the corresponding inflows) represented on average 4.7 per cent of the gross domestic product in Poland, 7.2 per cent in Hungary, 7.6 per cent in the Czech Republic and 4.2 per cent in Slovakia, reducing commensurately the national income of these countries.”

By comparison, over the same period, the annual net transfers from the European Union, that is, the difference between the totality of expenditure received and the contributions paid to the EU budget, were appreciably lower: 2.7 per cent of the GDP in Poland, 4.0 per cent in Hungary, 1.9 per cent in the Czech Republic and 2.2 per cent in Slovakia (as a reminder, France, Germany and the United Kingdom are net contributors to the EU budget of an amount equivalent to 0.3 per cent – 0.4 per cent of their GDP).” He adds that “East European leaders never miss an opportunity to recall that investors take advantage of their position of strength to keep wages low and maintain excessive margins” (citing, for example, a recent interview with the Czech Prime Minister).6

This is a snapshot taken at the end of nearly thirty years of transformation, time enough, one would have thought, to test the validity and consequences of an economic policy.

Unfortunately the recent trend of former Communist countries to more nationalist and what the liberal media insists on calling “populist” government (Hungary, Poland, and now the Czech Republic) suggests a good deal of disillusion. At the very least the theory of “trickle down”, whereby wealth created by entrepreneurs in the free market, assisted by indulgent attitudes to business on the part of government, will assuredly trickle down to the lowest levels of society, does not strike the man on the Bratislava tram as particularly plausible. Gross corruption in the privatisation process, Freunderlwirtschaft, abuse of their privileged position by foreign investors, extraction of profits to abroad and the volatility of “hot money” are just some of the factors that have contributed to the disillusion, notwithstanding a great deal of infrastructure investment. But each country’s navigation of the post-1989 challenges is to some extent sui generis and the great strength of Ther’s text is that he clearly delineates this.




Beside his native German, Ther would appear to be at home in Polish, Czech, Italian and English (for sources), which is why his text is strongest on countries like Poland, but also Italy (this is after all a book about Europe since 1989 and one of its most valuable insights is the way in which the rise of right- and left-wing populism and Euroscepticism in the West mirrored the rise of the same in the former Soviet satellites.) Although Poland has been arguably the most successful” country economically, greatly assisted by the writing off of most of its Communist era debts7 which did not occur in Hungary, it has also moved furthest to the right, and is facing the prospect of sanctions from the EU which even Hungary, the Brussels bête noire, has so far not undergone (i.e. withdrawal of voting rights).

Poland’s Finance Minister produced a ten-point plan at the beginning of the 1990s, which he calculated would shrink the economy by 5 per cent and slightly raise unemployment. The actual outcome was that GNP fell by 18 per cent in the first year and industrial production fell by a third, while inflation control (capping wages) simply dampened demand.8 This policy bears some striking resemblances to the medicine forced on an insolvent Greece, although Greece’s main problems were unsustainable debt and the inability to devalue its currency due to its membership of the Euro, both of which arguably placed it in an even worse position than former Eastern Bloc economies. Indeed Poland’s economy recovered after a while and now seems to be strong; however the political damage suffered as a result of shock treatment is more lasting, both in Poland and its fellow former Soviet satellites.

A common thread linking all EU countries currently with questionable governance is the prevalence of clientelismo, whereby parties build up a core of supporters by making as many as possible voters dependent on government through the creation of posts in the bureaucracy. Since all parties that achieve power in the warm water EU countries and in the former Communist states tend to do this, public sector employment grows like Topsy. Clientelismo reached operetta-like proportions in Greece, The New York Times drawing attention to an OECD report showing that “in some government agencies overstaffing was considered to be around 50 percent. Yet so bloated were the managerial ranks that one in five departments did not have any employees apart from the department head, and less than one in 10 had over 20 employees. Tenure ruled over performance as the factor determining pay”. When austerity was forced on Greece, one state employee was dismissed for every seven in the private sector.9 It is not only the headline ratio of public sector employment to the whole that counts (that can be high in many countries), but the fact that in particular cases the bureaucrats are awarded so many more privileges, perks, superior pensions and higher pay than those struggling in the private sector, but despite this still act corruptly.

