European Futures: The Perspectives of the New Member States in the new Europe Attila Ágh and László Vass (eds) Together for Europe Series No. 16 KadarKrisztian_16_belivek.indd 1 2013.01.18. 19:04 Budapest College of Communication and Business 2013 The Together for Europe Research Centre and Budapest College of Communication and Business wish to express its gratitude to the Hungarian Scientific Research Fund (OTKA) for the financial support of the ’Competitiveness of the Hungarian regions in the EU’ research project (OTKA ID: K77659) European Futures: The Perspectives of the New Member States in the new Europe Together for Europe Series No. 16 KadarKrisztian_16_belivek.indd 2-3 2013.01.18. 19:04 European Futures: The Perspectives of the New Member States in the new Europe Copyright © Attila Ágh © Jean Blondel © Zsolt Gál © Borbála Göncz © Petra Guasti © Miro Haček © Boglárka Koller © Simona Kukovič © Karin Liebhart © Miklós Losoncz © José M. Magone © Zdenka Mansfeldová © Tamás Polgár © Máté Szabó © László Vass © Jerzy J. Wiatr All rights reserved. Table of Contents Preface........................................................................................................................ 7 The unfolding new European architecture: The radical changes in national and regional competitiveness in the EU Jean BLONDEL: The great strength of the European Union: Its consensual character.......................... 13 Attila ÁGH: Alternative European Futures in the post-crisis world: Perspectives for the New Member States.................................................................... 31 José M. MAGONE: Living with the Eurocrisis in Southern Europe.......................................................... 69 Miklós LOSONCZ: Global crisis and peripherialization in the ECE region............................................ 123 Boglárka KOLLER: The fading civic identity of the EU nationals: With a special focus on the East-Central Europeans................................................ 139 Borbála Göncz: A Persistent East-West Divide? The Effect of the Crisis on People’s Perceptions of the European Union.................. 171 Publisher: Budapest College of Communication and Business H-1148 Budapest, Nagy Lajos király útja 1-9. mail@bkf.hu ISBN 978-963-88943-5-9 ISSN 1589-6781 Tamás POLGÁR: The Nordic view: impact of the economic crisis on the domestic politics and EU-policies of the Nordic countries............................ 211 Zdenka Mansfeldova and Petra Guasti: Czech Republic in the Context of Central Europe: Post-Enlargement Successes and Failures................................................................. 269 5 KadarKrisztian_16_belivek.indd 4-5 2013.01.18. 19:04 Miro Haček and Simona Kukovič: Quality of democracy in Slovenia: The (dis)trust in political institutions and rule of law.............................................. 301 Jerzy J. WIATR: Poland’s politics and the world crisis........................................................................ 325 Zsolt GÁL: Farewell to the Carpathian Tiger: Impact of the Global Crisis on Slovakia................................................................... 337 Karin LIEBHART: The CEE and SEE expansion of Austrian banks: A showcase analysis of relating media coverage........................................................ 365 Máté SZABÓ: The Protection of Fundamental Rights in Hungary upon the New Basic Law: Main directions of the new Ombudsman system from 2011................................... 381 Preface Attila Ágh: The European Futures at the Danube: Danube Strategy and the global competitiveness of the EU28................................. 411 6 KadarKrisztian_16_belivek.indd 6-7 7 2013.01.18. 19:04 The unfolding new European architecture: The radical changes in national and regional competitiveness in the EU The five former volumes of the book series “Together for Europe” have dealt with the main issues of the Spanish – Belgian – Hungarian (SBH) team presidency, in which the competitiveness of the member states and their regions has been a high priority. Against this background, in 2009 the four year project on the “Competitiveness of the Hungarian regions in the EU” began with the support of the Hungarian National Research Fund (OTKA), which has focused on the catching up process within the EU in Hungary in particular and in the new member states in general, at both national and regional levels. The national and regional competitiveness in the EU was already a central topic in the first volume on the competitiveness – From the Lisbon Strategy to the Europe 2020 Strategy: Think European for the Global Action (12th volume of the Together for Europe series) -, since the Lisbon Strategy has emphasized the regional competitiveness to a great extent, in view of its transition to the new European mega-strategy, to the Europe 2020 Strategy. The EU2020 Strategy has also meant a radical reform of the regional and cohesion policy as well as in the national and regional competitiveness. In this spirit this former book has underlined the need for the organic link between the cohesion policy and the EU2020 Strategy both within the EU and in its member states. As the global crisis has deepened, the competitiveness issue has become high priority in the international and domestic political science. In May 2011, during the Hungarian EU presidency, a big international conference was organized in Budapest on the EU issues in the political science matters. This conference offered a good occasion to review of the SBH team presidency and to look beyond to the competitive Europe in the post-crisis period in both national and regional terms. No doubt that in 2011 the European Union arrived at the crossroads and it necessitated to deal also with the European perspectives after the global crisis as also the title of the 15th volume of this series indicated: European Union at the crossroads: The European perspectives after the global crisis. The May 2011 Budapest conference has produced a series of interesting papers on these issues, so the second book on competitiveness has been based mostly on the papers of the Budapest expert conference. 8 KadarKrisztian_16_belivek.indd 8-9 9 2013.01.18. 19:04 It has argued that the Cohesive Europe is the best way of constructing the EU for the next decade in order to avoid the extreme Core-Periphery conflict by increasing the national and regional competitiveness of the less developed member states. At the same time the competitiveness has also proven to be a good theoretical framework to discuss the achievement of the EU crisis management process. Thus, the EU crisis management and the national-regional competitiveness as basic issues have supported and complemented each other in the second volume as two sides of the same coin, or top-down and bottom-up analytical devices. The present book, the third volume on competitiveness – European Futures: The Perspectives of the New Member States in the New Europe as the 16th volume of the Together for Europe series has gone beyond the 2011 perspectives, since it has dealt with the radical changes in the EU in 2012, and based on these events, it has summarized the four years of intensive research on the national and regional competitiveness. The October 2012 CEPSA (Central European Political Science Association) conference in Budapest has given a good occasion to overview of the latest research results in this field and to finalize the best papers turning them into chapters of this volume. It is not necessary to argue too much that the topic of competitiveness has changed during these four years – namely, before and after the global crisis - beyond recognition. Accordingly, these papers have followed the radical changes and they have summarized the situation after the global crisis. Together with the analyses of the two former volumes on the regional and cohesion policy, these three books give the summary of this research project on the national and regional competitiveness. present volume opens up to the wider European situation by analyzing the Danube Strategy as the European Futures at the Danube, discussing at length the national and regional competitiveness of the member states and regions concerned in this functional macro-region. On behalf of the participants of this OTKA project and all conference paper-givers the project leader expresses his gratitude to the Budapest College of Business and Communication for their assistance given to this project. Attila Ágh The project leader for the “Competitiveness of the Hungarian Regions in the EU” project (OTKA ID 77659) László Vass Rector of Budapest College of Business and Communication, The home university of the “Competitiveness” OTKA project The third book contains the insightful key note paper of Jean Blondel on the great strength of the EU in its consensual character. The introduction of Attila Ágh tries to give an overview of the Alternative European Futures with their Key Indicators in the EU28 in general and in the new member states in particular. This distinction appears in the structure of the book, since in its first part the papers discuss the impact of the global crisis on the EU in general, whereas in the second part the other papers deal with the impact of the global crisis on the individual new member states in particular, covering Poland, Czech Republic, Slovakia, Hungary and Slovenia. It is not by chance that the first part concentrates on the macro-economic processes of the global crisis, which have resulted in an EU-wide socio-political crisis, as it has been analyzed in the papers of José Magone, Miklós Losoncz, Boglárka Koller, Borbála Göncz and Tamás Polgár – in the South and in the North, in the peripherialization of the East and in its perceptions. The second part offers the colourful versions of national crisis management in East-Central Europe in the papers of Zdenka Mansfeldova and Petra Guasti, Miro Hacek and Simona Kukovič, Jerzy Wiatr, Zsolt Gál, Karin Liebhart and Máté Szabó. Finally, the 10 KadarKrisztian_16_belivek.indd 10-11 11 2013.01.18. 19:04 The great strength of the European Union: Its consensual character Jean BLONDEL European University Institute, Florence, and University of Siena Introduction Arend Lijphart has been one of the most influential political scientists of the last half-century in the field of comparative government. The depth of his influence resulted from his felicitous linkage between his empirical analysis of cabinet government in the Netherlands – his original aim – and a wholly different normative vision of what is the best structure and mode of rule within parliamentary cabinets. Arend Lijphart’s influence originated from his first major work, based on his PhD thesis, The Politics of Accommodation (1968), in which he analysed the characteristics of the governmental system of the Netherlands and showed that that system, unlike for instance that of the United Kingdom, was based on what has since been referred to as a ‘consensual’ (or ‘consociational’) form of government, by opposition to an ‘adversarial’ (or ‘competitive’) form. In the ‘consensual’ model, power in the cabinet is shared among parties of different ideological persuasions by means of coalitions. Such a cabinet structure had previously come to be regarded as a recipe for instability and disaster: Arend Lijphart showed that, on the contrary, the result could lead and indeed led in the Netherlands to stability in a political system in which the electorate was sharply divided into a substantial number of deeply felt social groups. The message of that original book was so important that it effectively resulted in Arend Lijphart devoting much of his life to the analysis of the consequences of the distinction of cabinet governments into ‘competitive’ and ‘consensual’: hence his important volumes in which the key theme was that not only could democracy be maintained where a number of ‘cleavages’ were represented in the cabinet, but that democracy could even be deeper and more effective were ‘consensualism’ was adopted instead of the ‘adversarial’ British-type model, in which a single party in the government is sharply and continuously 12 KadarKrisztian_16_belivek.indd 12-13 13 2013.01.18. 19:04 challenged by another party constituting the core of the opposition (see in particular Democracies, 1984, and Patterns of Democracy, 1999). with the prospect of future accession of the countries which had been involved in the wars of the 1990s, one of which, Croatia, has already been fully admitted within the EU. As a matter of fact, one must go further in appreciating the scope of Arend Lijphart’s influence as he not only played a crucial part in bringing about a better understanding of forms of cabinet government at the national level, but he effectively provided in the process the most realistic interpretation of the way in which the European Union does currently and indeed should operate. I propose to make this point in this paper by examining the case for the European development in the early years, by then showing the growing inadequacy of that case as time passed and by stating that only the ‘consensual’ view put forward by Arend Lijphart at the national level, once extended to the European Union level, is able to account for what is the undeniable strength of the European project, despite and perhaps even because its problems and its ‘crises’. I wish merely to add, as Arend Lijphart himself recognized, that there exists a model of government which embodies perhaps the consensual approach even better than that of the Netherlands, namely the Swiss model, to which the EU resembles unquestionably in many ways. Yet the problem with the original goal of what was to become the EU is that it has been achieved. As a result, the debate within and around the European Union is no longer focused at all on how war in Europe can be avoided: it is concerned with the many other problems resulting from the ‘integration’ process and specifically about whether that integration process should be ‘deepened’ or, on the contrary be stopped or even reduced. On such issues, the original goal of promoting peace in Europe has almost nothing to offer directly: the only manner in which that goal can still be considered has to be in a roundabout way by stating that, if further integration is not achieved and is even stopped, regression will inevitably take place, a development which many ‘Eurosceptics’ indeed advocate. Were such a regression to occur, one could justifiably point out that there would be once more opportunities for major clashes among the European countries and specifically among their rulers: the danger might then be that at least ‘cold wars’ would occur rather than cooperation. In other words, the European political climate would deteriorate and a situation more analogous to that which characterized nineteenth century politics would begin once more to emerge. I. The original purpose of the European development and its subsequent inadequacy as a legitimisation principle As is well-known, the European project started almost immediately after the end of World War II when a number of European politicians, led by Jean Monnet, decided to launch the idea of the gradual integration of processes of government in their countries and to begin by doing so with respect to the coal and steel industries. The idea behind the project was that one had to find a mechanism able to ensure that there would never been any wars between France and Germany and, more generally, any wars at all in Western Europe. In this respect, the project has been wholly successful: it is indeed the first time in many centuries that there has been no war in Western Europe in over sixty years; furthermore, there is no sign that a war could occur, as the national borders between the Western European countries are increasingly becoming mere administrative distinctions, at any rate among the ‘Schengen’ countries. Indeed, although there have been wars in Eastern Europe soon after the dissolution of the Soviet empire. The potential for future conflicts has been markedly reduced with the accession to the European Union of many of the East-Central European countries and 14 KadarKrisztian_16_belivek.indd 14-15 Such a scenario is probably valid, but a further danger is paradoxically that this scenario seems too remote, and that generations of Europeans, especially of Western Europeans simply do not believe that there might be once again violent clashes between the various Western European countries. It is therefore not unrealistic to conclude that, if the only rationale for supporting the European Union is that it has been able to avoid wars among the countries of the region, there is a non-trivial probability that there might be a gradual decline of not just the formal, but of the informal relationships which have taken place so far and, in the more or less distant future, some return to giving to state boundaries part of the political, social and economic importance which they had in the past. There is of course a view, frequently referred to in recent years, according to which Europe is ‘inevitably’ moving towards a situation in which the level of integration will vary among the various countries belonging to the European Union: this view is referred to by means of expressions such as that of ‘Europe à la carte’ or in terms of a number of different ‘speeds’ at which European integration is ‘bound to take place’. It is pointed out that this development has indeed already taken place, whether we like it or not, either with respect to 15 2013.01.18. 19:04 the Schengen agreement or in relation to the common currency. Yet it is noticeable that, as a matter of fact, the opportunity given to adopt such choices has not resulted in more friendly relationships: quite the contrary has occurred, as it seems that at least some of the countries which have used these choices have then come to demand further exceptional arrangements, precisely with respect to the role which might be attributed to state boundaries, at the very moment when the ’crisis’ which the ‘Eurozone’ experienced appeared to need an increase in tightening further together the countries belonging to the common currency area. Hence the idea that Europe should be ‘thought through’ again, an idea which is naturally combined with a flood of viewpoints presented by the specialists on the subject, that flood of viewpoints being more likely to increase differences among the various positions than to have the effect of tending to lead to common standpoints. This is why what needs on the contrary to be stressed is the view that there is already an existing rationale, and not just a need for a new one, on the basis of which the development of the European Union can be based both currently and in terms of its future development. It is at this point that what Arend Lijphart discovered at the level of national cabinets becomes truly important in order to understand better the extent of the consensual processes in which the European Union has already been engaged. II. The importance of the consensual approach in con nection with the European Union Let us reflect first at what the consensual approach to cabinet decision-making does entail. To say that a cabinet is consensual – or at least aims at being consensual - means that it is built of elements which are brought together on the understanding that they will have to work together and, in particular, that they will have to agree on the decisions which they are to take together. In contrast, a government which is referred to as being based on the ‘adversarial’ principle is one in which the most important decisions are taken in a context in which there is strong opposition between the ‘government’ and the ‘opposition’ and in which the government is compact and there is therefore little ground for discussions designed to avoid conflict. This being the overarching principle, it follows that not only will there be no endeavour to come to some agreement with the opposition and only a limited amount needs to be discussed within the party in power: politics is a battle between government and opposition and nothing must be done to undermine those who are in charge of leading that battle. 16 KadarKrisztian_16_belivek.indd 16-17 It is indeed because of that ‘battle spirit’ that it can be argued that, already prima facie, such an approach can be regarded as not truly ‘democratic’, the key arguments in favour of that approach being, on the one hand, that decisions are likely to be taken more rapidly and, on the other, that the system is based on what could be referred to as a ‘democratic sequence’: the party in power enjoys a temporary majority temporarily and, at the next general election, the other party may come to power and therefore be able in turn to act in a similar manner. The argument in favour of the consensual approach is based on the contrary on the view that this kind of ‘sequential’ notion of the democratic process, even assuming that it takes place regularly (which is often not the case, for instance if one takes the British example), does not constitute a genuine democratic procedure as decisions do not result from discussions among those who hold different views or at least among their protagonists: discussions might on the other hand lead to compromise outcomes which may well be regarded as more satisfactory by a larger proportion of the persons concerned. From this follows the standpoint that a purely ‘majoritarian’ democracy misses ultimately the real point about democracy, which is that decisions must be arrived at by agreements, if not among all those who have a view on the subject, at any rate among a large majority of them. Thus the point about coalitions, as they are set up in the Netherlands (and for that matter in other countries which practice coalition-building systematically) is not merely that these coalitions include a larger proportion of the population of a country, but that they may lead at the moment of their formation and later on as well, to discussions among those who are interested in order to look for a solution which is more widely acceptable. Although coalition-building and coalition-‘operating’, so to speak, are not quite the same as fully-fledged ‘deliberative processes’, they partake of the same general idea that an important part of the democratic process is constituted by discussions occurring prior to decisions. The view of the political process in (and around) national cabinets described by Arend Lijphart is thus wholly opposed to the formula which is characteristic of ‘adversarial’ political systems and is based essentially on party competition. Moreover, two further points need to be made in relation to the ‘consensual’ approach to cabinet decision-making. First, such an approach may be criticized, indeed almost certainly with some justification, on the grounds that decision-making is likely to be slower than in ‘adversarial’ systems; but it can be added that adversarial systems may result in a parody of democracy: indeed, since decision-making in authoritarian systems may be taken even more rapidly, rapidity 17 2013.01.18. 19:04 of decision-taking cannot be regarded as being in itself a justification for a governmental formula. Second, it may be felt that a ‘consensual’ approach is only a practical proposition if potential members of the coalition are willing to ‘play the game’: on the other hand, it is surely the case that the probability that potential coalition members prepared to ‘play the game’ is likely to increase as the notion becomes more widely recognized that consensual arrangements are what is being aimed for. Arend Lijphart was able to show that, in the context of the Netherlands, a consensual system was not only viable, but had helped the country markedly, from the time of the First World War when it was put forward: this was a time when it was feared that the country might be involved in the conflict, as Belgium was and as the Netherlands was indeed to be in the Second World War; it was argued that only on the basis of a consensual agreement could a satisfactory national response to a possible imminent danger be expected to be developed. This standpoint led over time to the elaboration of voluminous ‘coalition agreements’ among the political parties which agreed to be part of given governmental coalitions; these agreements led to the setting up of cabinets which remained typically in office for substantial periods. As Arend Lijphart then extended his analysis geographically in the studies which he undertook after his original work on the Netherlands, he was able to show that similar processes were taking place in other European countries and that the cabinets which emerged as a result were far from being unstable. Indeed, the author could state that there was evidence suggesting that ‘consensual’ governments could in various respects achieve more effective results than ‘adversarial’ governments (Lijphart, 1984, 1999). III. Even in an ‘adversarial’ context, cabinet decision-making is a step in the direction of ‘consensual’ decision-making The distinction between ‘adversarial’ and ‘consensual’ governments has been described so far in terms of a dichotomy: this is too sharp a distinction, however, as in a fundamental sense cabinet government, whether adversarial or consensual, is by its very structure ‘partly’ consensual. This is so from a legal standpoint in view of the fact that a cabinet government depends on obtaining a majority in parliament and at least in the lower chamber of that parliament if there is more than one. To be precise, such a government is only 18 KadarKrisztian_16_belivek.indd 18-19 dependent on there not being a majority against that government: this helps to account for the fact that there has been in Europe a significant number of ‘minority’ governments, particularly in the Nordic countries. Yet to call these governments ‘minority governments’ is in reality a misnomer, as these must, as any other cabinet governments, not be faced with a parliamentary majority against them: they have therefore a ‘minority’ character merely in the sense that the party or parties which are represented in the government do not have jointly a majority of seats in parliament, since a ‘minority government’ cannot survive unless it obtains enough support among the parties in parliament not represented in the government to avoid being defeated on a confidence motion; it should be further noted that ‘support’ in this case may mean only that the members of some of the parties not represented in the government abstaining from voting against that government. An interesting side characteristic emerges in the context of ‘minority governments’, from the point of view of the distinction between ‘adversarial’ and ‘consensual’ governments: these ‘minority governments’ may in effect be somewhat more ‘consensual’ than some of the ‘majority governments’, as, when it is being set up, a ‘minority government’ has to search for some support (or at least a degree of neutrality) beyond its ‘supporting parties’. Such governments must thus enter into a process of negotiation with other parties – i.e. behave in a rather consensual manner – both when they are set up and later on as well, unlike governments based on a party or a number of parties which have a majority in parliament, however small that majority may be. Moreover, whether it is a minority or a majority government, a cabinet government is more ‘consensual’ than are presidential governments as, in these, the national executive does not need to be constituted with any reference to the majority in parliament: this is so at any rate in what can be described as the ‘classical’ form of presidential government which is characteristic of the United States and of many other countries, particularly in Latin America but also in other parts of the globe. It is true that, although presidential governments are, as a class, more numerous in the contemporary world than are cabinet governments, even if one combines those of the monarchical (primarily from the Commonwealth) and those of the republican variety, a sizeable number of these presidential governments (the ones which are typically referred to as ‘semi-presidential’, although there are many types of such ‘less classical’ presidential formulas) partake from some of the characteristics of ‘cabinet’ governments as in this case the governments, if not the presidents, depend for their maintenance in office on the support of parliament. Yet there 19 2013.01.18. 19:04 are enough presidential systems of the ‘classical’ variety to be able to conclude that cabinet governments are based on a rather different principle from the principle on which are based those which can be described as ‘hard core’ presidential governments, namely those in which the executive is constituted and survives without depending on the support of an outside body. This is particularly so because there is another reason why all cabinet governments have a partly consensual aspect besides the fact that they need the support of parties in parliament. This is because decision-making processes within the cabinets are different from decision-making processes in presidential executives. It is of course often pointed out that the head of the cabinet, the prime minister, is very influential, not just when the cabinet is set up but in the day-to-day life of that body; it is even argued that a trend is taking place towards an increase in the role of prime ministers and that trend has been categorized, with some exaggeration, as being a form of ‘presidentialisation’ (Poguntke and Webb, 2005): but as this is only at most viewed as a trend and indeed a trend which is far from having everywhere the same strength, it follows that a difference is recognized between presidential executives and cabinet governments. Such a difference results from the fact that prime ministers are ‘closer’ to the ministers than are the members of a presidential administration to the president. One of the reasons for such a distinction stems from the fact that the members of the cabinet are part of what may be described as the ‘political class’ of the country; the activity of these cabinet members has taken place typically in parliament before they were ‘elevated’ to the position of ministers and, in many cases, afterwards as well: this means in particular that ministers play a part in decision-making both in the cabinet and in the party to which they belong. Therefore, admittedly to a varying degree, prime ministers have to take into account the views of ‘their’ ministers: this situation, by itself, indicates that there is an element of ‘consensualism’, so to speak, even in the most ‘adversarial’ of cabinets, and also even if that element is sometimes hidden, typically temporarily, when the prime minister is particularly popular. The point is important in relation to European developments as, in contrast to what occurred overwhelmingly in Latin America and Africa, as well as to a substantial if not a majoritarian extent in Asia, cabinet government, whether of the ‘adversarial’ or ‘consensual’ variety, dominates in Europe: it has traditionally dominated in Western Europe, France having been the only true exception since 1958. Cabinet government has also 20 KadarKrisztian_16_belivek.indd 20-21 come to dominate in East-Central Europe: the end of communism did not bring about presidentialism in the area, except in what appears more and more to be a temporary situation in parts of the Balkans, in contrast to what occurred in the ex-Soviet Union countries which all became presidential. Thus Europe, East and West, is unique as a region of the world in being overwhelmingly ruled by cabinet governments and it is also unique in becoming characterized increasingly in this way with the passing of time, as is shown by the cases of Finland, Portugal and most recently Croatia, in which cabinet government has gradually prevailed. Given what has just been pointed out about a tendency towards ‘consensualism’ in existence even in adversarial cabinet governments, it is not surprising that consensualism should have come to predominate in the European Union and be the order of the day, so to speak, in the whole European process. IV. The European Union cannot operate on an adversarial basis but has to be based on consensual patterns of behaviour It must begin to be apparent why the notion of consensual government is directly relevant for the European Union: if that Union is to function at all, it can only be on the basis of decisions taking place on the basis of standpoints shared widely across the Union. Such an obvious remark renders the idea of consensual decision-making imperative in the multi-national institution which the European Union has come to constitute. The impetus in that direction was probably the 1959 Treaty of Rome which laid the foundation of the Common Market; the efforts which needed to be made by a huge number of ‘agents’ to implement the treaty in the countries concerned entailed that there be continuous relationships among the decision-makers from all the member-states to enable these to achieve jointly the overall goal of the elimination of barriers: by eliminating barriers, moreover, one did not merely mean abolishing the highly obvious ones stemming from customs duties, but also the more concealed ones resulting from a whole variety of long-standing practices of individuals, of firms, of governments. These were clearly not just major obstacles, but indeed the strongest obstacles to the ‘free movement’ of goods and services across the territory of what were then six member-states. Such an elimination meant eradicating habits of dealing with particular agents with whom one was accustomed to deal with as, among other things, one shared the same practices and in particular the same language. Meanwhile, these changes had to take place in an expanding market which was soon to 21 2013.01.18. 19:04 move from six to nine countries before eventually constituting a Union of Fifteen and, after the fall of communism in Europe, to include by 2012 twenty-eight member-states and probably eventually to be composed of about thirty-five countries. There was simply no way in which the overall result of a truly common market could be achieved in one sweeping move and result from edicts stemming directly from the Treaty; what there would have to be would be long, often very long processes, involving series of complex negotiations among representatives of the member-states in order to ensure that new practices would be introduced which would gradually correspond to the overall aims of the Treaty. This network of negotiations was designed to bring about broadly acceptable arrangements and these arrangements could be adopted by means of compromises only; there had therefore to be a vast amount of de facto coalitions to ensure that the necessary arrangements be indeed be adopted. This was what the implementation of the common market treaty required, as well as of other treaties which came to be approved subsequently. An interesting and probably unexpected consequence of this state of affairs was the fact that, while some governments, in particular a government such as that of Great Britain when the United Kingdom joined the Common Market, could only remain ‘adversarial’ at the national level on condition that the decision-making process at the European level was and remained ‘consensual’: thus perhaps the greatest paradox was that a government operating at the national level on ‘adversarial’ principles was perhaps one which most needed to rely on the development of a coalition approach at the European level, since such an approach would ensure that the government of the country concerned would not be, or at least would be less likely to be, confronted with attempts at introducing a kind of ‘European integration by the backdoor’ which those who were increasingly referred to as ‘Eurosceptics’ were particularly likely to fear. In practice, the consensual approach to European policy-making was taking place not just at one level, but at three levels at least. First, the consensual approach was naturally the consequence of the need to negotiate and eventually approve treaties which would necessarily entail obtaining at least majorities at the national level in each of the states belonging to the members of the European community at a given moment; any state which would subsequently join would have to be prepared to accept en bloc the ‘acquis communautaire’ before that state could become a member. It followed that relatively few treaties would be adopted and that difficulties would arise almost in each case as a result of some memberstates experiencing problems of ratification, notably those states in which there were pro22 KadarKrisztian_16_belivek.indd 22-23 visions for approving by national referendum major constitutional changes before such a ratification could take place. Second, however, and contrary to what the population at large seems to believe, perhaps the question of the ratification of treaties is not the most important development which led to consensus and coalition-building having to be the daily form of decision-making in the European institutions. It is sometimes assumed that ‘Brussels’ imposes vast numbers of decisions on reluctant governments which are therefore impotent to stem the flow of unwanted (and ‘undemocratically achieved’) new arrangements. As a matter of fact, only rather recently is a truly substantial proportion of decisions taken on a majority basis, indeed typically still in most cases a qualified majority, rather than an ordinary one. The point is that there are likely to be many trade-offs among the various member-states and only if decisions which may not be to the entire satisfaction of some member-states are occasionally adopted can these same member-states be expected to have their way on issues for which they feel strongly. The fact that the European decision-making process is a continuous, indeed neverending operation means that it would simply be simply paralysing the process and be therefore wholly unproductive if member-states were never to allow decisions to be adopted with which these member-states disagreed: the consequences could be very serious when a matter was coming on the agenda with which that member-state felt very strongly. This analysis was conducted so far seemingly on the assumption that European decisionmaking processes, on matters such as the common market in particular, were conducted with respect to the general interests of the various member-states. As a matter of fact, the policies are so varied in terms of their specific object that by far the largest numbers of decisions (if not necessarily the most important ones) have tended to be taken at a lower level than that of member-states in general: this is why the development of the European project has entailed increasingly that individual ministers became involved in a major way. The involvement of individual ministers has had the effect of increasing the extent to which consensual practices take place and indeed of increasing this type of approach, by way of indirect consequence, even at the national level and not merely at the European level. Thus, in line with the original point made by Arend Lijphart in favour of consensualism, there could be trade-offs across policy fields in a given member-state if that member-state was to obtain a deal at the European level of which it was particularly keen. The role of individual ministers may well come to be increased in the process as tactical agreements between ministers of the same member-state may have to take place to achieve the desired 23 2013.01.18. 19:04 result. The European ‘operation’ thus led to the emergence of networks including ministers of various member-states anxious to achieve a particular policy with which, originally and in cold blood at least, some of these ministers may not have been in agreement. There are thus moves towards consensual decision-making with respect to overall arrangements, typically in relation to treaties or in relation to general policies; there are moves at the level of individual ministerial departments relating to issues which are concerned with more limited matters but which may lead to trade-offs among memberstates or trade-offs within a single member-state relating to questions which may have little or nothing in common. Yet there is also a third level at which consensual activities develop, namely the level of experts appointed by the Commission of the European Union in its capacity as the body in charge of presenting new policies to the European Council and to the European Parliament. As the Commission clearly does not want to present proposals likely to be killed almost immediately, the best way to avoid such an outcome is to appoint ‘experts’ from the various member-states and to hope in this way to elaborate proposals more acceptable to at least a substantial proportion of the member-states. Such a technique can contribute even more to the consensual character of EU decisionmaking, while it probably also helps the Commission to exercise influence on ‘experts’ from at least some of the member-states, not just with respect to the particular proposal under discussion but in the context of future decisions as well. Whether that approach to decision-making, combined with the two more classically ‘political’ approaches which have been mentioned earlier uniformly results in truly satisfactory sets of decisions is undoubtedly an exaggeration: yet what is at least clear is that these approaches render the policy-making process of the European Union squarely consensual and that it probably even renders more consensual some of the processes taking place at the national level, even in those member-states such as Britain which are traditionally regarded as belonging fully to the ‘adversarial’ type. V. Does the consensual character of the European decision-making process render that process unduly slow without making it democratic? Arend Lijphart stated that consensual decision-making processes at the national level rendered these processes more democratic than the adversarial formula because the 24 KadarKrisztian_16_belivek.indd 24-25 proportion of the citizens involved is larger; on the other hand, as he did not discuss the matter of the slowness of the process, he appeared not to believe that this characteristic was a major impediment. Yet it is typically argued that the European Union tends to takes its decisions too slowly while it also suffers from a substantial ‘democratic deficit’: can it be that the combination of these two problems render ‘consensualism’ unsatisfactory, at any rate at the level of a ‘multi-national’ (and partially ‘supranational’) institution such as the EU? The question of the exaggerated slowness of EU decision-making. The question of the exaggerated slowness of EU decision-making led once more to marked criticisms in connection with the ‘crisis’ which was regarded by some as ‘paralysing’ the European Union from the last years of the first decade of the twenty-first century. It was widely felt that, especially with respect to Greece, the EU was unable to develop strong policies which would remedy to the situation and that, as a result, the ‘crisis’ was worse than it might otherwise have been. The impression was therefore also widely shared that the apparent inability of the decision-makers within the EU, first to recognize fully and, subsequently, to act ‘decisively’, would result in a catastrophe, both for Greece itself and for the Union in general. The EU authorities manifestly do not have enough clout to be able to intervene rapidly in the context of a situation such as the one which emerged in the case of Greece. Neither the Commission, nor even the newly created Presidency of the Union simply have the kind of ‘charismatic authority’ which would have been required if emergency action was to be taken against the Greek policy-makers from the moment when the ‘crisis’ became apparent: it has to be realised, however, that it would be wholly unrealistic to expect the members of these ‘supranational’ bodies to be endowed with a ‘charismatic authority’ of this type. The history of the European Union has been inevitably marked by ‘fits and starts’, so to speak, that is to say by efforts made to expand the competence of the EU and by actions designed to prevent those who can loosely be referred to as the ‘Brussels authorities’ to go beyond narrowly circumscribed limits: De Gaulle’s action in the 1960s was only the most dramatic of the episodes designed to ‘cut to size’ the actions of those who believed that they had a mission to advance rapidly towards ‘true’ European integration. Nor is it really a fundamental mistake that there should be such ‘brakes’ in the process of ‘europeanisation’ of Europe, as the desire to achieve too quickly a number of supranational goals would almost certainly be misunderstood and might have led to disintegration rather than to further integration. 25 2013.01.18. 19:04 The question of the speed of the integration process has to be seen, as almost anything else in relation to the European Union, in terms of the consequence of consensualism. What consensualism means in practice is a request for time. A sizeable amount of time has to elapse for the various agents concerned and in particular for those who are affected negatively by the decisions which outside observers may feel have to be taken in order to solve the problem at hand. It is not suggested here that there might not have been, at the detailed level, somewhat speedier formulas which might also have been realistic: but a significant amount of time has to elapse for at least an important number of the various agents concerned to come to an arrangement, when it is clear that any arrangement would have to be painful, both for the citizens and for the political class of the countries concerned. The time-cost required to come to a solution which is acceptable to at least enough of the protagonists is manifestly much longer in relation to a large multi-national body such as the EU as it can be for a nation: but the taking of major decisions affecting for instance a substantial segment of the population of a nation cannot be undertaken rapidly either; as a matter of fact, history is littered with decisions which have not been taken and have been postponed repeatedly, with the result that social and economic processes have in effect produced outcomes which may not have been the most desirable ones. The time spent by the European Union to come to an arrangement has therefore to be regarded as having been very probably, and in most cases certainly, given the nature of the ‘crisis’ of the early years of the twenty-first century, the right amount required. This is the cost which has to be paid for a consensual approach – and a consensual approach in the context of the European Union is simply a necessity. Is the process of decision-making in the EU fundamentally undemocratic? It has been argued, indeed it has been seemingly believed by all concerned, that the European Union suffers from a fundamental ‘democratic deficit’. Almost every institution of the EU is said to suffer from the disease, with the possible exception of the Court of Justice; but the Commission, the Council, even the Parliament are regarded as not being able to achieve, at the Union level, the ‘extent’ of democracy which seemingly the individual states are regarded as being able to achieve. It is true that the democratic elements which characterise the Union are indirect, rather than direct: this is even the case with the European Parliament given that the turnout at elections is very low (except where voting is or has been at some point compulsory) and given that the political parties in that Parliament are the direct emanation from the individual states and, in effect, from the parties of these 26 KadarKrisztian_16_belivek.indd 26-27 states; many of these are indeed regarded as not being fully ‘transparent’ in the way in which they select the ‘MEPs’. Meanwhile the Commission passes for being essentially technical in character while the Council is viewed as representing rather ‘narrowly’ the views of the individual states. Interestingly, the idea of electing the President of the Union by universal suffrage has been rejected, with the result that this president tends not to have, as was pointed out earlier, the amount of ‘charismatic authority’ which is regarded as required if difficult decisions are to be taken and taken speedily. The specific points made in these criticisms are valid, but the practical question which arises is whether there is any realistic alternative given the consensual requirements which have to be met if the Union is gradually to increase the degree of ‘collaboration’ which has to take place among the member-states for the whole edifice to function. It is simply wholly unrealistic to expect that top national politicians will abandon the positions which they hold to become for instance members of the Commission: that the Commission is to be ‘technocratic’ rather than political is therefore inevitable; this is the only way to ensure that there will be a body of men and women who can adjust to the tasks at hand and do so with a substantial degree of consensus. It is interesting to note that, in the context of the ‘crisis’, in this case at the national level, one member-state, Italy, has definitely preferred to have a ‘technical’ government to having a political government. Both the European Council and the European Parliament are what they are as a result of the fact that the political class, in each member-state, is at most national, if not even to an extent regional. It follows that the consensualism which can be found in the European Union links the level of the individual states with the ‘pan-European’ level; it does not and cannot at this point result in a democratic process linking the pan-European level to the electorates of the individual states. Yet it would be wrong to criticise the European Union as being at the origin of that situation; the origin of the situation is to be found among the members of the national political class in each member-state. However, deeper down, the national political class of each member-state, while serving its own interests, is none the less in tune with the fact that there is very little sentiment, among the population of each country, which relates directly to Europe, except in a wholly vague manner. Thus it is not true that, in this case, and as Arend Lijphart generally suggests, the political system characterising the European Union is not consensual: it is consensual, but only in so far as it relates the European Union to the national political level; indeed, as was suggested earlier, there is a true consensualism relating the political system of the European Union to the national political systems of each 27 2013.01.18. 