The immediate effect of neoliberal shock in countries like Hungary, Slovakia, Poland and elsewhere was a return to power of the very people the imposition of a free market was designed to guard against, namely the old Communist apparatchiks now smilingly disguised as “Socialist” parties. They were able to scoop up many of the losers under the new system (a majority of voters), the not inconsiderable number who reckoned, probably rightly, that they had been better off under the Communist system, plus the people who were still in their Communist era jobs, though now professing a different ideology. In administration and business the latter were well-placed to exploit a somewhat undiscriminating capitalism and the potential for corruption in what was euphemistically known as “spontaneous” privatisation. Overall, for many people in these transition-challenged countries the famously witty complaint of the losers in post-Risorgimento liberal-ruled Italy seemed to apply: si stava meglio quando si stava peggio” (“we were better off when we were worse off”).

The realisation that this was what had happened nevertheless took some time to seep through to the consciousness of the voters, not least because electoral bribes and hefty subventions from the EU can keep the show on the road for quite a while. The role of the press was crucial. Ther makes the odd claim (p. 61) that many “journalists, newspapers, and radio broadcasters remained loyal to their [Communist] regimes for several years, but swiftly changed sides in 1989. More than by sheer opportunism, they were motivated by a sense of professional ethics, which they retained despite all Communist governments’ demand, since Lenin’s time, for partiynost (partisanship)”. No doubt this is what former Communist journalists would like us to believe, but it ignores the fact that journalists were rather privileged under the old regime (provided they toed the line) and were determined to be equally so in the new dispensation. Some may have become independent-minded and analytical, but very many exhibited arguably an even greater partisanship after their Paulite turns (what the writer Péter Esterházy called “rush hour on the road to Damascus”), whether on behalf of the new ex-Communist establishment, or later on behalf of the conservative nationalist one.10

The initial behaviour of the press after 1989 was a key factor in supporting the claim on the right (both in Poland and in Hungary) that the revolution was only “half-completed”. Liberal analysis does not accept this, of course, and is keen to stress only the manipulation of the media by today’s right-wing governments. Yet even Paul Lendvai, Vienna’s resident Cato, lets slip the following remark about Hungary in his book Mein Verspieltes Land: “In the first years after the [system] change, the media was mostly sympathetic to the Liberals and former Communists” which must be the understatement of the year, if not the century. However he immediately follows this with condemnation of measures, or attempted measures, both by the Antall and Fidesz governments, to remedy this state of affairs.11 According to an anecdote related by John O’Sullivan of this parish, when Orbán complained to a Socialist politician of press bias, the latter cynically told him to “buy a newspaper”, advice which was subsequently followed and has fuelled ongoing liberal complaints about the one-sided media in Hungary.

Nowhere was the toxic mix of neoliberal shibboleths and old Communist cronyism more vivid than in privatisation, the fundament on which the glorious future of free market prosperity was to be built. Ther is extremely acute in describing this process in Russia (pp. 92–93), where it was at its most obscene. The government handed the business of privatisation to the banks, which is akin to giving a paedophile the keys to the kindergarten. “This privatisation of the very process of privatisation (officially via a programme in which the state received loans for its company shares) marked a moment of glory for the oligarchs. In cooperation with the banks they owned, they intentionally depressed the prices of the companies earmarked for sale.” Mikhail Khodorkovsky, who owned a bank and was Yeltsin’s Minister for Fuel and Energy, bought the Yukos oil and gas group in 1995 for 350 million dollars using his bank. Two years later it was worth nine billion dollars. Since he has been targeted by Putin, the liberal press in the West has been painting him as some sort of human rights martyr, a good example of Western double standards. The money stolen by the oligarchs was pumped round the world, recipient countries being amazingly insouciant about its origin. “After all”, remarks the author drily, “free movement of capital is one of the basic principles of Neoliberalism. London, especially, and to a lesser extent, Vienna, thereby became accomplices to the oligarchs” (p. 93).




The financial crash that originated in the Anglo-American economies in 2007–2008, with global repercussions, had one common factor across nations, namely the excess of recklessly issued credit resulting in massive default, chiefly in the property sector. EU countries like Spain, Greece and Ireland were virtually in meltdown as a consequence. Former Communist countries adopted various remedies, a country like Latvia, for example, taking the same IMF-prescribed medicine as Ireland. This eventually worked, but at one point looked as if it might kill the patient. Greece, whether because she characteristically dissembled in the execution of the plan imposed upon her, or whether (as I would argue) the medicine was wholly inappropriate, did not expire, but went into a coma and still looks rather like a comatose patient whose life support has not been switched off. Although the EU-friendly press is not keen to headline it, the truth is that Greece will probably be on life-support for the foreseeable future, chiefly because the EU dared not let a country slip out of the Euro, and also because the Troika (IMF, EB and EU) long refused to make bond investors take the necessary hit as all investors must be prepared to do.

The Latvian case is remarkable, since the government refused (against advice) to devalue its currency in order to keep the country on track to join the euro. Instead it applied “internal devaluation”, causing the economy to contract by a massive 18 per cent and unemployment to triple. Yet, helped by her low external debt, Latvia recovered in a couple of years from this near death experience, although there are commentators who point out that the “success” of the recovery must be measured against unemployment remaining high and ten per cent of the labour force having left the country. Other countries, especially Hungary, eventually rejected the IMF prescription and battled their way out of the crisis using more or less “unorthodox” means. For them, being outside the straitjacket of the euro was a decided advantage, whereas for Greece being in the euro prevented her from taking the only known remedy for an insolvent country, which is devaluation. Moreover the Visegrád Four countries had more foreign direct investment in industry than many other members of the EU (where the money went into financials and real estate, making them extremely vulnerable when the crisis hit) (p. 219). Unfortunately, in the case of Hungary, this advantage was offset by irresponsible governance that resulted in excessive national debt. The IMF had to be called in by the Socialist–Liberal coalition.




One unforeseen consequence of the financial crisis is that it has consolidated the economic – and therefore political – ascendancy of Germany in Europe. Germany had earlier undergone the hair shirt treatment known as the Hartz reforms introduced by a Socialist Chancellor, which made it leaner and fitter to deal with the financial crisis and reunification. Furthermore its geopolitical position and industrial skills made it the prime beneficiary of cheap but skilled (or trainable) labour available in the former Eastern Bloc. As Ther felicitously puts it, “while the crisis-torn countries of southern Europe are bound by the Euro to Germany’s financial and economic policies, the new EU states have become the extended workbench of German industry, enabling it to produce at low costs” (p. 243).

This single sentence explains much of the current tensions in the EU, particularly between Italy and Germany. According to Ther, “only 45 per cent of Italians earn more than they spend and are able to save money over the year” (p. 253). The situation in Greece is considerably worse and that in Spain unlikely to be much better. Germany’s trade surplus seems to rise year on year, provoking demands that she consume more (or in other words adopt the irresponsible policies of her fellow Europeans.) Herein lie the seeds both of the populist revolt in the EU states and a rising resentment of Germany which is decidedly unhealthy. In Germany itself Hartz-inspired cuts in welfare and a perceived rise in inequality have severely dented the popularity of ex-Chancellor Schröder’s party, the SPD, which recently scored its lowest vote since the end of the war in the 2017 election. Some economists even claim that the depression of German wages following on Hartz was at least partially responsible for the financial crisis.