19:04 member-state, but the chain stops there, in part because the political class does not wish to lose the power which it has, but in part also because the population at large is not sufficiently ‘europeanised’ to wish to by-pass the national political class in order to participate in a European political class. It has been argued that the election of a European president by universal suffrage might hasten the process of ‘europeanising’ the electorate of the member-states, but it is difficult to imagine how both the national political class and the national electorate would react to the process of nomination of candidates and whether the national electorates would accept to see a president not from their own country being elected, except perhaps if such a president had in effect no powers – in which case it is not clear whether it would be worthwhile to go through the trouble of electing such a president. Thus, in the end, the president of the European Union has at most the position and prestige of a rather ‘consensual’ prime minister in a nation state, not the position and prestige of a president. It thus follows that, as Arend Lijphart did state, consensual practices lead to democratic practices and that they do so more than adversarial practices even in the context of the European Union. The ‘democratic deficit’ which exists in the European Union is not due to something which is faulty in the consensual practices at the European Union level: it is due to the fact that national practices are (still?) preponderant and that this is due in turn (also still?) to the fact that the national electorates remain national rather than European. Conclusions Whether the national electorates are aware or not of the fact, Europe has been engaged in a process, since the end of the Second World War, which is almost certainly unique around the globe, of bringing together national states which have in many cases lasted for centuries, which have fought against each other, also in many cases, for long periods and, in the last two cases, in a brutal and indeed ruthless manner. The fact that the process of unification of these states has gone on relatively smoothly for over six decades is a manifest cause of optimism. On the other hand, the fact that a substantial number of new states have come to be added to that unification process could not but render more vivid the difficulties which this unification process did pose. It is to the credit of the European Union that it has been able to live with these problems and look for solutions to overcome them: it has done so in the only way in which these difficulties can sensibly be met in an organization as complex as the EU, that is to say by means of stressing consensual forms of government 28 KadarKrisztian_16_belivek.indd 28-29 and, therefore, when it was necessary, by pausing in order to ensure that enough time passed to allow a general agreement to be achieved, even if this agreement required, and indeed because it required, painful sacrifices. There is no reason to believe that such a process of government will not continue to prevail in the European Union. Yet it is true that the eventual arrangement has to be in a consensual form which links directly the electorate with the European Union rather than take place, so to speak, at two successive stages, European and national. There is no doubt that such a development will require major changes in the nature of the political process in the European Union at large. It is worth at this point to remind ourselves that the only political system which has been able to overcome that kind of problem in Western Europe has been Switzerland. In the Swiss case, however, the problem was much simpler since the range of the differences was smaller: yet it took a very long time, indeed centuries, for the outcome to be perfected. The progress which the European Union has made over the last six decades has been so large, despite the fact that the top level remains, so far, rather weak, that it seems permissible to expect and not just to hope, that the process of unification will be rather shorter in the case of the European Union than it did in the case of the Confederatio Helvetica. References Lijphart, A. (1968) The Politics of Accommodation, Berkeley: University of California Press Lijphart, A. (1984) Democracies, New Haven, CT: Yale University Press Lijphart, A. (1999) Patterns of Democracies, New Haven, CT: Yale University Press Poguntke, T., and Webb, P., (ed.) (2005) The Presidentialisation of Politics, Cambridge University Press 29 2013.01.18. 19:04 Alternative European Futures in the post-crisis world: Perspectives for the New Member States Attila ÁGH Budapest Corvinus University Introduction: From global to transformation crisis, from Growthmania to Sustania In 2013 the EU has arrived at the turning point between the global crisis and the transformation crisis. After the five years of global crisis management the EU has turned step by step to the building of the new European architecture. The EU is already in the post-crisis period with the task of the biggest and deepest transformation of its history. The “worst is over” (Van Rompuy, 2012 and Euractiv, 2012b), but there can be no return to the pre-crisis stage, thus the EU now has to make a strategic choice between the Alternative Futures. Although in the present stage some measures still serve the global crisis management, but the EU has to focus in the post-crisis stage already on those radical transformations that will create a new balanced structure between the EU policy universe and its institutional architecture. The paper argues that nowadays the emphasis is on the Competitive Europe but in the coming years it has to be shifted to the Cohesive Europe. The year 2014 is the starting point for the new developments in the EU as the time for the strategic choice between the Alternative European Futures. Not just as a start of the new financial perspectives or multiannual financial framework (MFF, 2014-2020) with its new “policy framework” but also with the emergence of the new “institutional framework”, supported by the next re-election of the EU institutions in 2014. Policy changes during the global crisis management have led to the new regulations and to the ensuing soft institutional reorganizations, and finally they will lead to the renewed-reorganized institutions. Furthermore, there have also been some changes in the strategic visions, since during the crisis years there has been a change of paradigms in the “conceptual framework” of EU developments. The debates 30 KadarKrisztian_16_belivek.indd 30-31 31 2013.01.18. 19:04 about the financial discipline with austerity measures versus the new economic growth model have to be seen from these perspectives of the new “strategic framework”. It is the “beyond the GDP to the social progress” process, in which the EU has been turning in the globalized world from the narrow-minded economic growth to the sustainability based growth model, i.e. from Growthmania to Sustania. Therefore, in both cases of looking back to the global crisis management period and of looking forward to the future recovery period the analysis of the Alternative European Futures has to be based on this new paradigm. For giving an overview on these pre-crisis and post-crisis periods, it important to note that the world history has been moving in long cycles. The EU’s turn from global crisis management to the transformation crisis management has followed the historical itinerary of the transition between the Kondratieff long cycles. In the mainstream thinking the postwar long cycle ended in 1989 with the collapse of the bipolar world. So the present long cycle has now come to its halving point (1989-2014), hence the second sub-cycle begins in the mid2010s with a stormy start. However, this present change between the sub-cycles has taken place through a shorter transitory period that obviously began for the EU under the pressure of the global crisis. The transitory period will end with the creation the new European policy universe and architecture, as a signal for the overcoming of the transformation crisis. The global crisis has made clear that the former stage of history has been completed, since the GDP based economic growth model in the national frameworks - and with conflicting polities within the EU - reached its limits, therefore this model produced clear crisis patterns already in the 2000s. The five years of global crisis management have proven that the transition to the new economic growth model has become inevitable, and the structural crisis in the EU has to be overcome by creating the new policy and institutional frameworks. Actually, the crisis mechanism framework has recently entailed actions across a wide range of policy areas, bringing them step by step closer to the EU’s new priorities. In general, the EU has a long history of structural crisis, since even its foundation created an unbalanced structure between policies and institutions. Thus, the entire history of the EU has been a history of the EU “in the making”, analyzed in the “crisis studies” with constantly renewed futureoriented definitions. This asymmetry or misfit between policies pursuit and the institutions built for them has determined the structural dynamics of the EU that can also be presented as a permanent creative crisis. This structural crisis has been permanent, indeed, since it has belonged to the very nature of the EU, so there has been no EU history without “crisis”. The general Road Map of the “unbalanced” situation is that policy is always more dynamic 32 KadarKrisztian_16_belivek.indd 32-33 than institutions, since it provides a rapid adjustment to the external challenges, whereas the institution reforms follow slowly and belatedly, so far never perfectly. Therefore, the EU documents have also been always double faced, they are both analytical and normative because they have both regulated the given situation and mobilized for the expected future situation. This typical permanent EU crisis situation has seriously deepened from time to time, and, therefore, it has also been overcome in special reform periods, e.g. by the Maastricht Treaty. However, this permanent crisis has reached its climax by the structural unbalances provoked by the global financial crisis and its solution needs the biggest and deepest transformation so far in the EU history. In addition, the global crisis began at the worst historical moment, since “The economic crisis erupted as the EU was entering the final phase of the long and painful Lisbon Treaty ratification process.” (Tsoukalis et al., 2010:23). In the global crisis there have been serious challenges in the most crucial policy areas, with two overarching themes as regards the substantive challenges. The structural crisis has appeared in both policy-wise and institution-wise, namely the introduction of new policies under external pressure creates contradictions, disturbs policy coherence, and generates further pressure for policy changes on one side and it pushes beyond a certain point for institutional changes on the other. The EU institutions ab ovo have their internal contradictions with the inherent tensions between/among them because they are unbalanced due their different levels of the EU integration. The new policy changes provoke further tensions and controversies in the EU, and as a result, the EU has always been moving in contradictions, or in virtuous/vicious circles between the new policies and old institutions. Altogether, this characteristic feature of the misfit or tension in the EU history within both policies and institutions, and between the policy universe and the institutional architecture, has appeared beyond the imagination under the pressure of global crisis. This process finally has also to be seen from the side from the tension between the EU as an emerging polity and the nation states as composing parts. This tension is tilting now to the favour of the unfolding new system. In fact, the EU is an emerging “mega-region” because the EU has been pioneering in this reorganization of the global world. The EU mega-region is a real global unit in the present period of the advanced globalization, but it has reproduced its internal tension at a higher level. This unfolding new system demands a new future oriented definition of the EU for designing Alternative Futures. So in 2013 it is necessary to design the long term visions and strategies for this decade of the 2010s until 2020, as most EU documents and academic contributions have made so far. 33 2013.01.18. 19:04 However, it is also clear that this decade consists of three periods. The period of exit strategy ends in 2014 when the new financial perspective starts. In 2014 the new institutional cycle of the EU starts with the EP elections, and followed by the entry of new European Commission and the election of the EUCO President. After the second, take-off period between 2014 and 2017 a new turning point can be expected around 2017. It may result in a reformed EU28 based on the principles of social progress and/or sustainable development in the third period between 2018 and 2020 (see the Road Map in Van Rumpuy, 2012 and EUCO Conclusions, 2012f ). Thus, this paper in the first part outlines the strategic conceptual framework of the Alternative European Futures regarding the time horizon of 2020. It investigates four alternative scenarios in general and the two realistic scenarios in particular, in the light of the present debates in the EU28. In the second part it completes this exercise in the context of the NMS. These perspectives are closely connected with the developments of the West Balkan (WB) and East European (EE) states, although in this paper the focus is on the catching up process in NMS as well as on the Core-Periphery relations within the EU. I. Alternative Futures for the EU28 in 2020 1. Four scenarios for the Alternative European Futures The main task is nowadays to elaborate the new, future-oriented definition of the EU formulated in the terms of the Strategic Performance Indicators or Key Indicators. EU as a megaregion has two basic aspects: inside - the European policy universe and the European architecture as the policy and the institutional aspects -, and outside - the global context and the regional context as the strategic partnership with other emerging mega-regions and the regionalization of its own neighbourhood. Although there have been a large variety of approaches in the “ever increasing” EU literature, there has still been a relative consent about the most important development indicators of the EU developments, in which all basic EU documents have shown the achievements of the EU in the given period. The Strategic Performance Indicators can offer both the descriptions of the present situation and the main trends of the further reforms in the basic institutions and in the key policies. In such a way, they give also a coherent and systematic overview of the EU discussions, including the huge academic literature. The Strategic Performance Indicators summarize the various contributions and 34 KadarKrisztian_16_belivek.indd 34-35 standpoints that have been elaborated for all possible alternatives. Nonetheless, these Strategic Performance Indicators, based on the relevant arguments for these alternatives, reflect the present situation anyway, even by designing the alternative futures. Therefore, they have to be revised all the time when the EU arrives at the crossroads as it is the case in 2013. This paper is an effort to formulate these complex EU indicators and systematize them in view of the 2020 perspective. The general EU developments have also given the comprehensive frames for those of the new member states. The complex EU indicators can also be specified for the NMS, both for as the group of countries and the individual countries. These Strategic Indicators demonstrate the move from the narrow views of status quo to the new visions about the alternative futures. Internally, they have been summarized in the EU2020 mega-project for the EU policy universe (with the renewed cohesion policy) supported by the new financial perspective for 2014-2020 (with a policy-driven budgeting) on one side. They appear on the other side as the reform triangle between the institutional reform in the Lisbon Treaty, the new euro-zone financial regulations (Banking Union) and the “final” Political Union. The new internal structure has to be defined in the terms of policy memberships and institutional memberships in the new framework of differentiated integration. Externally, these Key Indicators have been based on two aspects. Namely, the new global role of the EU in its “strategic partnerships” with global powers (BRICs, especially Chindia) has to be taken into the consideration on one side and the continued enlargement policy as well as the reorganization of the European Neighbourhood Policy (ENP) on the other. Thus, the main Strategic Performance Indicators for the Alternative European Futures with the internal and external reforms are the following: 1. Policy reform – the EU2020 as the brave vision of the Cohesive Europe. 2. Institutional reform – the new European architecture (quasi Federation). 3. EU as global actor – strategic partnership with the other global actors. 4. EU as regional actor – pre-accession in WB, regionalization in ENP. Alternative Futures have to be distinguished in three dimensions. Namely, they differ according to (A) their dominating deep divides among the member states in general and/ or between the old and the new member states in particular, since the dominant cleavage line as the main controversy is very different in these diverging scenarios. Second, (B) they have been based on the long term vision of the member states in their official documents or the hidden assumptions, so they may also be distinguished according to their different 35 2013.01.18. 19:04 Second, the various countries and/or macro-regions in the EU have elaborated various long term visions and academic approaches according to their historical traditions and present situations, i.e. to their particular policies high on the list of priorities. The alternative ways to future appear in direct forms of the official documents but also in the hidden assumptions of member states as (B) The Long Term Visions and Approaches: (1) The “Nordic” scenario (Europe – the World’s Scandinavia). (2) The “Western” scenario (German-French engine). (3) The ”British” scenario (weak EU reduced to the Common Market). (4) The “Turkish” scenario with quasi disintegration. Altogether, based on these basic criteria in 2013 four scenarios can be outlined about the European Futures for the next decade. These alternative futures for the EU are the Headstart, Core Europe, Fragmented EU and Doomsday scenarios. These scenarios represent the main types of the possible future outcomes for the EU28 with positive or negative synergies in a SWOT analysis. These scenarios can be described in detail based on the criteria discussed above. In order to see the diverging perspectives, it is important to enlist the main reform drivers as the basic features that give at the same time the matrix for the Alternative European Futures. If these key drivers are properly discovered, then the Alternative European Futures can properly be described in detail in the following four scenarios: 1. Headstart scenario (best case scenario - strength) (A) The EU as a good performer (competitiveness rankings). (B) The “Nordic” scenario (strategic vision). (C) Radical reform with a creative crisis (new Federative Europe). 2. Fragmented EU scenario (partial disintegration - weaknesses) (A) The pro-integration versus Eurosceptic MS. (B) The ”British” scenario (weak EU reduced to the Common Market). (C) Weak reform with deep divergence and sluggish growth. 3. Core Europe scenario (partial success scenario - opportunities) (A) The big MS as drivers versus the small MS. (B) The “Western” scenario (German-French engine). (C) Partial reform with Core-Periphery divergence and slow growth. 4. Doomsday scenario (worst case scenario – threats) (A) The “new-new” virtual members versus EU28. (B) The “Turkish” scenario with quasi disintegration. (C) Over-extension with missing reforms and zero growth. Third, the global environment plays a big role in deciding the future of the EU28 until 2020. The EU alternative futures in 2020 are basically influenced by the different ways of overcoming the present global crisis from the different starting periods of this decade. The various exit strategies are alternative responses to the global crisis as (C) Exit strategies as Responses to Global Crisis (2014): (1) Radical reform with a creative crisis (new Federative Europe). (2) Partial reform with Core-Periphery divergence and slow growth. (3) Weak reform with deep divergence and sluggish growth. (4) Over-extension with missing reforms and zero growth. These alternative futures are analytical devices that can indicate the move from boring to daring, i.e. from the status quo thinking to the new brave vision. In fact, the best case scenario (Headstart) and the worst case scenario (Doomsday) are polar scenarios or positive and negative ideal types that outline only the frames within which the future itinerary of the EU may be designed. Headstart scenario is a scenario achieving the greatest success with a relatively quick convergence and homogenization in the EU28. It is based on the success of the creative crisis and on the quick global recovery. Accordingly, the EU as the civil superpower could be the trendsetter in the global governance of the post-crisis world. On the other side, the Doomsday scenario is based on the “zero growth model” or on the stagna- “historical-geographical patterns”. Finally, (C) these scenarios can also be described as alternative responses to the global crisis, since this adjustment to the global environment as exit strategy plays a big role in deciding the future of the EU28 until 2020. As pointed out above, first these alternative scenarios have to be distinguished according to their dominating deep divides among the member states (MS) in general and/or between the old (OMS) and the new member states (NMS) in particular. The dominant cleavage line as the main controversy is basically different in the diverging scenarios. If the key drivers are properly discovered, then the alternative futures can properly be described as (A) The Main Types of the Deep Divides in the EU28: (1) The good performer MS as drivers versus laggard MS. (2) The big MS as drivers versus the small MS. (3) The pro-integration MS as drivers versus eurosceptic MS. (4) The “new-new” virtual members versus EU28. 36 KadarKrisztian_16_belivek.indd 36-37 37 2013.01.18. 19:05 tion of the European economy leading slowly to the quasi disintegration of the EU. In this case, the EU as global actor has to face quickly declining influence in the global arena. Both polar scenarios are very helpful as analytical devices but they are unlikely, although from time to time too high expectations have still been echoed about the EU’s leading global role (Leonard, 2006 and Hill, 2010), or, at times of deepening crisis – starting from the spring 2010 euro crisis - the Doomsday scenario has been set in motion, as the favourite idea of “the European Union is dying” in the Anglo-American press (see Thies, 2012). 2. Two realistic — hard and soft — scenarios for the EU28 The two polar, “hard” scenarios as positive and negative ideal types indicate the main directions of the Alternative European Futures. Their softer varieties – Core Europe and Fragmented EU - show the opposite tendencies in the combined scenarios. Indeed, the future may be some kind of combination of the two polar scenarios, depending on the strength of the various factors described above. These two soft, realistic scenarios can also be described in the terms of integrative balancing as the workings of the “Convergence Machine” (Gill and Raiser, 2011), i.e. as worsening or improving in the Core-Periphery relations in the EU. They may also be called the Rocky Road or the Bumpy Road scenarios as special implementations of the Fragmented EU and the Core Europe scenarios. The Fragmented EU scenario (Rocky Road) is based on the “L model” in the European economy with very slow recovery that can produce long recession in the South, eventually also in the East. It indicates partial disintegration, first due to the former long hesitations in crisis management, and later due to the sluggish implementation of the EU2020 long-term strategy as well as to the failures of completing the new European architecture. Consequently, for policy memberships this partially negative scenario predicts the marked “sectoral” divergences and deep disintegration in many policy fields, although policy divergences provoke sectoral integrations by some willing states in these “neglected” policy fields. If the “no crisis-no solution” stalemate situation becomes too long, then in many policy fields the like-minded member states will decide to choose enhanced cooperation structures and will go ahead in closer policy cooperation as an ad hoc coalition of the MS concerned. The continued convergence and increasing coherence can be kept in some vital policy fields (“Common Market”) but the policy disintegration will dominate in the new key policy fields. Policy-wise or sectorally the Fragmented EU scenario means that 38 KadarKrisztian_16_belivek.indd 38-39 the euro-zone will divide the EU for a long time, and within the euro-zone there will be also deep divides. The divergences in the EU may be “sectoral” (policy) or “regional” (institutional) depending on whether a group of neighbouring countries takes the escape road of “enhanced cooperation”, or some countries - even if they regionally do not cooperate - use this method in a particular policy field. Otherwise, the fragmentation may not go necessarily along the lines of the macro-regionalization, since not all policies with the efforts for deepening are the same in a virtual or actual macro-region. The differentiation between/among the MS may emerge along the lines of sectoral integration as a set of different memberships at various policy levels like the Schengen Area etc. The mildest version of fragmented membership is this policy-wise differentiation, but when these policy memberships become strongly diverging, then these increasingly diverse sectoral memberships will generate various institutional memberships as well. Institutional memberships have two forms, namely first in the main development directions between the North, South and East regions, and second, in the functional macro-regional memberships like the Danube Strategy. These kinds of diverging policy and institutional memberships may also show some positive features, and as a result, polity-wise the defensive macro-regionalization will appear as the deep structural feature of the EU. Both the sectoral divergences and the internal macroregionalization will lead to the Multi-Speed or Two-Speed Europe in various policies, as and overdriven form of differentiated membership through the deep fragmentation. The Fragmented EU scenario due to the paralysing effects of the battle between prointegration and anti-integration MS will be earmarked by some institutional and policy failures, offering only a Rocky Road to a weak Cohesive Europe. It is predicting partial disintegration or fragmentation, as an unhappy mixture of divergences and convergences within the EU, in a word, an internally weak Cohesive Europe without the necessary policy cooperation and coherence. The EU can be hurt in its internal cohesion and homogenization if the EU2020 fails generating policy reforms for regaining the strength and global competitiveness of the EU. The poor crisis management and missing basic reforms for the EU2020, including the sluggish implementation of Lisbon Treaty (LT) and the new “Pacts”, coupled with the insufficient financial support for the new union policies may produce a relative decline of the EU global competitiveness. Consequently, the EU as global actor can also be paralyzed with conflicts in its close neighbourhood e.g. by the disturbances of its energy supplies and/or by the protracted civil wars. 39 2013.01.18. 19:05 The Core Europe scenario presupposes a basic convergence and increasing coherence in the EU. It can be the relatively short historical itinerary to the “Federation”, but it is still a Bumpy Road to the Cohesive Europe. The basic conflict may emerge due to the overreaction of big states with their concentrated power and re-emerging economic nationalisms pushing for a Competitive Core Europe for a long time by neglecting the unfolding deep conflict with the Southern and Eastern Periphery. This relatively successful Cohesive Europe still means that the EU as global actor can withstand the tough competition in the conflicting multi-polar world. It produces cautious optimism within the EU about the takeoff with a multi-speed global recovery, so despite the enduring crisis the opportunities seem to be stronger than weaknesses. Altogether, after the global crisis the programme “Making Europe Work” - as the title of the European Policy Centre (EPC) project indicates – is high on the agenda in the EU (Martens, 2010 and Dhéret, 2011). The New European architecture, however, has to be completed even after the LT in order to give a chance for the implementation of the EU2020 in the take-off period after 2014. The Core Europe scenario with partial success and “opportunities” it can produce the desired indicators of social progress at much slower rhythm with big delays and more controversial features in the above fields than the Headstart scenario. The Core Europe scenario depends basically on a rather deep reform in the classical policy areas of growth and jobs, with a better integration of the new union (community) policies and with the improvement of their budgeting as it has been envisaged in the latest “Pacts” or “Compacts” (European Council, 2012e,f ). However, there is a big risk in this scenario. If the economic nationalism as a perverse reaction to the global crisis becomes durable, then it may unleash a counterweight reaction. Namely, if the Franco-German rapprochement as an engine is so intensified that it creates an exclusive bilateral system of cooperation, as a reproduction of the Charlemagne Empire, then the integration in general slows down (see the small and big MS controversy). If these strong EU member states – arguing with the necessity of the transformation crisis management - organize a directoire, then other member states might also look for their own “regional” solutions. The desire of the strong big states to continue or even strengthen their dominant role may still be some threat for the common future of the EU28. As a result, there might be a Europe of the institutionalized regional diversity, above all with the growing tension between North and South in the EU (The Economist, 2011), instead of overcoming the economic differences through conscious political actions and having tolerance for the socio-political and cultural differences (Magone, 2011b, see also 2011a). 40 KadarKrisztian_16_belivek.indd 40-41 No doubt that the efforts for the big states dominance will be mostly leading to the regulated internal regionalization within the EU, following the model of the Nordic countries that can still be the positive side of differentiated membership. A new checks and balances system may emerge, i.e. balancing the EU not only in its central institutions but also “regionally”, by distancing the big regional units from each other. This might actually generate the partial decomposition of the EU to the five worlds of the regional - Nordic, West-Continental, Mediterranean, Central European and Balkan – regimes, although EU institutions might still hover above them as relatively well regulated functional metasystem. This is not a disintegration situation but a transparent, balanced, institutionalized and legitimate structuring process, through which the relationships within the regions would be intensified as stable coalitions, and among them some common interests would be formulated and represented at the EU level. This regionalized EU could still be relatively successful in competing within the global arena, but it would be a much looser organization, in which the solidarity principle might be applied more and more within a region, to a smaller circle of neighbouring countries than in the EU as a whole. The genuine idea of the EU has been based on overcoming the short-term national interests by accepting the well-considered long term transnational interests. The EU will still be competitive with the BRICs, since the reactions to the global crisis have intensively pushed into this direction of half-made reforms, which will produce less than a real creative crisis. Albeit this scenario would only be a half-success of the genuine idea of the European integration, it still shows that the rash to the Competitive Europe at the price of neglecting the Cohesive Europe, and the angry reaction against the growing diversity - that has been emerging in the big states - can partly derail the EU. These more realistic scenarios with opportunities and weaknesses outline the main alternative itineraries for the next years. All in all, in 2013 both the Bumpy Road to a stronger Cohesive Europe and the Rocky Road to a weaker Cohesive Europe are still on the horizon for the EU28. Therefore, the any decision can only be a Pyrrhic victory if it leads to the Rocky Road with the deep divide between the Core and Periphery in Europe: “On both sides, an increasing national focus and a rise in populism as well as anti-EU sentiment are evident in all parts of society. The EU is more and more perceived as a problem. The weakest hold that the EU, and especially core countries in the euro zone, are imposing too much on them and asking too much from them.” (Emmanouilidis, 2011:13, see also 2010). 41 2013.01.18. 19:05 II. Alternative European Futures in NMS (2020) 1. Alternative Futures for NMS as types of integrative balancing The developments of the NMS group depend first of all on the fate of the EU28 in general. The four scenarios presented above can also be characterized in the NMS group by the symbolic names like Sleeping Beauty, Hopeless Latecomer, Decent Cinderella and Eternal East. The first scenario is the ideal type with all quick successes (Sleeping Beauty). The second one contains the minor successes and the major failures, mixed in a partially negative scenario with an uncertain future (Hopeless Latecomer). In the third scenario the major successes are combined with minor failures, thus it is partially positive scenario (Decent Cinderella). Finally, the fourth one is the negative ideal type with all the failures leading to decline and disintegration in the “East” (Eternal East). This matrix will be analyzed in the NMS as a region, since these countries are more or less in the same EU membership situation. Thus, the specific SWOT features of the NMS can be briefly summarized as follows: • The Sleeping Beauty scenario could be applied to the NMS, if the EU provides all means for catching up and the NMS are able to improve their institutional and policy performance significantly. Both Europeanization and Democratization show up significant progress. Thus, homogenization-convergence dominates but leaves way also for the proper differentiation as the optimal way of the EU accommodation, in such a way integrative balancing works well and leads to a real Cohesive Europe in this decade. • The Hopeless Latecomer scenario could be applied to the NMS, if the EU reduces drastically the catching up support and also the increasing domestic populism and/or Euroscepticism slows down significantly the socio-economic Modernization. In this case both Europeanization and Democratization are weakened, and the differentiation or divergence between/among the member states comes to the fore by damaging harmonization and convergence. Thus, integrative balancing will be reduced to the minimal compensation through a poor cohesion policy that will produce a weak Cohesive Europe as a Fragmented Europe. • The Decent Cinderella scenario could be applied to the NMS, if the EU offers significant catching up resources – but below the optimal – and the NMS are also moving to 42 KadarKrisztian_16_belivek.indd 42-43 a higher performance stage, although it is still below the EU expectations and domestic demands. Under the global and the EU pressure the “external” Europeanization shows up some progress, while the “internal” Europeanization - the DemocratizationModernization - lags somewhat behind. Thus, homogenization-convergence still dominates but the proper differentiation as the optimal way of the EU accommodation has not yet been reached. The integrative balancing is incomplete because the big powers in the EU transnational bodies in the spirit of the Core Europe scenario will be pushing mostly for the competitiveness of the Core. In this delayed case of Cohesive Europe a relatively successful catch-up of the NMS can still take place. (4) The Eternal East scenario can be applied to the NMS, if the EU is not ready or able to support the catching up exercise and/or the domestic process of consolidation turns to the deconsolidation process in the NMS. In this case both Europeanization and Democratization processes are blocked, since differentiation turns to deep fragmentation, and the further harmonization or convergence is reduced to minimal or to nil. Thus, the NMS fall into a vicious circle and the efforts for Cohesive Europe is doomed to fail in a Disintegrated/ Disunited Europe, since integrative balancing could not and would not work. Here just some common basic tendencies in the NMS states can be indicated, without dealing with their special national profiles. The prospects of the NMS states depend very much on their internal developments in general, and on the success of their own exit strategy in particular. It is still an open question whether the NMS states follow - separately or in common - the W (restart), L (slow recovery) and 0 (or zero) models. These scenarios are very useful by summarizing the threats and opportunities, as well as the strengths and weaknesses in the matrix forms that has been a common exercise in all NMS analyses. Also in the case of the NMS states the polar scenarios have only served as the analytical devices indicating the general frames, in such a way the two realistic scenarios can be used for a detailed analysis. The two realistic EU scenarios in the specific case of the NMS group are the Rocky Road and the Bumpy Road. The real perspectives are whether the NMS are pushed to the longer Rocky Road with heavier conflicts, or they able to take the shorter Bumpy Road with lighter conflicts, mentioned above as the Hopeless Latecomer and the Decent Cinderella scenarios. First, the NMS can move along the painful Rocky Road, which leads to a gradual fragmentation of the EU and to the increasing divergence not only in GDP per capita or 43 2013.01.18. 19:05 in the socio-economic terms damaging social progress by internal social fragmentation decreasing social capital as cooperation capacity, but also in the socio-political terms that produces growing social and national populisms with strengthening extremist parties, damaging democracy even more. In this case the implementation of the EU2020 with policy coherence between economic, social and territorial policies will be sluggish with major tensions in the EU28, as well as between/among sectoral policies. Cohesion policy will not be able to serve properly as a bridge between the general criteria of the EU2020 and the NMS structural reforms. Thus, if the main bridge of cohesion policy is too narrow between Core and Periphery, then the long and painful Rocky Road to the Cohesive Europe remains the only opportunity. It means in the larger context of the NMS that the enlargement/widening perspectives will also be significantly worsened. If the NMS move along the Bumpy Road, then there can be a gradual homogenization of the EU not only in GDP per capita or in the socio-economic terms but also in the socio-political terms approaching to the EU average closer to the new indicators of social progress. This cautiously optimistic scenario based on the continued integration and the relatively successful realization of the EU2020 with some coherence between economic, social and territorial cohesion. The centrality of a European perspective in concrete terms means for the NMS embracing the EU2020 with its “three mutually reinforcing priorities” as the smart, sustainable and inclusive growth, indicating social progress. But this general EU28 Strategy has to be adjusted to the special situation in the less developed member states that try to coping with their own exit strategy and facing the new pressure of “running ahead” strategy of the “Pact designers” towards the new European architecture. Basically, it is the renewed cohesion policy that bridges the gap between the EU2020 and the national catching up efforts, or between the external and internal Europeanization. Hence, there is a need for a “feasibility study” to elaborate the entire arch of policy universe from the EU2020 to the National Reform Programs of the NMS. Altogether, the present situation in the NMS is that after the financial, economic, and political stages, the global crisis has recently reached the stage of social crisis. The social crisis with the increasing unemployment has produced a drastic relocation of social conflicts to the political level in the form of the aggressive social and national populisms. Conversely, the social crisis has to be dealt with a sense of urgency, since the NMS need radical reforms also in their own economic governance. Paradoxically, however, people are already fearful of any change, suffering from reform fatigue. Therefore, the populations of the NMS have 44 KadarKrisztian_16_belivek.indd 44-45 currently been deeply frustrated and hungry for success, although it has been of prime importance how much they feel and act as EU citizens. They have usually been caught in the cognitive dissonance with increasing malaise about the EU membership but still supporting the further EU integration and domestic Europeanization. Moreover, they have deep dissatisfaction with the results of the two decades of systemic change, although they are still supporting Democratization. In the last analysis, the centrality of a European perspective for the NMS turns out from all public opinion surveys as well. 2. Europeanization and Democratization as the main drivers in the NMS The detailed analysis of the two realistic scenarios has to start with a closer look at the short historical overview of the NMS. In the early 2010s the NMS group has suffered from the series of “triple crisis”, since in the early nineties the NMS had their own special crisis in democratic transition then in the mid-2000s the “post-accession crisis”, followed by the global crisis (Ágh, 2010a and 2012e). This closer analysis of the EU perspectives for the individual NMS countries presupposes the twin conceptual framework: Europeanization and Democratization as the evaluation of both the external and the internal reform drivers in the Alternative Futures Scenarios. Both have to be analyzed in a more general context, namely against the background of Globalization and Modernization respectively. The EU membership demands have put the NMS on the orbit of Europeanization that has also produced deep changes in Democratization, and vice versa. In this process Europeanization can produce strong or weak Democratization, and in its feedback Democratization can generate “thick” or “thin” Europeanization. In the first period - until the entry - there was an “anticipatory Europeanization”, and in the second period an “adaptive Europeanization”, in such a way the “general Democratization” was followed by the “EU-specific Democratization” in the NMS starting with the Copenhagen criteria. There have recently been several efforts to make a systematic overview of Democratization in the so called “Central and East European countries” (CEEs). The usual typologies distinguish between the “established” democracies in East-Central Europe (ECE) and the “hybrid” democracies in Eastern Europe proper (see Linde, 2009a). The ten NMS consist of two groups, the ECE and the Balkan states. Joergen Moller and Svend-Erik Skaaning have prepared a theoretically informed typology, a systematic and encompassing ordering of the post-communist political regime forms with special reference to the Bertelsmann Transformation Index (BTI) as a coherent framework: “First, the seven liberal democra45 2013.01.18. 19:05 cies and polyarchies are all situated in East-Central Europe, when this region is constructed as including the Baltic countries. Second, five of seven electoral democracies are to be found in the Balkan Peninsula. Third, three out of six minimalist democracies inhabit the Western part of the former Soviet Union. Fourth, and finally, six out of seven autocracies are situated in the Caucasus or Central Asia.” (Moller and Skanning 2010:64). In the NMS the systemic change has taken place in three major subsystems, in the socioeconomic, the socio-political and the EU systemic transformations with their very different timescales. Altogether, the Europeanization-Democratization criteria of the NMS are as follows in their historical sequence: (1) inclusion (versus exclusion) – the socio-economic developments as the cohesive social system with participatory society and democracy; (2) consolidation (versus deconsolidation) - the socio-political developments as the well performing democratic system with good governance; (3) effective membership – (versus formal-legal) – as the smart EU catching up process or complex, sustainable social progress with strong competitiveness within the EU. This matrix can be analyzed in the participatory democracy, good governance and sustainable membership terms. Actually, in the Europeanization cum Democratization process the institution-transfer and policy-transfer are the key adjustment processes of Europeanization in the NMS, in such a way the full content of Democratization may only be discovered through the comprehensive analysis of the Europeanization in the institutions and policies. First, according to these combined Europeanization-Democratization criteria, the complex process can be described in the terms of inclusion-exclusion, or in the more general meaning, as participative-integrative versus exclusivist-elitist socio-economic developments. There has been a dual – economic and political – challenge from the very beginning of systemic change in NMS. The NMS could have developed an inclusive, cohesive society with participatory democracy or a fragmented society with formalist democracy, depending on the social outcomes of the economic transformation process. In fact, given the controversial process of socio-economic exclusion in NMS, socio-economic developments did not generate a participatory society with a substantial, participatory democratization. Accordingly, the EU institution transfer led only to the “procedural Democratization” that has to be understood first of all in the institutional-administrative dimension. The socio-economic process can also be analyzed “quantitatively” because some countries have been more, and some other countries less successful in the catching up process in the GDP based economic terms or in much wider socio-economic terms 46 KadarKrisztian_16_belivek.indd 46-47 (progressing – backsliding). Although the recurring crises have changed the external conditions a lot, still the catching up is the biggest effort of the NMS, but the social fragmentation has become its main hindrance. The latest EU discussions on the global crisis have been heavily dominated by the economic reports on the euro-zone in general and in the South in particular (“Europe’s diverging economies: Northern lights, southern cross”, The Economist, 2011). The NMS socio-economic situation has been largely marginalized in these debates, but the basic data and evaluation have still been available on Eurostat and other databases. Second, the socio-political transformations could have led later to the consolidation of democracy in socio-political terms depending on to what extent the participatory democracy may emerge as political system, as an outcome of the radical changes in the social structure. Namely, as in the case of institution transfer, the EU policy transfer with more detailed measures and agenda settings should have produced the process of “performance Democratization” resulting in good governance-based new political system. It has hardly taken place so far either, since the negative process of the missing or weak social consolidation have prevented the complex democratic consolidation based on the well working, horizontal and vertical public administration structures with their “partnership triangles”. Hence, nowadays the main internal tension in the NMS still appears between the formal-procedural and the substantive-performance aspects of Democratization and Europeanization. Indeed, in the 2000s already most people accepted that at formal-legal level there was an EU-type democratic order in their country concerned but they considered that it worked at a low performance (Forsense, 2009 and Pew Foundation, 2009). Democratization means here creating a new system in the holistic terms of the common economic, political and social consolidation. Or, in the negative case of the deepening socio-economic and political exclusion, weak democracy with bad governance and high corruption leads to the systemic deconsolidation (Transparency International, 2012a,b,c). However, the consolidation as a complex socio-political system appears not only domestically, but also transnationally, and the NMS countries differ in their EU integration strategy to a great deal. The more pro-integration countries have been more “converging” with the EU mainstream developments and consolidating their position in the EU, while some others have been closer to the “Europe of nations” group. They have been more “diverging” from the “ever increasing” integration, since they have emphasized their relative independence and they have deconsolidated their position in the EU, too. In general, even within the 47 2013.01.18. 19:05 EU, the EU membership is a process with the increasing or decreasing efforts for participation in several EU policies and institutions as policy and institutional-regional memberships (Schengen, euro etc.). Third, the character of consolidation (as the quality of democracy) decides the EU membership type that, finally, can be also expressed in the Europeanization terms of formallegal versus effective-competitive membership. The “reduced”, less effective, formal-legal democracy with bad governance produces a “thin”, low profile Europeanization, or it can be a “comprehensive”, high performing democracy with an “effective” EU membership and satisfactory performance in good governance as a thick” Europeanization. In the EU adjustment process the NMS has to reach at least the “minimal” EU compatibility for the formal-legal membership. They can stay at this minimal level of membership or they can aim at the “maximal” EU membership as the competitiveness within the EU as the “effective membership” as mentioned above. The NMS countries are not yet competitive in the EU as an “effective membership”, since after their formal adoption they have been mostly reluctant to follow and implement the EU level regulations. ters as the complete Europeanization. Therefore, a strict distinction has to be made between the narrow, legally enforced EU adjustment and the broad, social progress based Europeanization, or between the simple “EU-ization” in formal-institutional terms and the real, complex and deep Europeanization in socio-political terms. These scenarios been called above “thin” and “thick” Europeanization, or can be even called “facade Europeanization” and substantial Europeanization. Actually, thin Europeanization has only been combined with formal, thin Democratization, while thick Europeanization with substantial, thick Democratization. Otherwise, in the EU as a whole this distinction between the formal and the substantial integrative processes applies between the merely legally united Europe and the Cohesive Europe, united deeply in socio-economic and socio-political terms. Altogether, the Europeanization-Democratization criteria of the NMS - with its positive or negative reinforcing processes, its virtuous or vicious circles - can lead both to the catching up process and to the peripherialization. Nowadays, the future is still open. Conclusions: The workings of the “Convergence Machine” All in all, the capacity of the member states to influence the common decisions is rather different in the EU policy-making process. Effective membership means also that the given member state has the capacity to influence the EU decisions, whereas in the case of formal membership the weak states have been marginalized in the decision-making process. These basic Europeanization criteria of the compatibility and competitiveness can be paralleled, again, with the basic Democratization criteria of formal-procedural and substantive-performance Democratization, since they can have the formal-legal compatibility with the EU but without the proper competitiveness within. In the last analysis the NMS countries have not been able to reach the level of sustainable social progress, quite to the contrary, their historical itinerary in the EU has proven to be unsustainable and the global crisis has drastically aggravated their position. In this paper I have identified democracy, governance and sustainability deficit in the EU due to its very specific historical development, as the EU in the permanent process “in the making”. These deficits have been reinforced by the global crisis and they have to be overcome by the transformation crisis. It is not by chance that by introducing the Road Map for the stronger economic governance (“Banking Union”) the December 2012 EUCO Conclusions (2012f: 5) have emphasized at the same time the strengthening the democratic legitimacy of the EU and the member states in this process: “Throughout the process, the general objective remains to ensure democratic legitimacy and accountability at the level at which decisions are taken and implemented. Any new steps towards strengthening economic governance will need to be accompanied by further steps towards stronger legitimacy and accountability.” Thus, these basic processes of Europeanization and Democratization can reinforce each other or they might have also turned against each other. The contradictions and tensions between Europeanization and Democratization in the NMS appear as a split or deep asymmetry between their “external” and “internal” Europeanization. Europeanization can only be high on the agenda externally, in all directly EU related institutions and policy fields as “EU-ization”, although significantly lagging behind domestically, in all “internal” mat- No doubt that these complex deficits have appeared much more drastically in NMS that has generated a deeper Core-Periphery Divide than ever before (Ágh, 2012e). After the first years of transformation crisis the EU itself has to make the move from the Competitive Core Europe to the Cohesive Europe in order to re-unite the EU after the global crisis. Yet, the removal of these deficits is a separate regional program at the NMS level with the effort of the member states concerned. 48 KadarKrisztian_16_belivek.indd 48-49 49 2013.01.18. 19:05 These deficits can be summarized as a complex democracy deficit, or backsliding of democracy in all aspects of participation, good governance and the sustainable social progress. The way out of the transformation crisis is to remove these deficits at the EU level as overcoming the democratic, governance and sustainability deficit. These deficits are altogether a complex, or comprehensive democracy deficit, in which the democracy deficit in narrow meaning means the illness of participatory democracy that produces the governance weaknesses and finally results in the lack of sustainable social development. By now, this tendency in NMS has become “the cause of preoccupation” for the EU: “By 2007, countries like Poland, Slovakia, Hungary and Czech Republic appeared to take a ‘populist turn’, suddenly calling into question the hitherto linear reading of democratisation: which presumed a cumulative and irreversible progression of the CEE democracies from transition to consolidation. Fast-forwarding to the present day, against the backdrop of the crisis, the incidence of threats to the EU’s democratic principles and values has increased (…) Recent political events in Hungary and Romania have made it all too clear that democratic achievements are reversible and there is not much the EU can do when backlashes happen.” (Balfour and Stratulat: 2,4). The NMS countries have to make serious efforts to turn back this anti-democratic trend, which preceded the aggravation of their situation due to the global crisis, but they could not continue the catching up process without overcoming the democracy, good governance and sustainability deficit on their own. At the historical crossroad when laying the foundations for the next long-term strategy, the EU has to make a clear statement about the Alternative European Futures. The EU has produced a heavy sustainability deficit because there can be no return to the pre-crisis situation, and no return to the former model of economic growth either, but the decision has not yet made about the future. The situation has still been unclear so far with mixed results and mixed feelings, since the move to the Federative Europe has provoked criticism from several member states, and has met tough resistance from the UK. In elaborating the vision about the Future Europe, the EUCO and the Commission have done a good job of suggesting new ideas and the EP and the national parliaments have tried to balance in its stance between peoples and governments (Kaczynski, 2011). However, no basic compromise has been reached by the late 2012 and the situation is far from optimal with an uncertain fate for the European project. The latest debates and events have just caused an open war of words between the MS, basically with the UK, which has been not ready to endorse any initiative for a more integrated Europe. It is true, however, that the EU has 50 KadarKrisztian_16_belivek.indd 50-51 suffered a big “earthquake” (Hill, 2012) and as a result, “Between the summers of 2011 and 2012 the political discourse on EU integration changed dramatically. (...) Now, the old debate about a ‘Political Union’ (...) is back.” (Janning, 2012: 1). The Convergence Machine of the EU, as the World Bank analysis termed it (see Gill and Raiser, 2011), has been based on the model of Social Europe that worked rather well in the EU until the outbreak of the global crisis. But in 2009-2012 the stress test has failed and there has been a breakdown instead of a breakthrough under the pressure of the global crisis. Parallel, however, the EU has gone through a creative crisis, and it has changed to a great deal by the end of 2012. The EU has always developed through the successive crises, and this time the overcoming of the recent transformation crisis may take place in two stages, at present focusing still on the exit strategy, and in 2014 the new take-off period can start. Thus, in the late 2012 the following conclusions may be very briefly drawn about the Future Europe through the lens of NMS: First, the EU is still in the midst of the global crisis management, but moving to the transformation crisis management. It may be consolidating the strong economic governance and the euro-zone in 2013 by building up a new system of institutions as a quasi “Fiscal Union” and this Road Map leads even to some kind of a “Political Union” (EUCO Conclusions, 2012e). Second, the situation is even more difficult in the NMS, since they have suffered more from the global crisis than the OMS, so overcoming the crisis is also a longer process in NMS, but the “East” still seems to be in a better condition than the “South” (Magone, 2011b and Couloumbis et al). Third, the crisis management focuses now on the Competitive EU, but in the next, takeoff period it has to concentrate on the Cohesive EU, since the EU cannot remain competitive “externally” for a long run without being cohesive and inclusive enough “internally” (EUCO Conclusions, 2012f ). References Ambrosetti Foundation (2009, 2010, 2011) Observatory on Europe 2009: Improving European Integration and Competitiveness. Brussels: The European House 51 2013.01.18. 19:05 Ágh, Attila (2010a) “Post-Accession Crisis in the New Member States: Progressing or Backsliding in the EU?”, Studies of Transition States and Societies, Vol. 2, Issue 1, pp. 74-93 Ágh, Attila (2010b) “Regionalisation as a driving force of EU widening: Recovering from the EU ‘carrot crisis’ in the ‘East’”, Europe-Asia Studies, Vol. 62, Issue 8, October 2010, pp. 1239-1266 Ágh, Attila (2010c) “Democratic Consolidation or Backsliding in East Central Europe: Rediscovery of the Past Twenty Years of the ‘Lands in Between’”, in Riedel, pp. 117-141 Ágh, Attila (2011a) “Regionalising the EU’s neighbourhood: Planning the Global Role for the Trio Presidency, in Fabry (ed.) pp. 243-249 Ágh, Attila (2011b) “The European Futures and Cohesive Europe: EU2020 Strategy and cohesion policy with flexible integration”, Journal of Comparative Politics, Issue 6, July 2011, pp. 49-66 Ágh, Attila (2011c) “Cohesion Policy and the Europe 2020 Strategy: Constructing the EU for the next decade”, in Ágh (ed.), pp. 15-70 Ágh, Attila (2011d) “Regional competitiveness of the EU in the global context: EU developments from regional policy to cohesion policy”, in Ágh (ed.) 2011, pp. 291-337 Ágh, Attila (2011e) “Danube Strategy and Europe 2020 Strategy: The organic link between the bottom-up and top-down EU projects”, in Ágh, Kaiser and Koller (eds), pp. 10-54 Ágh, Attila (2012a) “Global Governance and Integrative Balancing: EU Efforts to Respond to the Global Challenge”, Journal of Global Policy, Vol. 3, Issue 2, pp. 145-153, May 2012, http://onlinelibrary.wiley.com/doi/10.1111/gpol.2012.3.issue-2/issuetoc, first published online 22 May 2012 Ágh, Attila (2012b) “The Socio-Economic Crisis and Social Polarization in Hungary: The Paradoxes of the European Integration Process”, in Sonja Schüler (ed.) Politische Kultur in (Südost-) Europa, Munich: Verlag Otto Sagner, pp.59-85 Ágh, Attila (2012c) “The Hungarian Rhapsodies: The Conflict of Adventurism and Professionalism in the European Union Presidency”, Journal of Common Market Studies, The JCMS Annual Review of the European Union in 2011, pp. 68-75. First published online: 10 April 2012, http://onlinelibrary.wiley.com/journal/10.11 11/%28ISSN%291468-5965/earlyview Ágh, Attila (2012d) The Perspectives of Danube Strategy in the EU28: The challenges for the ECE-WB interregional cooperation, http://events.uaces.org/documents/papers/1201/ agh.pdf 52 KadarKrisztian_16_belivek.indd 52-53 Ágh, Attila (2012e) The triple crisis in the New Member States: Decline in democracy, good governance and competitiveness, Budapest: Together for Europe Research Centre, the early version already available at http://www.feps-europe.eu/en/news/316_reporton-democracy-freedom-and-liberty-in-central-and-eastern-europe Ágh, Attila and Alexandra Ferencz (eds) (2006) Deepening and widening in an enlarged Europe: The impact of the Eastern Enlargement, Budapest: Together for Europe Research Centre, p. 396 Ágh, Attila (ed.) (2011) European Union at the crossroads: The European perspectives after the global crisis, Budapest: Together for Europe Research Centre, p. 337 Ágh, Attila, Tamás Kaiser and Boglárka Koller (eds) (2011) The New Horizons for the Cohesion Policy in the European Union: The Challenge of the Danube Strategy Budapest: Together for Europe Research Centre, p. 229 Balfour, Rosa and Corina Stratulat (2012) The enlargement of the European Union, EPC Discussion Paper, 10 December 2012, http://www.epc.eu/documents/uploads/ pub_3176_enlargement_of_the_eu.pdf Becker, Torbjörn et al. (2010) Whither growth in central and eastern Europe? Policy lessons for an integrated Europe, Bruegel Blueprint Series Volume XI, p. 143, www.bruegel. org Best, Heinrich (2009) “History Matters: Dimensions and Determinants of National Identities among European Populations and Elites”, Europe-Asia Studies, Vol. 61, No. 6, pp.921-942 Bideleux, Robert (2009a) “Introduction: Reconstituting Political Order in Europe, West and East”, Perspectives on European Politics and Society, Vol. 10, No. 1, pp. 3-16 Bideleux, Robert (2009b) “Rethinking the Eastward Extension of the EU Civil Order and the Nature of the Europe’s New East-West Divide”, Perspectives on European Politics and Society, Vol. 10, No. 1, pp. 118-136 Blockmans, Steven (2012) A Nobel Peace Prize to revive the EU enlargement process, European Neighbourhood Watch, Issue 87, November 2012, http://www.ceps.eu/ system/files/simplenews/2011/05/NWatch87.pdf Börzel, Tanja (2010) “European Governance”, Journal of Common Market Studies, Vol. 48, No. 2, 191-219 Bresser-Pereira, Luiz Carlos (2012) “The global financial crisis, neoclassical economics, and the neoliberal years of capitalism”, Revue de la regulation, Spring 2010, http://regulation.revues.org/7729?&id=7729 53 2013.01.18. 19:05 Bretherton, Charlotte and John Vogler (2010) The European Union as a Global Actor, London and New York: Routledge, p. 273 Bútora, Martin, Grigorij Meseznikov and Miroslav Kollár (eds) (2010) Trends in Quality Democracy: Slovakia 2009, Bratislava: Institute for Public Affairs, p. 174 Case, Holly (2009) “Being European: East and West”, in Checkel and Katzenstein (eds) Cerami, Alfio and Pieter Vanhuysse (2009) “Introduction: Social Policy Pathways, Twenty Years after the Fall of the Berlin Wall”, 1-14, in Cerami and Vanhuysse (eds), available http://www.palgrave.com/PDFs/9780230230262.pdf Cerami, Alfio and Pieter Vanhuysse (eds) (2009) Post-Communist Welfare Pathways: Theorizing Social Policy Transformations in Central and Eastern Europe, Basingstoke: Palgrave Macmillan, p. 289 Charron, Nicholas and Victor Lapuente (2009) Does Democracy Produce Quality of Government? QoG Working Paper Series 2009:1 (The QOG Institute, University of Gothenburg, Quality of Government), http://www.qog.pol.gu.se/working_papers/2009_1_Charron_Lapuente.pdf Charron, Nicholas, Lewis Dijkstra and Victor Lapuente (2010) Mapping Quality of Government in the European Union, QoG Working Paper Series 2010:22 (The QOG Institute, University of Gothenburg, Quality of Government), http://www. qog.pol.gu.se/working_papers/2010_22_Charron_Dijkstra_Lapuente.pdf Checkel, Jeffrey and Peter Katzenstein (eds) (2009) European Identity, Cambridge University Press Chopin, Thierry, Jean-Francois Jamet and Francois-Xavier Priollaud (2012) A Political Union for Europe, Fondation Robert Schuman, 24 September 2012, http://www. robert-schuman.eu/doc/questions_europe/qe-252-en.pdf Closa, Carlos (2010) Differentiated integration and Flexibility in the EU under the Lisbon Treaty (ARI), 26 April 2010, http://www.realinstitutoelcano.org/wps/portal/rielcano_eng/Content?WCM_GLOBAL_CONTEXT=/elcano/elcano_in/zonas_in/ europe/ari77-2010 Colignon, Stefan (2012) Economic growth and competitiveness: a Franco-German tale, September 2012, Bertelsmann Stiftung, http://www.bertelsmann-stiftung.de/cps/ rde/xbcr/SID-F9D034AA-E2052E8B/bst/xcms_bst_dms_36629_36631_2.pdf Cramme, Olaf (ed.) (2010) Rescuing the European project: EU legitimacy, governance and security, London: Policy Network, www.policy-network.net Couloumbis, Theodore, Andrea Dessi, Thanos Dokos, Paulo Gorjao, Ettore Greco, Dimitris Katsikas, Charles Powell, and Dimitris A. Sotiropoulos, Southern Europe 54 KadarKrisztian_16_belivek.indd 54-55 in Trouble (2012) Domestic and Foreign Policy Challenges of the Financial Crisis (GMF/IAI, Mediterranean Paper Series 2012), http://www.ipris.org/php/download.php?fid=747 Darvas, Zsolt and Valentina Kostyleva (2011) The Fiscal and Monetary Institutions of CESEE Countries, Bruegel Working Paper, 2011/02, p. 36, www.bruegel.org Darvas, Zsolt, Christophe Gouardo, Jean Pisani-Ferry and André Sapir (2011) A Comprehensive Approach to the Euro-Area Debt Crisis, Bruegel Working Paper, 2011/05, p. 150, www.bruegel.org Delors, Jacques et al. (2011a) The European Semester: only a first step, Notre Europe Policy Brief No. 22, February 2011, http://www.notre-europe.eu/uploads/tx_publication/ bref22-EN.pdf Delors, Jacques et al. (2011b) The Euro, the investors and the governance, http://www.notreeurope.eu/uploads/tx_publication/Actes-Euro__investisseurs_et_gouvernance-ENweb.pdf Dhéret, Claire (2011) What next for EU Cohesion Policy? Going “beyond GDP” to deliver greater well-being, EPC Policy Brief, March 2011, http://www.epc.eu/pub_details. php?cat_id=3&pub_id=1243&year=2011 Dhéret, Claire and Fabian Zuleeg (2011) Well-being 2030: A new vision for “Social Europe”, EPC Issue Paper No. 65, July 2011, http://www.epc.eu/documents/uploads/pub_1326_a_new_vision_for_social_europe.pdf Dhéret, Claire, Andrea Martinovci and Fabian Zuleeg (2012) Division of Powers between the European Union, the Member States and Local and Regional Authorities, European Policy Centre, September 2012, http://www.epc.eu/documents/uploads/pub_2969_ cor_3801_division_of_powers_between_the_european_union,_the_member_states_ and_local_and_regional_auhtorities_-_fiscal_and_budgetary_elements.pdf Diamond, Patrick (2012) Governing as Social Democrats, Policy Network, October 2012, http://www.policy-network.net/publications/4270/Governing-as-SocialDemocrats Dohmen, Frank and Hans-Jürgen Schlamp (2005) A Club Within the Club, Spiegel, 19 December 2005, http://www.spiegel.de/international/0,1518,391251,00.html Duff, Andrew (2012) On Governing Europe, Policy Network, 24 September 2012, http:// www.policy-network.net/publications/4257/On-Governing-Europe EBRD, European Bank for Reconstruction and Development (2011a) Transition Report 2010: Recovery and Reform, http://www.ebrd.com/pages/research/publications/ flagships/transition.shtml 55 2013.01.18. 19:05 EBRD, European Bank for Reconstruction and Development (2011b) Strategy for Hungary, http://www.ebrd.com/downloads/country/strategy/hungary.pdf EBRD, European Bank for Reconstruction and Development (2012) Transition Report 2012: Integration Across Borders, http://www.ebrd.com/downloads/research/transition/tr12.pdf EIU, The Economist Intelligence Unit (2010) Democracy Index 2010, www.eui.com EIU, Economist Intelligence Unit (2011) Democracy index 2011: Democracy under stress, The Economist, http://www.eiu.com/public/topical_report.aspx?campaignid=Demo cracyIndex2011 EIU,EconomistIntelligenceUnit(2012)Europerisk:Risingpovertyratesthreatensocial­cohesion,­28 November 2012, http://viewswire.eiu.com/index.asp?layout=RKArticleVW3&article_ id=449873029&refm=rkHome&page_title=Latest%20risk%20analysis&mkt_ tok=3RkMMJWWfF9wsRolv6rNZKXonjHpfsX87+4qUKeg38431UFwdcjKPmjr1 YcDTMV0dvycMRAVFZl5nQlRD7I= Emerson, Michael et al. (2011) Global Matrix, CEPS Working Document No. 355, July 2011, www.ceps.eu Emmanouilidis, Janis (2010) “The case for differentiated integration in the EU: making right choices”, in: Cramme, pp. 97-108 Emmanouilidis, Janis (2011) A quantum leap in economic governance – but questions remain, EPC Post-Summit Analysis, http://www.epc.eu/documents/uploads/ pub_1247_post-summit_analysis_-_28_march_2011.pdf EPC (European Policy Centre) (2010) A Schuman Declaration for the 21st Century, http:// www.epc.eu/documents/uploads/1091_schuman_declaration.pdf EPC – Egmont Institute – CEPS (2010) The Treaty of Lisbon: A Second Look at the Institutional Innovations, Brussels, September 2010, p. 197 European Council on Foreign Relations (ECFR) (2011) Wider Europe – EU scorecard, http://www.ecfr.eu/scorecard/2010/wider/ Euractiv (2012a) Delors disciples request leaders to draw vision for the future, 17 October 2012, http://www.euractiv.com/priorities/delors-disciples-request-leadersnews-515459 Euractiv (2012b) EU leaders hail “successful” Cyprus Presidency, 14 December 2012, http:// www.euractiv.com/future-eu/leaders-eu-summit-hail-successfu-news-516692 Fabry, Elvire (ed.) (2011) Think Global – Act European, Vol. III, Paris: Notre Europe Institute, p. 383 56 KadarKrisztian_16_belivek.indd 56-57 Fitoussi, Jean-Paul (2009) Report by the Commission on the Measurement of Economic Performance and Social Progress, by Joseph E. Stiglitz, Amartya Sen and Jean-Paul Fitoussi (coordinator), www.stiglitz-sen-fitoussi.fr Fischer, Thomas and Sarah Hoffmann (2011) European Economic Governance. And what is about the Social Dimension?, Spotlight Europe No. 2011/04 – September 2011, Bertelsmann Stiftung, , www.bertelsmann-stiftung.de/spotlight Flockhart, Trine (2010) “Europeanization or EU-ization?” Journal of Common Market Studies, Vol. 48, No. 4, pp. 787-810 Forsense (2009) European Values Study presented on 11 May 2009, http://www.forsense.hu /?page=cikk&source=articles&id=70&p=1 Freedom House FH (2011) Freedom in the World 2011, The Authoritarian Challenge to Democracy, Freedom House, http://freedomhouse.org/images/File/fiw/FIW_2011_ Booklet.pdf Freedom House FH (2012a) Freedom in the World 2012, The Arab Uprisings and their Global Repercussions, http://www.freedomhouse.org/sites/default/files/FIW%20 2012%20Booklet_0.pdf Freedom House FH (2012b) Nations in Transit 2012, Fragile Frontier: Democracy’s Growing Vulnerability in Central and Southeastern Europe, Freedom House, http:// www.freedomhouse.org/sites/default/files/Release%20Booklet.pdf Freedom House FH (2012c) Freedom in the World, Country ratings and status, FIW 19732012, http://www.freedomhouse.org/report-types/freedom-world Freedom House FH (2012d) Freedom in the World, Aggregate Scores for Political Rights and Civil Liberties 2003-2012), http://www.freedomhouse.org/sites/default/files/ AggregateScores_FIW2003-2012%20%5Bfinal%5D.xls Gill, Indermit and Martin Raiser (eds) (2011) Golden Growth: Restoring the lustre of the European economic model, The World Bank, p. 371 Giuliani, Jean-Dominique (2012) Learning about and understanding the Budgetary Pact, Fondation Robert Schuman, European issues No. 253, 1 October 2012, http:// www.robert-schuman.eu/doc/questions_europe/qe-253-en.pdf Government (2012) Pan European Networks: Government, Issue 4, November 2012, http://www.paneuropeannetworks.com/government4-pdf/_GHJYDk23k/#/1/ Gros, Daniel and Felix Roth (2008) The Post-2010 Lisbon Process: The Key Role of Education in Employment and Competitiveness, CEPS Working Document No. 308, December 2008 57 2013.01.18. 19:05 Guérot, Ulrike (2011) Germany in Europe: Europe needs a re-set!, http://www.ecfr.eu/blog/ entry/germany_in_europe_european_illusion_or_a_new_pact_for_europe Hallerberg, Mark, Benedicta Marzinotto and Guntram Wolff (2012) On the effectiveness and legitimacy of EU economic policies, Bruegel Policy Brief, No. 4, http://www.bruegel.org/publications/publication-detail/publication/758-on-the-effectiveness-andlegitimacy-of-eu-economic-policies/ Happy Planet (2012) Happy Planet Index 2012, http://www.happyplanetindex.org/assets/ happy-planet-index-report.pdf Havlik, Peter et al. (2012) European Neighbourhood – Challenges and Opportunities for EU Competitiveness, The Vienna Institute for International Economic Studies (WIIW), Research Report No. 382, September 2012, http://ideas.repec.org/p/wii/rpaper/ rr382.html Hill, Steven (2010) Europe’s Promise: Why the European Way is the best hope in an insecure age, Berkeley: University of California Press, p.472 Hill, Steven (2011) “Can Krugmanomics Be Saved?” http://www.social-europe.eu/2011/02/ can-krugmanomics-be-saved/ Hill, Steven (2012) Europe’s Earthquake, Social Europe Journal, 12 October 2012, http:// www.social-europe.eu/2012/10/europes-earthquake/ Hübner, Kurt (2012) „German crisis management and leadership – from ignorance to procrastination to action”, Asia Europe Journal, Vol. 9, Nos 2-4, March 2012, pp. 139-177 Ilonszki, Gabriella (2009) “Introduction: A Europe Integrated and United – But Still Diverse”, Europe-Asia Studies, Vol. 61, No. 6, pp. 913-920 International IDEA (2009) Democracy in Development: Global consultations on the EU’s role in democracy building, Stockholm: International Institute for Democracy, www. idea.int Jabko, Nicolas (2011) Which Economic Governance for the European Union? SIEPS 2011:2 Jacoby, Wade and Sophie Meunier (2010) “Europe and the management of globalization”, Journal of European Public Policy, Vol. 17, No. 3, April 2010, pp. 299-317 Janning, Josef (2012) “Political Union: Europe’s defining moment”, EPC Policy Brief, 24 July 2012, http://www.epc.eu/documents/uploads/pub_2838_political_union.pdf Kaczynski, Piotr Maciej (2011) Paper tigers or sleeping beauties? National Parliaments in the post-Lisbon European Political System, CEPS Special Report, February 2011, http:// www.ceps.eu/book/paper-tigers-or-sleeping-beauties-national-parliaments-postlisbon-european-political-system 58 KadarKrisztian_16_belivek.indd 58-59 Kahn-Nisser, Sarah (2010) Drawing the line: The EU’s Political Accession Criteria and the Construction of Membership, Jean Monnet Working Paper 07/10, www. JeanMonnetProgram.org KOF Index of Globalization (2012a), General information, http://globalization.kof.ethz.ch/ KOF Index of Globalization (2012b), 2012 Report, http://globalization.kof.ethz.ch/static/ pdf/rankings_2012.pdf Lamassoure, Alain (2012) The European Budget must focus on future spending to support growth and to revive competitiveness, Fondation Robert Schuman, European Interview No. 68, 20 November 2012, http://www.robert-schuman.eu/doc/entretiens_europe/ee-68-en. pdf Legatum Institute (2012) The 2012 Legatum Prosperity Index, http://www.prosperity.com/ Content/Download/PI2012_Brochure_Final_Web.pdf Leonard, Mark (2006) Why Europe Will Run the 21st Century, London: Harper Collins Publishers, p. 183 Lewis, Paul (2011) Europeanization and Party Politics in Central and Eastern Europe, University of Jena, p. 47 Liddle, Roger (2011) Europe confounds its Anglo-Saxon doubters, Policy Network, http:// www.policy-network.net/pno_detail.aspx?ID=4041&title=Europe+confounds+its+ Anglo-Saxon+doubters Liddle, Roger, Olaf Cramme and Renaud Thillaye (2012) Where Next for Eurozone Governance? Policy Network, 17 July 2012, http://www.policy-network.net/publications/4222/Where-next-for-Eurozone-governance Linde, Jonas (2009a) Into grey zone: The recent trend of “hybridization” of political regimes, QoG Working Paper Series 2009:7 (The QOG Institute, University of Gothenburg, Quality of Government) http://www.qog.pol.gu.se/working_papers/2009_7_ Linde.pdf Linde, Jonas (2009b) Why Feed the Hand that Bites You? Quality of Government and System Support in the Post-Communist EU Member States, QoG Working Paper Series 2009:20 (The QOG Institute, University of Gothenburg, Quality of Government) http://www.qog.pol.gu.se/working_papers/2009_20_Linde.pdf Magone, José (2011a) Contemporary European Politics: A comparative introduction, London and New York: Routledge, p. 651 Magone, José M. (2011b) “Centre-Periphery conflict in the European Union? Europe 2020, the Southern European Model and the euro-crisis”, pp. 71-122, in Ágh, ed. 2011 59 2013.01.18. 19:05 Malová, Darina and Zuzana Lisonová (2010) “Political Culture and Style in the New Member States”, in Malová, pp. 167-178 Malová, Darina (ed.) From Listening to Action? New Member States in the European Union, Bratislava: Slovak Research and Development Agency, p. 221 Martens, Hans (ed.) (2010) Europe 2020: delivering well-being for future Europeans, EPC Challenge Europe Issue 20, March 2010, www.epc.eu Marzinotto, Benedicta (2012a) The growth effects of EU cohesion policy: a meta-analysis, Bruegel, 11 October 2012, p. 22, http://www.bruegel.org/publications/publicationdetail/publication/754-the-growth-effects-of-eu-cohesion-policy-a-meta-analysis/ Marzinotto, Benedicta (2012b) The long-term EU budget: Size or flexibility? Bruegel Policy Paper, Issue 20, 23 November 2012, http://www.bruegel.org/publications/publication-detail/publication/760-the-long-term-eu-budget-size-or-flexibility/ Moeller, Joergen and Svend-Erik Skaaning (2010) „Post-communist regime types: Hierarchies across attributes and space”, Communist and Post-Communist Studies, Vol. 43, No 1, March 2010, pp. 51-71 Munck, Geraldo and Jay Verkuilen (2002), “Conceptualizing and Measuring Democracy”, Comparative Political Studies, Vol. 35, No. 1, pp. 5-34, http://www-bcf.usc. edu/~munck/pdf/Munck_Verkuilen%20CPS%202002.pdf Nicolaidis, Kalypso and Rachel Kleinfeld (2012) Rethinking Europe’s “Rule of Law” and Enlargement Agenda: The Fundamental Dilemma, SIGMA PAPER No. 49, http:// www.oecd.org/site/sigma/publicationsdocuments/SIGMA_SP49_061112_Eng.pdf Nicolescu, Agnes (2012) Romanian politics: Struggling with the grass roots and digging for democracy, EPIN Commentary No. 11, 29 August 2012, http://www.ceps.eu/book/ romanian-politics-struggling-grass-roots-and-digging-democracy OECD (2010) The Well-being of Nations: The Role of Human and Social Capital, OECD publishing, http://www.oecd.org/site/worldforum/33703702.pdf OECD (2012) The Well-being of Nations: The Role of Human and Social Capital, OECD publishing, Pacheco Pardo, Ramon (2012) „Leadership, decision-making and governance in the European Union and East Asia: crisis and post-crisis”, Asia Europe Journal, Vol. 9, Nos 2-4, March 2012, pp. 77-90 Pálné Kovács, Ilona (2011) “The future of European cohesion policy: The paradoxes in domestic governance of CEE countries”, in Ágh (ed.), pp. 213-234 Ponzano, Paolo (2011) “Community and intergovernmental method: an irrelevant debate?”, Notre Europe Policy Brief No. 23, April 2011, www.notre-europe.eu 60 KadarKrisztian_16_belivek.indd 60-61 Pew Foundation (2009) End of Communism Cheered but Now with More Reservations, http://pewglobal.org/2009/11/02/end-of-communism-cheered-but-now-withmore-reservations/ Pierre, Jon (2009) New Governance, New Democracy? QoG Working Paper Series 2009:1 (The QOG Institute, University of Gothenburg, Quality of Government) http:// www.qog.pol.gu.se/working_papers/2009_4_Pierre.pdf Political Capital Institute (2012) How to tackle far right? 11 October 2012, http://www. riskandforecast.com/post/europe/how-to-tackle-the-far-right-delusions-and-newproposals_788.html Rabikowska, Marta (2009) “The ghosts of the past: 20 years after the fall of communism in Europe”, Communist and Post-Communist Studies, Vol. 42, No. 2, Special Issue: The Ghosts of the Past, pp. 165-179 Recon, Reconstituting Democracy in Europe (2011) 6th Framework Program (Oslo) http://www.reconproject.eu/main.php/RECONSelectedFindings_ALL_May11. pdf?fileitem=7816307 Riedel, Rafal (ed.) (2010) Central Europe: Two Decades After, University of Warsaw, p. 458 Rifkin, Jeremy (2010) “The Coming of the Third Industrial Revolution”, The Globalist, 3 May 2010, http://www.theglobalist.com/printStoryId.aspx?StoryId=8359 Schoutheete, de Philippe (2011) “Decision-making in the Union”, Notre Europe Policy Brief No. 24, April 2011, www.notre-europe.eu Sepos, Angelos (2006) „Differentiated integration in the EU: The Impact on the New Member States”, in Ágh and Ferencz (eds), pp. 61-86 SIGMA (1998) Sustainable Institutions for European Union Membership, SIGMA Papers No. 26, Joint Initiative of the OECD and the European Union, http://www.oecd. org/site/sigma/publicationsdocuments/36953545.pdf Soroka, Stuart and Christopher Wiezien (eds) (2010) Degrees of Democracy, Politics, Public Opinion and Policy, New York: Cambridge University Press, p. 241 Streeck, Wolfgang (2012) “Markets and Peoples: Democratic Capitalism and European Integration” New Left Review, January-February 2012, pp. 63-71, http://newleftreview.org/II/73/wolfgang-streeck-markets-and-peoples Tekin, Funda (2012) Differentiated integration at Work, Baden-Baden: Nomos, p. 330 Temin, Peter (2002) “The Golden Age of European growth reconsidered”, European Review of Economic History, Vol. 6, pp. 3-22, http://128.97.165.17/media/files/Temin.pdf The Economist (2011) „Europe’s diverging economies: Northern lights, southern cross”, 21 May 2011 pp. 31-32 61 2013.01.18. 19:05 Theodoropoulou S. with Zuleeg F. (2009) “What do citizens want? Well-being measurement and its importance for European social policy-making”, EPC Issue Paper No. 59, December 2009, www.epc.eu Thies, Wallace (2012) „Is the EU Collapsing?” International Studies Review, Vol. 14, No. 2, pp. 225-239 Thompson, Robert (2009) “Actor alignments in the European Union before and after enlargement”, European Journal of Political Research, Vol. 48, No 6 Tokarski, Pawel and Stijn Verhelst (2012) Macroeconomic Conditionality in Cohesion Policy: Added Value or Unnecessary Burden? Egmont European Policy Brief No. 13, November 2012, http://www.egmontinstitute.be/papers/12/eur/EPB13.pdf Transparency International (2012a) Corruption Perception Index 2011, Results, http://cpi. transparency.org/cpi2011/results/ Transparency International (2012b) Corruption Risks in the Visegrad countries: Visegrad Integrity System Study, p. 74, July 2012, http://www.transparency.org/files/content/ pressrelease/20120726_Visegrad_integrity_system_study.pdf Transparency International (2012c) Corruption Perception Index 2012, http://cpi.transparency.org/cpi2012 Tsoukalis, Loukas, Olaf Cramme and Roger Liddle (2010) An EU “fit for purpose” in the global age, London: Policy network, www.policy-network.net Türk, Erik, Josef Wöss and Fabian Zuleeg (2012) 1000 billion Euros at stake: How boosting employment can address demographic change and public deficits, EPC Issue Paper No. 72, November 2012, http://www.epc.eu/documents/uploads/pub_3074_1000bn_ euros_at_stake.pdf Vanhanen, Tatu (2000) “A New Dataset for Measuring Democracy, 1810-1998”, Journal of Peace Research, 37 (2), pp. 251-265 Vanhuysse, Pieter (2006), Divide and Pacify: Strategic Social Policies and Political Protest in Post-Communist Democracies, Budapest: CEU Press, p. 190, http://www.ceupress. com/books/html/DivideAndPacify.htm Vanhuysse, Pieter (2009) “Power, Order, and the Politics of Social Policy in Central and Eastern Europe”, 53-72, in Cerami and Vanhuysse (eds), also available at SSRN: http://ssrn.com/abstract=1330171 or http://dx.doi.org/10.2139/ssrn.1330171 Vida, Krisztina (ed.) (2010) The impact of the 10 New Member States on EU DecisionMaking, Foundation for European Progressive Studies (Brussels) and Institute for World Economy (Budapest), June 2010, p. 133, http://www.feps-europe.eu/fileadmin/downloads/framingeurope/1008_FEPS_IWE_NewEUMS.pdf 62 KadarKrisztian_16_belivek.indd 62-63 Vida, Krisztina (ed.) (2012) Strategic issues for the EU10 countries, Budapest: Foundation for European Progressive Studies (FEPS), p. 322 WEF, World Economic Forum (2012) Global Competitiveness Report 2012-2013, http:// www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2012-13.pdf Weiler, J.H.H. (2010) Rashomon in Karlsruhe: A reflection on Democracy and Identity in the European Union, http://centers.law.nyu.edu/jeanmonnet/papers/10/100501.html Weiss, Thomas (2000) “Governance, good governance and global governance: conceptual and actual challenges”, Third World Quarterly, Vol. 21. No. 5, pp. 795-814 Wetzel, Anne and Jan Orbie (2012) The EU’s Promotion of External Democracy In search of the plot, CEPS Policy Brief No. 281, 13 September 2012, http://www.ceps.eu/book/ eu%E2%80%99s-promotion-external-democracy-search-plot Zubek, Radoslaw and Klaus H. Goetz (eds) (2010) Performing to Type? Institutional Performance in the New EU Member States, Special Issue of Journal of Public Policy, 30:1, p. 136 Zuleeg, Fabian (2011) Achieving sustainable austerity, EPC Policy Brief, 16 December 2011, http://www.epc.eu/documents/uploads/pub_1384_achieving_sustainable_ austerity.pdf EU documents Annoni, Paola and Kornelia Kozovska (2011) EU Regional Competitiveness Index 2010, European Commission, Joint Research Centre, EUR 24346, www.jrc.ec.europa.eu Annoni, Paola and L. Dijskra (2012) EU Regional Competitiveness Index 2011, European Commission, Joint Research Centre, http://ec.europa.eu/enterprise/policies/industrial-competitiveness/competitiveness-analysis/seminars/files/bbs_annoni_dijkstra_ slides_en.pdf CoR, Committee of Regions (2009) White Paper on Multilevel Governance, 17-18 June 2009, CONST-IV-020, http://web.cor.europa.eu/epp/Ourviews/Documents/White%20 Paper%20on%20MLG.pdf and, http://cor.europa.eu/en/activities/governance/ Documents/CoR%27s%20White%20Paper%20on%20Multilevel%20Governance/ EN.pdf Council of the European Union (2011) Council conclusions on enlargement and stabilisation and association process, 3132nd GAC meeting, Brussels, 5 December 2011, http:// www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/EN/genaff/126577.pdf 63 2013.01.18. 19:05 Eurobarometer 75 (2011) Europeans’ Perceptions on the State of the Economy, August 2011, http://ec.europa.eu/public_opinion/archives/eb/eb75/eb75_en.htm Eurobarometer (2012a) Standard Eurobarometer 75, http://ec.europa.eu/public_opinion/ archives/eb/eb75/eb75_en.htm Eurobarometer (2012b) Standard Eurobarometer 77, http://ec.europa.eu/public_opinion/ archives/eb/eb77/eb77_first_en.pdf Eurofound (2009) Second European Quality of Life Survey, http://www.eurofound.europa. eu/publications/htmlfiles/ef0902.htm Eurofound (2012) European Quality of Life Surveys (EQLS) 2011-2012, http://www.eurofound.europa.eu/surveys/eqls/2011/index.htm European Commission (2009a) Five years of the enlarged EU: Economic achievements and challenges, SEC(2009) 177, Brussels, 20.2.2009, COM(2009) 79/3 European Commission (2009b) Five years of an enlarged EU: Economic achievements and challenges, Brussels, 20.2.2009, SEC(2009) 177 European Commission (2011a) A new response to a changing Neighbourhood, Brussels, 25/05/2011, COM(2011) 303 European Commission, ECFIN (2011b) European Economic Forecast, Spring 2011, http:// ec.europa.eu/economy_finance/eu/forecasts/2011_spring_forecast_en.htm European Commission (2012a) Debate on the future of Europe, http://ec.europa.eu/european-debate/index_en.htm European Commission (2012b) Annual Growth Survey 2012, http://ec.europa.eu/europe2020/pdf/ags2012_en.pdf European Commission (2012c) Annual Growth Survey 2013, http://ec.europa.eu/europe2020/pdf/ags2013_en.pdf European Commission, DG-Regio (2011) Cohesion Policy and the Europe 2020 Strategy, http://ec.europa.eu/regional_policy/policy/future/eu2020_en.htm European Commission (2012) Implementation of the Compact for Growth and Jobs, Report to the European Council, 18-19 October 2012, http://ec.europa.eu/commission_2010-2014/president/news/archives/2012/10/20121017_1_en.htm European Council (2010a) Conclusions, Brussels European Council 25/26 March 2010, EUCO7/10, Brussels, 26 March 2010 European Council (2010b) Conclusions, Brussels European Council 17 June 2010, EUCO 13/10, Brussels, 17 June 2010 European Council (2010c) Conclusions, 16 September 2010, Brussels, EUCO 21/10 European Council (2010d) Conclusions, 28-29 October 2010, Brussels, EUCO 25/10 64 KadarKrisztian_16_belivek.indd 64-65 European Council (2010e) Conclusions, 16-17 December 2010, Brussels, EUCO 30/10 European Council – Task Force (2010f ) Strengthening the economic governance in the EU: Report of the Task Force to the European Council, 21 October 2010, http://www. consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/117236.pdf European Council (2011a) Statement of EU Heads of State or Government, Brussels, 26 October 2011, http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/125621.pdf European Council (2011a) Conclusions, 4 February 2011, Brussels, EUCO 2/11 European Council (2011b) Extraordinary European Council 11 March 2011, Declaration, EUCO 7/11 European Council (2011c) Conclusions of the Heads of State or Government of the Euro Area of 11 March 2011, http://www.consilium.europa.eu/uedocs/cms_Data/docs/ pressdata/en/ec/119809.pdf European Council (2011d) Conclusions, 24/25 March 2011, Brussels, EUCO 10/11 European Council (2011e) Conclusions, 24 June 2011, Brussels, EUCO 23/11 Eurogroup Summit (2011f ) Text of euro zone summit statement - Emergency Summit on Greek crisis on 21 July 2011, Brussels, http://www.reuters.com/assets/ print?aid=USLDE76K1AS20110721 European Council (2011g) Euro Summit Statement, Brussels, 26 October 2011, http:// www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/125644.pdf European Council (2011h) Conclusions, EUCO 139/11, Brussels, 9 December 2011, http:// www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/126714.pdf European Council (2012a) Conclusions, EUCO 4/12, Brussels, 2 March 2012 European Council (2012b) Treaty on Stability, Coordination and Governance, 2 March 2012, http://european-council.europa.eu/media/639235/st00tscg26_en12.pdf European Council (2012c) Conclusions, EUCO 76/12, Brussels, 29 June 2012 European Council (2012d) Conclusions, EUCO 156/12, Brussels, 19 October 2012 European Council (2012e) Implementation of the Compact for Growth and Jobs, Report to the European Council, 18-19 October 2012 European Council (2012f ) Conclusions, EUCO 205/12, Brussels, 14 December 2012, http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/134353. pdf European Parliament (2012) Resolution on MFF, 23 October 2012, http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P7-TA-20120360+0+DOC+XML+V0//EN 65 2013.01.18. 19:05 Eurostat (2009) Sustainable development in the European Union 2009, http://epp.eurostat. ec.europa.eu/cache/ITY_OFFPUB/KS-78-09-865/EN/KS-78-09-865-EN.PDF Eurostat (2011) Sustainable development in the European Union 2011, http://epp.eurostat. ec.europa.eu/cache/ITY_OFFPUB/KS-31-11-224/EN/KS-31-11-224-EN.PDF Future of Europe Group (2012) Final Report, 17 September 2012, http://www.statewatch. org/news/2012/sep/eu-future-of-europe-report.pdf Merkel, Angela (2010) Speech in College of Europe, Bruges, on 2 November 2010, http:// notre-europe.eu/fileadmin/IMG/pdf/Speech.Merkel-english.pdf Annex European Futures, 2012 – selected list of scenarios BEPA, Bureau of European Policy Advisers (2010) http://ec.europa.eu/bepa/about/ fresh-start/index_en.htm BEPA, Bureau of European Policy Advisers (2012) Working plan 2012, http://ec.europa. eu/atwork/synthesis/amp/doc/bepa_mp_en.pdf Bertrand, Gilles, Anna Michalski and Lucio Pench (1999) Scenarios Europe 2010, European Commission Forward Studies Unit, Working Paper, July 1999, http:// ec.europa.eu/comm/cdp/scenario_en.htm, and http://www.pedz.uni-mannheim. de/daten/edz-mr/pbs/00/senarios_an.pdf Bertrand, Gilles et allii and Jan Rood et allii (2000, 2007) Scenarios Europe 20102020, Possible Futures for the Union, http://webhost.ua.ac.be/psw/pswpapers/ PSWpaper%202000-07%20bertrand.pdf Biscop, Sven (2012) Raiders of the Lost Art: Strategy-Making in Europe, Egmont, Security Policy Brief No. 40, November 2012, http://www.egmontinstitute.be/papers/12/ sec-gov/SPB40.pdf ESPAS Report (2012) European Institute for Security Studies, Global Report 2030, Citizens in an Interconnected and Polycentric World, 27 April 2012, http://www. iss.europa.eu/publications/detail/article/espas-report-global-trends-2030-citizensin-an-interconnected-and-polycentric-world/?print=1 ESPON (2000) European Visions, list of scenarios until 2000, http://www.mcrit.com/espon_scenarios/visions_european.htm 66 KadarKrisztian_16_belivek.indd 66-67 European Council (2000) Presidency Conclusions, Lisbon European Council, 100/1/00, 23 and 24 March 2000 European Commission (2001) European Governance: A White Paper, Brussels, 26.7.2001, COM(2001) 428, http://ec.europa.eu/governance/white_paper/en.pdf European Commission (2010a) Europe 2020: A strategy for smart, sustainable and inclusive growth, Brussels, 3.3.2010, COM(2010) 2020 final European Commission (2010b) Part I of the Europe 2020 Integrated Guidelines, Brussels, 27.4.2010, SEC(2010) 488 final European Commission (2010c) Part II of the Europe 2020 Integrated Guidelines, Brussels, 27.4.2010, COM(2010) 193 final European Commission (2012a) Debate on the future of Europe, http://ec.europa.eu/european-debate/index_en.htm Future of Europe Group (2012) Final Report, 17 September 2012, http://www.statewatch. org/news/2012/sep/eu-future-of-europe-report.pdf Future Lab Europe (2012) European Policy Centre, Newsletter No. 1, December 2012, www.epc.eu Gill, Indermit and Martin Raiser (eds) (2011) Golden Growth: Restoring the lustre of the European economic model, The World Bank, p. 371 Global Futures Studies and Research (2012) The Millennium Project (US), http://www. millennium-project.org/ González, Felipe (ed.) (2010) Project Europe 2030: Challenges and Opportunities (A report to the European Council by the Reflection Group on the Future of the EU 2030), May 2010), the González Report, http://www.reflectiongroup.eu/wp-content/uploads/2010/05/reflection_en_web.pdf Gros, Daniel and Felix Roth (2008) The Post-2010 Lisbon Process: The Key Role of Education in Employment and Competitiveness, CEPS Working Document No. 308, December 2008 Langer, Josep (2005) Future scenarios for the European Union, http://www.europe2020. org/spip.php?article299 Lisbon Council (2012) The 2012 Euro Plus Monitor: The Rocky Road to Balanced Growth, http://www.lisboncouncil.net/news-a-events/417-new-publication-the-2012-europlus-monitor.html Metris Report (2009) Emerging Trends in Socio-economic Sciences and Humanities in Europe, Brussels: DG Research 67 2013.01.18. 19:05 Monti, Mario (ed.) (2010) A New Strategy for the Single Market, Report to the President of European Commission José Manuel Barroso, 9 May 2010, http://ec.europa.eu/ bepa/pdf/monti_report_final_10_05_2010_en.pdf Newsletter Europe 2020 with the Laboratoire européen d’Anticipation Politique (LEAP), http://www.europe2020.org/ Saltelli, Andrea et al. (2010) Indicators for European Union Policies: Business as usual?, European Commission, Joint Research Centre, Institute for the Protection and Security of the Citizen (ISPRA), Social Indicators Research Sapir, André (ed.) (2009) Europe’s economic priorities 2010-2015: Memos to the new Commission, Brussels: Bruegel Institute Smithsonian Institution (2012), Annual State of the Future Reports since 1996, see the latest, State of Future Report http://www.millennium-project.org/millennium/2012SOF. html Van Rompuy, Herman (2012) Towards a Genuine Economic and Political Union, in cooperation with José Manuel Barroso, Jean-Claude Juncker and Mario Draghi, 5 December 2012, http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/ en/ec/134069.pdf Living with the Eurocrisis in Southern Europe José M. MAGONE Berlin School of Economics and Law I. The Eurocrisis and the crisis in Southern Europe: the two faces of the European currency In a new book with the quite provocative title “If Europe Fails” the Dutch bestseller author Geert Mak warns us about the apparent normality of our daily lives in the context of the Eurocrisis. He compares the present situation to the vesper of the beginning of the First World War in 1914. The dynamics of the war building moment then were underestimated by most politicians. He compares this situation to the present Eurocrisis (Mak, 2012: 7-12). Present politicians are not able to find a solution to the problem and we remain stuck in a ‘muddling through´ situation, that at any time maybe seized by the wrong leaders which may go in a different direction, namely that of nationalism, authoritarianism and in worst case scenario fascism. Attila Ágh refers in his excellent chapter about the ´Golden Age of Populism´ in Central and Eastern Europe (Ágh, this volume). In times of crisis of European capitalism, one can see the re-emergence of authoritarian and nationalist tendencies that prevent the principle of solidarity and cooperation in the EU to prevail. One should remind ourselves of the excellent analysis of the great HungarianCanadian scholar Karl Polanyi in his “Great Transformation” (Polanyi, 1944,1957). There he made clear that a liberal market economy based on the principle of the invisible hand does not work (Polanyi, 1957: 3). It has always major substantive consequences for the social fabric of a particular country. The double movement between Gesellschaft and Gemeinschaft understood dynamically, interact and can create “perverse effects” (Dale, 2008: 520; see also Tönnies, 1926). “Labour” and “Land” are fictitious commodities used in the liberal economic theory, however, they are not real commodities, so that it creates considerable tensions in society (Dale, 2008:498). The utopia of the “self-regulatory” 68 KadarKrisztian_16_belivek.indd 68-69 69 2013.01.18. 