Germany’s position remains rather paradoxical in that it has become the target of criticism precisely because it has run its economy efficiently and taken the necessary medicine to preserve its financial stability in the face of the enormous pressures of reunification and the financial crisis. However, instead of being praised for running a tight ship, solemn articles appear in the Financial Times and elsewhere criticising it for running a surplus, while weaker Eurozone members complain of being beholden to German notions of prudent economic management. Ther encapsulates the grounds for this complaint when he writes: “While the German government is consolidating the welfare state internally, it is prescribing a debilitating austerity policy to southern Europe” (p. 337). Such a situation, and its accompanying resentments, could only arise where Germany is effectively Europe’s lender of last resort. Here again a dichotomy arises, this time in the context of domestic German politics: Germany is resisting Emanuel Macron’s plans for Eurobonds, which would imply an EU joint sovereign debt – which the German electorate would probably view as “reform shortcuts bankrolled by Berlin”.12 At a tricky time when the forming of a coalition hung by a thread, German politicians (with the possible exception of serial loser Martin Schulz) hardly wanted to remind the electorate that domestic opponents of the euro were right when they pointed out that the common currency would actually be a system of transfer payments from the wealthy northern EU (chiefly Germany) to the poorer, or at least economically feckless, southern states. Concealment of this was indeed the reason why the then German government did not risk a referendum on the introduction of the euro.

The love-hate relationship with Germany in Euroland appears, but with different parameters, outside it. Viktor Orbán’s Hungary benefits from substantial German investment, particularly in the auto industry. German business enjoys thereby access to cheap and skilled labour, while Hungary benefits from the jobs and tax revenue flowing from the investment. German business is pragmatic and generally ignores political issues as long as the investment climate is right. However the German political class, and especially the German media, have conducted a vitriolic, at times hysterical, campaign against Orbán and all his works.

Ther’s treatment of Hungary under Orbán follows the line of criticism pursued by the Hungarian opposition (which conducts its operations as much from outside the country as inside it), but also of liberal journalists and the Brussels establishment. We are told that Orbán was a “bad loser” in 2002 and a “bad winner” in 2010; that he has “infringed” the freedom of the press (this a more cautious assessment than that of Lendvai, who often implies that there is really no freedom of the press, yet quotes denunciations from journals like Élet és Irodalom to buttress his arguments); that Orbán “curried favour” (p. 225) by “pledging to put the international banks in their place” – a rather weasel-worded formulation considering that banks all over the Western world, and especially in the UK, were made by governments to answer for misselling activities that reduced many to penury. In fact the misselling of mortgages in foreign currencies (mostly Swiss francs) was egregious in Hungary; Ther himself quotes a TV commercial by Austria’s powerful Raiffeisen Bank (p. 223) where an advisor bullies a cautious mortgage seeker with the (false) assurance that the property being purchased on credit is security enough. Yes, Orbán has reacted opportunistically to the unattractive side of inward “investment” and the mistakes of the EU, but it is wishful thinking on the liberal-left to interpret his third landslide victory in April 2018 as purely the result of manipulation of the media or abuse of power. He successfully articulates what many Hungarians feel and has also exposed the hypocrisy of EU positions (for example on migration and in regard to Russia.) That of course is the greatest sin of all for those committed to the “European project”, who view with angry frustration the refusal of the nation state to vanish and Orbán’s alarmingly successful championing of it.

In general, commentary on the rightward turn in Central Europe has concentrated on individual examples of varying degrees of illiberalism, but has been too little concerned with why people are often keen to vote for governments ritualistically denounced by the liberal establishment as “nationalist” and “populist”. Ther’s demonstration of the effects of neoliberalism is therefore all the more valuable, though he is careful to say that neoliberalism cannot be blamed for everything that has gone awry economically with its attendant political consequences. He does however give a startling example of the potential fallout from rampant neoliberalism when he tells us that Nokia relocated its cellular phone production from Bochum to Romania in 2008, but just as abruptly relocated from Romania to Southeast Asia when Romania became “too expensive” (p. 129). As soon as skilled workers in Eastern Europe started demanding more appropriate wages for their skills, investors often jumped ship.




An equally valuable contribution to the debate on Mitteleuropa is supplied in the book by Emil Brix and Erhard Busek,13 both senior figures in the Austrian political and diplomatic scene. While obviously critical of democratic backsliding among the former Eastern Bloc states, they make the point that Western Europe would do better to engage more intensively with the governments of the EU’s Eastern members, rather than indulging in rather self-righteous finger-wagging. It could do far more to understand the historical, politico-economic and social context in which resentments have arisen. One might add that both those resentments stemming from a troubled past (for which, after all, those countries so keen on denouncing Hungary and others bear a grave responsibility), and those stemming from an often exploitative present, lend themselves to nationalist and populist propaganda in the states concerned; yet the same would probably be the case in the West, were the still relatively prosperous Western European nations in a similar position historically and economically. Where mismanagement by Europe’s liberal elite has arisen in Western Europe, nearly identical political forces to those in the former Eastern Bloc have come into being – in Sweden, Holland, Italy, and finally in an excessively sanctimonious Germany as a result of Merkelism.14

In summary, the EU’s new Eastern members were presented with “precise criteria and strict conditionality” (the acquis communautaire) which had the positive effect of “obliging reform laggards to implement genuine reforms, but ended the era of national paths to capitalism, just as the national paths to socialism had disappeared from the real world agenda some five decades previously”.15 In other words, the economic model was part and parcel of the democratic reform requirements, which is a questionable imposition of orthodoxy, mixing altruistic motives with economic opportunism. There is a tension between endogenous and exogenous economic modernisation, well described by Ther, to which a new “Habsburg model” might provide a partial solution. “The problem of an endogenous solution”, he writes, “is that it can lead societies’ internal resources to become badly overstretched in pursuit of vague promises of future prosperity. The drawback of exogenous modernisation is the economic dependency it creates” (p. 157). The pluralist structure of the Austro-Hungarian Monarchy, if academic and political elites could be persuaded to look at it objectively and abandon the malevolent Marxist lie of the Völkerkerker (prison of the nations), was potentially a better solution to the endogenous/exogenous dichotomy than the current malfunctioning mixture of political hubris and economic rapacity.

The present approach has sometimes led to the application of double standards and propagandistic left-liberal denunciation masquerading as objective analysis. For example, part of the blanket condemnation of Viktor Orbán’s governance centred on his determination to dismiss the Central Bank Governor he had inherited from the previous regime. Yet independence from government of the Central Bank was only introduced in the UK by an incoming Labour government in 1997 and it is debatable whether it has really limited the opportunity for governments to dole out electoral bribes; certainly it did not prevent the financial crash that had its origin in the banking sector, supposedly overseen by the Bank of England. Now even those who lauded Chancellor Gordon Brown’s original initiative, such as the Financial Times, have begun questioning cautiously whether the power of Central Bank Governors is not excessive and unaccountable. Yanis Varoufakis, the former Greek Finance Minister reminds us of the dangers of excessive Central Bank power with his account of the toppling of the German Chancellor Ludwig Erhard, whose policies the Bundesbank opposed, “in a move more reminiscent of a banana republic than a European democracy”.16

As to the political dimension, Brix and Busek worry about the marginalisation of Mitteleuropa. “A peaceful and successful Europe requires more than a Carolingian core and a second class periphery”, they write. “It requires fair mutuality (Gemeinsamkeiten), which takes into account Central European traditions and suggestions, and not only those which have been worked out in Brussels, Paris or Berlin.”17 Amen to that!

Inevitably, but I think not unreasonably, Brix and Busek do indeed seem to hanker after a sort of Habsburg solution to the democratic and nationalist crisis in the eastern EU. The latter could partly be solved in terms of infrastructural investment (it takes longer today to travel by train from Vienna to Kraków than it did under the Habsburg Monarchy), but also by a recognition that in none of these eastern states does the population believe that democratic legitimacy can be transferred wholesale from the national to the European level (p. 198). As a Polish Conservative puts it: “European Union institutions should respect the tradition, culture, and national identity of all member states; they cannot seek to impose any single model of democracy” (p. 196). Interestingly enough this was, and is, exactly the complaint of the British Brexiteers. The suits in Brussels know this, which is why they are determined to make sure that the UK is suitably punished for its lèse-majesté, lest the whole project of a Federal Europe (run by themselves) should be undermined. Brix and Busek even suggest that the marginalisation of the eastern EU could be greatly ameliorated by locating its second capital in the former Ostbloc (they suggest Kraków.) Well, good luck with that! While this would remove the wasteful nonsense of the European Parliament’s treks to Strasbourg for twelve sessions a year, since the latter arrangement only exists to assuage French amour propre, the Brix–Busek suggestion is no more likely to be implemented than a proposal to move the EU capital to the real centre of European power, namely Berlin.