19:05 market propagated today as neoliberal globalisation and accompanied by an “incomplete protectionist intervention” through now workfare policies is creating perverse effects in all countries, but particularly today in the southern, central and eastern European semiperiphery. The southern, central and eastern European semi-periphery emerged already in the sixteenth century, when capitalism began to emerge as a global system (on the concept see Wallerstein, 2011: 102-103). The social fabric across the world is being changed by globalisation thrusts of the world economy at a quite fast pace. There are major difficulties for any society to adjust fast enough to these changes. The regulatory force of the state is necessary to compensate and re-balance economic and social life. We see a new Great Transformation emerging which now is induced by new technologies, the breakdown of the separation between space and time, and the merging of the global and local towards a “glocalised” reality (Magone, 2006a: 51-60). However, today we know that rebalancing of the economic and social life has a high price tag. The welfare states that emerged after the Second World War have reached their climax and are becoming victims of its own success due to the positive side effects that it produces (longevity of life, better socio-economic conditions for a vast part of the population). The Eurocrisis is also a crisis of the European project. It begs the question Quo Vadis Europa? (Where are you going Europe?). The Member-States tend to think in national competitive terms and not in European ones. We are still in a transition in Europe from the “competition state” to the “cooperative state” (see the seminal book by Cerny, 1990). For that to happen, there is a major change of mentalities necessary. Through supranational cooperation, they would probably be able to restore some more control over the existing problems that it is done at the moment. The globalisation of capitalism has created a dynamics that cannot be dominated by any of the member-states of the European Union. On the contrary, a national approach to the world economy, going into alone, has become less and less viable. There is a need to work together and build economies of scale of European and global proportions. Central to this strategy can only be the completion of the Single European market. At the moment, the European Union has 27, soon 28, different markets, which achieved some convergence, but are still different. This crisis of the single European market is also a major impediment for a culture of a European market (McCann, 2010: 71-80). This affects also the mentality of national politicians that tend to look first for the national interest, and then only afterwards to the European dimension in order to solve 70 KadarKrisztian_16_belivek.indd 70-71 a particular issue. In this sense, we are still in a major transition from methodological nationalism to methodological Europeanism when tackling the most prominent policy issues for the economic survival of the European continent. The crisis in southern Europe is intrinsically linked to the crisis of the European project. There is a general agreement that all four southern European countries, Portugal, Spain, Greece and Italy, have to improve their competitiveness in the global markets. Although some measures can be achieved by changing regulatory frameworks and give more freedom to the market, other measures like better qualifications, a new model of management in southern European enterprises, investment in research and development can only be achieved over time. Southern European countries have always linked the modernisation of their countries with being part of the European Union. Kenneth Dyson and Kevin Featherstone have characterised in an article on the politics of Economic and Monetary Union in Italy the European Union as a “vincolo esterno” (external link) which is of utmost importance to overcome the labyrinthic negative aspects of the country (Dyson and Featherstone, 1996). Such external link thesis can be extrapolated to the other southern European countries Portugal, Spain and Greece, which also regarded the European Union as an external link in order to overcome the vicious circle of domestic politics. However, the finance and Eurocrisis changed the nature of the relationship between the EU and domestic politics. Indeed, all four countries joined the EU, before top-down “Europeanization” was systematically and forcefully applied across all member states. The EU made a qualitative change when Jacques Delors became president of the European Commission between 1985 and 1995. His “Russian dolls” approach changed the nature of the “vincolo esterno” (Ross, 1995: 39). Supranational institutions became pro-active in top-down Europeanisation thrusts. Before 1985, member states were in a community of states which had their sovereignty rights more or less intact, afterwards, particularly after the adoption of the Treaty of Maastricht in 1993, they moved to a regime of shared sovereignty. Mark Pollack speaks of a period of extensive “creeping incrementalism” in terms of policies that was a spill over of the Single European Market Programme (Pollack, 1994; Pollack, 2000). However, after the adoption of the Treaty of Maastricht in 1993, which included also Economic and Monetary Union, southern European countries were in a new kind of European order, in which the centre had more powers to impose policies. Euroscepticism began to set in southern European countries. They have become dissatisfied societies with democracy in the respective countries, but also in the EU. (Eurobarometer 46, 2011: 48). This is an amazing turnaround, because for decades 71 2013.01.18. 19:05 these countries were among the most Euro-enthusiast countries of the EU. They share this dissatisfaction with the central and eastern European member states (see Ágh, in this volume). One of the main reasons for this sceptical approach towards the EU by southern European citizens is the fact that the way these countries are being helped is actually counterproductive because it is leading to a contraction of the economy, society and politics. The model of the troika is too one sided towards the model of the International Monetary Fund (IMF) and does not take into consideration the premises of the European social model. Moreover, the debt spiral is growing, particularly in Greece but also in Portugal which will reach a public debt of 120 percent by the end of this year, also the budget deficit is considerably off target. The recent agreement on reducing the debt of Greece to a sustainable level which they may be able to repay until 2024 is just a confirmation that slowly, but sure, the troika is recognising that the strategy has to be changed towards more realistic targets. Our main thesis in this paper is that the European Union has to be bold now in the negotiations of the new budget and find a common supranational approach to the debt problem. Otherwise, the European integration will be severely undermined. A new qualitative step has to be made, going beyond the incipient bailout fund following more the American way of integration. This involves support for ailing countries without the help of the International Monetary Fund. Reforms have to be done as a collective effort and not by imposition of an international organisation that is not contributing a lot of funding to the programme. The southern European examples and those of Ireland, Hungary, Latvia and Estonia show that just a supranational “domestication” of the debt problem can strengthen the collective cooperative spirit among countries. The model used in the past two years has only created more social suffering and more debt. For this, a budgetary increase of the EU is essential in order to overcome the problem. In a previous contribution, I focused on the problems of competitiveness of the southern European countries, particularly Portugal, Spain and Greece and the reforms that they need to undertake to overcome the centre-periphery cleavage that is emerging in the EU. I argued that the Europe 2020 strategy need to be restructured in order to become tailored to the problems of each individual countries in the context of a supranational global strategy (Magone, 2011a;see also Ágh,2011). In this contribution, we will first explore 72 KadarKrisztian_16_belivek.indd 72-73 the impact of the global debt crisis on Southern Europe, before turning to the social and political consequences in the individual countries. Afterwards a section will deal with the impact of the southern European crisis on European integration. Last but not least, some conclusions will be drawn. II. The Global debt crisis and the impact on Southern Europe We tend to forget that Asia was in a major debt crisis in 1997-8. In many ways, these economies had quite sound foundations, however unregulated markets allowed for speculative behaviour leading to a collapse of the credit market induced by inflows and subsequent very fast outflows of cheap credit coming from core countries like the United States and other European countries. It seems also that the International Monetary Fund (IMF) developed policies that were not adjusted to the reality of the sound foundations of the East Asian economies. The Asian countries affected by the crisis, particularly South Korea, learned lessons out of the crisis in order to avoid in the future a “stand by” credit of the IMF (Wade, 1998; Radelet and Sachs, 2000; Song, 2006). More than 14 years later, the Asia-Pacific region has become the centre of the world economy, while the EU and the United States have become actually the crisis regions, because they were not able to learn from the Asian crisis. According to Ellen Frost, there are particularly three lessons that Asian countries learned from the crisis. Firstly, Asian countries cannot rely on outside help. Asian countries were particularly disappointed with the United States which did not participate in the IMF programme for Thailand. Instead, Japan and Australia stepped in and contributed to the bailout programme. This left deep resentments among Asian leaders and the US lost influence as a regional leader. The second major lesson was that capital flight can have strong negative repercussions on politics. Political leaders lost their jobs due to the collapse of the economy. A third lesson was that the Asian economies are considerably intertwined and therefore vulnerable if there is crisis in one land. Although the crisis started in Thailand it spread soon after to Indonesia, Malaysia, Philippines and South Korea. Just Malaysia was able through capital controls to prevent an intervention of the International Monetary Fund. Asian leaders, particularly in the Association of East Asian Nations (ASEAN) that they needed to create a mechanism which would make the region independent from intervention by international 73 2013.01.18. 19:05 organisations. There were calls to establish a regional Asian monetary fund. However, the United States vetoed such a regional institution, because it would undermine the credibility and influence of the IMF. Instead, ASEAN+3 (China, Japan and South Korea) concluded mutual agreements of currency swap (Frost, 2008: 113). The rise of China in the last three decades is a further factor contributing to this decline of the US and the EU. Actually, the IMF was in a deep crisis before the finance crisis in the United States broke out in 2007. The failed policies worldwide had discredited considerably the IMF. The IMF had a US $ 300 million deficit and countries avoided to ask for help due to the rigid nature of its neoliberal policies. In many ways, the bailout austerity programmes proposed were more or less the same and always leading to considerable social suffering of the respective populations. Major reforms in governance, economic philosophy, staff competencies and the new forms of financing had to be undertaken (Griesgraber, 2009: 180-184). The emergence of the G-20 and the finance crisis in the United States played a major role in resuscitating the moribund institution (Griesgraber, 2009: 180). Also the complementary World Bank projects were basically almost the same for the less developed countries, so that they were not able to become competitive (Griesgraber, 2009: 182). The Asian financial crisis has contributed to accelerated transformation of the region into the centre of the world economy. Informational and financial capitalism became central to the economic growth of the economic growth. Manuel Castells identifies three centres of capitalism in the United States, the European Union and Asia (China-Japan-South Korea). However, the core dynamics of the world economy shifted definitively to the East (Castells, 2000: 107-115). The Asian countries are constructing not only a more protected integrated regional economy, but changing the conditions of the markets worldwide. Another lesson that these countries learned from the Asian financial crisis is that money is power, particularly in order to protect and project its own currency, but also to get influence in other regions and countries. In this sense, currency reserves and the establishment of wealth investment funds became an important element in the strategic outlook of Asian economic governance. Considerable liberalisation took place in most Asian countries affected by the crisis, however the state learned to behave in a more strategic way internationally (see Weiner, 2011: 70-71). In the new millennium, the United States became quite dependent on the cheap credit from Asian countries such as Japan and China. Particularly, the Chinese economy became 74 KadarKrisztian_16_belivek.indd 74-75 considerably intertwined with the United States. While the United States needed more and more credit to finance the budget, China increased its export to the United States. Historians Niall Ferguson and Moritz Schularick coined the expression “Chimerica” to characterise the symbiotic relationship between China and the United States since the 1990s. The high level of consumption and low level of savings of the United States was financed by borrowing cheap money from China which was sustained through a successful export led economic policy. Moreover, the manipulation of the currency by the Chinese led to a constant growth of imbalances between the two countries. In spite of major transformations in China, labour in the country was 40 percent cheaper in 2009 than it was in 2000. Moreover, the average wage was still just 4 percent of that of the US. While in China the average hourly wage in the manufacturing sector was $ 1.2, in the United States was $ 31 (Ferguson and Schularick, 2009: 17). The two countries cover 13 percent of the surface of the world, 25 percent of the population, 30 percent of Gross Domestic Product (GDP) and between 2002 and 2007 both countries generated about 60 percent of economic growth in the world economy (Ferguson and Schularick, 2007: 228; Ferguson, 2008: see chapter 6). However, both authors are adamant that Chimerica is coming to an end due to the high imbalances in each country. The symbiotic relationship may end up in divorce over the next decade or so. If the divorce takes place, then one can expect also conflicts over markets, resources and influence in the political economy, just not to speak about political influence and hegemonic pretensions over global leadership. While the Asia-Pacific rim is taking the lead in the world economy, the US is still recovering from the finance crisis. In 2011 the total federal debt reached US$ 14.8 trillion and it is forecast to reach US$ 16.4 trillion at the end of 2012. This does not include state and local debt, not unfunded liabilities related to entitlement programmes such as social security and Medicare. Overall, it is expected that federal debt will reach 70 percent of GDP by end of 2012. The budget deficit in 2011 was US $ 1.5 trillion and 9.8 percent of GDP (MacGuineas, et. al., 2011; Congress Budget Office, 2012). The situation in the European Union, in general, and the southern European countries have to be understood in this context of a shift of the world economy centre to the AsiaPacific rim. While Asian economies have solved their financial and debt problems, the present situation in the European Union and the United States makes both economies hostage to fortune. The difficulty to get investors interested in ailing economies has become a major problem on both sides of the Atlantic. In this context, the US and the European Union 75 2013.01.18. 19:05 are now competitors in a global market of investors. In this sense, the European Union, if it wants to gain influence in the world economy it has to not only solve the financial and debt problem, but also to find a way to make the European market more attractive in a competitive world. So far, this is not working optimally. (Figure 1 and Figure 2) According to Michael Lewis in his bestseller “Boomerang” the US and the European countries have become the new third world in a changing global context. The intervention of the IMF in several European countries reminds investors of the ailing economies in developing countries. In this sense, the IMF has contributed to exacerbate the situation, not to improve it (Lewis, 2011). As already mentioned, the adoption of the Treaty of Maastricht in 1993, which included also Economic and Monetary Union, changed the condition of the southern European countries in the European Union, in which the centre had more powers to impose policies. At that time, the debate was about excluding the weaker economies from the first wave of countries to join the European Union. The southern European economies were regarded as too weak to join an ambitious Economic and Monetary Union. This included Italy that just after 1996 started the process of convergence to other economies based on the Maastricht criteria. In the end, former prime minister Romano Prodi had to introduce an extra tax to reduce the budget deficit and become part of the first wave of countries to join EMU (Magone, 2003: 267). Also Greece qualified just in 2001, shortly before the circulation of notes was introduced one year later. As we know now, this was done with help of Goldman Sachs by finding loopholes in EU legislation to consolidate the budget (The Guardian, 28 February 2010). Both countries had huge budget deficits when they joined Economic and Monetary Union. In contrast, the governments of the Iberian countries took the whole process quite seriously. Efforts were made in both countries to change the macroeconomic policy culture of policy makers towards the EMU regime of stability. In Portugal, one has to mention that prime ministers Anibal Cavaco Silva (185-1995) and Antonio Guterres (1995-2001) that started quite early to develop a congruent macroeconomic policy. In Spain both prime ministers Felipe Gonzalez (19821996) and José Maria Aznar (1996-2004) were engaged in improving considerably the macroeconomic situation of the country. Already before the southern European countries were members of the Eurozone, this is also valid for Italy, many economists predicted that in times of world economic crisis these semi-peripheral economies would be affected by asymmetrical shocks due to their uncompetitive economic structure (Tsoukalis, 2000: 76 KadarKrisztian_16_belivek.indd 76-77 173 and Ardy et. al., 2002: 69-72). In order to compensate for the weaker structure of the southern European economies in the emerging Single European Market (SEM) and the Economic Monetary Union (EMU), the so called structural funds/cohesion funds were upgraded in 1988 and 1992, leading to a doubling of the EU budget twice. After two and half decades of structural funds, the situation did not change very much in terms of economic structure of these countries (see Magone, 2011a). The recent asymmetrical shock due to the US Finance crisis affected badly these countries which missed the opportunity of the past decades to push harder towards reforms (see Magone, 2011a). Now reforms are being done inhumanly and probably too hasty. Side effects like political and economic corruption in privatisation programmes and other market de-regulatory measures may actually create the opposite effect. In the end, structural change has to be accompanied by a socialised cultural change, but this takes time to materialise. The present “big bang” or “shock therapy” may lead to “destruction without creation”, instead of the “creative destruction” (to paraphrase Schumpeter, 1947: 81-86). Let´s have a closer look at the impact of the Eurocrisis on the southern European countries. III. Economic, Political and Social Consequences of the Eurocrisis on Southern Europe: Comparing southern European trajectories towards the crisis In comparison to the accession process to the EU by central and eastern European countries, the southern European states of Portugal, Spain and Greece had an easy process towards membership. Greece joined just five years after application for membership in 1981, Portugal and Spain after eight years in 1986. However, there are major differences between Greece and the Iberian countries. Greece joined far too soon without really adjusting properly to the European Community, while the Iberian countries were under more pressure to implement reforms. Particularly, Spain was blocked by France until 1983, due to the competitive challenge posed by its agricultural sector (Magone, 2010: 229). For now almost three decades these economies have been receiving structural funds from the EC/EU, however in terms of structural economic deficit they still show the same problems as before they joined the European Union. As already mentioned, the political class in all three countries, including also Italy looked at the EC/EU as a benevolent vincolo esterno that would have an effect to change the ailing political, economic 77 2013.01.18. 19:05 and social problems. In some way, both the populations and the political class regarded the EC/EU as the solution to reform the political systems that still were in a transition from neo-patrimonial forms of political culture to a more democratic one. Still today the state remains a major problem of reform of these countries (Sotiropoulos, 2006; Spanou and Sotiropoulos, 2011; Magone, 2011b, Ongaro, 2011, Alba and Navarro, 2011, Kickert, 2011). The political and social consequences of the Eurocrisis ended in many ways this kind of muddling through of the southern European economies. The high level of accumulated debt became a major problem for each one of these countries. However, one has to differentiate between Greece on one side, and Portugal and Spain on the other side. Portugal and Spain were quite disciplined as members in the first (1993-1995) and second phase of the Economic and Monetary Union (1995-1998), while Greece struggled to keep the Maastricht criteria. In 2001, it was added to the list of countries to join in the first phase for political reasons. The same applies to Italy which had already at that time a budget deficit well above the threshold accepted in the Maastricht criteria. Shortly before the currency was finally introduced in 2002, Portugal had to deal as the first country with the excessive budget deficit procedure. However, also other countries had problems like Germany and France so that in 2004, it was watered down by these larger countries. It means that in a crucial period during the introduction of the currency mixed messages were sent, which were criticized by the smaller member-states like Austria, Belgium and the Netherlands (Hodson, 2010: 172-3). Between 2002 and 2004, prime minister José Manuel Barroso and his coalition government introduced an austerity package which led to a contraction of the Portuguese economy. In this sense, Portugal started to take austerity measures already in this period. Although Barroso was able to reduce the budget deficit to a 3 percent of GDP in 2003, his successor Pedro Santana Lopes had major difficulties to manage government. It became clear that he had neither the political nor managerial skills to lead a government. At the end of 2004 after about six months in office it had to resign “voluntarily” after pressure coming from president Jorge Sampaio and people from his own party, including former prime minister and future president of the Republic Anibal Cavaco Silva, the present president of the country (Magone, 2006b). The first absolute majority government of José Socrates between 2005 and 2009 was quite successful in bringing down the budget deficit. In 2007 the budget deficit sank to 3.1 per cent. It means that successive Portuguese 78 KadarKrisztian_16_belivek.indd 78-79 governments were quite disciplined and trying to improve the situation. This was also achieved by taking into account the social partners. Spain is in a different league, after decades of a stagnating economy, between 1997 and 2008 the Spanish economy was booming. During the conservative governments of José Maria Aznar (1996-2004) the budgetary policy was quite strict and he imposed a zero deficit rule on the seventeen decentralized autonomous communities. This was very much helped by the booming economy. However, the good economic situation was due to speculation in the housing sector and consumption in the Spanish market. The finance crisis in the United States led also to the end of available cheap credit. This clearly contributed to the breakdown of the Spanish economy. The prudent budgetary and borrowing policies of the Aznar government were followed by those of the Socialist governments under prime minister José Luis Zapatero. In the first legislature period between 2004 and 2008, the Zapatero government was able to keep the budgetary policy below the threshold of the Maastricht criteria for budget deficit and public debt. In fact, in 2008 finance minister Solbes was able to announce a budget surplus in 2007. This was announced timely before the elections in March 2008. However, soon after the elections signs of deterioration began to emerge (Magone, 2009: 186; Royo, 2009). The Greek case shows quite a different picture. Both budget deficit and public debt were always above the Maastricht criteria. The Kostas Karamanlis´ New Democracy government was not very successful in changing this situation. On the contrary, the situation during this period worsened. The crisis erupted after the new Greek government under the leadership of George Papandreou came to power and found out that there was no money in the coffers of the state. Finance minister George Papaconstantinou had to find out that the budget deficit was much higher than originally presented by the previous Karamanlis government. While the Karamanlis government estimated the budget deficit to be 3.7 per cent of GDP, the revised figure was then 12.7 per cent. However, further adjustments had to be made, after Eurostat and Commission officials went to Greece, so that in the end the final figure ended up by 15.6 per cent of GDP. The deficit went up from € 7 to 30 billion (Lewis, 2011: 47-8). Papaconstantinou was probably the first Greek finance minister that made the effort to know exactly what were the exact figures of the budget deficit and public debt of the country. However, one should not elude oneself about his role in the political class. He was adviser and then was involved as a “special” junior minister on information society in the Socialist Costas Simitis government between 2002 and 2004. 79 2013.01.18. 19:05 One of the main reasons for this situation was the quite complex fragmented system of the budget control that was in place. Indeed, according to Kevin Featherstone, in 2009 there were 14,000 separate budget lines, each line representing groups of expenditure of public administration. Nevertheless, there was lack of capacity of control of these expenditure and also follow up procedures if the money was well-spent. This kind of kafkaesque world allows for clientelistic and patronage practices because it lacks transparency and accountability procedures (Featherstone, 2011: 196). Moreover, reform has been always half-hearted and non-existent. According to Featherstone, the constituency for liberal market reforms has been quite shallow and limited (Featherstone, 2011: 197). Instead, interest groups, particularly strong trade union confederations (GSEE and ADEDY), blocked any change of the status, in spite of the good will of some leaders such as prime minister Costas Simitis between 1996 and 2004. Even the political parties would oppose important reform policies of the government (Papadimitriou and Featherstone, 2008). Kostas Lavdas speaks of disjointed corporatism. It means that any social dialogue with the employees´ and employers organisations is not compatible with the “competitive” corporatism proposed by the European Union (Lavdas, 2005). Another major problem was and is the high level of tax evasion which reached about 30 percent in 2006 (3.4 per cent) of revenue (Featherstone, 2011: 196). This clearly contributes to a higher level of the budget deficit than it should be. Among other factors, one of the main reasons for the low efficiency of the tax collection system in Greece is still a very archaic and fragmented way of collecting it, reinforced by the lack of investment in integrated information systems. It is important to stress that actually the banking crisis which initiated in the US and contaminated the rest of the world through the so called ‘toxic assets’ of the housing market was not the cause of the Greek crisis. On the contrary, the debt crisis is something that has been accumulating in risk over the years until it came full to the fore in 2010. The banking crisis only exacerbated the problem, was not the cause of it. A study of the management of the finance crisis shows that already in 2008 and 2009 the Greek government was struggling to save their banking sector (Pagoulatos and Triangopoulos, 2009). According to Kevin Featherstone, Greece begins to have first signs of a ‘failed state’ (Featherstone, 2011). As predicted, “asymmetrical shocks” had a major impact on these four countries. The Greek crisis and its management by the political leaders led to a contagion to Ireland, Portugal, Spain and Italy. The so called “PIIGS” (Portugal, Ireland, Italy Greece and Spain) became the focus of the sovereign bond crisis, the debt crisis in the Eurozone. Although the Treaty of Lisbon included a no bailout clause for member states, the crisis in Greece was so severe and the images of the Lehmann Brothers collapse were so vivid, that 80 KadarKrisztian_16_belivek.indd 80-81 a bailout of € 110 billion loan with strict conditionality was given in March 2010. For this bailout, the Greek government had to sign a memorandum with a new entity called the “troika” which consisted of representatives of the European Commission, the European Central Bank and the International Monetary Fund (IMF). In 2011, the Greek government got a second bailout of € 109 billion Euros which included also a “voluntary” debt relief agreed with private bond owners. Such negotiations took quite a long time leading up then to new elections which clearly delayed the whole process in implementing the Memorandum. Moreover, the general elections of April 2012 were inconclusive due to the decline of the two main parties, Socialists (PASOK) and New Democracy (ND) that were running the country for the past forty years, and the rise of radical and extreme parties on the left and the right of the party spectrum. Just after new elections in May 2012, a new broad coalition government was formed under prime minister Antonis Samaras (ND). A new Memorandum partly with supplementary measures was drafted and signed by the respective parts. The memorandum of understanding is almost a government policy programme, however, it is more or less “dictated” by the European Union institutions and the International Monetary Fund. It does not only include measures to reduce the position of the state in the economy, but also to modernise public administration. Measures include quite considerable cuts such as in the pharmaceuticals bill for the health system, the labour market unemployment benefits reform, pensions´ system, privatisation of the public sector enterprises (IMF, 2012; European Commission, 2012). Quite important is that the troika wants also a huge catalogue of measures to be implemented in the regulatory framework of the economy. Tax rises have been so far the solution to get more money into the state, however, Greek citizens are now suffering considerably due to simultaneous cuts in all possible areas. More or less, the already weak welfare state was reduced even more, increasing so the level of poverty and misery in the country. The long awaited sixth evaluation report was to define the future of Greece in the EU. However, the troika was more or less split over the strategy to take. Greece had not fulfilled most of the commitments of the memorandum of understanding, however while the European Commission wanted to give more time to Greece, including the provision of a third aid package of debt reduction, the International Monetary Fund was more sceptical about the merits of giving more time. There are calls from the Bavarian Christian-Social Union (CSU) and the Liberal Party in Germany to thinking about the possibility that the Greece should leave the Eurozone (Der Spiegel, 28 August 2012). In the end, the sixth evaluation report was delivered in November 2012 and provided the Eurozone finance ministers and the troika with an important document in order to assess what was necessary to reduce the unsustainable level of debt in Greece. 81 2013.01.18. 19:05 On 27 November 2012, the Eurozone ministers agreed to provide Greece with further aid in order to reduce the public debt to sustainable levels. Measures include a “buy back” programme of the sovereign bonds at a lower price, in order to reduce the public debt. Moreover, member states reduced interest rates in different forms of debt owed by Greece. It is estimated that the new aid will total about 47 billion Euros (Der Spiegel, 30 November 2012; 28 November 2012). However, the Greek case seems to show that it is quite difficult to come out of the debt trap, once the level is too high. Prime Minister José Socrates tried quite hard to avoid a similar fate for Portugal. Throughout 2010 and in the first months of 2011, Socrates tried to gain the support from the main opposition party in order to bring through several austerity packages demanded by the European Commission. As a minority Socialist government it had major difficulties to get support for austerity packages in parliament. Finally, in March 2011 he resigned after a lost vote over a fourth austerity package. Afterwards, the rating agencies clearly downgraded the Portuguese economy to lower levels. In the end, Portugal reached the bottom of these ratings and Prime Minister Socrates had to seek for a bailout from the troika (Santos, 2011: 128). On 5 May 2011, Portugal signed a bailout of € 78 billion with the troika and after the early general elections of 5 June 2011, a new conservative coalition government between the social-democrats (PSD) and the democratic social centre (CDS) was formed in record time in order to start implementing the agreed programme with the troika. In comparison to Greece, the Portuguese government started quite well and with great dynamics (Reuters, 3 May 2011; Magalhães, 2012). The government worked throughout the summer 2011 in order to get on top of the agenda. It clearly it was quite successful in pushing through many of the scheduled reforms. Nevertheless, it was found out that there some so called “financial holes” in public administration. Probably, one of the cases drawing attention of the media was the financial hole in the autonomous region of Madeira. President of the autonomous region of Madeira, Alberto João Jardim had built over decades a political economy that was quite dependent on state employment. It was estimated that there was a € 1.8 billion shortfall in Madeira. The absolute majority of his party since the first elections of 1979 created problems of transparency and accountability which clearly the authorities in Lisbon due to the pressure of the troika were beginning to uncover. The previous budget deficits of 2008, 2009 and 2010 had to be revised upwards as a consequence of the shortfall in Madeira (Expresso, 16 September 2011). 82 KadarKrisztian_16_belivek.indd 82-83 In spite of a quite austere policy, in 2011 the government had difficulties to reach the target of budget deficit of 5.9 per cent. Therefore, they decided to cut the bonus wages for Christmas and Summer holidays for civil servants that earned more than € 1000. These bonuses were designed to create more equality between the private and public sector in terms of pay, based on the experience that the private sector paid better than the public sector. This additional cut was a major burden for many civil servants that do not earn very much money. In July 2012, the Constitutional Court decided that the measure was unconstitutional due to the principle of equality in the constitution, but nevertheless allowed such cuts for the year 2011 due to the higher objective of fulfilling the budget deficit targets, however it should be reinstated in 2012 and thereafter (Expresso, 5 July 2012). At the end of 2011, the government used a surplus of the banking pensions´ funds to reduce the deficit to 4.2 per cent. However, 2012 has become more complicated. Although the Portuguese government has been quite successful in implementing most of the measures agreed with the troika, due to the deteriorating economic situation, it was expected that the deficit could be 6.8 percent, well above the original target of 4.5 per cent by the end of the year. It meant that the government had to announce additional measures in order to meet the targets. Due to the quite good implementation record of the measures of the Portuguese government so far, the troika allowed for an increase of the budget deficit target from 4.5 to 5 per cent of the GDP, and the achievement of the 3 per cent threshold not anymore in 2013, but in 2014 (Publico, 11 September 2012). This clearly eased the pressure in terms of the time frame, but not in terms of the new austerity measures that had to be implemented in order to satisfy the troika. Therefore, the announcement of additional measures included tax increases and an increase in the income tax for people working in the private sector. After consideration of alternatives, the government will use the new reformed progressive income tax system to get more out of the higher-earning part of the population. The new budget 2013 was approved with the votes of the coalition partners, but it was opposed by all leftwing parties including the Socialists in parliament. The population also doubled the protests against further austerity measures included in the budget 2013. There is a real danger that Portugal may move in the same direction of Greece, because public debt increased to 120 per cent of GDP at the end of 2013 (O Sol, 27 November 2012). While Greece and Portugal lost their complete autonomy in terms of decision-making, Spain and Italy avoided so far to be part of the European Stability Mechanism. There are 83 2013.01.18. 19:05 considerable austerity measures efforts going on in both countries. Unemployment has risen considerably and it may worsen considerably until the end of the year due to the additional measures of the government. Spain was able to resist any bailout during the Socialist José Zapatero, instead it clearly introduced radical reforms to the labour market and the economy. This difficult decision led to a considerable increase of the unemployment figures. Meanwhile, the unemployment figure reached 25 percent, it means one in four Spaniards in working age have no job, the figures are even higher for women and young people. It means that the institutions of social regulation like the welfare state and the social partners are under considerable pressure. The Socialist government paid the bill for its unpopular austere policies in the general elections on 20 November 2011, which was won by the rival People´s Party with a historical absolute majority. Leader Mariano Rajoy became the new prime minister of the PP government (Martin, Urquizu-Sancho, 2012; on the Zapatero period see Colino and Cotarelo, 2012). However, the transition from one government to the other was not optimal. The new government has shown problems in managing the crisis and particularly public opinion. Its communication strategy within Spain and in relation to the markets has been abysmal. Prime Minister Rajoy had ministerial experience in the Aznar governments between 1996 and 2004, however, it showed some problems in dealing with the crisis throughout the first six months of its government (The Economist, 15 September 2012). The most important problem is the capitalisation of the banking sector. Due to the dire economic situation, the capital flight has remained a major problem for the Spanish economy. In first quarter of 2012, € 97 billion left the country, and just in March 2012 € 66.6 billion. More problematic is the growing dependency of the banking sector from the European Central Bank. In the first months of 2012, the Spanish banks got loans under favourable conditions of 1 per cent worth € 287.813 billion in May, 263.535 billion in April and € 226.5 billion in March (El Pais, 14 June 2012, Bloomberg, online,10 May 2012). Finally, on 9 June 2012 Spain negotiated a softer bailout programme with the European Union and the International Monetary Fund in order to save the Spanish banking sector. In November 2012, Spain asked for a loan of € 40 billion Euros to capitalise its banks. This means that Spain will not be exposed to the same level of humiliating scrutiny as the smaller countries of the Eurozone that got a bailout like Greece, Ireland and Portugal (El Pais, 10 June 2012). The second major problem is that Spain has also major difficulties in controlling the budget deficit due to the overspending of the seventeen autonomous regions. The progress 84 KadarKrisztian_16_belivek.indd 84-85 towards reducing the budget deficit has been less successful as expected. The target was a reduction from 9.3 percent to 6 percent, but in reality only 8.1 percent was achieved. The new target for 2012 had to be changed from 4.4 percent to 5.3 percent, while there was already discussion of a possible delay in reaching the 3 percent Maastricht criteria target in 2014, instead of 2013 (El Mundo, 2 March 2012, Euractiv, 10 May 2012). In the end, the European Commission allowed for a revised target of 6.3 per cent and to reach the 3 per cent threshold in 2014. However, the late inclusion of all the bailouts to the banking sector since 2010 has led to a revision of the budget deficit figure of 2011 to 9.4 per cent of GDP. This means also that the forecast budget deficit for 2012 will be 7.4 per cent of GDP and not 6.3 per cent as agreed with the European Commission (El Pais, 29 September 2012). Moreover, the public debt ratio has increased to 72.1 per cent of GDP in mid-2012 due to this overspending of the autonomous communities. It may surpass the target of the government for 2012 of 79.5 per cent (El Pais, 14 June 2012. The inclusion of the bailouts to the banks forced the government to revise the public debt forecast to 90.5 per cent of GDP (El Pais, 29 September 2012). All these mean that Spain is moving slowly in the same direction as Greece and Portugal. There have been rumours about a possible bailout for Spain, due to the difficulties of the country to get funding from the markets due to the high volatility of interest rates, which in certain occasions reached over 7 per cent. As a further complication, the three agencies have been downgrading the rating of Spain since May. First, it was Standard and Poor, followed by Fitch and then Moody. It means that interest rates for sovereign Spanish bonds have reached 7 per cent and therefore too expensive for the country. At some stage during the summer, Spain was not able raise funds from the markets (El Pais, 14 June 2012). In spite of the downgrading of Spanish bonds by the credit rate agency to trash level, finance minister Luis de Guindos has been trying through a campaign offensive to create credibility and trust in Spanish efforts in the markets. According to him, the situation of Spain in the sovereign bond market has been improving (El Pais, 13 October 2012). In terms of budget deficit, Italy is the country that is performing best among the southern European countries. In 2011, the budget deficit was 3.9 per cent. The main problem of Italy has been more related to the stagnating economic prospects. Major reforms had to be undertaken to make the Italian economy more competitive. The Italian case is quite interesting, because they decided to install former European Commissioner Mario Monti as prime minister, replacing so the controversial handling of the country by prime minister Silvio Berlusconi in mid May 2011. Monti´s technocratic government 85 2013.01.18. 19:05 is due to remain in power until February 2013, afterwards there are new elections and he is scheduled to step down. Although originally there was an increase in optimism when he took over, soon it became clear that the reforms can only be implemented at a much slower rate. One particular problem for Monti, was the fact that the predicted collected tax level was much lower than forecast. According to The Economist tax evasion is estimated to be worth 18 per cent of GDP (€ 285 billion) (The Economist, 25 August 2012). Although unemployment is about 8.3 per cent nationally, Monti had the same difficulties as previous governments in improving the situation in the Mezzogiorno with figures of 30 per cent particularly among the youth. Central to any economic reform is a liberalisation of the labour market in spite of the opposition of the strong trade union confederations (The Economist, 2 June 2012). Prime Minister Monti has introduced quite a considerable burden on the population, however it seems that in comparison to the traditional political class, particularly former prime minister Silvio Berlusconi, Monti has a strong credibility among the electorate (The Economist, 13 October 2012; El Pais, 26 November 2012). In comparison to Portugal, Spain and Greece, Italy is in a different league. It is a major economy of the European Union and, in spite of all political problems, has a strong functioning economy in the north while at the same time a lagging Mezzogiorno. In sum, the economic consequences have been quite difficult for all four countries. However, while the smaller countries had to ask for help due to the inability to finance themselves in the markets, Spain and Italy were still able to resist. These are also two countries that have done quite extensive difficult reforms which led to considerable social cuts and , in the case of Spain, a high level of unemployment. (Figure 3 and Figure 4) IV. Political Consequences: Deteriorating Democratic Conditions In terms of political consequences, one can differentiate between four main aspects that have become salient in 2011 and 2012, and may endanger the stability of the southern European countries, but also of the EU. These three main aspects are: • The suspension of democratic constitutions , so that the existence of the particular member-state can survive the debt sovereign crisis; • The growing radicalisation in terms of party politics in the respective countries; 86 KadarKrisztian_16_belivek.indd 86-87 • The growing instrumental dissatisfaction with national and EU democracy leading to the emergence of a stronger Eurosceptic population. In a very interesting article Ulrich Hufeld analysed the construction of the bailout fund and how it fits in the economic governance system of the European Union. One interesting thesis is that basically what is happening in the bailout countries is that they are more or less suspending their constitutions in order to overcome an existential crisis. The measures that they are implementing are imposed by others. He refers here by quoting Carl Schmitt to “breaking through measures” (durchbrechende Massnahmen) which are used to ensure the survival of the nation-state, so that the norms in the constitution are suspended temporarily (Hufeld, 2011: 121-122). This clearly has major implications for the democratic conditions of these countries. Before the memorandum was signed, political parties had to send a formal letter to the troika confirming that they endorse the agreement and will do their utmost to fulfil all the measures. Some political parties in Portugal and Greece did not sign the agreement. In the case of Portugal, both the leftwing Communists as well as the Block of the Left refused to meet the troika and sign the memorandum. The same happened in Greece where the more radical parties refused and opposed the memorandum. However, their positions were ignored and sidelined afterwards. This is the reason why there are protests organised by these groups and trade unions confederations against the troika and the never ending additional measures of the respective governments. Democracy has become the first victim of this suspension of the constitution and loss of sovereignty. Portuguese and Greek governments are highly dependent on a good periodic evaluation of the troika in order to get the next tranche of funding. The best example for the suspension of democratic considerations is the way former Greek prime minister was treated by the Franco-German directoire consisting of Chancellor Angela Merkel and Nicolas Sarkozy (also known as “Merkozy”) in the autumn 2011. On 31 October 2011, Papandreou announced that he would organise a referendum on the new bailout to the surprise of the Franco-German axis. This led to opposition inside and outside the country, which triggered then the resignation of the prime minister (The Telegraph, 9 November 2012; Reuters, 1 November 2011). He was replaced after weeks of negotiations by a new interim national unity government led by former Greek Central Bank president Lucas Papademos. This clearly showed the authoritarian streak of the Franco-German directoire in a time of crisis. The referendum was certainly a good way of finding out if there was support for the second bailout package and attached aus87 2013.01.18. 19:05 terity measures. In the end, a directly elected government was replaced by a technocratic government. The Papademos government was in charge in negotiating with creditors the debt of the Greek state. This took longer than expected until 8 March 2012. The result was writing off of € 154.5 billion worth of debt, 75 per cent of € 206 billion held by the private sector. Such a deal was important to get the second bailout of € 130 billion. Such restructuring of the debt did not affect the markets very much, because the level of Credit Default Swaps (CDS), designed as insurances against a potential default was just worth € 3.2 billion (CNN Money news online, 9 March 2012). early elections in 2012 shifted the relationship between national democracy and outside influence. In the end, Finance minister Schäuble was very keen to have the right result of moderate parties, so that the memorandum is implemented. The danger that the more radical Syriza party of charismatic leader Alexis Tsipras would prevail was regarded as a danger for the implementation of the memorandum and a possibility that Greece may forced out of the Euro. This led to the intervention of president Karolos Papoulias in which he protested against the offensive insinuations that a new elected government would not fulfil their commitments to the troika (El Pais, 15 February 2012; El Pais, 11 May 2012). This example shows that the European Union has major problems to be democratic in times of crisis. The same happened after the Constitutional Treaty was rejected in France and the Netherlands in 2005. After a time of reflection, the German and Portuguese presidencies of 2007 pushed through the Treaty of Lisbon which clearly was almost the same as the Constitutional Treaty, but using other terms for the more delicate issues such as “foreign minister” and “constitution”. Such a method prevented the populations to vote on it. It had to be approved just by the national parliaments, which most countries did, apart from Ireland. In the first Irish referendum the Treaty was not accepted, so that a second one had to be organised in order to get the “right” positive result. The elites of the European Union have missed to take the populations on board. It remains a quite technocratic elite-driven process and in crucial moments suspends its own “constitutional” framework (see Haller, 2008). The problem is that the permanent crisis of the EU is leading also to an almost permanent suspension of this constitutional framework. In spite of a dire economic situation, Ireland took the time to organise a referendum on the permanent European Stability Mechanism (ESM) (Euronews, 1 August 2012). The referendum was successful, showing that maybe a referendum would have clarified much better the position of the Greeks in relation to Economic and Monetary Union (EMU) and the European Union. Another feature of decline of democratic conditions is the importance of the use of technocratic governments to solve the crisis. In Greece, we have already mentioned the government under former Greek Central Bank president Lucas Papademos who became the new prime minister after the resignation of George Papandreou. Papademos formed a technocratic government, however representatives of the political parties remained in government, like for example the leader of PASOK Evangelos Venizelos who was finance minister between 17 June 2011 and the end of the Papademos government on 21 March 2012. The technocratic government was in charge of negotiating the package of debt reduction with creditors. In Italy, prime minister Mario Monti was installed by the political elite in order to succeed Silvio Berlusconi who had not achieve to improve the economic prospects of Italy. Meanwhile, Mario Monti introduced major reforms and it seems that there are calls in several parties and also among industrialists to stay on after the general elections after February 2013. Technocratic governments have been installed before in Italy. They have been more the rule than the exception until 1992. They have been more successful. In comparison to the Greek case, they have been less dominated by partyocratic considerations (The Economist, 13 October 2012; El Pais, 26 November 2012). The hardship that the Greek population is enduring has led to a radicalisation and fragmentation of the electorate. Both elections in April and May increased the support for the more radical groups on the left and right. Quite problematic is the violent fascist party “Golden Dawn” which is highly xenophobic and has been quite engaged in attacking immigrants. It seems also that many voters were from the police. This clearly gives quite a negative image of the quality of democracy in Greece (The Telegraph, 13 June 2012; New York Times, 10 July 2012) (Figure 5) The suspension of the constitution and the temporary loss of sovereignty clearly led to a deterioration of the language of politicians, particularly in relation to Greece International Monetary Fund president Christine Lagarde was quite offensive to the Greeks before the first early elections. She told off the Greeks that they should pay the taxes, and complain less. It led to considerable upset among Greek politicians and society. Many French leaders also condemned the “lessons” to the Greek population by Lagarde (El Pais, 28 May 2012). Also the pressure of German finance minister Wolfgang Schäuble before and after the two 88 KadarKrisztian_16_belivek.indd 88-89 A further political consequence specific to Spain is the latent centre-periphery conflict within the country. As already mentioned, one the major problems of the debt crisis in Spain is the deficit of the autonomous communities which in some of them is higher than 89 2013.01.18. 19:05 agreed at the beginning of the year. This was clearly a major problem for the final forecast of the 2011 budget deficit. During the summer, it became clear that some autonomous communities had major difficulties to pay their bills. Catalonia, one of the economically more developed regions along with the Basque Country and Madrid, was in a particular difficult situation. Mariano Rajoy announced that he would establish a Liquidity Fund for the Autonomous Communities (Fondo de Liquidez Autonomo - FLA) of about € 18 billion. Although the Catalan government was the first autonomous community to apply for it, asking for € 5,023 billion, they were still waiting for any of the money in the beginning of October. It meant that many bills of social welfare institutions, schools and the health sector could not be paid. Already in July health sector bills were not paid. The Catalan government was expecting in the next days a major payment from the central government of about € 560 million to pay their health bills (El Pais, 5 October 2012). This was paid on 9 October 2012, however, this led to an increase of interest of € 24 million (El Pais, 9 October 2012). The same situation applied to the Valencian community which could not pay several bills to the health sector. It was still awaiting a bailout from the government in mid October, supposed to be paid at end of the month (El Pais, 11 October 2012). Bailouts of the FLA are just a loan and have to be repaid over a period of 20 years. The regional government under the leadership of president Artur Mas demanded that the money that Catalonia was transferring to the other regions to the Territorial Compensation Fund (Fondo de Compensación Inter-territorial - FCI) should be returned back to the “stateless” nation. The parties that were pro-Catalan independence joined together and voted in favour of a roadmap towards secession through a referendum. This led to divisions inside the Socialist party of Catalonia (PSC), which is a regional branch of the Spanish Socialist Workers´ Party (PSOE), the second largest party in Spain. One of the regional MPs, former regional president Maragall voted in favour of the motion. In order to avoid a division, the rest of the group abstained in the vote. The final vote was 84 votes for, 21 votes against (mainly the regional representatives of the central government party People´s Party and the citizen’s movement (Ciutadans), and 26 votes abstained (mainly the Socialists) (El Pais, 28 September 2012). Apart from the difficult budgetary situation in Catalonia, one of the major factors leading to this re-emergence of demands for independence was the forthcoming regions elections on 25 November 2012. On 3 October 2012, the conference of presidents of central and regional governments agreed on a threshold of deficit of 4.5 percent of GDP for Spain, in which 3.8 per cent is reserved to central government and 0.7 per cent to the autonomous communities. One day later, Catalan regional president already doubted that this ceiling for the regional administration is adequate, and it 90 KadarKrisztian_16_belivek.indd 90-91 should be 1.5 per cent due to the fact that the regions are in charge of one third of all expenditure (El Pais, 4 October 2012). The tensions between central government and the Catalan government increased when the Minister of Education José Ignacio Wert, himself a well-known political scientist, said in the national parliament that the Catalan pupils had to be educated to be Spanish (españolizar), so that they would have a more balanced double identity. This led to protests from the Catalan government and other leading politicians that this would be like returning to the policies of the authoritarian regime under Franco. This clearly was a kind of hidden reference to the fact that the People´s Party was more or less founded by former members of the authoritarian regime during transition (El Pais, 10 October 2012). In autumn 2012, three regional elections will take place in Catalonia, Basque Country and Galicia. Particularly, in Catalonia and the Basque Country there is a strong demand for independence from regional parties. Prime Minister Mariano Rajoy will be under considerable pressure to do well in the forthcoming elections. In Galicia, the ruling People´s Party was able to achieve an absolute majority increasing its number from 38 to 41 out of 75 and the nationalist-regionalist National Galician Block (Bloque Nacionalista Gallego - BNG) lost heavily, and saw their number of seats reduced from 12 to 7. In between is the Socialist party (Partido Socialista de Galicia - PSG) that also lost heavily getting just 18 of the 25 seats of 2009. In spite of the austerity measures, it seems that the vote of the PP was able to remain quite stable and even improving in Galicia. The president of the autonomous region of Galicia Alberto Nuñez Feijóo was able to keep in power and continue similar policies of austerity as the same colour government in Madrid. Indeed, the Galician government has one of the lowest deficits of the autonomous communities with 0.7 per cent of GDP in 2011, and is engaged in reducing it to a zero deficit, a policy that was implemented successfully during the Aznar governments between 1996 and 2004 (El Pais, 27 November 2012). However, Galicia is quite a conservative stronghold of the People´s Party and they won almost all elections since the establishment of the regional autonomous community. Nevertheless, the result is remarkable if we take into account that the central government of the same colour is under considerable pressure from the markets and the population. Another factor that played a role is that the Galician nationalists are split in two groups. The new splinter party, the Galician Alternative of the Left (Alternativa Gallega de Esquerda - AGE) was able to surpass the BNG and establish itself as the third largest group in the Galician parliament in 2012. The splinter group called ANOVA- Irmandade Gallega (Galician Brotherhood) joined forces with the communist 91 2013.01.18. 19:05 United Left. Leader Xosé Manuel Beiras is quite charismatic. He was a former leader of BNG and was quite successful in strengthening the party from election to election .However, shortly before the BNG formed a coalition government with the Socialists in 2005, Beiras was sidelined. The new party focus considerably on opposition to the austerity measures of the national and regional government. They speak of the troika inside the country, which is undermining citizens´ rights. This is certainly the clearest expression of radicalisation of the nationalists due to the Eurocrisis. One has to acknowledge, that both nationalist regionalist parties are rather moderate in their demands. Independence is just a minority position, the more dominant position is related to federalism or greater autonomy. However, the independentist faction is stronger represented in the new Galician Alternative of the Left. (Figure 6) More problematic for the unity of Spain are the nationalist movements in Basque Country and Catalonia. The issue of independence remained quite salient throughout the campaigns of the nationalist parties, but particularly in Catalonia. In the Basque Country, the Nationalist Basque Party (Partido Nacionalista Vasco - PNV) has been the traditional representative of nationalism. It is a centre right party, so that there are also other parties on the left representing nationalism. The main challenge for the PNV comes from the political arm of the terrorist organisation, the Basque Country and Freedom (Euskadi ta Askatasuma-ETA). The political arm of ETA had to change its name several times over the past decade, because in the new law of political parties, any political group associated with violence have to be forbidden. By changing the name and the programme, they circumvent the legislation and it takes time for the courts to look into the new political group and eventually block it from taking part in elections. In the past decade ETA has been more or less dismantled by the Spanish and French police, so that violence was substantially reduced in the Basque country. However, the main political parties PSOE and PP want to remain on the alert, in order to prevent that ETA becomes again a threat to the country. In the 25 October 2012 regional elections, the new party is called the Basque Country Unite (Euskal Herria–Bildu - EH-Bildu) and was able to achieve a remarkable result. It became second after the PNV. EH-Bildu campaigned against the austerity measures which were imposed on the “sovereignty” of the Basque country. One of the successes of EH-Bildu is that it was able to achieve a platform for the scattered nationalist groups, and become now a real leftwing alternative to the centre-right PNV. In contrast the People´s Party and the Socialists which are against independence of the Basque country lost considerably in terms of votes and seats. It means that the winning party PNV lost 92 KadarKrisztian_16_belivek.indd 92-93 seats in relation to 2009 and has to govern as a minority government, probably with the ambiguous support of the moderate Socialists. This does not spell a very good situation for the Basque Country. The new polarization between the leftwing nationalists of EH-Bildu and centre-right PNV contributed to a marginalisation of the two main national parties PP and the Socialists.(Figure 7) Last but not least, we see a similar trend emerging in Catalonia. In the elections of 25 November 2012, the main centre right nationalist party Convergence and Union (Convergencia I Unio - CiU) won the Catalan elections campaigning on the issue of independence. President of the autonomous regional government Artur Mas wanted to conduct a referendum on independence of Catalonia in the next four years. As already mentioned, he was able to get support from most political groups that support the quest for independence of Catalonia. However, in spite of winning the elections, president Mas was not able to achieve an absolute majority and got one of the worst results for the party since the autonomy was granted in 1979. Instead, the Republican Catalan Left (Ezquerra Republicana Catalana - ERC) was able to become the second largest party. ERC is even more radical than CiU in demanding the independence of Catalonia from Spain. Both Socialists and People´s Party were again sidelined in this debate. PP was not able to profit from the fact that it was the only party campaigning on the status quo of a state of autonomies. The same is valid for the PSOE which campaigned for federalism. The party of citizens (Ciutadans) was able to improve its result, and a grassroots leftwing municipal party called Candidature of Popular Unity (Candidaturad´Unitat Popular - CUP) joined forces with the movement of the “indignados” (outraged) who have been protesting against the austerity measures and deteriorating situation for young people to get jobs. Although the CUP has a long standing history at municipal level, it took part in regional elections for the first time achieving 3.79 per cent of the vote and 3 seats. It is very much a bottom-up movement. One of the main topics was also the austerity measures and the crisis of financing in Catalonia. (Figure 8) In sum, the debt crisis in Spain has exacerbated considerably the centre-periphery relations in all three regions, but particularly in the Basque Country and Catalonia. More radical groups were able to improve considerably their electoral results. Quite problematic is the case in the Basque country, in which the political arm of ETA was able to reinvent itself by joining forces with other more moderate nationalist groups. A referendum on independence was deemed illegal by the Spanish Constitutional Court, so that if such referendums 93 2013.01.18. 19:05 would take place, the central government would have to intervene in order to prevent it to happen. A potential conflict may be looming over the Mariano Rajoy government for the next three years. If we look at the Eurobarometer studies, the southern Europeans show really a considerable dissatisfaction in the way national and EU democracy is working. The 2011 Euro barometer figures show that a clear cleavage is emerging between the core countries and the southern, central and eastern European periphery in terms of satisfaction with national democracy. The Eurocrisis played a major role in polarizing core and periphery in terms of quality of performance of democracy (similar argument in Ágh, in this volume). In this context, southern Europe is now more or less well below the EU average in terms of satisfaction how democracy works.​(Figure 9) This dissatisfaction with democracy has become a pattern which, if it endures may create problems of output legitimacy for the respective governments. In the end the weak output legitimacy may affect input legitimacy and enhance the existing crisis of democracy.(here following Scharpf, 1998). Leonardo Morlino and Mario Tarchi have written a seminal article in 1996 referring to Italy as dissatisfied society (Morlino and Tarchi, 1996; Tarchi and Morlino, 2006). Both authors differentiate between the conjunctural-instrumental and the more dangerous ideological anti-systemic dissatisfaction. The latter may emerge in such crisis situations. Italy of the 1970s was such a situation of ideological dissatisfaction, however evolved latter to a more instrumental mode. (on Italy of 1970s see Tarrow, 1989). In many ways, the Italian case could be extrapolated to all southern, central and eastern European countries. These are societies that are mainly instrumentally dissatisfied with the performance of their governments. However, the Greek case and the Spanish regions of Catalonia and the Basque country are showing considerable signs of ideological dissatisfaction, because of the radicalisation of the vote. It still did not reach the quite violent situation of Italy of the 1970s, but clearly one can already see vestiges of a deterioration of democracy towards “voice” through the permanent protest demonstrations and “exit” by voting for authoritarian parties such as Golden Dawn. The basic problem is that southern Europeans no longer regard the way democracy works in the EU as satisfactory. The Eurobarometer figures show that now all four countries are below the EU average and a majority is dissatisfied with the way democracy works at supranational level. (Figure 10) 94 KadarKrisztian_16_belivek.indd 94-95 This is quite dangerous, because the southern European block was always the more pro-European one (Magone, 2002; 2003: 229-23). The instrumental Euroscepticism is also beginning to be a permanent feature of southern European populations. The big surprise is Spain which was always quite positive both towards national and European democracy. In the past four years there has been a considerable drop on satisfaction with national and EU democracy (on Euroscepticism in Southern Europe see the special issue by Verney and Bosco, 2011). In sum, dissatisfied societies in the periphery of the European Union, including the southern European ones, are a danger to the European project. Particularly Greece and some parts of Spain could become an ideologically dissatisfied society and vote for more extreme parties which clearly would undermine democracy in the country. The southern European populations are together about 128 million people, about 25 per cent of the 504 million in the EU-27. It means that support for the EU coming from this region is of strategic importance due to their full integration in the EU and the potentially pro-European inclination. If the crisis is not solved in a more compassionate and generous way, the danger is that the EU will lose the most important supporters of the European integration process, something that the Euro-Polity cannot afford. ​ V. Social Consequences: The Generation in “Trouble” One can summarise the social consequences of the debt crisis around three topics: • The growing dissatisfaction of young people that are not able to find a job; • Growing emigration to other European countries, but also to Latin America , Africa and Australia; • Growing pauperisation of the southern European families due to the collapse of the already weak welfare states and growing financial vulnerability. Socially, the populations of the countries feel let down by the political leaders. The collapse of the already weak social regulation institutions lead to an increase of protest of the populations who want their human dignity restored. In March 2011, a movement called geração à rascal (generation in trouble) emerged in Portugal. It consisted mainly of young people who protested against a blocked society, which is not able to generate enough good jobs for the majority of the new generation. This movement that reached up to half a million people protested in major well-known centres in Lisbon and other cities of the country. They felt 95 2013.01.18. 19:05 neglected by the political class (O Publico, 11 March 2011). A similar movement emerged in May 2011 in Spain called the indignados (the outraged), which was carried by several extra-parliamentary groups consisting mainly of young people. They occupied Porta del Sol, the main square in the centre of Madrid for a long period, afterwards the movement spread to other cities of Spain (El Pais, 15 October 2011, The Guardian, 15 October 2011). Soon thereafter a similar movement of indignados emerged in Athens and other parts of Europe (El Pais, 25 May 2011, El Pais, 30 June 2011, El Pais, 26 September 2011). Last but not least, the Occupy movement was certainly influenced by these events in southern Europe and in Egypt in Tahrir Square during the Arab Spring. According to The Guardian there were 951 protests in 82 cities across the world until the above mentioned date (The Guardian, in June 2012) .This clearly was an important sign of resistance against the austerity measures and the bailouts for the banking sector which were implemented in the different countries. In many ways, the movements are a symptom of a civil society with difficulties to accept the sometimes very detached and circular discourse of the political elites. Trade union confederations in all four countries were at the forefront of the protest movement against a reversal of wage and welfare policies. The growing pauperisation of the southern European populations due to the austerity policies have been highlighted throughout the finance and the Eurocrisis. General strikes were organised in Greece, Portugal and Spain though with limited success. Trade unions were divided about supporting the reform programmes of the respective governments, particularly in relation to further flexibilisation of the labour market. Particularly in Spain and Portugal, previous and new labour reforms have led to a considerable increase in temporary and part time work. This reinforced even more the already high level of precarisation among young people and women (Lima, 2012a; 2012b; Miguel, 2012b). In Greece, there has been a crackdown on undeclared work by uninsured workers. It is estimated that 30 per cent of workers perform undeclared work. Moreover, several general strikes were undertaken since 2010 (Kapsalis, 2012; Georgiadou, 2012). While some groups “voice” their discontent with the ongoing socioeconomic development of their countries, others “exit” the land. Since 2006 half a million Portuguese left the country and immigrated to Brazil, Angola, Mozambique, France, Switzerland and the United Kingdom. Just in 2011, 150,000 Portuguese left the country. Family connections to Luxembourg and Switzerland also lead to a growing immigration of Portuguese over 50 years old, who then work in the construction sector (TSF Radio, 8 June 2012; Der Spiegel, 23 March 2012; Diário de Noticias, 23 March 2012). This is quite a lot for a 96 KadarKrisztian_16_belivek.indd 96-97 10 million population. In spite of emigration, unemployment has already reached 14.9 per cent mark in the first trimester of 2012, it reached over 15 per cent in the second trimester (Statistics Portugal, 2012). Many Portuguese leave for Portuguese speaking countries in Africa, particularly Angola and Mozambique creating problems for higher educated graduates in these countries (The Guardian, 21 December 2011). Also emigration in Spain has increased by 21.9 per cent between 2008 and 2011. In 2011 it increased to 36.6 per cent from previous years. According to the figures about 36,000 Spaniards left the country in 2010, and 50,000 in the year 2011 (El Pais, 25 December 2011). Most Spaniards either emigrate to Latin American countries or to other European countries particularly Switzerland, France, UK and Germany. There was a doubling of Spanish emigrants to Germany. However, the so called Mecca for Spaniards is the United Kingdom, presently in recession as well. They are highly qualified (El Pais, 25 December 2011). In Greece, emigration to Australia has increased considerably in the last years. The only problem is that emigration to Australia is quite restricted and reserved for certain professions (The Guardian, 21 December 2011). Another destination is Germany, where the Greek community is over 300,000. There are estimates of about 10,000 Greek newcomers, who emigrated in the last years to Germany (Reuters, 28 October 2011). Last but not least, the collapse of social regulatory institutions is leading to an increase in suicides in some countries. In Greece and Italy the suicide rate has increased by 20 per cent and largely related to the inability to cope with the crisis (Manager magazine online, 4 May 2012). The populations are also highly indebted. Spain is also among the most financially vulnerable populations and the level of private household debt reaches 84.9 per cent in mid 2011 (Ministerio de Economia y Hacienda, 2011). In a period of recession and high unemployment this is leading to a social tragedy across the country. Repossession of housing has increased considerably. In April 2012, there were about one million houses and flats available in the market. Banks had to lower the buying price by about 25 percent on average (Financial Times, 19 April 2012). The same can be said about Portugal, repossession of houses and selling it at discount prices has become normal practice in Portugal. At least between 2008 and 2011, housing was repossessed by banks, if clients did not pay their monthly instalments, and had nevertheless to continue to pay their debt. There were then calls for a change of legislation as exists in the United Kingdom and Spain, which ensures that after transfer of the estate to the bank, the client has paid all the bills (Jornal de Noticias, 25.12.2011). In April 2012, a landmark decision 97 2013.01.18. 19:05 by a lower court in Portalegrehas changed now this situation. It means that Portuguese can now return the house to the bank, and immediately all liability was paid back. In August 2012, 150,000 families were not able to pay their mortgage. For all forms of credit, the figure rose to 709,000 (Correio da Manhã, 6 August 2012; Jornal de Negócios, 28 April 2012). Due to the slow process of the Portuguese judiciary, many enterprises and banks rely now on American-style debt collector methods which are more efficient in achieving the results, however leading to a deterioration of the culture of the credit market. Many welfare institutions are closing their doors, because of lack of funding. According to the association of welfare institutions in the health sector, in July 2012 about 58.3 per cent were running into economic difficulties and could not pay their providers (Expresso, 2 July 2012). Probably, the worst situation is in Greece were 83 per cent of the population owns a housing estate. The government tried to freeze foreclosure by decree in 2010 and 2011, but the number of people with mortgages in arrears is increasing. The European Credit Research Institute estimates that Greeks had € 80 billion worth of mortgage in arrears in 2011 (Athens News, 2 July 2011). Moreover, the European Credit Research Institute found out that in the past years there has been a considerable decline of growth in household debt in comparison to the core countries (ECRI, 2012: 3-4). According to the Genworth Index on financial vulnerability of private households in 2010, all southern European countries are financially vulnerable in terms of household debt. Particularly Portuguese and Greeks are having major difficulties to control the financial vulnerability. Their position deteriorated from 2009 to 2010. Spain is also financially vulnerable but at lower level than Portugal and Greece. Italy also emerges among the most vulnerable countries.(Figure 11) Southern Europe is showing the limits of the European social model. A national political economic, financial collapse of institutions and the continuing pressure of the Eurocrisis have constrained considerably governments in terms of social distribution and social policy. The end result is a shrinking economy which forces many people to leave the country and improve their future prospects. Democracy and the institutions of social regulation are failing to provide most southern European citizens with positive prospects in national labour markets. Paradoxically, the southern European crisis of democracy and institutions of social regulation may in the end contribute to further integration in the European Union. This pauperisation of the south cannot be an image that the EU wants to project to the rest of the world. A revamping of EU policies has to increase the 98 KadarKrisztian_16_belivek.indd 98-99 level of communitarisation, so that the EU can respond with one voice to the threats coming from the global markets. Politics has to gain the hegemony over a growingly anarchical market place. Southern European countries are not very optimistic about the future. In the Spring 2012 Eurobarometer survey, the majority of respondents in southern Europe thought that the crisis had not reach its peak and still there was worst to come.(Figure 12) VI. The impact of the Southern European crisis on European integration The Southern European crisis had a major impact on European integration. First of all, major transformations took place at European level in order to deal with the sovereign debt crisis. A whole package of new institutions and processes were introduced to closely monitor the budgetary policies of the governments. This clearly changed the architecture of the European integration process. While politicians were still learning to deal with such cases as Greece, they built simultaneously intergovernmental mechanisms to deal with the potential contagion of the Greek case. The recent adoption of the European Stability Mechanism (ESM) is an important milestone of this process that started in 2010. However, one has to be cautious about the ESM. It is still an intergovernmental instrument, not a transnational one. Troubled countries are dependent on the good will and solidarity of the other member states of the Eurozone. In the end, this can only be a transitional phase towards a transgovernmental or transnational institution, or even supranational arrangement that is permanently there to help member states that have difficulties with the markets (Hufeld, 2011; Kunstein and Wessels, 2011). Nevertheless, the European political elite can be proud of what was achieved, which clearly represents more integration in the field of the economic and budgetary policy. To recapitulate here are the main aspects of this remaking of the finance and economic governance architecture: • European Stability Mechanism (ESM): In the beginning it was designed as a temporary bailout fund in order to overcome the problem of some states, particularly Greece with rising interest rates when trying to raise funds in the markets through sovereign bonds. However, the contagion coming from Greece led to further bailouts to Ireland in 2010 and Portugal 2011. There is agreement to allow a softer bailout 99 2013.01.18. 19:05 to Spain, in order to deal with the ailing banking sector. The ESM emerged out of the temporary European Financial Stabilisation Mechanism (EFSM) funded by the EU budget, and the European Financial Stability Facility (EFSF) funded by the member-states according to a distributive key, both established on 28-29 October 2010. The permanent feature of the ESM was agreed in 2011. It will enter into force on 27 September 2012, if a sufficient number of member-states approved it. It is an intergovernmental organisation dominated by the member-states. It will fulfil the role of a kind of European Monetary Fund. Political conditionality will be attached to any support for member states. The role of the International Monetary Fund in shaping, controlling and co-funding any bailout programme will be essential in order to preserve the credibility of the ESM. It will be a bailout fund of about € 500 billion (Council of the European Union, 2012). • Economic governance and European Semester: Parallel to ESM, the European Commission was quite active in pushing forward the agenda of more economic policy integration. The Barroso European Commission presented already end of September 2010, six legislative proposals in order to control even better the budgets of the member-states. Since January 2012, a new annual exercise for member-states was introduced which is called the “European Semester”. All member states have to submit their budget drafts to the Council of the European Union which is then reviewed by its peers and experts leading then to recommendations in order to control imbalances or excessive budget deficits. The European Semester uses very much the “Open Method of Coordination” and is conceived as a process that will integrate memberstates towards a budgetary and fiscal union over time. The first such exercise took place in the first six months of 2012. At the end of May 2012 the Barroso European Commission published the recommendations for a large part of countries. In total, 13 countries have to correct imbalances in the budget, including France and Italy. An important achievement of the German chancellor Angela Merkel and German Finance Minister Wolfgang Schäuble was to get all member states with the exception of the United Kingdom and the Czech Republic as part of a so called Europlus Pact. Two important aspects are in this additional pact which will change article 136 of the Treaty of Lisbon slightly. Firstly, the member states have to create institutional and/or constitutional mechanisms to control their debt levels towards the maximum allowed by the European Union, budget deficit of 3 per cent of gross domestic product (GDP) and public debt of maximum 60 per cent of GDP. This so called debt brake was already introduced by several countries including Germany, 100 KadarKrisztian_16_belivek.indd 100-101 Spain, Poland, Hungary, Italy and Austria. Secondly, the national wage indices shall now be connected with level of productivity of a particular country in the Eurozone. Countries with lower productivity will have lower or no wage increases in the annual wage bargaining agreements, while countries with higher productivity will also have higher wages. This certainly will have major implications for the institutions of social regulation. This model is quite widespread in the Benelux countries and Germany. It will have major implications for the southern European countries, which probably will see their wages decline in the next years, before through higher productivity can count on an increase. On 28 November 2012, president of the European Commission José Manuel Barroso presented a new budgetary architecture for the Eurozone countries. According to the plan, there should be a separate budget for the European Commission from which it can also help ailing member-states. This would be an upgrading of the ESM from an intergovernmental to a supranational instrument. Apart from it, the European Commission could veto budgetary drafts within the process of the European Semester. Furthermore, he advocated a communitarisation of the sovereign debt through Eurobonds (European Council, 2010; Council of the EU, 2010; European Commission 2010a;b;c;d; Schwarzer, 2010; Keller, 2011: 7-10; Euractiv, 2012c). • New supervisory institutions: The banking crisis led to the creation of several European supervisory institutions that will play a role in restoring credibility in European markets. Among the new supervisory institution is the European Banking Authority (EBA) which will complement national banking authorities and create value-added information by interpreting data coming from different countries and develop so European strategies to fight against crisis in the banking sector. Further new supervisory institutions that were established were a European Insurance and Occupational Pensions Authority (EIOPA) and a European Securities and Markets Authority (ESMA). Furthermore, a new European Systemic Risk Board with European Central Bank members and economic experts is already playing a major role in identifying problems in the financial markets and proposing solutions. • Banking Union: The Barroso European Commission also proposed a so called Banking Union which should give more powers to EBA to control the banking sector which is still split in national markets. This is an important step towards the single European market. EBA would then have more powers to close down ailing banks in a particular country. It is difficult to assess how long it will take until the Banking Union is established. A European Council summit on 18-19 October decided to establish the 101 2013.01.18. 19:05 Banking Union by 2014 which would consist of three main pillars. The first pillar would be the Single Supervisory Mechanism under which all 6,000 European banks would be scrutinised and controlled under objective criteria defined at European level. The other two pillars were for bank recovery and resolution and guarantee deposits. All this is a quite positive trend towards more integration. It means that there has been a learning process taken place to make the Eurozone more stable and better prepared for similar situation as the present sovereign crisis (Euractiv, 2012d). One positive lesson that we can learn from European integration theory is that the “spill over” effect from first intergovernmental agreements is slowly turning those into supranational permanent processes and institutions. The Barroso proposal of a supranational treasury for the Eurozone and veto powers for budget drafts for the supranational level would certainly change the until now intergovernmentalist approach. In many ways, the whole process seems to follow what Wayne Sandholtz and Alec Stone Sweet presented in their theory of supranational governance which regards the process of European integration as an accumulation of transactions in particular policy field, until it becomes an institutionalised area of supranational intervention (Sweet and Sandholtz, 1999: 8-20). A second lesson that we can learn is that the inclusion of the International Monetary Fund (IMF) in the troika was probably a mistake. There are at least two reasons for that. Firstly, as German foreign secretary Guido Westerwelle said in a speech to top German diplomats, the EU is one of the richest regions of the world and is receiving funding that should better be used for developing countries. Brazil has also criticized this diversion of funds to the European Union. According to Westerwelle the Europeans could do this alone, they do not need outside help. Secondly, the assumption is not evident that the countries in trouble would comply only with the IMF. A less aggressive and more conciliatory tune in achieving the reforms over a longer period of time would have been better for the democratic process. In the present form, the IMF destroys not only the image of the European Union as a community of democratic states, but also enhances the negative image of the Euro-Polity internationally. Besides, trust between the countries may deteriorate considerably over time. It was the German Chancellor Angela Merkel, and Wolfgang Schäuble that insisted on the inclusion of the IMF, because otherwise the countries in trouble would not comply (Die Welt, 28 August 2012). Quite important is the fact, that the IMF acknowledged that it had miscalculated considerably the impact of the austerity packages. All economies affected by the austerity programmes receded even more than the projections predicted. It means that 102 KadarKrisztian_16_belivek.indd 102-103 the economies of Portugal, Greece and Ireland are considerably worse off than projected. Particularly, the Portuguese case led to a rethinking of the programmes, because the government had implemented almost all the measures that the troika asked them to, but this put them in an even worse position that they were. For every saved euro, it was expected that there would be a recession on the GDP of 50 cents, however in reality the effect is between € 0.9 to 1.7. It means more than double the original prediction (Expresso, 9 October 2012; World Economic Outlook, October 2012: 41). It means that even the expertise of the IMF suffered in reputation due to the wrong projections. The once praised technocratic objective process institutionalised by the troika is becoming more and more a centre of attention for interests coming from the European Commission and the individual member-states like Germany. For example, in the case of Greece the European Commission wants to keep the country in the Eurozone, however the German government did not want to give any assurances in this direction until the sixth evaluation report was drafted. In many ways, the troika is failing, because there is a clash of different philosophies in how to tackle the debt crisis. The social crisis due to the austerity measures is creating problems for the compliance with the hard short term programme of the memorandums. In the end, there is no other possibility than to continue to support Greece. Probably, it will take more than seven years to overcome this situation (Der Spiegel, 30 September 2012; 7 August 2012). As mentioned above the new aid package of about € 47 billion through measures such as a “buy back” of sovereign debt programme, reduction of interest rates and other financial measures may not be enough to conduct Greece towards sustainability of debt. It means that a communitarisation of the debt, a debt union, will remain on the agenda. Such debt union was already proposed by former Belgian prime minister and present Member of the European Parliament Guy Verhofstadt. It means that the ESM has to become a community instrument. Verhofstadt speaks of debt mutualisation and also the introduction of Eurobonds. This is the big step towards a more integrated solidarity in the European Union. This would also restrict even more national sovereignty and increase the pooled shared one of the European Union. Another important lesson is that the economic crisis was actually reinforced by a kind of political crisis. The bickering of leaders over money issues has deteriorated the already quite damaged image of the European Union. Verhofstadt argues that the European Union needs to build a communitarised firewall, not just fire extinguishers. He argued in an interview with Euractiv as follows: “It is a general lack of political courage to transfer new sovereignty to a European level because it is a loss 103 2013.01.18. 19:05 of power. This is what it is about. That is the obstacle that we are facing. It is a transfer of power from the nation states to the European level, to a supernational European authority, and to establish a supernational European authority. It is not so difficult to understand that. What we are asking to politicians now on a national level is to transfer power to the supranational level. And they shall only do it with their back against the wall. I think they all have their back against the wall. Some of them may think that they can escape because let’s be clear: The attitude of some of these European leaders is fuelling the crisis at the moment. It is making in worse. For example if in Germany, Ms Merkel accepts to have the votes in the Bundesrat and the Bundestag to create a mutualisation of the debt inside Germany – this is what they have just recently agreed, but given the fiscal compact that we have at the European level, she is not accepting the same rules. So she is indicating that she trusts the Länder, but she is not trusting the monetary union. And by doing that, she is undermining the fiscal compact, and fuelling the crisis.» (Euractiv, 2012b). There is a need of a democratization of the European Union in times of crisis. The FrancoGerman directoire was certainly important in order to have some leadership in the European Union, however European leaders have also to begin to overcome their technocratic-authoritarian streak and respect more the populations of the European Union (Haller, 2008). There is a need for a better communication policy of European leaders and stronger presence of the actual leaders of the European institutions. The direct election of the president of the European Commission through the European Parliament elections would be a decisive step in the right direction. Globally, the European Union is losing on weight and importance. The Eurocrisis has further exacerbated this situation.These efforts can only bear fruits if the EU becomes the strongest economy in the world. The position of economic hegemon may have policy diffusion effects on other regions of the world such as China and the United States. The European Union aims at developing and sustaining a more developed highly complex social market economy both domestically and if possible globally. However, the present economic figures are worrying. The EU is losing importance in economic terms. According to president of the European Investment Bank (EIB), Philippe Maystadt the EU´s share of GDP in the global market has decreased from 30 per cent in 1980 to 23 per cent in 2005 and will decrease to 20 per cent in 2015. In contrast, China and India have increased their share from 6 percent in 1980 to 22 per cent in 2005 and 30 per cent in 2015 (Maystadt, 2011: 13). The demographic change in most European countries will further weaken the 104 KadarKrisztian_16_belivek.indd 104-105 dominance of Europe in the world. It is predicted that the population of Europe will decline from 7 per cent in 2010 to 4 per cent in 2100 of the world population. Moreover, it would be a much older population. The role of immigration will play an important role to increase or at least sustain present population levels. However, the xenophobic waves are emerging in most European countries and creating tensions in relation to the much needed immigration policies (Piris, 2012: 12). Last but not least, the Eurocrisis alerted us to the fact that the European Union has an asymmetrical political economy. There is a rich core and a poor southern, central and eastern Europe periphery. The periphery problems are not only related to the sovereign debt, they are also about a crisis of society, particularly in southern Europe. In Portugal, Spain and Greece the economic structures are not competitive and collapse regularly when there is a crisis. One particular problem is the low level of educational attainment, particularly in the Portuguese case. It means that in all four countries public policy has to contribute to an improvement of the quality of life of these populations (see Magone, 2011a). In sum, the Eurocrisis has made the European Union stronger and more integrated, however the economic and finance governance architecture is still not completed. It needs to go all the way to mutualisation of debt which should function as firewall for the whole European Union. Conclusions: Transforming the European Union The European Union has a unique opportunity to move towards a permanent firewall after achieving the still intergovernmental ESM. Such a firewall would finally make the EU immune to international speculators and volatile markets. The courage to make this step has to come from the leadership of European leaders. In an increasingly globalised world, and an increasing interdependent European economy, “fire extinguishers” like the ESM can only provide inadequate protection from the markets. Just a bold decision to move to the firewall model of a mutualisation of debt, particularly Greek debt will finally strengthen the European Union and restore the credibility of the Euro-Polity as an economic superpower. The firewall may restore the social dimension of the single European market and allow for the projection of the European social model of capitalism globally. This would certainly improve the quality of democracy in central, eastern and southern European semi-periphery. 105 2013.01.18. 19:05 References Ágh, Attila (2011) Cohesion Policy and the Europe 2020 Strategy: Constructing the EU for the next decade. In: Attila Ágh (ed.) The European Union at the crossroads: The European Perspectives after the Global Crisis, Budapest: Budapest College of Business and Communication, pp. 15-67 Alba, Carlos R., Carmen Navarro (2011) Administrative Tradition and Reforms in Spain: Adaptation Versus Innovation. In: Public Administration, Vol. 89, Issue 3, pp. 783-800 Ardy, Brian, Iain Begg, Waltraud Schelkle and Francisco Torres (2002) EMU and Cohesion: Theory and Practice, Lisboa: Principia Castells, Manuel (2000) The Rise of the Network Society. Vol. 1 of The Information Age: Economy, Society and Culture, London: Blackwell Cerny, Philippe (1990) The Changing Architecture of Politics. Structure, Agency and the Future of the State, London: SAGE Colino,César, Ramón Cotarelo(2012) (eds.) España en crisis. Balance de la Segunda Legislatura de Rodriguez Zapatero, Valencia: Tirant Congress Budget Office (CBO) (2012) 2012 Long Term Budget, Budget-outlook, posted on website http://www.cbo.gov/publication/43289, accessed on 8 October 2012 Coulombis,Theodore, Andrea Dessi, Thanos Dokos, Paulo Gorjão, Dimitris Katsikas, Charles Powell, Dimitris A. Sotiropoulos (2012) Southern Europe in Trouble. Domestic and Foreign Policy Challenges, Mediterranean Paper Series 2012 .Washington D.C.: German Marshall Fund Council of the European Union (2010) Press release of 3030th Council Meeting, Economic and Financial Affairs, Brussels 7 September 2010, Press release 13161/10, Presse 229, PR CO 14 Council of the European Union (2012) Factsheet - European Stability Mechanism, posted on http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/ en/ecofin/132734.pdf, accessed on 1 December 2012 Dale, Gareth (2008) ‘Karl Polanyi’s The Great Transformation: perverse effects, protectionism and Gemeinschaft’, Economy and Society, 37: 4, 495-524 Dyson, Kenneth and Featherstone, Kevin (1996) ´Italy and EMU as a ‘Vincolo Esterno’: empowering the technocrats, transforming the state´, South European society & politics, 1 (2), pp. 272-299 106 KadarKrisztian_16_belivek.indd 106-107 Euractiv (2012a) Brussels sees Spain missing budget targets, 10 May 2012 posted at http:// www.euractiv.com/euro-finance/brussels-sees-spain-missing-budg-news-512614 accessed 16 June 2012 Euractiv (2012b) Verhoftstadt: Merkel and Hollande squabble like children, 27 June 2012, http://www.euractiv.com/eu-elections/verhofstadt-merkel-holland-squabinterview-513566 accessed on 15 October 2012 Euractiv (2012c) Barroso lays out ambition vision for the Eurozone. 30 November 2012 http://www.euractiv.com/euro-finance/barroso-lays-ambitious-vision-eunews-516327 accessed on 1 December 2012 Euractiv (2012d) EU summit deal aims for full ´banking union´ in 2014. 19-22 October 2012, posted at http://www.euractiv.com/euro-finance/summit-advances-eu-planbanking-news-515515 accessed on 1 December 2012 European Council (2010) The European Stabilization Mechanism. Memo 10/173 ,Brussels 10 May 2010 European Commission (2010a) EU Economic Governance: The Commission delivers a comprehensive package of legislative proposals, IP 10/1199, Brussels 29 September 2010 European Commission (2010b) Economic governance package: (1) Strengthening the Growth and Stability Pact, Memo 10/455, Brussels, 29 September 2010 European Commission (2010c) Economic governance package: (2) Preventing and correcting macroeconomic imbalances, Memo 10/454, Brussels 29 September 2010 European Commission (2010d) Economic Governance: (3) Chronology and overview of the new framework of surveillance, Memo 10/456 Brussels, 29 September 2010 European Commission (2012) The Second Economic Adjustment Programme in Greece. European Economy European Council, The European Stabilization Mechanism, occasional paper 94, March 2012, Brussels: European Commission European Credit Research Institute (2012) Newsletter, No. 43, Autumn Featherstone, Kevin (2011) ´The Greek Sovereign Debt Crisis and EMU: A Failing State in a Skewed Regime´ In: Journal of Featherstone, Common Market Studies, Vol. 49, Issue 2, pp. 193-217 Ferguson, Niall, Moritz Schularick (2007) Chimerica and the Global Asset Market Boom´, In: International Finance, 10:3, pp. 215-239 Ferguson, Niall (2008) The Ascent of Money. A Financial History of the World, London: Penguin Books Ferguson, Niall, Moritz Schularick (2009) The End of Chimerica, Harvard Business School, Working Paper 10-037, October 2009 107 2013.01.18. 