* On Philipp Ther: Europe Since 1989: A History, and Emil Brix and Erhard Busek: Mitteleuropa Revisited: Warum Europas Zukunft in Mitteleuropa entschieden wird.



1 Quoted in Emil Brix, Erhard Busek: Mitteleuropa Revisited: Warum Europas Zukunft in Mitteleuropa entschieden wird (Kremayr & Scheriau, Wien, 2018), p. 61.

2 Emil Brix, Erhard Busek, op. cit., p. 194.

3 Philipp Ther: Europe Since 1989: A History (Princeton University Press, 2016), p. 20.

4 Francis Fukuyama: The End of History and the Last Man (The Free Press, 1992).

5 Karl Kraus: “Versuchsstation des Weltuntergangs”, in Die Fackel, Nr. 400–403, Wien, 10 July 1914, S. 2.

6 M Blogs: Le Blog de Thomas Piketty, 16 January 2018 (“2018, the year of Europe”).

7 Ther (p. 256): “Poland had accumulated debt worth 75.9 per cent of GDP by 1990. With only weak exports, it was incapable of paying it all back. In 1991, half of these debts were deferred or cancelled – for mostly political reasons. Poland was a key state in the Soviet Union’s outer sphere of influence.”

8 The fall-out in Hungary was arguably worse. According to journalist Paul Lendvai, between 1988 and 1993 GDP fell by 20 per cent, 12 per cent alone in 1991; in 1990–1991 real wages fell by 12 per cent, while inflation was 35 per cent in 1991, 23 per cent in 1992 and only sank below 20 per cent in 1993. Unemployment rose sharply as thousands of firms were liquidated and half a million jobs disappeared. See Paul Lendvai: Mein Verspieltes Land: Ungarn im Umbruch (Ecowin, 2010), p. 54.

9 The New York Times report by John Sfakianakis, 10 October 2012.

10 See, for example, Paul Lendvai, op. cit., pp. 165–166, for the situation in Hungary.

11 Paul Lendvai, op. cit., p. 161.

12 Irish Times, 25 February 2018.

13 Erhard Busek und Emil Brix, op. cit.

14 For example, in an interview in regard to his book with ORF Zeit im Bild 2, 6 March 2018, Busek pointed out that the latest judgement of the European Court condemning the Hungarian land law, while fully correct legally, could not take into account that Austrians had acquired agricultural land in Hungary at knockdown prices after the fall of the Iron Curtain, and the government’s determination to return much of it to national ownership was understandable. He even suggested that Austria, in similar circumstances might have done the same, an extremely heretical statement to make on a broadcasting medium overdosing on smugness and anti-Orbán reportage!

15 Geoffrey Swain, Nigel Swain: Eastern Europe since 1945 (Fourth Edition 2009, Palgrave Macmillan), pp. 234–235.

16 Yanis Varoufakis: And the Weak Suffer What They Must? (Vintage, 2017), p. 62. The immediate dispute was Erhard’s acquiescence with Washington’s request to co-operate in supporting the Bretton Woods system of currency fixing, which then involved printing more Deutschmarks than the Central Bankers thought was prudent. Erhard was arguably the most successful German Chancellor (and formerly Finance Minister), but he was no match for the Central Bankers. A new book by a former Deputy Governor of the Bank of England goes so far as to ask “whether and how democratic societies can cope with the challenges posed by the scale of unelected power concentrated in nominally independent central banks ... which threatens to erode our democratic system of governance.” See “Inflated powers”, a review of Unelected Power: The Quest for Legitimacy in Central Banking and the Regulatory State by Paul Tucker (Princeton, 2018) in Weekend FT, 12th–13th May, 2018.

17 Brix and Busek, op. cit., p. 217.

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