19:05 Frost, Ellen L. (2008) Asia´s New Regionalism, Boulder, Colorado: Lynne Rienner Georgiadou, Penny (2012) Trojka approves new set of changes in jobs and pay. European industrial relations observatory (EIRO), GR1203019I, 1 June 2012 http://www.eurofound. europa.eu/eiro/2012/03/articles/gr1203019i.htm accessed on 15 October 2012 Griesgraber, Jo (2009) Reforms for Major New Roles of the New International Monetary Fund? The IMF Post-G20 Summit´, In: Global Governance, 15, pp.179-185 Haller, Max (2008) European Integration as an Elite Process, London: Routledge Hodson, Dermot (2010) Economic and Monetary Union: An Experiment in New Policy Modes, In: Helen Wallace, Mark A. Pollack, and Alasdair R.Young (eds.) Policymaking in the European Union, Sixth Edition, Oxford: Oxford University Press ,pp. 229-252 Hufeld, Ulrich (2011) Zwischen Notrettung und Rütlisschwur: der Umbau der Wirtschaftsund Währungsunion in der Krise´, In: Integration, 2, 2011, pp. 117-131 International Monetary Fund (IMF) (2012a) Greece: Letter of Intent, Memorandum of Economic and Financial Policies, and Technical Memorandum of Understanding, 9 March 2012, posted on website http://www.imf.org/external/np/loi/2012/ grc/030912.pdf, accessed on 15 October 2012 International Monetary Fund (IMF) (2012b) World Economic Outlook, October 2012, Coping with High Debt and Sluggish Growth, Washington D.C.: IMF posted at http://www.imf.org/external/pubs/ft/weo/2012/02/pdf/text.pdf, accessed on 2 December 2012 Kapsalis Apostolos (2012) Tackling the Problem of undeclared work, European Industrial Relations Observatory (EIRO), GR1202039I, 17 May 2012, posted at website http://www.eurofound.europa.eu/eiro/2012/02/articles/gr1202039i.htm accessed 15 June 2012 Kickert, Walter C. (2011) Distinctiveness of Administrative Reform in Greece, Italy, Portugal and Spain, Common Characteristics of Context, Administrations and Reforms’ In: Public Administration, Vol.89, Issue 3, pp. 801-818 Kunstein, Tobias und Wolfgang Wessels (2011) Die Europäische Union in der Währungskrise: Eckdaten und Schlüsselentscheidungen´ In: Integration 4/2011, pp. 308-322 Lavdas, Kostas (2005) ´Interest Groups in Disjointed Corporatism: Social Dialogue in Greece and European ‘Competitive Corporatism’ West European Politics, Vol. 28, No. 2, March 2005 pp. 297-316(20) Lewis, Michael (2011) Boomerang. Travels in the New Third World. New York: Norton and Company 108 KadarKrisztian_16_belivek.indd 108-109 Lima, Maria da Paz Campos (2011) Unions set to strike over 2012 austerity budget plan, PT1110019I, 18 November 2011; http://www.eurofound.europa.eu/eiro/2011/10/ articles/pt1110019i.htm accessed on 15 June 2012 Lima, Maria da Paz Campos (2012) Highest record rise in unemployment in 2011, European Industrial Relations Observatory, PT1202019I, 3 May 2012 ,posted at http://www. eurofound.europa.eu/eiro/2012/02/articles/pt1202019i.htm accessed on 15 June 2012 MacGuineas, Maya, C. Fred Bergsten, Sebastian Mallaby and Daniel Mitchell (2011) The Budget Deficit and US Competitiveness, posted at website of Council of Foreign Relations, May 6, 2011, http://www.cfr.org/economics/budget-deficit-us-competitiveness/p24910 accessed on 8 October 2012 Mak, Geert (2012) Was wenn Europa scheitert, München: Pantheon Magalhães, Pedro C. (2012) ‘After the Bailout: Responsibility, Policy, and Valence in the Portuguese Legislative Election of June 2011´, South European Society and Politics, 17:2, 309-327 Magone, José M. (2002) Attitudes of southern European citizens towards European integration: before and after accession 1974 to 2000, In: António Costa Pinto, Nuno Severiano Teixeira (eds.), Southern Europe and the Making of the European Union, New York: Columbia University Press, pp. 209-236 Magone, José (2003) The Politics of Southern Europe. Integration into the European Union. Westport, CT: Praeger Magone, José M.(2004) The Developing Place of Portugal in the European Union, New Brunswick, New Jersey: Transaction Magone, José M. (2006a) The New World Architecture. The Role of the European Union in Making Global Governance, New Brunswick, New Jersey: Transaction Magone, José M. (2006b) The Rise and Fall of the Centre-Right Coalition Government in Portugal (2002-2005), In: Lusotopie, Vol. XIII, 2006, pp. 39-59 Magone, José M. (2009) Contemporary Spanish Politics, 2ndedition, London: Routledge Magone, José M. (2010) The Role of the EEC in the Spanish, Portuguese and Greek Transitions, In: Gregorio Alonso and Diego Muro (eds), The Politics and Memory of Democratic Transition. The Spanish Model, London: Routledge, pp. 215-235 Magone, José M. (2011a) Centre-Periphery conflict in the European Union? Europe 2020, the Southern European Model and the euro-crisis, In: Attila Ágh (ed.), European Union at the crossroads: The European perspectives after the global crisis, Budapest: Budapest College of Communication, Business and Communication, pp. 71-122 109 2013.01.18. 19:05 Magone, José M. (2011b) The Difficult Transformation of State and Public Administration in Portugal. Europeanization and the Persistence of Neo-Patrimonialism, In: Public Administration, Vol. 89, 3, pp.756-782 Maystadt, Philippe (2011) Europe: le continent perdu? Waterloo: Avant-propos McCann, Dermot (2010) The Political Economy of the European Union. Cambridge: Polity Miguel, Pablo Sanchez (2012) Spain: Unions oppose new law sanctioning greater flexibility, ES1202021I, 5 March 2012 posted on http://www.eurofound.europa.eu/ eiro/2012/02/articles/es1202021i.htm accessed 15 June 2012 Ministerio de Economia y Hacienda (2012) Private Indebtedness: Some Highlights, 29 June 2011, p.2 posted at http://www.thespanisheconomy.com/SiteCollectionDocuments/ en-gb/Financial%20Sector/110629_Private_debt.pdf accessed on 15May 2012 Morlino, Leonardo and Mario Tarcchi (1994) The dissatisfied society. The roots of political change in Italy, In: European Journal of Political Research, Vol.30, pp. 41-63 Morlino,Leonardo and Mario Tarcchi (2006) La società insoddisfatta e suoinemici. I partitinella crisi italiana, Leonardo Morlino e Mario Tarcchi (eds), Partiti e caso italiano. Bologna: il Mulino, pp. 207-243 Nöellet, Jacques Keller (2011) Economic Governance: Ambitions and Ambiguities, In: Studia Diplomatica, The Brussels Journal of International Relations, Vol. LVIX, No. 4, pp. 7-10 Ongaro, Edoardo (2011) The Role of Politics and Institutions in the Italian Administrative Reform Trajectory, In: Public Administration, Vol. 89, Issue 3, pp. 738-755 Pagoulatos, George and Triantopoulos, Christos (2009) The Return of the Greek Patient: Greece and the 2008 Global Financial Crisis, In: South European Society and Politics, 14:1, pp. 35-54 Piris, Jean Claude (2012) The Future of Europe. Towards a Two-Speed EU? Cambridge: Cambridge University Press Pollack, Mark (1994) “Creeping Competence: The Expanding Agenda of the European Community”, In: Journal of European Public Policy, 14,2(1994), pp. 95-140 Pollack, Mark (2000) “The End of Creeping Competence? EU Policy Making Since Maastricht.” In: Journal of Common Market Studies, 38,3(2000), pp. 519-538 Polanyi, Karl (1944,1957) The Great Transformation. The Political and Economic Origins of Our Time, Boston: Beacon Press Radelet, Steven and Jeffrey Sachs (2000) The Onset of the East Asian Financial Crisis, In: Paul Krugman (ed.), Currency Crises, Chicago: Chicago University Press, pp. 105-162 110 KadarKrisztian_16_belivek.indd 110-111 Rifkin, Jeremy (2004) The European Dream. How Europe´s Vision of the Future is Slowly Eclipsing the American Dream, Cambridge: Polity Press Ross, George (1995) Jacques Delors and European Integration, Cambridge: Cambridge University Press Royo, Sebastian (2009) After the Fiesta: The Spanish Economy Meets the Global Financial Crisis, In: South European Society and Politics, Vol.14, 1, pp. 19-34. Santos, Boaventura Sousa (2011) Portugal. Ensaio contra a Autoflagelação, Lisboa: Edições Almedina Scharpf, Fritz (1999) Governing in Europe: Effective and Democratic? Oxford: Oxford University Press Schwarzer, Daniela (2010) Gouverner l´Euro après la Crise´.In: Politique Étrangére, 3, pp. 511-522 Schumpeter, Joseph (1947) Capitalism, Socialism and Democracy. London: Georg Allen and Unwin Song, Jesook (2006) ”Family Breakdown and Invisible Homeless Women: Neoliberal Governance During the Asian Debt Crisis in South Korea”, In: Positions. East Asian Cultures Critique, Vol.14,1, pp.37-65 Sotiropoulos, Dimitri (2004) “Southern European Public Bureaucracies in Comparative Perspective.” In: West European Politics, 24(3), pp.405-22 Sotiropoulos, Dimitri (2006) “Old Problems and New Challenges: The Enduring and Changing Functions of Southern European State Bureaucracies, In: Richard Gunther, P. Nikiforos Diamandouros and Dimitri A. Sotiropoulos (eds), Democracy and the State in the New Southern Europe, Oxford: Oxford University Press, pp. 1977234 Spanou, Kalliope, Dimitri Sotiropoulos (2011) ‘The Odyssey of Administrative Reforms in Greece, 1981–2009: A Tale of Two Reform Paths´, In: Public Administration, Vol. 89, 3, pp. 723-737 Statistics Portugal, 14 June 2012, Unemployment figure in first trimester 2012 posted at http://www.ine.pt/xportal/xmain?xpid=INE&xpgid=ine_indicadores&indOcorr Cod=0005599&selTab=tab0 accessed on 15 June 2012 Sweet, Alec Stone and Wayne Sandholtz (1998) Supranational Governance and European Integration, in: Wayne Sandholtz and Alec Stone Sweet (eds.), European integration and Supranational Governance, Oxford: Oxford University Press, pp. 1-26. Tarrow, Sidney (1989) Democracy and Disorder in Italy. Protest and Politics in Italy 19651975. Oxford: Oxford University Press 111 2013.01.18. 19:05 112 KadarKrisztian_16_belivek.indd 112-113 Source :Eurostat posted at http://epp.eurostat.ec.europa.eu/tgm/refreshTableAction.do?tab=table&plugin=0&pcode=teina200&language=en accessed on 08 October 2012 Annexes Figure 1. Budget deficit in EU-27 betweeen 2007-2011 Tönnies, Ferdinand (1926) Gemeinschaft und Gesellschaft. Grundbegriffe der Reinen Soziologie. Berlin: Verlag von Karl Curtius Tsoukalis, Loukas (2000) Economic and Monetary Union, In: Helen Wallace and William Wallace (eds.) Policy Making in the European Union, Oxford: Oxford University Press Verney, Susannah and Anna Bosco (2011) (eds) Euroscepticism in Southern Europe: A Diachronic Perspective, Special issue of South European Society and Politics, Vol.16, Issue 1 Wade, Robert (1998) ‘The Asian Debt-and-Development Crisis of 1997-?. Causes and Consequences´, In: World Development, Vol. 26, No. 8, pp. 1535-1553 Wallerstein, Immanuel (2011) The Modern World System I .Capitalist Agriculture and the Origins of the European World Economy in the sixteenth century, Berkeley: University of California Press Weiner, Eric J. (2011) The Shadow Market. How Sovereign Wealth Funds Secretly Dominate the Global Economy, Oxford: Oneworld book US Government Accountability Office (GAO) (2012) Federal Debt Basics posted on website at http://www.gao.gov/special.pubs/longterm/debt/debtbasics.html accessed on 8 October 2012 113 2013.01.18. 19:05 114 KadarKrisztian_16_belivek.indd 114-115 5,6 Popular Orthodox Rally(LAOS 2009 15 21 0 0 0 13 160 91 Seats 2,9 8,5 6,1 7 10,6 16,8 13,2 18,7 May 2012 % 26 19 21 33 52 41 108 Seats 4,5 6,3 6,9 7,5 26,9 12,3 29,7 June 2012 % 12 17 18 20 71 33 129 Seats Source: website of Parties and Elections in Europe. At http://www.parties-and-elections.eu/greece.html accessed on 2 December 2012 7,5 0 Democratic Left(DIMAR) Communists(KKE) 0 Golden Dawn(XA) 4,6 Syriza 0 43,9 Socialists(PASOK) Independent Greeks(ANEL) 33,5 % New Democracy (ND) 0 20 40 60 80 100 120 140 160 180 Source: Eurostat posted at http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&language=en&pcode=tsdde410&plugin=1 accessed on 8 October 2012 Source:Eurostat posted at http://epp.eurostat.ec.europa.eu/tgm/refreshTableAction.do?tab=table&plugin=0&pcode=teina200&language=en on 12 October 2012 Source:Eurostat, http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&plugin=0&language=en&pcode=teina225 accessed on 12 October 2012 Figure 2. Public of EU countries 2007-2012 % of GDP Figure 5. General Elections in Greece in 2009, April and May 2012 115 2013.01.18. 19:05 116 KadarKrisztian_16_belivek.indd 116-117 31 16 0 Socialists Galician Nationalist Block Galician Alternative of the Left 2009 0 12 25 38 Seats 13,9 10,1 20,6 45,8 % 2012 9 7 18 41 Seats 12,5 PCTV 14,1 3,5 2,2 6 3,7 People ´ s Party - EA United Left Union for Progress and Democracy Aralar EA 2009 1 4 1 1 13 25 9 30 Seats 0 0 1,9 5,4 11,8 19,1 25 34,6 % 2012 0 0 1 3 10 16 21 27 Seats Figure 7. Basque elections in 2009 and 2012 Source: Basque government, Ministry of Interior,Justice and Public Administration, posted athttp://www.euskadi.net/q93TodoWar/eleccionesJSP/q93Contenedor.jsp?me nu=li_2_1_1&opcion=a&idioma=c accessed on 1 December 2012 30,7 Socialists - EH - Bildu 38,6 % Basque Nationalist Party 0 5 10 15 20 25 30 35 40 45 Source: Xunta de Galicia, posted at http://resultados2012.xunta.es/11AU/DAU11999CM_L2.htm accessed on 1 December 2012 46,7 % People´s Party 0 5 10 15 20 25 30 35 40 45 50 Figure 6. Galician elections in 2009 and 2012 117 2013.01.18. 19:05 118 KadarKrisztian_16_belivek.indd 118-119 4 3,5 7,6 9,9 13 14,4 13,7 30,7 % 2012 3 9 13 19 20 21 50 Seats Source: Government of Catalonia, posted at http://www.parlament2012resultats.cat/09AU/DAU09999CM_L2.htm accessed on 1 December 2012 3,29 Catalan Solidarity for Independence 4 0 10 7,4 3,39 0 - Catalan Initiative Candidature of Popular Unity(CUP) Ciutadans (C) United Left 12,4 People ´ s Party 18 10 28 7 62 Seats 18,4 Catalan Republican Left(ERC) 2010 Socialists 38,43 % Convergence and Union(CiU) 0 10 20 30 40 50 60 70 Figure 8. Elections in Catalonia 2010 and 2012 Figure 9: How the way national democracy works? (2011) Eurobarometer, 76,Autumn 2011, p.48 119 2013.01.18. 19:05 Figure 10: How the way democracy works in the EU (Autumn 2011) Figure 11: Genworth index score on financial vulnerability of private households 2010 Euro barometer, 76, Autumn 2011, p. 51 Source: Genworth Index 2010: 5 120 KadarKrisztian_16_belivek.indd 120-121 121 2013.01.18. 19:05 Global crisis and peripherialization in the ECE region Figure 12: Assessment of economic crisis (2012) Miklós LOSONCZ Source: Eurobarometer 77, First results, Spring 2012: 17 Introduction The objective of this paper is to analyse the impact of the global economic and financial crises on the relative economic position of the Eastern and Central European (ECE) member states in the EU. It intends to find answer to the question whether the spontaneous and/or policy driven adjustment to the new situation and the crisis management led to any improvement in the relative economic position of the ECE region (or some of the countries) in the EU or, on the contrary, the result was peripherialization. If peripherialization took place, the question arises whether it was exclusively driven by the global financial and economic crisis or other factors played a part in it as well. If other factors are relevant, the question is to what extent the European Union can be blamed for peripherialization. The answers to these questions have implications for the catching-up process in the EU including its cohesion policy. The time frame of the paper covers the 2000s. Within this range some other sub-periods can be distinguished. Eight Eastern and Central European countries (Poland, the Czech Republic, Slovakia, Hungary, Slovenia, Estonia, Latvia and Lithuania) joined the EU in 2004, Romania and Bulgaria followed suite in 2007. The years prior to these dates were characterised by preparations for EU accession in these countries. The global financial and economic crises started in late summer 2007 in the sub-prime real estate market of the US and spilled over to the real economy after the default of the US investment bank Lehman Brothers in mid-September 2008. It led to sovereign debt crisis in 2009, which has not been overcome until recently. In the paper future oriented conclusions are intended to be drawn from past figures. 122 KadarKrisztian_16_belivek.indd 122-123 123 2013.01.18. 19:05 The first part of this paper gives an overview of the political and economic background of the present situation. In the second part peripheralization is analysed with the help of real economic figures, more precisely in terms of GDP growth, per capita GDP in PPS, gross capital formation, the general government deficit and government debt. The economic performance of the ECE countries are analysed in relative terms, i.e. how the major economic indicators of the individual ECE member states changed compared to the EU average. The third part discusses peripherialization according to other indicators related to competitiveness and some socio-economic indicators. The final part contains the conclusions. I. Political and economic background Although the Eastern and Central European candidate countries met formally the Copenhagen criteria of accession, the last enlargement of the EU was basically a political decision. As a consequence of this, the ex-post analysis shows that some new EU member states were not suitable for EU membership completely. In addition, the political consensus over EU accession eroded in the new member states after 2004 and 2007, respectively, as soon as the external pressure concerning the adaptation of the acquis communautaire faded away. This narrowed the room of manoeuvring of economic policy. Until the date of accession the common objectives (including economic ones) of EU membership kept together the diverging interests. Latent disagreements and differences of interests dating back to previous periods and suppressed by the necessity of establishing consensus to preparations for accession to the EU led into open political conflicts. They, too, were mirrored in parliamentary deadlocks, weak governments and frequent government changes. In Slovenia the national consensus was maintained by setting the objective of joining the Economic and Monetary Union as of 1 January 2007. Slovenia assumed the role of the rotating EU presidency in the second half of 2011. This, too, strengthened the centripetal forces in politics. In Slovakia, too, preparations for introducing the euro as of 1 January 2009 postponed the articulation of partial interests among political forces. On the other hand, in Poland the political turmoil seemed to have finished or at least eased in 2007 when the coalition of populist parties lost the elections and a rather stable government was formed. Incentives on structural reforms in the framework of the Stability and Growth Pact as well as economic policy co-ordination in the EU were weak prior to the global financial and 124 KadarKrisztian_16_belivek.indd 124-125 economic crisis. Therefore several new member states were not in an appropriate condition to withstand the global financial and economic crisis successfully. In the wake of the crisis the ECE countries were hit by the same external shocks. With differences in their economic structure and institutional system, the specific features and the state of their economies prior to the global crisis these shocks proved to be asymmetrical in nature implying that although they were the same, they affected the countries concerned differently. The economic policy responses of the ECE countries, too, were different in many respects. The most significant dividing line was between countries using fixed exchange rates as members of the Economic and Monetary Union (EMU) such as Slovenia, Slovakia and Estonia and currency board agreements such as Bulgaria, Latvia and Lithuania on one hand and those having maintained their floating exchange rate regimes such as Poland, Hungary, the Czech Republic, and Romania on the other one. Countries with fixed exchange rate regimes were not in the position of using devaluation as a means of crisis management. In turn, the common currency fended off the risk of an exchange rate and liquidity crisis. In fixed exchange rate regimes the burdens of adjustment were imposed on the real sphere since it is not possible to devalue the national currency. Floating exchange rate regimes are more flexible. However, it should be noted that according to the terms of accession to the EU new member states are obliged to join the EMU and thereby to give up their floating exchange rate regimes, although sequencing is with their responsibility. With the global economic and financial crisis and hesitant and controversial crisis management by EU institutions, extreme political forces with pronounced anti EU sentiments gained ground in several new member states. In addition, the public attitude towards the EU became more critical in general sometimes nurtured by incumbent governments as well, particularly in Hungary. This must have something to do with the rather controversial and inefficient crisis management of EU institutions and the lack of common long-term objectives or perspectives in European integration. Thereby the room of manoeuvring of incumbent governments became rather limited in economic policy. The political implications of crisis management were different in the individual new member states. In the Baltic countries political consensus was brought about on the maintenance of the currency board agreement, which implied severe austerity measures. In the 125 2013.01.18. 19:05 other new member states the governing forces had to face rather significant pressure from the part of the opposition parties with negative implications for economic policy in general and crisis management in particular. These factors set the framework of adjustment to the new situation in the Central and Eastern European EU member states. These background factors played a rather significant role in the crisis management of the new member states and in their economic performance. II. The impact of the crisis on the real economy The impact of the crisis on the real economy can be analysed with a great number of indicators. This report is limited to those relevant to the analysis of peripherialization of the ECE region such as the rate of growth of GDP, changes in per capita GDP, investments, general government deficit and government debt. The most important indicator of overall economic performance in quantitative terms is gross domestic product (GDP). Between 2009 (the year of recession in the OECD countries) and 2011 (the latest historical statistical figure available) GDP growth was slower and recession in 2009 deeper in seven new member states than the average of the EU-27 and the EU-15 (Table 1). The exceptions include Poland, Slovakia and the Czech Republic. These countries performed better than the EU averages. (Table 1) GDP growth was much slower in new member states with fixed exchange rate regimes (Bulgaria, the Baltic states and Slovenia) than in those with flexible ones. The only exception was Slovakia. Poland’s past performance was the best not only among the new member states but in the EU-27 as well. Poland was namely the single EU member country, which did not suffer recession during the crisis. On the contrary, its GDP grew in the recession year of 2009 by 1.6 per cent. This was to a large extent due, first, to its large economic size: demand in the huge domestic market counterweighted shrinking external demand. Second, the flexible exchange rate regime allowed the depreciation of the Polish currency. The devaluating currency contributed to the improvement of the competitiveness of exports, thereby compensated for to a large extent the drop in external demand. On the other hand, since the stock of foreign exchange loans of households was marginal, devaluation did not endanger the stability of the financial system. This was different in other new member states where the degree of devaluation was limited for this reason. Slovakia withstood the global crisis with a rather mild recession relative to others in spite of the fixed exchange rate regime. 126 KadarKrisztian_16_belivek.indd 126-127 The EU’s economic and monetary policy framework did not have an outstanding positive or negative impact on GDP growth rates. There were new member states with both fixed and floating exchange rate regimes that performed relatively favourably. Economic growth in Slovakia with the euro and Poland with its flexible exchange rate regime was quite impressive between 2009 and 2011. On the other hand, GDP growth in Latvia with a currency board and Hungary with a floating exchange rate regime was rather poor. In the case of Hungary the unorthodox or unconventional economic policy of the government after 2010, too, contributed to the meagre economic performance. This economic policy shifted the burdens of adjustment on the business sector with a negative impact on gross fixed investments. In principle, one of the most comprehensive indicators of economic convergence, particularly in the long-run, is GDP per capita in purchasing power standards (PPS). Per capita GDP is expressed in PPS, which is a common currency that eliminates the differences in price levels between countries allowing meaningful volume comparisons of GDP between countries. Nevertheless, in this particular case per capita GDP may include distortions because of changes in the number of total population that may not be in line with long-term trends. First, with the accession to the EU in 2004 and 2007, respectively, the labour market of the EU-15 have been gradually liberalised for the employees of the new member states. Second, the response of many employees to the global financial and economic crisis in the new member states was emigration, although not necessarily, but mostly to the EU. These two factors certainly might have changed the number of inhabitants in some countries surveyed. Growth in per capita GDP associated with the decline of the population does not imply the same as that related to the increase of GDP. Nevertheless, in spite of these methodological problems it is worth analysing the catching-up process of the new member states to the EU average with the help of this indicator (Table 2). Prior to the global financial and economic crisis in the 2000s the catching-up process of the new member states to the EU-27 average in terms of per capita GDP in PPS was remarkable. Per capita GDP in PPS as a percentage of the EU-27 grew sharply. With the crisis the catching-up process came to a halt. Primarily due to the contraction of GDP, which was more pronounced in the new member states than in the EU-15, per capita GDP relative to the EU-27 average fell in 2009. Even after the recession year of 2009 the catching-up was rather sluggish in most of the new member states. 127 2013.01.18. 19:05 Declining population had a favourable impact on the trend. E.g. from 2004 to 2011 the population decreased by 432 thousand in Bulgaria, 245 thousand in Latvia and almost 400 thousand in Lithuania. The decrease of the population did not result in the increase of per capita GDP in Bulgaria. Nevertheless, it contributed to the acceleration of the catching-up process in Latvia and Lithuania. According to the figures Slovenia was hit most by the global financial and economic crisis. The most pronounced exception to the halt was Poland, where the catching-up process continued uninterruptedly regardless of the crisis. Gross capital formation (including investments) is one of the most important elements of future GDP growth. From 2009 to 2011 growth capital formation declined in six new member states more than the average of both the EU-25 and the EU-15 (Table 3). Poland again was the most pronounced positive exception. Estonia performed well, Slovakia relatively satisfactorily. No strong relationship could be observed between the type of the exchange rate regime and gross capital formation. Economic policy and the specific features of crisis management seem to have been more decisive. With the decrease of GDP as a result of the global financial and economic crisis, the functioning of automatic stabilisers as well as the increase of discretionary expenditures the general government deficit grew in every new member states from 2008 to 2010 with the exception of Bulgaria (Table 4). In the average of the period of 2009-2011 only Bulgaria, the Czech Republic, Hungary and Estonia performed better than the average of the EU-27 and the EU-15. In spite of the relatively good general government deficit figures, excessive deficit procedure is going on against all the new member states. The gross debt of the general government in per cent of GDP is lower than the average of the EU-27 and the EU-15 (Table 5.). The lower value is related to the fact that in the wake of the transition to the market economy and western type parliamentary democracy the Baltic states did not inherit anything from the government debt of the Soviet Union. Therefore, their room of manoeuvring in fiscal policy was greater than that of their Central and Eastern European counterparts, which they obviously exploited. This is reflected in the increase of their government debt relative to GDP (Table 5). It should be noted that the price of Poland’s favourable real economic performance was the increase of general government deficit and government debt. The later is approaching critical levels. The consolidation of the general government is still ahead that may have a negative impact on GDP growth. Due to its specific features Poland won time, but the country cannot spare the austerity its central and eastern European counterparts have already undergone.(Table 4) 128 KadarKrisztian_16_belivek.indd 128-129 The relative size of the general government deficit and the government debt may be a limiting factor of GDP growth. Measure aiming at the consolidation of the general government (such as the increase of taxes and/or the decrease of expenditures) may be detrimental to GDP growth and thereby to the economic catching-up of new member states. (Table 5) III. The crises in the mirror of other indicators The effects of the global financial and economic crisis can be traced by composite and socio-economic indicators. One set of these indicators refer to the overall competitiveness of the individual countries. Changes in the global competitiveness index ranking indicate the global deterioration of the position of the new EU member states (Table 6). With the exception of Bulgaria all of them ranked worse in 2013-2013 than before the crisis in 2007-2008. Emigration trends model the behaviour of the most mobile segment of human capital. A pick-up in emigration is an indication of the deterioration in the attractiveness of a country for the most flexible employees. (In addition, it reflects to a certain extent the flexibility of the labour market as well.) Emigration, too, has tended to develop unfavourably from the point of view of new member states. (Table 6) Figures of Eurostat are available only for long-term emigration that does not cover completely the movement of persons and employees. Nevertheless, considering the EU, the number of long-term emigrants increased in the Central and Eastern European countries from 2004 (the year of accession to the EU) to 2008, but the rate of growth jumped subsequently (Table 7). A complete set of up-to-date time series on the quality and the quantity of human capital that enable international comparison are not available in the database of Eurostat. In order to highlight the issue the participation rates in life-long learning are worth examining. As far as the age group ranging from 25 to 64 years is concerned, the figures of the Czech Republic, Poland as well as Slovakia and Slovenia are above or close to the concomitant average numbers of the EU (Table 8). The other new member states lagged behind. The figures of Bulgaria and Hungary are particularly low. (Table 8) As a result of the global financial and economic crisis the Czech Republic and Poland and to a lesser extent Romania laid more emphasis on the extension of life-long learning. Finally social exclusion is illustrated by the share of people at risk of poverty. In this 129 2013.01.18. 19:05 field the picture is rather diversified. In a cross-country view the numbers of the Czech Republics, Estonia, Slovenia and Slovakia are below or close to the averages of the EU (Table 9). As far as changes in social exclusion figures are concerned, with the exception of Poland, Slovakia and Romania the situation deteriorated in the new member countries. The impact of the crisis was quite considerable, thus peripherialization in this field is undeniable. Meeting the objectives of the Europe 2020 strategy will be a rather tough task for the new member states. (Table 9) Conclusions The Central and Eastern European EU member states were hit by the same external shock of the global financial and economic crisis. However, the impact of the crisis on the individual countries was different depending on a great number of factors external and internal factors, including limiting ones such as the legal and economic policy framework of the EU on one hand and the level of economic development, the historical heritage, the economic policy and the exchange rate regimes of the countries surveyed on the other one. The first general conclusion that can be drawn from the above analysis (that is far from being completes in both coverage and depth) is that as a general trend the caching-up and the convergence process as well as the improvement in global competitiveness of the Central and Eastern European member states came to a halt in the wake of the global financial and economic crisis. Instead of the catching-up and the convergence peripherialization became the major trend in both economic and social terms and in quantitative and qualitative ones alike. The major exception to this trend of peripherialization is Poland whose caching-up and convergence continued during the crisis, albeit much more slowly and controversially than before. However, it should be stressed that, first, the relatively good performance could be attributed to a large extent to a specific factor, namely the size of the domestic market. Second, the price of the good performance was the increase of the general government deficit and the government debt. Painful adjustments are waiting for Poland in the near future. been assumed before. One of the most important determining factors of adjustment was certainly the type of the exchange rate regime. Nevertheless, economic policies, particularly if they are based on broad political and social consensus could counterweight the effects of the crisis to some extent in a positive way. This was the case in Estonia and Slovakia. Latvia and Lithuania, too, pursued similar economic policies, with less success due to other factors. On the other hand, the flexible exchange rate regime could not necessarily compensate for the unorthodox or unconventional economic policy of the Hungarian government diverging from mainstream trends by alone that has been pursued since May 2010. The positive example is Poland with its successful adjustment based on its floating exchange rate regime. The Czech Republic, too, was rather successful, but this was not the case in Romania. The role of the EU in general and EU membership in particular in the peripherialization is rather controversial. First, the perspective of EU membership contributed to the emergence of political and social consensus for the preparations for accession. With EU membership this consensus faded away partly because the EU failed to provide the new member states with perspectives. Second, the external pressure for discipline particularly in fiscal policy deriving from EU institutions was not strong enough in the case of member states with flexible exchange rate regimes such as Hungary, Romania and to some extent the Czech Republic. Third, the external pressure of the set of rules associated with fixed exchange rate regimes (the Economic and Monetary Union and currency board agreements) proved to be rather tough in terms of the real economic burdens of the adjustment. Nevertheless, the experience of some Central and Eastern European EU member states demonstrate that the consequences of the global financial and economic crisis (halt in the catching-up and convergence process, the deterioration of global competitiveness comprising economic, human and social factors) can be overcome or at least mitigated by political will and appropriate economic policies. Nevertheless, the overall view is not as bleak as it may seem from the above generalisation. There are substantial differences in the performance and adjustment trends of the individual new member states. Peripherialization was much more differentiated than it had 130 KadarKrisztian_16_belivek.indd 130-131 131 2013.01.18. 19:05 Annexes Table 1: GDP growth in the new member states (Percentage change over the previous year) 2008 2009 2010 2011 2009-2011 EU-27 0,3 -4,3 2,1 1,5 -0,7 EU-15 0,0 -4,3 2,1 1,4 -0,8 Bulgaria 6,2 -5,5 0,4 1,7 -3,4 Czech Republic 3,1 -4,5 2,5 1,9 -0,1 (Percentage change over the previous year) Estonia -4,2 -14,1 3,3 8,3 -2,5 2008 2009 2010 2011 2009-2011 total Table 3: Changes in gross capital formation in the new member states Latvia -3,3 -17,7 -0,9 5,5 -13,1 Lithuania 2,9 -14,8 1,5 5,9 -7,4 EU-27 -2,2 -17,3 4,3 1,3 -11,7 Hungary 0,9 -6,8 1,3 1,6 -3,9 EU-15 -2,7 -16,7 4,2 0,9 -11,6 total Poland 5,1 1,6 3,9 4,3 9,8 Bulgaria 16,3 -24,9 -14,0 -1,6 -40,5 Romania 7,3 -6,6 -1,6 2,5 -5,7 Czech Republic 1,9 -20,2 5,8 0,3 -14,1 Slovakia 3,4 Slovenia 5,8 -7,8 -4,9 Source: Eurostat 1,2 0,6 -6,0 Estonia -21,2 -45,9 13,7 34,8 2,6 4,4 3,2 2,7 Latvia -19,7 -47,1 -4,2 43,6 -7,7 Table 2: GDP per capita in PPS in the new EU member states (EU-17=100) 2000 2004 2008 2009 2010 2011 Bulgaria 28 35 44 44 44 45 Czech Republic 71 78 81 82 80 80 Estonia 45 57 69 64 64 67 Latvia 36 46 56 51 55 58 Lithuania 40 51 61 55 57 62 Hungary 54 63 64 65 66 67 Poland 48 51 56 61 63 65 Romania 26 34 47 47 47 49 Slovakia 52 57 73 73 73 73 Slovenia 50 87 91 87 85 84 Lithuania 3,7 -57,1 53,8 9,7 6,4 Hungary 3,7 -29,6 7,6 -0,4 -22,4 Poland 4,0 -11,5 9,3 10,5 8,3 Romania 3,7 -24,1 -2,0 11,9 -14,2 Slovenia 3,1 -33,8 -5,8 -4,6 -44,2 Slovakia 4,7 19,9 10,2 -1,4 -31,5 Source: Eurostat Source: Eurostat 132 KadarKrisztian_16_belivek.indd 132-133 133 2013.01.18. 19:05 Table 4: Net lending (+) or net borrowing (-) of general government Table 5: Gross debt, general government (In percentage of GDP) (In percentage of GDP) 2003-2007 EU-27 -2,2 2008 -2,4 2009 -6,9 2010 -6,5 2011 -4,4 2009- 2008 2009 2010 2011 2011 av. EU-27 62,2 74,6 80,2 83,0 -5,9 EU-15 70,2 80,0 85,6 88,1 EU-15 -2,1 -2,1 -6,3 -6,2 -4,1 -5,5 Bulgaria 13,7 14,6 16,2 16,3 Bulgaria 1,1 1,7 -4,3 -3,1 -2,0 -3,1 Czech Republic 28,7 34,2 37,8 40,8 Czech Republic -3,2 -2,2 -5,8 -4,8 -3,3 -4,6 Estonia 4,5 7,2 6,7 6,1 Estonia 2,0 -2,9 -2,0 0,2 1,1 -0,2 Latvia 19,8 36,7 44,5 42,2 Latvia -0,8 -4,2 -9,8 -8,1 -3,4 -7,1 Lithuania 15,5 29,3 37,9 38,5 Lithuania -1,0 -3,3 -9,4 -7,2 -5,5 -7,4 Hungary 73,0 79,8 81,8 81,4 Hungary -7,2 -3,7 -4,6 -4,4 4,3 -4,4 Poland 47,1 50,9 54,8 56,4 Poland -4,2 -3,7 -7,4 -7,9 -5,0 -6,8 Romania 13,4 23,6 30,5 33,4 Romania -1,8 -5,7 -9,0 -6,8 -5,5 -7,1 Slovenia 22,0 35,0 38,6 46,9 Slovenia -1,6 -1,9 -6,0 -5,7 -6,4 -6,0 Slovakia 27,9 41,0 43,3 Slovakia -2,6 -2,1 -7,2 -4,9 -6,7 35,6 Source: Eurostat 134 KadarKrisztian_16_belivek.indd 134-135 -8,0 Source: Eurostat 135 2013.01.18. 19:05 Table 6: Global competitiveness index ranking 2007-2008 2008-2009 2010- 2011- 2011 2012 2012-2013 Bulgaria 79 76 71 74 62 Czech Republic 33 33 36 38 39 Estonia 27 32 33 33 34 Latvia 45 54 70 64 55 Lithuania 38 43 47 44 45 Hungary 47 62 52 48 60 Poland 51 53 39 41 41 Romania 74 68 67 77 78 Slovenia 39 42 45 57 56 Slovakia 41 46 60 69 71 Source: World Economic Forum Table 7: Total number of long-term emigrants Table 8: Life-long learning: participation in education and training from 25 to 64 years (In per cent of the total) 2004 2008 2009 2010 2011 EU-27 9,2 9,4 9,3 9,1 8,9 EU-15 9,7 9,9 9,8 9,6 9,4 Bulgaria 1,3 1,4 1,4 1,2 1,2 Czech Republic 5,8 7,8 6,8 7,5 11,4 Estonia 8,4 6,8 5,3 5,0 5,0 Latvia 4,0 3,1 2,7 2,8 2,7 Lithuania 5,0 4,7 4,7 5,3 4,5 Hungary 1,5 1,5 1,5 1,3 1,6 2004 2008 2009 2010 Poland 16,2 13,9 14,6 16,2 15,9 Bulgaria n.a. 2112 n.a. n.a. Romania 4,3 3,3 2,8 2,8 3,9 Czech Republic 34818 51478 61782 61069 Slovenia 9,2 9,4 9,3 9,1 8,9 Estonia 2927 4406 4658 5294 Slovakia 9,7 9,9 9,8 9,6 9,4 Latvia 2744 6007 7388 10702 Lithuania 15165 17015 21970 83157 Hungary 3820 9591 10483 11103 Poland 18877 74338 n.a. n.a. Romania n.a. n.a. n.a. n.a. Slovenia 8269 12109 18788 15937 Slovakia 6525 4857 Source: Eurostat 4753 4447 136 KadarKrisztian_16_belivek.indd 136-137 Source: Eurostat 137 2013.01.18. 19:05 Table 9: People at risk of poverty or social exclusion (Percentage of total population) 2008 2009 2010 2011 EU-27 23,5 23,1 23,4 23,6 EU-15 21,4 21,2 21,7 21,4 Bulgaria 38,2 46,2 41,6 49,1 Czech Republic 15,3 14,0 14,4 15,3 Estonia 21,8 23,4 21,7 23,1 Latvia 33,8 37,4 38,1 40,1 Lithuania 27,6 29,5 33,4 33,4 Hungary 28,2 29,6 29,9 31,0 Poland 30,5 27,8 27,8 27,2 Romania 44,2 43,1 41,4 40,3 Slovenia 18,5 17,1 18,3 19,3 Slovakia 20,6 19,6 20,6 20,6 Source: Eurostat The fading civic identity of the EU nationals: With a special focus on the East-Central Europeans Boglárka KOLLER King Sigismund College, Budapest Introduction The project of the common Europe has recently arrived to a turning point. It seems that the self-definition and the future of the EU became uncertain. An increasing majority of the EU citizens feel that the EU is mostly dealing with non-salient issues that are far away from their everyday problems. Further, the challenges facing the European Union internally and globally would require a more unified Europe. Nevertheless, the latest developments of European integration indicate that the EU lacks many of its citizens’ support. The necessity of bottom-up processes and the activation of European citizens have never been so timely as today. This paper discusses the current dilemmas of European identity with a special focus on the East-Central Europeans’ attachments. The author builds on the constructivist and functionalist theoretical model of identity-net - which demonstrates the dynamic co-existence of individuals’ collective attachments - when explaining the prospects of the common identity.1 The following questions are raised in the paper: What could be the cultural and the civic poles of the European identity? Is the civic component of European identity fading away? Do Europeans trust their European and national institutions? What is the effect of the crisis of European economic governance on the identities of Europeans? What challenges the EU is currently facing due to the spread of differentiated integration? Who are “the others” for Europeans inside and outside its borders? And at last, but not least what are the possible means to establish European identity? In order to be able to answer these questions, an interdisciplinary approach is taken. These themes are foremost explored through reviewing and synthesizing the major theoretical contributions of nations and nationalism 138 KadarKrisztian_16_belivek.indd 138-139 139 2013.01.18. 19:05 discourse and identity formation theories. The current dilemmas of European identity are analysed by applying the approach of political science and within that the European integration studies. The arguments presented in this paper are supported by the data of the Eurobarometer surveys. The author argues that the European identity has recently been undergoing significant changes due to the crisis of the common Europe project as well as the spread of differentiation integration modes. I. The top-down and the bottom-up — the oretical considerations European integration started as an elite driven project in the 1950s. Although it gained widespread support among the European public later, the role of the social and political elites in developing and running integration remained significant up until today. European elites initiated the gradual establishment of European identity in the 1970s and since then the European Community has made great efforts to establish the legal and political framework, a common cultural policy as well as the symbols for the sake of a common identity. The Declaration on European Identity in 1973, the Tindemans Report in 1976 and the Adonnino Report in 1984 were all signs of an increased interest on the side of the EC to establish a direct link between the individuals and the Community, though it was not until the beginning of the 1990s when the concept became involved in the founding treaties of the Union. The Maastricht Treaty introduced the concept of “Citizenship of the Union” in 1991. Article 8 declares that “Every person holding the nationality of a Member State shall be a citizen of the Union”. Although this Article declares that citizens have both rights and duties, the rights declared by the Treaty were very limited compared to the national citizenship concepts. Article 128 of the Maastricht Treaty furthermore states that “The Community shall contribute to the flowering of the cultures of the member states, while respecting their national and regional diversity and at the same time bringing the common cultural heritage to the fore.” The Union’s ambition to support the establishment of a common identity can be seen in the later legal documents. The entire second chapter of the Amsterdam Treaty is dedicated to the “Union and its Citizens”. The Charter of Fundamental Rights, declared in Nice in 2000 represented another major step in establishing a direct link between the Union and its citizens, though it did not become legally binding until the Lisbon Treaty entered into force in 2009. Nevertheless, the Lisbon Treaty did not incorporate 140 KadarKrisztian_16_belivek.indd 140-141 the Charter into the text, but made it legally binding by declaring that it has the same legal value as the Treaties. Beyond the structural elements, the European Union strived to create the symbolic elements of the common identity. The blue flag with the golden stars “representing the union of the peoples of Europe”; the anthem, Beethoven’s Ninth Symphony; “Europe Day” on the 9 May; and the common currency, the Euro; all symbolise a sense of belonging to the EU. As indicated above, the European identity has many constructed elements, both structural and symbolic. The question is whether a constructed identity, like the European identity, could be loaded with sufficient real content to become a strong reference point for collective self-understanding of citizens or the pursuits of European Union to establish a common identification will end in failure. To answer this, we can recall the theoretical debate of ethno-symbolist and constructivist theories of nations and nationalism discourse. Ethno-symbolists argue that a common ethnic past, myths, and symbols rooted in a shared history are necessary for successful nation-building, and through the popular memory these elements form the identities of individuals. Therefore, without a common ethnic past, identity formation cannot be successful (Smith, 1986 and Armstrong, 1982). For constructivists, national identity is “an intellectual artefact”. Symbols and traditions are young creations. In the 19th century, due to the pursuits of the nation-building elites “entirely new symbols and devices came into existence: national anthem, national flag, personification of the nation”, etc. (Hobsbawm and Ranger, 1983). Where we put our theoretical standpoint in this debate, determines what we say about the existence and the future of European identity. There are many structures in politics and society that were first constructed by the leading elites and later became accepted and admired by the majority of the population. For example, the existence of the greatest French national holiday is due to the choice of the elite of the time, too. The republican delegates selected 14 July in 1880 to be the national holiday of France. Revolutionary days of 1830, 1848 and 1870 were also options, but finally the delegates choose the day of demolishing the Bastille (Nora, 1996: 119). Moreover, with the tools of mass-media and communication, construction of identities has become easier and faster. It is enough to think about the diversity of communities in which we can obtain “imagined” memberships (Anderson, 1991:6). As Anderson rightly argued, the national intelligentsia has a key role in this process. In the 19th century, the producers of the print market, “the lexicographers, philologists, grammarians, folklorists, publicists and composers” glittered 141 2013.01.18. 19:05 ancient histories and depicted “golden ages” of history which became available for “the consuming public” and thus the nation became an imagined community (Anderson, 1991: 71-75). Nevertheless, the establishment of European identity should be looked at as not only a construct but also an outcome of socialisation process through which individuals gradually adapt and internalize new loyalties, values and symbols into their multiple attachments. As Risse rightly argues: “It is wrong to conceptualize European identity in zerosum terms, as if an increase in European identity necessarily decreases one’s loyalty to national or other communities.” (Risse, 2004: 4). Collective identities of Europeans can only be imagined in a more differentiated structure. For individuals, the immediate vicinity, the town or village where they live, the region, the county, the nation, the European Union all signify one of their geographical attachments. Nevertheless, for a long time the prevalent opinion was held that there is a certain hierarchy between these collective allegiances and national identity has a peculiar and superior place among these attachments (Pataki, 1986). The complex social, political and economic processes and the mass migration in the second half of the 20th century caused theorists to use multiple models to describe and interpret individuals’ collective identities. Although the majority of theorists accept the concept of multiple identities, they differ in understanding its content. As Salazar claims, for example, aside from the most important national identity there are other “nationrelated identities” such as regionalism, stateless nationalism and supra-nationalism which constitute concentric circles of identities or, as he calls it after the Russian wooden doll, the “matryoshka of identities” (Salazar, 1998). For him, there is a hierarchy between allegiances, and the national identity stands at the top of other identifications. Smith, talking about collective identities, emphasises that these are “pervasive and persistent” and can be “situational”, but not completely “optional”. Therefore, the “national identification possesses distinct advantages over the idea of a unified European identity” (Smith, 1997: 322‑325). The Hungarian writer György Konrád believes that individuals can freely choose among their attachments. He sees an analogy between the multi-layers of identities and a “manystorey house” and argues that the individual’s mind can as easily shift from one identity to another as we can visit different floors in a building (Konrád, 1997). The self-understanding of Europeans can also be described by the post-national identitynet model (Koller, 2004). This model indicates not only the multiple loyalties of individuals in contemporary Europe but it also refers to functionalist and neofunctionalist 142 KadarKrisztian_16_belivek.indd 142-143 approaches. The identity-net model signifies the dynamic co-existence of individuals’ collective attachments and also includes the time dimension. Individuals regularly decide which aspect or junction of their identity-net they activate in their every-day lives. It can be imagined as a net made from Christmas tree lights. The lights at the junction points of the net light up alternatively. It may be that they shed more or less intense light in different time periods. It may also be that either many of them or only a few are sparkling. Applying that analogy; individuals are capable of changing their collective attachments regularly as well as their respective ranking and intensity. Namely, the European attachment should be understood as an element in EU citizens’ dynamically changing identity-net among other collective attachments (national, regional, local etc.), and it is more or less intensive in the various life situations of the individuals. The Eurobarometer surveys regularly measure the EU citizens’ national and European identifications. On the basis, of the last 20 years’ survey results, it can be said that the EU citizens have in general incorporated the “European dimension” into the multiple structures of their collective identities. With the exception of some short periods of time (Spring 1987 and Spring 1990), the number of EU citizens who felt themselves to some extent EU citizens too outnumbered the number of those that only felt of being citizens of their nations. It should be, moreover, emphasized the trend has not been significantly changed due to the negative effects of the recent economic and financial crisis either; almost six out of ten Europeans feel themselves to some extent a European citizen as opposed to four who do not. (Chart 1). The geographically multiple character of Europeans’ identity is also proved by the results of the Eurobarometer surveys. While, the attachment to their county is still the strongest for most of Europeans, the level of attachment to region and town or village is very close to it. Attachment to the EU is significantly weaker than to the country, region or to the immediate vicinity, however it is an existing element among the geographical attachments.(Chart 2.) II. The fading civic identity With regard to the analysis of the nature of European identity, foremost the following question should be asked: is it a culturally defined or a civic identity? Looking back on European history, we can see that national identities can be built around two poles: around 143 2013.01.18. 19:05 the cultural and ethnic communities or around the state. The first means that national identity is defined by decent and cultural elements as the common myths, symbols, language and customs. The second signifies that belonging to the political community is linked to a certain territory and manifested in citizens’ rights and duties. In current nations, both have their relevance, and we do not find any European nation to date where only one pole dominates. However, as Friedrich Meinecke, Hans Kohn and Anthony D. Smith pointed out, the two kinds of identification were not born at the same time in all European nations (Meinecke, 1969, Kohn, 1955 and Smith, 1986). There were two nation-building models in Europe: the territorial and the ethnic/cultural nations. In the territorial model, the membership in the community is linked to a certain territory; the rights and duties are determined by the legal and institutional system. All citizens living in the territory are members in the political community. France between 1789 and 1794 can be named as an example for this model. However, as Napoleon’s conquests began, the French nation-state started to redefine itself. The territorial state’s identity formation methods were extended by cultural and linguistic tools (Brubaker, 1992). Eugen Weber emphasized this change in his Peasants into Frenchman (Weber, 1979) book and pointed out that France started to apply a wide range of cultural tools in order to form “good French citizens” from peasants. In Europe’s other regions, for example in Central and Eastern Europe, the birth of a universal citizenship concept was preceded by the birth of a national identity which was defined by the ethnic, cultural and linguistic boundaries of the community and not tied to a certain territory. The territorial element of national identity as well as the political nation was born at a later stage in these nations. In the case of the European Union, there is no need to explain that there is no common ethnic past of the twenty-seven member states. The existence of a common European culture can also be debated. On the one hand, we can all agree that western Christianity, humanism, renaissance, enlightenment, democracy, capitalism, urban development, rule of law and human dignity are all parts of our “Europeanness”, as well as making the argument that Shakespeare, Beethoven, Picasso belong to our common European cultural heritage. However, we all know that the Irish and Catalan culture – both the high and the popular – are rather different than similar. There is a thin layer in our cultural heritage that we all share but there is a thick one where we are all different. In 1999, when EU citizens were asked about the existence of a common cultural identity shared by all Europeans, 49% of the citizens rejected that statement, and only 38% of the respondents agreed with it (Standard Eurobarometer 50). Consequently, the majority of Europeans did not believe in the existence 144 KadarKrisztian_16_belivek.indd 144-145 of a common culture. Other attitude surveys had similar results. As for example a 2005 survey indicated: 41% of EU citizens were afraid of the loss of national identity and national culture within Europe and were favouring cultural diversity in the EU (Standard Eurobarometer 64). Thus, the EU rather symbolizes cultural diversity than unity for the majority of Europeans. When evaluating the existence of the civic pole in the European Union, the level of trust in the European and national institutions could be analyzed. (Table 1.) With regard to the last ten years’ data, the trust in EU institutions, i.e. in the European Parliament and the European Commission was in general higher that in national ones. Moreover, in each surveyed period, the number of people who trusted the EU institutions outnumbered those who distrusted them. With regard to the European Parliament, the absolute majority of the surveyed people answered that they trusted the EP. The opposite could be concluded on the trust in national institutions, with the exception of the year 2002, in all of the surveyed period, an absolute majority of the EU citizens distrusted their national parliaments and their national governments. There is an increasing trend in this respect: in the Spring 2012 two third of the Union’s populations answered that they distrusted both their national parliaments and governments. Apparently, the trust level in the European institutions was generally higher than in national institutions, which is a sign that European citizens became parts of a bigger political community than their national one. The attitude of European citizens toward the European Union, however, changed significantly in the last three years. While with the exception of the year 2003, until the autumn 2009, more people trusted the EU in general as opposed to those that distrusted it; from the spring 2010 on those that did not trust the Union outnumbered the people that trusted the EU. Moreover, since then, in each surveyed period the majority of European citizens answered that they did not trust the Union, which is clear sign of the loss of credibility of the supranational political community (Standard Eurobarometer 77). (Chart 3.) Further, it can also be interpreted as a new direction in the European identity formation. The supranational political community that was already incorporated into the identities of millions of EU citizens has started to lose it place among their collective attachments. According to the Eurobarometer survey conducted in the spring 2012, there was a further, dramatic fall in the number of Europeans who trusted the European Union. As the latest results indicate, 66%, an absolute majority of the European citizens do not trust the Union, while only 31% trust it. This is the worst ever trust-distrust ratio measured in the 145 2013.01.18. 19:05 history of the Union. Two third of the EU citizens distrust the Union as opposed to only one third that trust it, which could be interpreted as a dramatic change in Europeans’ identity. With regard to the country specific data, distrust has been intensified in most of the EU member states (Standard Eurobarometer 77). The percentage of people who do not trust in the EU is the highest in the United Kingdom: 73%. It is followed by Greece (68%), Spain (62%), Ireland (60%) and France (60%). Nevertheless, the distrust level in Austria (59%), in Germany (57%), in Portugal (56%), in Slovenia (56%) is higher than in the Union on average. There are only 12 countries of the 27 member states, including Bulgaria (59%), Estonia (51%), Lithuania (50%), Denmark (50%), Belgium (50%), Romania (50%), Slovakia (48%), Hungary (47%), Luxembourg (47%), Cyprus (47%), Poland (47%) and Malta (41%) where the number of people that trust the EU outnumber those that distrust the Union. The number of people that trust the EU, however, has been continuously decreasing in these member states too (Standard Eurobarometer 76). With regard to the trust in East-Central European countries towards the Union, it can be concluded that with the exception of Check Republic, it is higher in the EU than in general. (Chart 4.) There are also significant differences between the EU member states with regard to the trust levels towards national institutions, e.g. trust towards national parliaments and national governments. With the exception of Estonia and Slovakia, trust in national parliaments and national governments is lower in the ECE countries than in the other members. (Table 2.-3.) On the basis of the above examined growing distrust towards the Union and the national institutions, it is also worth looking at the perception of the decision making levels by the EU citizens. Which does have the most impact on the living conditions: the European, the national or the regional/local level? (Chart 5.) In the most EU member states, including the ECE countries, the national level is seen as having the biggest impact on citizens’ every-days. Among the ECE countries, there are only two exceptions: the regional/local level ranked as most important in Estonia, and with an equal importance as the national in Slovakia. Paradoxically, although there is a high level of distrust in national institutions - both the parliament and the government -, European citizens still think that national institutions have the most impact on their living condi146 KadarKrisztian_16_belivek.indd 146-147 tions. Further, there has been another major change in the results. While traditionally, according to the survey results of 2002-2009, the most socially and financially advantaged groups tended to trust the Union, currently the most advantaged social classes and the young generations do not trust the EU. Consequently, distrust is prevalent in all social categories, in all age groups, in all professions, irrespective of the economic situation (Standard Eurobarometer 76). To sum up, does it all mean that the already established and once existed civic pole of European identity is fading away? Whether this negative trend and the dramatic fall in the trust level of EU citizens towards the Union continues, cannot be predicted. With regard to timing, it is noticeable though that the change in people’s attitude towards the Union happened at that time, when the global economic and financial crisis hit Europe and started to affect the citizens’ every-days. Probably, there is little chance that European citizens in the short and medium term become more receptive to messages that aim to establish a common culturally based European identity. European identity could be rather built around the civic pole: around the political community and its institutions that were gradually established in Europe after the World War II. The far greatest challenge therefore today is to regain the strength of the civic identity and make European citizens believe again in the common Europe project. III. The crisis of European economic governance and the weakening European identity Trust can only be regained, when European governance works effectively, its institutions are credible and when the Union is capable to provide answers to the most salient issues in Europe; those that affect the every days of EU citizens. According to Jacques Delors’ famous expression, the European Union is an UPO, an “Unidentified Political Object”. It is indefinable. It is similar as well as different from the national political communities. In accordance with this, the European governance can be characterised as unique. Political scientists tried to provide a definition for European governance. Some of them argued that there is a multi-level form of governance in the EU (Puchala, 1972, Wallace, 1983 and Caparaso, 1996). Others interpreted the Union as a new form of post-modern state (Ruggie, 1993) and again others characterised European governance as the system of “a network of pooling and sharing sovereignties“ (Keohane and Hoffmann, 1991). One 147 2013.01.18. 19:05 of the leading scholars of this subject, Börzel defined European governance as a mixture of different forms of governance (Börzel, 2010).2 How can this hybrid political community with its multi-layered mix of governance provide adequate answers to the most salient issues? In this section, some of the important shortcomings and failures of EU governance are introduced that could cause dramatic downturn in the support of the European Union and a rising distrust among the European citizens. Foremost, what are issues that the EU citizens consider as the most important? According to the Eurobarometer survey, conducted in the spring 2012, the most important issues the EU is facing today are the followings: economic situation, national public finances, unemployment and inflation. All the others – immigration, EU’s influence in the world, crime, taxation etc - were only listed after naming the economic ones that is in all probability due to the serious negative effects of the economic crisis. With regard to the answers, the European citizens in general would like to prefer a joint action of the European Union and their member states’ governments (Standard Eurobarometer 77, First results). Consequently, despite the increasing distrust of the EU citizens in the EU in general, they still think that the European Union is the one of the most important place where these issues can be solved. Leaders of the European Union have been trying to provide answers to the effects of the economic and financial crisis. The crisis-management tools however proved to be inefficient in numerous cases and resulted in the emergence of deep fragmentation lines among the member states. Foremost, the Union is devoted to save one of greatest achievements of European integration, the common currency: the euro and tries to pave the way for establishing the “e” part, the economic part of the Economic and Monetary Union (EMU). So far the European Union has managed to save some of its euro-zone members e.g. Ireland, Spain, and Greece from state bankruptcies, but effects of the required austerity measures caused serious tensions and riots in these members. The crisis management manoeuvres, however, are many times the outcomes of intergovernmental political bargains, thus they are not always transparent and consistent. The system of the euro-zone that was created in 1992 by the Maastricht Treaty was built on three “no-s” , namely: there is no bailout (1); no exit from the euro-zone (2) and no state-bankruptcy (3). Currently, what we are experiencing is that the Union has been started to soften all the three criteria. In case of Greece for example state bankruptcy and leaving the eurozone are possible scenarios.3 148 KadarKrisztian_16_belivek.indd 148-149 How could all these affect the European identity of the EU citizens? Foremost, the crisis management in the euro-zone proves that solidarity, and foremost financial solidarity, is a subject of political bargaining. Therefore, the EU member states can never be assured that the other member states would help them out in case of financial problems. Moreover many of these decisions are taken in the European Council where the heads of the states and governments are present, thus are dependent upon short term political aspirations (Benczes, 2011: 768). Further, the possibility of excluding a member like Greece, from the euro-zone could be interpreted as declaring “otherness” within the club of the EMU. The euro is not only one the greatest achievements of the European integration, but also one of the greatest symbol of the common Europe, for those members too that has not yet launched the euro. When EU citizens were asked about their attachments to the European Union, namely what the EU personally meant to them, a relative majority of the citizens (42%) answered that it is “freedom to travel, study and work anywhere in the EU” and one third of the EU citizens associated the EU with the euro.4 Consequently, the euro notes and coins launched only ten years ago became very important symbols of European identity. The results of the latest Eurobarometer surveys also support this argument. Despite serious effects of the economic and financial crisis, the level of support for the euro has remained relatively stable in the last 10 years. According to the latest survey, the majority of Europeans (52%) support the euro (Standard Eurobarometer 77, First results). Knowing this, it is no wonder that the European Union and some of its members e.g. Germany, France particularly are dedicated to save the euro. They have already expressed their support of the stronger cooperation of their economies and they have decided to work more closely in establishing a higher level of fiscal discipline too.5 Though outside the Union’s institutional system, 25 EU member states signed the so called fiscal pact in March 2010. When it enters into force it would mean another major step towards a greater economic and political integration of Europe. It seems however that there is a widespread uncertainty over the future development of the Union. When trying to convince the heads of states and governments to sign the fiscal pact, Angela Merkel warned her colleagues that “The failure of the euro, would lead to the failure of Europe”. And she continued with even more threatening words: “The euro or war in 10 years.” In his speech, at the University of Strasbourg in November 2011, Nikolas Sarkozy was arguing that not all European states would be part of a closer Union: “The single currency is a wonderful idea, but it was strange to create it without asking oneself the question of its governance, 149 2013.01.18. 19:05 and without asking oneself about economic convergence (…) There will not be a single currency without greater economic integration and convergence. That is certain. And that is where we are going. Must one have the same rules for the 27? No. Absolutely not (...) In the end, clearly, there will be two European gears: one gear towards more integration in the euro zone and a gear that is more confederal in the European Union.”6 Britain’s attitude however demonstrated clearly: not all the member states would like to give up their economic sovereignty and head towards the political union. David Cameron commenting the refusal to join the fiscal pact said: “Britain would still remain in NATO and the single market. Europe has many rooms.”.7 Summing up, the shortcomings of the European economic governance affected negatively the image of the European Union. There is a downward trend and a sharp decline in the image of the EU. While e.g. in the Spring 2006, 50% of the European citizens answered that for them personally the EU conjured up with a positive image, it was only 31% in the spring 2012. The number of EU citizens with a negative image of the Union, however, has been increasing steadily in the last seven years (Standard Eurobarometer 65 and 77). The process of economic and financial crisis management resulted in the questioning of solidarity and in the emergence of tensions and fragmentation lines among the member states. IV. The boundary issues — Who are the “others” for Europeans? We form our identities in the process of comparing ourselves to “others”. But defining who the “others” are for Europeans is not easy in the Union. All the twenty-seven member states’ population is heterogenic and the number of people not belonging to the dominant nations is growing. Meeting the others is an everyday experience of EU citizens. As Bauböck rightly pointed out: „Imagine a Kurdish immigrant who has been naturalized in France, keeping as most do, his Turkish passport. Using his right of free movement as EU citizen he has recently settled in Germany. He can now vote there in local and European Parliament elections. He may also participate in general elections in France and Turkey if he cares to travel there to cast his vote. He is a citizen of two nation states, of a municipality in another state and of a supranational union, and may yet feel to be a foreigner whose strongest political affiliation is with a stateless Kurdish nation that cannot offer him citizenship.” (Bauböck, 2001: 38). Minorities, immigrants, foreign citizens live 150 KadarKrisztian_16_belivek.indd 150-151 permanently in EU member states, therefore citizenship and allegiances to the state do not tell too much about people’s identities. There are however significant differences between member states in this respect. While for example in Portugal there are not minorities in considerable numbers, and Portuguese only meet “others” in the persons of immigrants, in Spain, minority issues are at the centre of domestic politics and the whole state structure was redesigned in order to satisfy minorities’ demands. Migration does not affect all the twenty-seven member states in the same way either. All of the migration to the European Union is directed mainly towards four member states: Spain, Italy, Germany and the United Kingdom and the countries joined in 2004 and 2007 are less targeted by migrants than the fifteen old member states (see Eurostat statistics on immigrants). There have been significant changes with respect to the inclusion of immigrants in the Union. As it was pointed out earlier, according to the results of the attitude surveys, a relative majority of EU citizens associates the Union with personal mobility, namely the freedom to travel, study and work anywhere in the EU. This is a fundamental right of the individuals and can be fully enjoyed within the borders of the Schengen Zone, one of the other great achievements of European integration. The looser internal borders however have started to pose problems of illegal immigration. Therefore France and Italy jointly requested to modify the Schengen Agreement and re-launch border controls. Denmark also expressed a very similar demand. If it is realized, would lead to a weakening of one of the most important pillars of EU identity, namely the freedom of mobility. Moreover, there has been another major change in the European integration process since the 1980s that directly affects the collective identities of EU citizens and re-interprets the concept of otherness in the community: the spread of differentiated integration. As De Neve argues, the European integration today resembles an onion, which is “a visualization of governance in Europe segmented not only by policy areas and levels of government - as has been the conventional wisdom - but also by subgroups of European states.” (De Neve, 2007: 504). Thus, European integration is becoming differentiated not only by decision-making levels and various EU policies but also by several groups of member states; as a consequence it becomes differentiated territorially as well (De Neve, 2007, Stubb, 1996 and Koller, 2012) Currently the concept of differentiated integration is extensively analysed by integration theorists (Ehlermann, 1995, Stubb, 1996 and 1997, and Kölliker, 2001). Nevertheless, less has been written so far about it in the context of identity. 151 2013.01.18. 19:05 Differentiated integration was first introduced in the EU’s primary law in the 1980s and became a widely accepted practice in the 1990s. In the 1990s, the European Union was experiencing an increasingly “non-unified” integration and there were obvious signs of shrinking legitimacy of the common Europe project. Due to this, some member states decided not to take part in some of the common policies. The United Kingdom opted out from the Economic and Monetary Union and the Social Chapter, Denmark opted out from the EMU and European citizenship, and Sweden decided not participating in the EMU in 1991. The “Big Bang enlargement” of 2004 and 2007, however, marked a new era in integration and also gave an impetus to the spread of differentiation. The European Union with differing interest of 27 member states, 500 million inhabitants and a 4.2 million square km territory became an exceptionally heterogeneous polity that is hardly manageable according to the old recipes. As a consequence, the “multi-speed”, “variable geometry” or “a la Carte Europe” approaches became widely accepted and various sub-groups emerged within the EU as answers to the “oversized EU challenge” (Koller, 2012).8 Differentiated integration is a boundary issue. Forming a new club and delineating its boundaries means including the joining members and excluding those who do not participate in the cooperation, therefore differentiated integration is about defining “ins” and “outs” in relation to the club. For example, Hungary is a member of the EU and the Schengen regime, but to date, not yet included in the euro-zone. Similarly, Norway is not an EU member-state, but because of its membership in European Economic Area enjoys most of the advantages of the single market. Further, although the United Kingdom is an EU member state, decided to stay away from the intergovernmental fiscal pact. In line with the spread of differentiated integration, the mirror of self-understanding of the Union becomes vague and uncertain. It is not so obvious to define who belongs to “us” and “they” any more. Being a member of the EU 27, the euro-zone, Schengen Zone or part of the European Economic Area or cooperating with the EU in frames of the Stabilisation and Association Agreement all represent a different type of “club membership” and all in a way exclusionary in nature. Apparently, the value of these memberships differs to a large extent. Thus, differentiated integration can also be interpreted as forming new fragmentation lines within the Union and establishing new boundaries inside and outside the EU. European Neighbourhood Policy (ENP) should be mentioned as an example of variable geometry outside the EU borders. ENP reinterprets the concept of otherness within 152 KadarKrisztian_16_belivek.indd 152-153 and outside Europe. This policy launched in 2003 aims to share some of the benefits of the European Union with the neighbouring countries, without letting them have their voice in setting its fundamentals. Thus, a new, in-between category, “the neighbours” emerges which indicates that these countries are attached to Europe in economic, social, cultural and political aspects but should not be considered as fully being part of the EU. Simply, saying: “These partners are almost like us, but not us”. European Neighbourhood Policy requires a wide range of commitments from the non-member countries to follow the “European way”, while not offering them full membership. “The ENP is as much about the identity of Europe as it is about the handling of the relations to the neighbouring states” (Ifversen and Kølvraa 2007: 3). The much criticized Eastern Partnership with the post-soviet countries also aim to establish stronger links between the EU and the Eastern neighbours while importing the European values, norms eastwards without letting these countries contribute to this relationship. The Stabilization and Association Agreements with the Western Balkan states are different in nature because they explicitly include provisions for future accession and thus representing a step towards gaining full membership, therefore can be interpreted as multi-speed Europe outside the EU’s border. The establishment of the so called functional macro-regions could be interpreted as new forms of differentiated integration, too. Functional macro-region, a term widely used in the EU documents indicates a territorial unit, which encompasses various states - EU members and non-members -, covers different areas of cooperation and is interwoven with multi-levels of competences. In that sense it is also an example of multi-level governance (Hooghe és Marks, 2008, Kaiser, 2007 and Ágh, 2011). The macro-region aims to find the lost consent of people to the whole European project at various levels of their activity, including the national level, the regional level, the local level and even the level of the individuals. It also aims to foster the better use of existing financial resources, institutions and legal framework in order to enhance the level of cooperation between the stakeholders of the region without establishing new institutions, financial and legal structures.9 It is, therefore rather a catalyst to get things moving in the society, economy and environment than a new establishment. Macro-regions can also be viewed as new territorial forms of differentiated integration. On the one hand, by fostering bottom-up processes they can contribute to the strengthening of the common Europe. On the other, they are regional sub-groups in the 153 2013.01.18. 19:05 European integration that could work against the unity of the EU and create new fragmentation lines on the map of the continent. This approach is in line with the variable geometry concept. It seems logical that in a Union with 27 member states manageable sub-groups, like the Baltic or Mediterranean cooperation evolve and work in unison for common projects and actions. The recent establishment of the Danube Region is an example of that. Additionally, due to differentiated integration, the concept of enlargement gains new interpretations. We will not be able to talk about enlargement in a traditional way in the future. Accession to the EU will only be one form of enlargement in the future. It is expected that this form will be still very attractive for the foreseeable future. Currently, there are many countries, – Croatia, Iceland, Turkey, waiting for becoming full members of the EU27. Accessions to other clubs such as the euro-zone, the European Danube Region Strategy or the fiscal pact constitute different memberships. Accordingly, we can only talk about enlargement in plural in the future, i.e. enlargements of the various clubs and about continuous pursuits of some states to change their status of outsider to insider in policy areas like Economic and Monetary Union or in geographical entities such as the Danube Region. Similarly, “deepening” should be reformulated too. It could only be interpreted within certain clubs of the integration. Further developing this argument, it can be imagined that deepening integration in one club of the EU could lead to increase the value of that membership, and to strengthen its exclusionary nature and make it less open to outsiders. Implementing a stronger cooperation in budgetary and fiscal policies in the euro-zone and bringing fiscal and banking union into life could be an example of differentiation, too. But, what is the attitude of European citizens to the spread of differentiated integration? (Table 4.) When the European citizens were asked about their opinion on the “two-speed Europe”, more citizens opposed the concept than accepted in all the above indicated surveyed periods. There was however a striking difference between the old and new members in this respect. While in most of the old member states the differentiated integration is not supported, the East-, Central Europeans with the exception of Poland were for “two-speed Europe”.10 V. Can European identity formation be fostered? As it was argued before, there is a fading civic pole of European identity that should be revived again. In order to reach that, the Union has to gain back its credibility, and be able 154 KadarKrisztian_16_belivek.indd 154-155 to provide adequate answers to the issues that are regarded as the most salient ones by the EU citizens. Consequently, the future of European identity strongly depends upon the success of European governance including the management of the economic and financial crisis and also upon finding a suitable vision for EU that could be accepted by the majority of EU citizens. These are the prerequisites for a successful identity-building. Only when the EU recovers from agony and misery that has been characterising the last 10 years, can the European identity regain its strength. The possible means fostering identity formation can be put into two categories. The first category implies the methods that can influence identity building “from above” and includes all communication tools applied in favour of establishing European identity. The second category covers all the possible means that have an influence on European citizens’ every days, thus, it can influence identity formation “from below”. Within the first category, communication and media should be emphasized. Referring back to Anderson’s thesis, even in the 19th century nation building there were opinion leaders such as lexicographers, philologists, grammarians, folklorists, publicists and composers who glittered ancient histories of the nations to the masses. Currently, journalists, reporters, editors, and bloggers are the key figures of communication that can have a significant effect on identity formation. In establishing and fostering European identity, the involvement of the media is therefore a necessity. Additionally, special attention should be paid to the media tools most attractive to the youth, since they are the people whose identity can be most affected. Shared festivals, exhibitions, concerts, performances and sport events can also contribute to this end. Apart from top-down identity formation methods, the means fostering identity formation “from below” should also be considered. Personal experience plays a crucial role. Falling in love with a stranger, travelling to a new country, participating in a sport event or studying and living abroad etc., can completely change our thinking about the others and therefore it can contribute to establishing new identities for ourselves as well. As it was already demonstrated, the EU is identified with free movement of persons on the first place which concerns travelling, studying and living in another member state. Mobility is one of the most important positive meanings of EU membership. Students who spent some time in a foreign country were more informed about EU and knew more about EU and had a more pro-Europe attitude than those who did not have this opportunity. After returning to their home country they felt that they belong to a bigger cultural space 155 2013.01.18. 19:05 than their national one. Consequently, mobility programs could contribute significantly to reinterpret the existing stereotypes of the individuals and to establish new junction points among the multiple structure of their attachments. In order to strengthen the civic pole of the European identity European citizens should be further activated and involved personally in identity formation. Participating in civil society activities and especially in transborder programs are key directions in this respect. Conclusions In items of its structural and symbolic elements, European identity is a constructed identity. The establishment of European identity however can be also viewed as an outcome of socialization, in which individuals incorporate the new values and symbols into their multiple attachments and develop a new set of loyalties. As the examination of the cultural and civic poles of identification indicated, European identity is more civic-based than culturally-based. We Europeans have a thin layer in our cultural heritage that we all share but there is a thick one where we are all different, a thesis supported by the Eurobarometer survey results. Europeans become part of the supranational community through practicing their political and civil rights and not by sharing a common culture. Further, it was also demonstrated that the once already established relatively strong civic pole of European identity has recently been weakened mainly due to the negative effects of the economic and financial crisis. According to the latest survey results, 66%, an absolute majority of the European citizens do not trust the Union, while only 31% trust it. This is the worst ever trust-distrust ratio measured in the history of the Union. The far greatest challenge therefore today is to regain the strength of the civic component of European identity and make the European citizens believe again in the common Europe project. Although the EU decision-makers have been trying to provide answers to the effects of the economic and financial crisis, the crisis-management tools have proved to be inefficient in numerous cases and resulted in the emergence of deep fragmentation lines among the member states. It was further demonstrated that, defining “the other” has been becoming a very complex task in Europe. Due to the spread of differentiated integration, the selfdefinition of the EU itself and the definition of otherness gain new interpretations that significantly alter the way how we imagine European identity in the future. With regard to possible means of establishing European identity, both top-down and bottom-up approaches have their relevance. 156 KadarKrisztian_16_belivek.indd 156-157 References Ágh, Attila (2011) “A közpolitika változó paradigmája: az érdekcsoportoktól a többszintű kormányzásig” (The changing paradigm of public policy: from the organized interests to the multilevel governance), Politikatudományi Szemle, 2011/1., XX. évfolyam, pp. 31-51 Ágh, Attila, Tamás Kaiser, Boglárka Koller (2011) The New Horizons of the Cohesion Policy in the European Union: The Challenge of the Danube Strategy. Blue Ribbon Research Centre, King Sigismund College, Budapest Ágh, Attila, Tamás Kaiser, Boglárka Koller (eds) (2010) Europeanization of the Danube Region: The Blue Ribbon Project. Blue Ribbon Research Centre. King Sigismund College, Budapest Andersen, S. S. and Sitter, N. (2006) “Differentiated Integration: What is it and How Much Can the EU Accommodate?” Journal of European Integration, 28 (4), pp. 313-330. Anderson, Benedict (1991) Imagined Communities, Reflections on the Origin and Spread of Nationalism. Revised ed., Verso Arató, Krisztina and Koller, Boglárka (2009) Európa utazása. Integrációtörténet. (The journey of Europe. History of European integration) Gondolat, Budapest Armstrong, John A. (1982) Nations before Nationalism. The University of North Carolina Press Bauböck, Rainer (2001) “Recombinant citizenship” In: Alison E. Woodward and Martin Kohli (eds), Inclusions and exclusions in European societies. Routledge, pp. 38-59 Benczes, István (2011) “Az európai gazdasági kormányzás előtt álló kihívások” (Challenges for European economic governance), Közgazdasági Szemle, LVIII. évf., 2011. Sept, pp. 759–774 Börzel, Tanja (2010) “European Governance: Negotiation and Competition in the Shadow of Hierarchy”, Journal of Common Market Studies. Vol. 48. No. 2, pp. 191–219 Börzel, Tanja (2012) “The European Union – a unique governance mix” In: The Oxford Handbook of Governance Edited by David Levi-Faur. Oxford University Press, pp. 613-627 Brubaker, Rogers (1992) Citizenship and Nationhood in France and Germany. University Press, Cambridge, Massachusetts 157 2013.01.18. 19:05 Caparaso, J. A. (1996) “The European Union and Forms of State: Westphalian, Regulatory or Post-Modern?”, Journal of Common Market Studies, Vol. 34, No. 1, pp. 29–52 De Neve, Jan-Emmanuel (2007) “The European Onion? How differentiated integration is reshaping the EU?”, European Integration. Vol. 29. No. 4, pp. 503-521 Dinan, Desmond (2004) Europe Recast: A History of European integration. Palgrave Macmillan Dyson, Kenneth and Sepos, Angelos (2010): Which Europe? The Politics of Differentiated Integration. Palgrave Macmillan Ehlermann, Claus-Dieter (1995) “Increased Differentiation or Stronger Unity.”, EUI Working Paper PSC, No. 95/21 Greskovics, Béla (2010): “Central Europe” In: Dyson, Kenneth and Sepos, Angelos (eds): Which Europe? The Politics of Differentiated Integration. Palgrave Macmillan, pp. 142-155 Haas, Ernst B. (1958) The Uniting of Europe: Political, Social and Economic Forces 1950‑57. Stanford University, California Hix, Simon (2006): The Political System of the EU. Basingstoke: Palgrave Hobsbawm, Eric and Terence Ranger (1983) Invention of Tradition. Cambridge University Press Hoffman, S. (1966): “Obstinate or obsolete? The fate of the nation-state and the case of Western Europe”, Daedalus, Vol. 95, No. 4, pp. 862-916 Hooghe, Liesbet and Gary Marks (2001) Multi-level Governance and European Integration. Rowman and Littlefield Publishers, Oxford Ifversen, Jan and Christoffer Kolvraa (2007) “European Neighbourhood Policy as Identity Politics” EUSA Tenth Biennial International Conference. Montreal, Canada, May 17-19, 2007 Kaiser, Tamás (2007): “Az európai régiók a többszintű kormányzás rendszerében” In: Garaczi Imre (ed.): Mi a Nyugat? Atlantizmus és integráció. Veszprémi Humán Tudományokért Alapítvány, Veszprém, pp. 71-87 Karolewski, Pawel Ireneusz and Kaina, Viktoria (2006) European identity. Theorethical Perspectives and Empirical Insights. Lit Verlag, Berlin Kohn, Hans (1955) Nationalism, Its Meaning and History. D. Van Nostrand Company. Princeton, New Jersey Koller Boglárka (2011) “Trajectories of identity formation in the post-enlargement era. The Hungarian example”, Jagiellońskie Forum Europejskie [Jagiellonian European Forum], 2011, No. 20, pp. 7-29 158 KadarKrisztian_16_belivek.indd 158-159 Koller Boglárka (2012a) “Klubtagságok az EU-ban. A differenciált integráció gyakorlati és elméleti vonatkozásai” (Club memberships in the European Union), Politikatudományi Szemle. 2012/1. pp. 32-58 Koller, Boglárka (2004) A poszt-nemzeti identitás-struktúra dinamikus modellje (The Dynamic Model of the Post-National Identity Structure), Budapest University of Economic Sciences, PhD Dissertation Koller, Boglárka (2006) Nemzet, identitás és politika Európában. (Nations, identity and politics in Europe) L’Harmattan – Zsigmond Király Főiskola, Budapest Koller, Boglárka (2012b): “The takeoff after Lisbon. The practical and theoretical implications of differentiated integration”, World Political Science Review, Vol. 8, Issue 1, Published Online Kölliker, Alkuin (2001) “Bringing Together or Driving Apart the Union? Towards a Theory of Differentiated Integration”, West European Politics, 24(4): 125 – 151 Konrád, György (1997) “A sok emeletes tudat”, Európai Szemle, VII. / 3 Král, David (2008) “Multi-speed Europe and the Lisbon Treaty. Threat or opportunities?” EUROPEUM Institute for European Policy, 2008 Lindberg, L. N. (1963) The Political Dynamics of European Integration. Oxford University Press Meinecke, Friedrich (1969) Weltbürgertum und Nationalstaat. Studien zu der Genesis des deutschen Nationalstaates. Oldenburg Verlag, München Moravcsik, A., - Nikolaidis, K (1999) “Explaining the Treaty of Amsterdam: Interests, Influence and Institutions”, Journal of Common Market Studies, Vol. 37 Moravcsik, Andrew (1993) “Preferences and Power in the European Community: A Liberal Intergovernmentalist Approach”, Journal of Common Market Studies, Vol. 30 No. 4, pp. 473-524 Nora, Pierre (1996): Realms of Memory. Rethinking the French Past. Vol. III: Symbols. Columbia University Press O’Neill, Michael (1996) The Politics of European Integration. Routledge, London – New York Örkény, Antal (2005) “Hungarian National Identity. Old and New Challenges”, International Journal of Sociology. Vol. 35, No. 4, Winter 2005–6, pp. 28–48 Pataki Ferenc (1986) Identitás, személyiség, társadalom. Akadémiai Kiadó, Budapest Puchala, D.J. (1972) “Of Blind Men, Elephants and International Integration”, Journal of Common Market Studies, Vol. 10, No. 3, pp. 267–84 159 2013.01.18. 19:05 Risse, Thomas (2004) Neo-functionalism, European Identity and the Puzzles of European Integration. Center for Transatlantic Foreign and Security Policy. Otto Suhr Institute of Political Sciences Ruggie, J.G. (1993) “Territoriality and Beyond: Problematizing Modernity” in International Relations”, International Organization, 47, 1, pp. 139-174 Salazar, Jose Miguel (1998) “Social Identity and National Identity” In: Worchel, S.; Morales J.F; Paez, D.; Deschamps, J.C. (eds.): Social Identity. SAGE Publications, London Sepos, Angelos (2005) “Differentiated integration in the EU. The position of small member states”, European University Institute. Robert Schuman Centre. EU Working Papers 2005/17 Smith, Anthony D. (1982) The Ethnic Origins of Nations. Blackwell, Oxford Smith, Anthony D. (1997) “National Identity and the Idea of European Unity” In: Gowan, Peter and Anderson, Perry (eds.) The Question of Europe. Verso Stubb, Alexander C. (1996) “A Categorization of Differentiated Integration”, Journal of Common Market Studies 34, pp. 283-295 Stubb, Alexander C. (1997) “The 1996 Intergovernmental Conference and the management of flexible Integration”, Journal of European Public Policy 4:1 March, pp. 37-55 Wallace, W. (1983) “Less than a Federation, More than a Regime: The Community as a Political System” In: Wallace, H., Wallace, W. and Webb, C. (eds), Policy- Making in the European Community, Chichester, John Willey, pp. 43–80 Weber, Eugen (1979) Peasants into Frenchmen: The Modernisation of Rural France 1870‑1914, Chatto and Windus, London Wiener, Antje and Diez, Thomas (2004) European Integration Theory. Oxford: Oxford University Press Zielonka, Jan (2001) “How new enlarged borders will reshape the European Union”, Journal of Common Market Studies, Vol. 39. No. 1, pp. 507-36 (Endnotes) Notes 1 European identity in this paper refers to the collective identity of EU citizens. European identity, however, could be interpreted outside the EU context. 2 The European governance mix includes the hierarchic, supranational coordination where the member states must implement a decision as it prescribed by the EU law, 160 KadarKrisztian_16_belivek.indd 160-161 and in case of not performing that duty, sanctions are possible against it, and also the open-method coordination in which it is mainly the member states responsibility to implement a common decision, see Börzel (2010). 3 According to the Article 103 of the Maastricht Treaty neither the Community nor any Member State is liable for or can assume the commitments of any other Member State. 4 See Standard Eurobarometer 71. A quarter of EU citizens (25%) named peace as the most important meaning of Europe. A considerable number of people believed that the EU means a stronger say in the world (23%), democracy (22%) and cultural diversity (19%). 5 The “balanced budget rule” requires governments to keep deficits below 0.5% of gross domestic product. When the not yet ratified document enters into force, those members that break the rule will be subject to sanctions. 6 Speech of Nicolas Sarkozy, University of Strasbourg, 8 Nov 2011, “The future of the EU, Two-speed Europe, or two Europes?” quoted by The Economist, 9 November 2011. 7 David Cameron quoted by Jonathan Freedland: “The two-speed Europe is here, with UK alone in the slow lane” The Guardian, 9 Dec 2011 http://www.guardian.co.uk/ world/2011/dec/09/jonathan-freedland-two-speed-europe. 8 See Stubb (1996) on the various categories of differentiated integration. 9 This three “No”-s principle has been already altered and financial resources are available for implementing the European Danube Region Strategy. 10 The Eurobarometer opinion poll surveys only asked about “two-speed Europe”, it is however worth noting that there are various types of it. One of the most comprehensive typology of differentiated integration comes from Stubb who defined three major forms of differentiated integration: ‘Multi-speed EU can be defined as the mode of differentiated integration according to which the pursuits of common objectives is driven by a core group of member states which are both able and willing to pursue some policy areas further, the underlying assumption being that others will follow later’ (1); ‘Variable 161 2013.01.18. 19:05 geometry can be defined as the mode of differentiated integration which admits to unattainable differences within the main integrative structure by allowing permanent and irreversible separation between the core of countries and lesser developed integrative units.’ (2); ‘A la Carte Europe’, based on the culinary metaphor ‘allows each member state to pick and choose as from a menu, in which policy area it would like to participate, whilst at the same time maintaining a minimum number of common objectives.’ (3) (Stubb, 1996: 287-288). Annexes Chart 1: The European dimension in the identity of EU citizens, 1982-2012 Chart 2: European citizens’ attachment to various geographical entities European dimension in the identity of EU citizens, 1982-2012 70 50 43 40 49 48 41 53 44 63 57 60 57 51 48 46 38 40 33 30 37 40 57 54 52 51 51 52 46 45 44 43 45 41 60 59 59 53 44 38 38 38 2002 II. 53 59 56 2001 II. 60 56 57 56 57 40 40 41 41 54 44 58 58 51 46 39 38 20 10 2012 I. 2010 I. 2011 II. 2006 II 2004 I. 2004 II. 2003 I. 2003 II. 2002 I. 2000 I. 2000 II. 1999 II. 1998 I. EU citizen to some extent 1998 II. 1997 I. 1996 II. 1995 I. 1995 II. 1994 II. 1992 I. 1993 II. 1990 I. 1989 I. 1988 II. 1987 I. 1982 I. 1986 II. 0 Nationality only Source: Eurobarometer 17, 26, 27, 30, 31, 33, 37, 40, 42, 43, 44, 46, 47, 49, 50, 52, 53, 54, 56, 57, 58, 59, 60, 61, 62, 66, 73, 76, 77 162 KadarKrisztian_16_belivek.indd 162-163 Source: Eurobarometer 36, 51, 57, 73, 77 *In the 2010 and 2012 surveys, the attachment to the region was not examined. 163 2013.01.18. 19:05 Table 1: Trust in the European and national institutions 2002-2012 (%) no data available no data available 2003 II. 41 42 54 27 46 28 35 53 2004 I. 42 42 54 29 48 29 35 54 30 61 2004 II. 50 36 57 26 52 27 38 55 34 60 2005 I. 44 43 52 31 46 31 35 57 31 64 2005 II. 45 43 51 34 46 33 35 56 31 62 2006. I. 48 39 52 30 47 27 38 54 35 59 2006 II. 45 40 52 32 48 31 33 58 30 62 2007 I. 57 32 56 28 52 27 43 50 41 53 2007. II. 48 36 55 27 50 26 35 56 34 59 2008 I. 50 36 52 27 47 27 34 58 32 62 2008. II. 47 41 51 31 47 30 34 58 34 61 2009 I. 47 41 48 36 44 34 32 61 32 63 2009. II. 48 40 50 33 46 32 30 63 29 65 2010 I. 42 47 no data available no data available 31 62 29 66 2010. II. 43 45 no data available no data available 31 62 28 67 2011 I. 41 47 no data available no data available 33 60 32 63 2011. II. 34 55 no data available no data available 27 66 24 70 2012 I. 31 60 no data available no data available 28 66 28 67 60 53 50 43 40 49 48 41 53 44 60 57 51 48 46 38 40 33 30 37 40 54 52 51 51 52 46 45 45 44 43 57 41 60 59 59 53 44 38 38 38 56 57 56 57 40 40 41 41 54 44 58 58 51 46 39 38 20 10 0 EU citizen to some extent 2012 I. 24 2010 I. 50 2011 II. 23 63 57 2006 II 57 38 59 56 2004 I. 44 2003 I. 60 2004 II. 51 2003 I. 39 2003 II. no data available 2002 I. no data available 2002 II. 24 2001 II. 35 53 2000 I. 47 23 2000 II. 24 59 1999 II. 54 1998 I. 37 1998 II. 46 European dimension in the identity of EU citizens, 1982-2012 70 1997 I. 47 no 1996 II. 42 yes 1995 I. no 1995 II. no 1994 II. yes 1992 I. no 1993 II. yes 1990 I. no 1989 I. yes no data available yes National Government 1988 II. 2002 II. National Parliament 1987 I. 2002 I. European Commission 1982 I. Time European Parliament 1986 II. EU Chart 3: Trust in the European Union in general 2002-2012 (%) Nationality only Source: Eurobarometer 57-77 Source: Eurobarometer 57-77 *Light grey indicates where the level of trust/distrust is higher than distrust/trust. ** Dark grey indicates a percentage of 50% or above 164 KadarKrisztian_16_belivek.indd 164-165 165 2013.01.18. 19:05 Table 2: Trust in the national parliaments, 2012 Chart 4: Trust in the European Union in the 27 EU member states, 2012 Source: Eurobarometer 77 Countries Trust Do not trust EU27 28 66 LT 7 90 IT 8 84 CZ 9 89 ES 11 82 EL 12 86 LV 12 84 RO 16 76 BG 17 77 PL 18 77 SI 18 80 HU 21 74 PT 21 76 CY 22 70 UK 23 72 IE 24 69 MT 29 56 EE 36 59 SK 39 58 FR 42 47 BE 46 52 DE 46 49 AT 48 48 NL 49 47 LU 55 27 FI 59 39 DK 64 34 SE 70 28 Source: Eurobarometer 77 *Light grey indicates the ECE countries 166 KadarKrisztian_16_belivek.indd 166-167 167 2013.01.18. 19:05 Table 3: Trust in the national governments, 2012 Countries Trust Do not trust EU27 28 67 EL 6 91 IT 11 79 CZ 13 86 ES 13 83 LT 15 81 LV 17 79 PT 17 79 PL 20 75 CY 21 71 HU 21 73 UK 21 77 SI 22 77 IE 24 70 RO 27 67 BG 28 64 MT 31 56 DE 39 56 EE 43 52 NL 43 54 SK 43 53 BE 44 54 DK 44 53 FR 44 48 AT 48 48 FI 57 41 SE 58 41 LU 68 24 Source: Eurobarometer 77 *Light grey indicates ECE countries 168 KadarKrisztian_16_belivek.indd 168-169 Chart 5: Levels of authorities having most impact on living conditions Source: Eurobarometer 77 169 2013.01.18. 19:05 A Persistent East-West Divide? The Effect of the Crisis on People’s Perceptions of the European Union Borbála Göncz Table 4: Opinion on differentiated integration in the European Union Countries 2005 I. 2008 I. 2009 I. For Against For Against For Against EU 25/27 38 42 39 40 39 42 HU 49 35 47 39 49 33 CZ 53 32 43 44 41 47 SK 47 38 42 46 47 40 PL 37 47 39 44 39 43 SI 45 48 46 43 44 44 LV 42 28 34 35 38 37 LT 44 24 44 31 39 35 EE 55 26 66 19 69 20 RO 40 23 38 30 33 39 BG 31 33 35 19 30 34 Source: Eurobarometer 63, 68, 71 *Dark grey indicates where the support is higher than opposition. Visiting PostDoc researcher at the Centre d’Étude Européenne of Sciences Po, Paris Introduction On the first of May, 2004, eight countries from Central and Eastern Europe (CEE) joined the European Union (EU). This was followed by the accession of Romania and Bulgaria in 2007. Compared to older member states of the European Union, these countries are characterized by their lower level of economic development and the weaker development of their democratic systems. Additionally, the communist past and the context of the political transitions in these countries have led to different social and economic challenges that are also affecting attitudes towards the EU. The main expectations of people in this region towards their country’s EU membership concerned consolidation of the democratic system and the free market, and economic development (Optem, 2001). Nevertheless, attitudes towards the EU in CEE countries are rarely compared directly with older member states; the subject is usually addressed using different analyses for the two country groups. Recent studies, however, show that the differences between the Eastern and the Western regions of the EU exist, but can be attributed to economic factors, while the cognitive construction of attitudes remains similar (Sanders et al., 2012).1 Several strands of logic have been elaborated and tested so far to explain general support for the EU. Utilitarianism and the perception of one’s own country’s economic and political performance are among the most dominant explanations (e.g. Eichenberg and Dalton, 1993 or Gabel, 1998). Besides economic approaches, many politically-focused pieces of research have considered the role of ‘political cues’ or domestic proxies on opinions about the EU (e.g. Steenbergen et al., 2007, Hooghe and Marks, 2005 or Anderson, 1998). A third group of approaches examines normative preferences as defining factors 170 KadarKrisztian_16_belivek.indd 170-171 171 2013.01.18. 19:05 of attitudes towards the European integration process. These include ideological values related to left-right self-identification, to market regulation (see Steenbergen and Marks, 2004 for a summary), to democracy and to the free market capitalism (e.g. Christin 2005, or Loveless 2010). Much previous work has confirmed that domestic politics, individual perceptions or satisfaction with the national or personal economic situation and prospects, along with normative preferences about ideological values related to economic, political and national issues are important determinants of attitudes towards the EU. As these are factors all related to or affected by economic cycles, it can be hypothesised that the crisis we are witnessing in the countries of the EU might have affected public perceptions of the European integration process. The financial crisis that the member states of the European Union are undergoing started in 2008 and developed into a sovereign debt crisis from early 2010. As a result of the crisis, economic recession and unemployment problems are present across the EU (Blundell-Wignall, 2012 and OECD, 2012). Through the economic crisis the presence of the European Union seems to have become more salient. The EU could be interpreted either as a positive presence (i.e. a contributor to solving economic and financial problems) or as a negative one, based on the economic difficulties that its citizens experience and the different economic and resultant symbolic threats they might perceive. The sovereign debt crisis and the recession, however, did not affect the different countries to the same extent. Some countries were better able to cope with the effects of the financial crisis and some less, depending on many systemic and procedural factors, the structure of their economies, their institutional setups, the measures governments took, etc. As the crisis affected the different EU member states in different ways – regardless of whether they were new or old member states – differences between old and new member states in terms of attitudes towards the EU might have become more blurred. Consequently, the main research question discussed in this paper concerns how the crisis has affected public perceptions of the EU and what impact this has had on the initial differences between older member states and the newly joined CEE countries. The short term effects of the crisis will be analysed to see whether it has led to a convergence of attitudes towards the EU, or whether attitudes are diverging. This paper is designed to contribute to the literature on the utilitarian and political drivers of public opinion about the European Union by taking the short term effect of the present economic cycle, the crisis, into account. The analysis is carried out using Eurobarometer survey data collected in 2007 (preceding the crisis) and 2011. The findings of this analysis 172 KadarKrisztian_16_belivek.indd 172-173 confirm that, besides identifying decreasing support for the EU, the East vs. West divide has indeed somewhat decreased between 2007 and 2011. However, the basic patterns underlying the attitudes which exist have not changed. The paper is structured as follows: the first part summarizes the theoretical frame and findings of previous research on this subject. It is followed by a presentation of the main hypothesis, and a description of the methodology and the variables used. Then the hypotheses are checked using a multinomial logistic regression approach which is focused on identifying the drivers of attitudes and their changes over time. Finally, the main findings are summarized and some conclusions are drawn. I. Attitudes towards the EU in the Light of the East vs. West Divide 1. The East vs. West Divide The East-West division in Europe has its roots in a long term process of historical development (Steenbergen and Marks, 2004). Historical theories about nation building and state formation in Europe are dominated by the distinction they make about the East-West axis (e.g. Rokkan, 1999, Szűcs, 1983, Delanty, 1995 and Smith, 1991). These theories focus on the different political, economic, cultural and system development patterns in Eastern and Western Europe due to their different historical contexts. These different historical contexts have induced different patterns of state and nation development along this East-West axis. Work dealing with this question identifies on the one hand democratic participation and citizenship as being the basis of nation formation in the Western part of Europe. On the other hand, the other model, in seeking to characterize the Eastern part of Europe, is based on a more ethnic nationalism, where territorial boundaries play a less important role than common ancestry, a common language and/or common customs; these nations first had to define themselves in opposition to a dominant culture (e.g. as colonies or in multi-ethnic empires like the Habsburg Monarchy) (Smith, 1991 and Delanty, 1995). In terms of the more recent history of Eastern and Western Europe, the differences in economic development and the impact of the political transition in post-communist countries are defining elements. The different patterns of social and economic development led 173 2013.01.18. 19:05 to different, “emergency” forms of welfare states in these countries (Cerami, 2009). While the majority of EU member states are either social-democratic or conservative welfare states (Esping-Andersen, 1999), the welfare systems of Central and Eastern European new member states with a communist past are based on social-democratic and conservative principles although significant liberal reforms were undertaken during the past 20 years following the transition (Szikra and Tomka, 2009). These countries, however, are not homogeneous in this sense. Different patterns of development occurred in different countries: while the Baltic countries and Slovakia undertook direct liberal reforms, the other Visegrád countries (Poland, the Czech Republic and Hungary) maintained a higher level of continuity of former welfare systems (Inglot, 2009). Furthermore, countries of Central and Eastern Europe lag behind their Western counterparts not only in terms of economic development or the maturity of the democratic systems, but in their value structures and the social capital of their citizens as well. Differences exist in the lower levels of social capital (i.e. formal and informal trust) and a lower level of civic engagement (e.g. Fuchs and Klingemann, 2006). For instance, turnout in both the 2004 and 2009 EP elections were lower for new member states. When analyzing the referenda held about a country’s accession to the EU, it seems that there are two models. Lower voter turnout with a higher proportion of positive votes defines the Eastern model while higher turnout with a lower share of positive votes defines the Western approach (Bozóki and Karácsony, 2003). There are further differences in terms of value orientation: values inherent in self-expression (tolerance, trust, well-being and self-expression) that are all related to democracy and democratic functioning are lower in countries with a communist past (Inglehart, 2006). Following Inglehart’s argument, self-expression values can be said to be related to democratic institutions and depend on sociological and cultural changes over the longer term, but they are also defined by the level of economic development. Accession to the European Union gave an opportunity for new member states from Central and Eastern Europe to economically develop but also promoted the possibility that a market economy and democratic regimes would become consolidated. The EU accession for these countries meant more dynamic economic development, usually based on increased foreign investment and infrastructural development, financed by EU transfers (Ó Beacháin et al. 2012 and Magone, 2011). This resulted in a higher GDP growth rate and a lower level of unemployment than for most of the older mem174 KadarKrisztian_16_belivek.indd 174-175 ber states. This period of more dynamic economic development could not, however, close the gap between these two country groups; CEE countries still lag behind their Western counterparts in terms of GDP, innovation and social inequality – among other things. However, the general economic development in these countries which characterized the period before 2008 could not overcome the more vulnerable and exposed nature of these countries’ economies. While Latvia, together with Greece, Ireland and Portugal was one of the countries more affected by the financial crisis (Magone, 2011), Estonia and Poland have coped with it quite successfully, at least so far (Ó Beacháin et al., 2012). The crisis thus affected the different member states to different extents. According to an early analysis of the effect of the crisis, it did not increase divergence within the European Union; nevertheless, it made the centre-periphery differences more salient (Magone, 2011). This centre-periphery differentiation, however, does not correspond to the East vs. West divide, as Mediterranean countries (Greece, Portugal and Spain) and Ireland are also considered to be part of the periphery. 2. Drivers of the Support for European Integration According to Easton’s system’s theory, support is a “major summary variable linking a system to its environment” (Easton, 1965: 156). Without support, public demands are not processed into outputs; it is impossible to assure stability in the structure of rules. It is vital to maintain a minimal level of cohesion of membership. Support can be overt, expressed in action, or covert, represented by attitudes. This latter form will be the object of the current paper. Easton states that changes in economic environments might result in stress to political systems which might lead to the erosion of support. The economic crisis within the European Union can be considered to be such a type of stressor. This makes analysis of the effect of the crisis on support of particular interest. As mentioned in the Introduction, several explanations for the general support for the EU have been elaborated so far for the older member states, while some others focused on the specificities of the newly-joined countries of Central and Eastern Europe. The bulk of scientific research which deals with the general perception and acceptance of the European integration have been based on a utilitarian approach where attitudes are defined by a rational evaluation of the EU’s advantages and disadvantages (e.g. Gabel, 1998). This ap175 2013.01.18. 19:05 proach defines support as a result of a rational calculation of potential personal benefits, taking into account individual socio-economic characteristics (Gabel, 1998). According to this logic, citizens who have more material, social and cultural resources (i.e. are more educated, have better jobs, enjoy higher incomes, speak foreign languages or live close to borders) are better able to benefit from the opportunities provided by the EU. Besides these individual factors, advantages of the EU can also be perceived at the country level resulting from membership status (Eichenberg and Dalton, 1993). As part of this instrumentalist logic, economic cycles and the economic performance of a country are also important determinants of attitudes (Anderson, 1998). In studies dealing with the subject, several indicators of the national economic context are typically taken into account – e.g. GDP, inflation or/and whether the country is a net beneficiary from the EU or benefits from fiscal transfers (Eichenberg and Dalton, 1993, Christin, 2005, Hooghe and Marks, 2005). While GDP seems to have a positive effect on support for European integration, inflation and unemployment have a negative effect (Eichenberg and Dalton, 1993). However, in member states of Central and Eastern Europe, lower GDP growth – bad economic performance – increases support for integration (Christin, 2005). The ‘European Union’ is rather an abstract and distant bureaucratic construct, about which people lack information. This low information context can nevertheless create rational opinion-forming in the sense that people turn to heuristics or ‘proxies’. An obvious proxy is the domestic political arena: people rely on their perceptions of their government, a certain party, or the political system in general (Anderson, 1998). Perceptions of the democratic functioning of a system or the quality of national institutions are similar cues (Sánchez-Cuenca, 2000 and Rohrschneider, 2002). However, the use of cueing rationality might give more multi-faceted outcomes. In a process of simple projection or transfer of perceptions about national institutions, a positive perception of national institutions will lead to a positive perception of the EU (Bellucci et al., 2012). In opposition to this logic, however, a substitution can happen when a positive perception of a European institution compensates for a negative perception of national ones (SánchezCuenca, 2000 and Sanders et al., 2012). Attitudes towards the EU can be approached from the point of view of the threats it represents or the fears it generates. The EU could be seen negatively if it is perceived to be creating group conflicts or symbolic threats (McLaren, 2006). Group conflict is generated if group interests seem to be threatened in a competition for resources (when, for instance, the European integration process is perceived to threaten the status of national education, social benefits, or seen to be increasing 176 KadarKrisztian_16_belivek.indd 176-177 unemployment at the group level). Symbolic threat on the other hand is more related to the concept of national and group identity and can be grasped through the fear of losing one’s own culture and language. Besides utilitarian and cueing approaches, both representing rationality to some extent, factors such as normative preferences are also confirmed to have an important impact on support for the EU. These factors include ideological values about economic or political principles. As such, the left-right ideological split has been considered by many, together with attitudes towards greater integration which promotes supranational governance, or preference for either regulated capitalism or neoliberalism (Steenbergen and Marks, 2004). Regarding the left-right political self-positioning, those who place themselves in the centre are theorised to hold the most positive attitudes towards European integration because they have an instrumentalist approach, they acknowledge international interdependence and recognise that the EU stands for economic prosperity and peace. Both extreme left and right self-positioning might lead to individuals rejecting European integration, although for different reasons. On the left, where state intervention and high regulation is valued, the EU might represent a liberal free market, whereas on the right the EU might be rejected due to its supranational character which is perceived to interfere with national independence and sovereignty (Aspinwall, 2002). Several pieces of research have dealt with the effect of attitudes towards democracy, the ‘free market’, and globalization in general – especially in countries with a communist past (Cichowski, 2000, Tucker et al., 2002, Caplanova et al., 2004, Tverdova and Anderson, 2004 and Loveless, 2010). People who hold positive attitudes to these elements (democracy, the free market and globalization) are more supportive of European integration as well. When dealing with support for the EU in CEE countries many pieces of research have already taken the already-mentioned special characteristics of the CEE region into account. These pieces of research have confirmed that positive attitudes towards democracy and a market economy tend to result in greater support for a country’s EU membership (Cichowski, 2000, Tucker et al., 2002, Caplanova et al., 2004, Tverdova and Anderson, 2004 and Loveless, 2010). Normative preferences towards democracy and the free market are identified to be especially important drivers of the attitudes which exist in the countries of Central and Eastern Europe (Rohrschneider and Whitefield, 2006 and Loveless, 2010). Furthermore, the perception of the transition and the consequent political and economic reforms (Christin, 2005) or general satisfaction with 177 2013.01.18. 19:05 a country’s economic and political performance (Göncz, 2011) in these countries were important determinants of attitudes towards the EU as well, just as was the international economic embeddedness of a country (Tverdova and Anderson, 2004). Regarding the effect of having an advantageous or disadvantageous social situation in these countries, the experience of the transition is often taken into account – being a winner from the transition process promotes a positive attitude towards the EU (Tucker et al., 2002 or Caplanova et al., 2004). This approach, however, can be further refined: being a winner or a loser of the transition has an effect only when the country’s economic performance is evaluated to be good. If a country is performing poorly, being a winner or a loser has no effect on attitudes towards the EU (Christin, 2005). The way this latter phenomenon is operationalized is very similar to the way utilitarianism is being measured in research which deals with attitudes towards the EU in older member states: both are based on the individual socio-economic characteristics of the citizens. Nevertheless, not many pieces of research have directly compared new and old member states; drivers of public opinion about the European Union are usually dealt with separately in the case of CEE member states. The few pieces of research that compared older and new member states in terms of the mechanisms shaping the attitudes towards the EU found, however, no essential difference. Utilitarian logic in these countries plays an important role, just as in the older member states. However, here it has a more individualist character (McLaren, 2006). McLaren found that group level threats are of higher importance in CEE countries than for older member states; however, these are all related to a respondent’s personal situation, which is not the case for individuals in older member states. Another more recent piece of research found that there are similar cognitive processes underlying attitudes in both country groups (Sanders et al., 2012). When rational calculation predominantly contributes to the formation of opinions with the usage of cues, Eastern member states are more enthusiastic about expanding the policy competences of the EU as opposed to older member states (where European identity and the perception of representation matters more). However, these differences might be attributed to differences in economic development and length of membership, or the socialization effect of being a member state: Eastern countries may not have had enough time to develop an identity or a sense of representation. Furthermore, it seems that opinions about European integration are less crystallized in Eastern and Southern countries than in Western countries within the EU, where a higher level of crystallization of opinions also means lower levels of support (Tóka et al., 2012). 178 KadarKrisztian_16_belivek.indd 178-179 II. Hypotheses and Methodology 1. Hypotheses Taking the previously presented theoretical considerations into account, the main question this paper addresses is whether within the EU the initial East-West divide in terms of attitudes towards European integration has lost some importance after the financial crisis. According to previous studies it seems that the personal perceptions and objective measures of a country’s economic and political performance can have an effect on the public perception of the European Union, and in this way, short term changes in the economic context (namely the crisis) might indeed have an impact. Furthermore, the economic crisis affected different member states to a different extent, which might have blurred the differences between the Eastern and Western countries of the European Union and have given way to other, more economically-rooted logics for EU support. The main hypothesis of this paper is therefore the following: H1. The initial East-West divide within the EU in terms of attitudes towards the EU is less pronounced after the crisis. Due to the primary importance of utilitarian drivers and the evaluation of a country’s political and economic performance on attitudes towards the EU, the East-West divide might have become less salient, because: H2a. Utilitarian drivers behind attitudes towards the EU became more salient after the crisis. H2b. Domestic proxies as determinants of attitudes towards the EU strengthened after the crisis. During an economic crisis, public uncertainty grows, which might have increased the effect of perceived group threats (McLaren, 2006) in determining attitudes towards the EU: H2c. Group threats as drivers of attitudes towards the EU strengthened after the crisis. However, as presented above, the East-West divide is rooted in the different levels of development in political and economic terms over the last few decades that have shaped, among 179 2013.01.18. 19:05 other things, the ideological orientation, values and normative preferences of citizens. The latter supposedly change more slowly. As opposed to Hypothesis 2 (a,b,c), Hypotheses 3 predicts a lasting effect on normative preferences regarding ideologies and values related to democracy and the market economy. H3. Normative preferences as determinants of atti tudes towards the EU remained unchanged after the crisis. 2. The Dependent Variable Support for the European integration process has been measured in many different ways since the 1970s, when studies started to address the subject. An early measure used by Inglehart (1970) was a pro-European index based on three questions (attitudes towards common foreign policy, free movement of workers and business, and tariffs). Since then, Eurobarometer data and questions have also defined the way authors measure support. Much research has taken the question of whether a country’s EU membership is a good/ bad/, neither good nor bad thing as the basis of its modelling. This question was then either treated on an ordinal scale (Anderson, 1998), as part of an index with other variables (McLaren, 2006, Hooghe and Marks 2004 or Gabel 1998), or ‘net support’ was calculated by extracting the proportion of negative answers from positive ones (Eichenberg and Dalton, 1993). Support, however, was mainly dealt with using a scale containing negative to more positive attitudes. Nevertheless, the EU is an abstract, bureaucratic and distant construct and people possess a low level of information about it (Optem, 2001). As a result, besides studying the drivers for positive attitudes towards the European integration process, a high level of indifference to it or an absence of opinions cannot be ignored (Therborn, 1995 and van Ingelgom, 2010). According to a recent piece of research this phenomenon typically characterizes those with a lower occupational status (van Ingelgom, 2010). While previous research on the subject in older member states mainly conceived support to be a scale variable, studies carried out in CEE countries from the 1990s onwards were inclined to take indifference into account. With questions measuring support that were different from those questions used in the case of older member states, neutral positions were also taken into account (Christin, 2005). When dealing with answers about whether one would vote for or against his/her country’s EU membership in a hypothetical referendum, ‘would not vote’ or ‘don’t know’ answers were also analysed separately (Tucker et al., 2002 and Tverdova and Anderson, 2004). 180 KadarKrisztian_16_belivek.indd 180-181 Correspondingly, in order to correctly address attitudes towards the EU, the indicator chosen in this current analysis includes indifferent or neutral opinions in addition to positive and negative ones. Support for the EU is measured using the traditional Eurobarometer question: ‘Generally speaking, do you think that (OUR COUNTRY)’s membership of the European Union is a good thing/ a bad thing/ neither good nor bad/ don’t know?’ and answers expressing indecision or indifference will be dealt with separately.2 This indicator of support is similar to that suggested by Easton (1965): a scale running from decreasing support through indifference or passive acceptance to increasing support. In the following, Eurobarometer data is used to compare responses from 2007 (67.2) and 2011 (75.3). Both data sets were collected in the spring. Eurobarometer data are representative for the member states’ adult population and the country data are weighted in order to represent the EU population accurately.3 Overall, when looking at support for the European Union, it is important to place the 2007 and 2011 data in the wider perspective (see Figure 1). The overall trend regarding the perception of the EU by citizens of its member states shows that the share of those saying that their country’s EU membership was a ‘bad thing’ increased between 2000 and 2011 and the share of those who could not answer decreased, while there was a slight increase in those who said it was a ‘good thing’ and those who said that it was ‘neither good nor bad’ for their country.4 With 49% of EU adult citizens holding a positive opinion in 2000, positive attitudes reached their peak in 2007 (57-58% support) and dropped back to 47% by 2011. Negative attitudes, on the other hand, increased from 14% to 18% within the period, with the lowest being in 2002 (10‑11%) and the highest in 2004, at the time of the enlargement and in 2010-2011 (1718%). The percentage of those who expressed neutral opinions went up from 27% to 31%. The share of those who could not express an opinion dropped from 9% in 2000 to 4% in 2011. Comparing support before the crisis with support after/during the crisis, it can be seen that the tendencies were similar for CEE countries and older member states (see Figure 2): a decrease in positive opinions (11-12% points) together with an increase in negative opinions (4-5% points) and in neutral opinions (6-7% points). The trend was similar for the two country groups, although initial differences remained unchanged. Both before the crisis in 2007 and during the crisis in 2011, CEE countries were significantly more enthusiastic or indecisive about their country’s EU membership, whereas citizens in older member states were significantly more likely to voice negative opinions. 181 2013.01.18. 19:05 Differences, however, showed great variety according to member states as well, and the two groups of countries were not homogeneous in terms of tendencies (see Table 3 in the Annex). In Finland and Sweden positive opinions increased by 5-6% points together with a similar decrease in negative opinions. In France, Belgium, Luxemburg and Austria there was only a slight decrease in the proportion of those saying the EU is a good thing. In Estonia, Denmark and Great Britain the decreasing number of positive opinions (10‑18% points) resulted in an increase in neutral opinions, however, while Denmark and Estonia were above the EU average in terms of support in 2007, Great Britain was one of the most Eurosceptic countries already. The greatest negative change in support was experienced in Greece, Spain, Slovenia and Estonia (17-18% points). In Greece and Slovenia the drop in positive attitudes appeared to lead to the formation of increasingly negative attitudes (22% points and 13% points respectively), whereas in the other countries the share of neutral opinions increased. 3. The Explanatory Variables The East vs. West divide can be grasped through use of a variable signifying a communist past (H1). It should be noted, however, that being in one group or another is highly correlated with other contextual factors. Eastern countries have a lower GDP, higher net financial transfers from the EU, lower sovereign debt, a lower quality of democracyand lower expenditure on social protection, among other things. Resultantly, the ‘East vs. West divide’ embodies all of these characteristics as well to some extent. Furthermore, Eastern member states most recently joined the EU, so the duration of EU membership also overlaps somewhat with this variable.5 Utilitarianism (H2a) is addressed both through its individual and socio-tropic aspects. At the individual level, education and occupation are taken into account.6 At the country level, perceptions of the national economy will be included as a subjective measure, while the GDP growth of a country’s economy is used as an objective measure of a country’s economic performance.7 Confidence in national institutions (Government and Parliament) serves to measure domestic cues (H2b) (for the exact wording of the questions used please see Table 2 in the Annex). In order to control for possible substitution or transfer effects, European institutions are also included. According to the findings of Sánchez-Cuenca (2000), the initially positive effects of trust in national governments turn negative after trust in the European Commission is included.8 182 KadarKrisztian_16_belivek.indd 182-183 Two measures of group threat (H2c) are taken into account in accordance with McLaren (2006); an economic one which captures fear of unemployment, and a symbolic one that deals with the fear of loss of cultural identity. Nevertheless, these two aspects may display different patterns. A more difficult economic situation does not inevitably affect one’s sense of cultural identity. Normative preferences (H3) are measured using values such as the democracy and economic prosperity attributed to the European Union. Furthermore, selfidentified political left-right positioning is also included.9 As for the explanatory variables, there have been important changes over time and significant East vs. West differences as well. The level of satisfaction with a country’s economic performance significantly dropped from 2007 to 2011; however, in older member states people were more satisfied with their country’s situation than in CEE countries both in 2007 and in 2011 (see Table 4 in the Appendix). In newly-joined CEE countries, trust in EU institutions was higher than trust in national institutions in both time periods. Trust in EU institutions was also higher than for older member states, whereas trust in national institutions was lower. However, while trust in EU institutions dropped similarly in the two country groups, trust in national institutions dropped first of all in older member states. As a result, in terms of trust in national institutions, Eastern and Western countries had become slightly more similar to each other by 2011 (see Table 5 in the Annex). In terms of symbolic and economic group threat, older member states showed greater fear than newly joined Eastern countries. However, the trend was the opposite in this regard. While there was a slight decrease in perceived threat by older member states by 2011, negative connotations were more attributed to the EU by Eastern countries. This indicates a closing gap between the two groups, especially in terms of the EU as a threat to employment, where no significant East-West differences existed in 2011. The trend is clearer in terms of positive connotations attributed to the EU, such as democracy and economic prosperity. Although this positivity decreased during the crisis, Eastern countries remained more positive than older member states (see Table 6 in the Annex). III. The Effect of the Crisis on the Support for the EU In the following the results of a regression analysis will be presented. The type of the dependent variable defines the kind of analysis that can be carried out. For the purpose 183 2013.01.18. 19:05 of this paper multinomial logistic regression is used. Multinomial logistic regression compares multiple groups through a combination of binary logistic regressions. This approach allows the comparison of drivers of positive and neutral opinions with negative ones, and the identification of possible differences. A similar approach was previously used by some researchers when dealing with drivers of attitudes towards the EU in CEE countries (Tucker et al., 2002 and Tverdova and Anderson, 2004). An advantage of this technique is that it does not make any assumptions about the normality, linearity, and homogeneity of variance for the independent variables. However, interpreting the results is more complicated and there is no appropriate measure for the goodness of the model.10 students, were less likely to hold positive attitudes. Education primarily defined positive attitudes: both in 2007 and 2011, those with a higher education (they who had finished studying after their 20th birthday) were more likely to think that the EU membership was a good thing than a bad one for their country. Similarly, the effect of the perception of the national economy had a significant influence on positive attitudes only. The more one thought that the economic situation of the country was good, the more likely one it was that one thought that the EU was a good thing. Overall, the following regression models are able to capture about 21-23% of the variation of the support for the EU. Estimates can be considered robust (they are stable after the inclusion of other variables). The results of three models are presented: separate models for 2007 (Model 1) and 2011 (Model 2) in order to answer Hypothesis 2-3 and to see how the effect of the different drivers has changed from 2007 to 2011, and a pooled one (Model 3) which includes both data from the 2007 and the 2011 surveys which is designed to answer the main research question of this paper; i.e. to test Hypothesis 1 (the results of the models are in Table 7-9 in the Annex). Nevertheless, it is worth mentioning that even though parameters are significant and robust, these models do not necessarily represent causal relationships in technical terms: the results of earlier theoretical and empirical research will help in the interpretation of these results.11 2. Domestic cues (H2b) 1. Utilitarian drivers (H2a) Hypothesis 2a about the increasing salience of utilitarian drivers was addressed through a comparison of the parameter estimates of models in 2007 and 2011 (which included a similar set of explaining variables). Utilitarian drivers of attitudes had a significant impact in both time periods. In 2007, occupation was indeed a decisive factor behind neutral opinions; manual workers, unemployed people and students were all less likely to say that their country’s EU membership was ‘neither good nor bad’. These results seem to confirm van Ingelgom’s findings (2010). However, they did not significantly affect positive opinions in 2007; furthermore, this changed by 2011 when positive opinions were determined by occupation, while neutral opinions did not depend on the respondents’ job. In 2011, the self-employed, unemployed and manual workers, together with 184 KadarKrisztian_16_belivek.indd 184-185 In summary, results did not confirm Hypothesis 2a: utilitarian drivers remained very similar, both in terms of the direction and magnitude of their effects. The effect of domestic cues was approached through assessing confidence in national institutions. In order to control for a possible transfer or substitution effect, confidence in EU institutions was also included in the models. Findings show that no substitution effect existed; a positive evaluation of national institutions had a positive impact on attitudes towards the EU. However, trust in European institutions had a slightly more significant effect on attitudes than trust in national ones. Although very similar, results also showed the increasing impact of trust in European institutions. In 2007, a higher level of trust increased the likelihood of holding a positive opinion by 57%; this increased to 71% in 2011. In summary, results did not confirm Hypothesis 2b either: the effect of domestic cues on attitudes to the EU remained very similar in 2011 to before the crisis. 3. Group threats (H2c) Symbolic and economic group threats also had a significant impact on attitudes in the expected direction: they both reduced the likelihood that a respondent held a neutral or a positive opinion about the EU (McLaren, 2006). Their impact was, however, more important on positive attitudes. While the symbolic threat of losing one’s own culture due to the European integration process had slightly more impact on attitudes than the economic threat of increasing unemployment associated with the EU, their effects did not change from 2007 to 2011. Consequently, results did not confirm Hypothesis 2c about the increasing impact of group threats on attitudes towards the EU. 185 2013.01.18. 19:05 4. Normative preferences (H3) Normative preferences about the EU standing for democracy and economic prosperity remained unchanged through 2007-2011. They were the most important determinants of positive opinions about the EU: associating the EU with democracy increased the likelihood that a respondent would hold a positive opinion by 250 - 170% (2007-2011) and increased the likelihood of respondents reporting neutral, non-negative opinions by 50%. Similarly, associating the EU with economic prosperity increased the likelihood of a respondent having a positive opinion by 150 - 130% (2007-2011). The other measure of ideology or normative preferences included in the models was political self-identification. Some changes could be noticed in this respect. While in 2007, left or right self-identification did not make a difference compared to a centrist position, in 2011 people who placed themselves on the right were more likely to hold a negative opinion than either those in the centre or on the left. In summary, the effect of normative preferences changed somewhat across the period of 2007-2011. Correspondingly, Hypothesis 3 is partly confirmed. 5. The East-West divide (H1) In the light of the previous findings that drivers of attitudes towards the EU were very similar in 2007 and 2011, the data for these two years were merged and treated together. This way Hypothesis 1 could be addressed through a pooled regression model where the effect of being a Central and Eastern Europe country in 2007 and 2011 could be measured and compared while controlling for the other explanatory factors such as utilitarian drivers, domestic proxies, group threats, normative preferences and socio-demographic variables (see Model 1). The inclusion of the year of the survey (2007 or 2011) and GDP growth provided the opportunity to see the effect of the East vs. West divide while controlling for the short term effect of the economic crisis.12 Results revealed that, after the crisis, the likelihood that a respondent would have a positive attitude decreased, while the proportion of neutral opinions did not change significantly. This also translates into predicted probabilities. While the probability that a respondent would think that one’s country’s EU membership was a good thing decreased 186 KadarKrisztian_16_belivek.indd 186-187 from 0.57 to 0.51 from 2007 to 2011, undecided opinions increased from 0.31 to 0.36. The GDP growth rate had a positive effect on both neutral and positive opinions, meaning that a higher rate of GDP growth meant higher support. This effect remained unchanged among the CEE countries in the two years included; in older member states, however, while this was a significant determinant of positive opinions in 2007, it had become irrelevant in 2011.13 As for the main concern of this paper, the results partly confirmed Hypothesis 1. Being a citizen of a post-communist member state increases the likelihood of having either a neutral or positive attitude. In 2007, the likelihood that a person from an Eastern country would have a neutral opinion was 79% higher than they would have a negative opinion. Additionally, there was a 49% higher likelihood that they would have a positive opinion than a negative opinion compared to their Western counterparts. This effect, although it remained significant, decreased in 2011 to 65% for neutral and 27% for positive opinions. Due to the decreasing impact of geographical origin, it can be said that the initial East vs. West divide has somewhat diminished from 2007 to 2011. However, looking at the predicted probabilities of Model 3 (see Figure 3) it seems that, although there have been slight changes in the probabilities of different attitudes towards the EU, the changes were not very important. Furthermore, both country groups followed similar trends in 2011 as in 2007 and the differences remained unchanged. The main difference between replies of respondents from Eastern and Western member states lies in the higher probability of getting an indecisive answer about the EU accession from a citizen of a new member state. The probability of getting a negative response to this question is meanwhile higher for a respondent of the older member states. These patterns did not change over the crisis. [Figure 3 about here] 6. Euro-indifference? Finally, it is worth discussing the benefits of dealing with neutral opinions separately from either positive or negative ones. According to the results of the regression models it seems that the same drivers determine whether one holds a positive or neutral opinion as opposed to a negative one. Younger respondents, those who trust institutions, those who are affected by group threats to a lesser extent, those who associate the EU with democracy and those who position themselves in the political centre or left are all more likely to hold positive or 187 2013.01.18. 19:05 neutral opinions than negative ones. So what differentiates neutral opinions from positive attitudes? The above-mentioned factors have slightly less explanatory power in the case of neutral opinions. Men, manual workers and the unemployed are less likely to hold neutral opinions as opposed to negative opinions, and attitudes to the national economy or the idea that the EU means economic prosperity play a less important role in thinking that the EU is a good thing for the country. People from Eastern countries are more indecisive, and their occupations are not a differentiating factor. Furthermore, there has not been a significant change between 2007 and 2011, taking all other factors into account. Can these neutral opinions, saying that a country’s EU membership is ‘neither a good, nor a bad thing’ be considered to be indicators of indifference towards the EU, as suggested by van Ingelgom (2010)? It seems that positive and neutral opinions have the same roots, and, with no effect of the evaluation of the economic context, it also seems that neutral opinions are less reflected than either positive or negative ones. In this sense it can indeed be seen as a sign of indifference towards the EU. However, given the more general character and the greater occurrence of these attitudes in the newly-joined Eastern member states, it also seems that there might be a socialization effect of the EU; people need time to get used to it and elaborate opinions about the European Union. An alternative to this explanation is that the higher proportion of neutral opinions in the new member states of Central and Eastern Europe is due to the higher level of political passivity in these states which are still rooted in the communist past. However high the share of neutral answers is, a system may still persist in a state of apathy or indifference (Easton, 1965). Conclusions The main aim of this research was to examine the East vs. West divide in terms of seeing how attitudes towards the EU have changed over the last few years. The underlying supposition of the paper was that, as perceptions of the economic and political context and the actual economic and political context were important drivers of attitudes towards the EU, the economic crisis must have had an impact on these attitudes. Furthermore, as the economic crisis did not affect the different EU member states to the same extent, the initial differences between new member states from Central and Eastern Europe and older member states would become more blurred, and would decrease. Findings from the multinomial logistic regression analysis showed that, although the drivers of attitudes remained more or less unchanged from 2007 to 2011, the impact of 188 KadarKrisztian_16_belivek.indd 188-189 being a new member state from Eastern and Central Europe somewhat decreased over this period. However, the trends underlying support did not significantly change: there remains a higher probability that a respondent from a CEE country will be indecisive about their support for the EU and a citizen of an older member state will hold a negative opinion. Although it seems that there has been some erosion of public support for the EU in general, the basic patterns underlying the support that exists remain unchanged. Correspondingly, it seems that the short term effect of the crisis on EU support has not significantly blurred initial East-West differences. Furthermore, the higher share of indecisive opinions from respondents in CEE countries shows that a ‘socialization’ effect may exist about being a member state of the European Union. This kind of learning process which is related to the duration of a country’s EU membership could be taking place over the long term. However, neutral opinions, standing for less well-formed attitudes towards the EU, increased in the short term as well, which shows that different dynamics may underlie indecisive responses. References Anderson, Christopher J. (1998) “When in doubt, use proxies”. Comparative Political Studies, Vol. 31, No. 5, pp. 569–601 Aspinwall, Mark (2002) “Preferring Europe Ideology and National Preferences on European Integration”. European Union Politics, Vol. 3, No. 1, pp. 81–111 Ó Beacháin, Donnacha, Vera Sheridan, and Sabina Stan (2012) (eds) Life in Postcommunist Eastern Europe after EU Membership, New York: Routledge Bellucci, Paulo, David Sanders, Gábor Tóka, and Mariano Torcal (2012) “Introduction: Antecedents and Consequences of European Citizenship”. In Sanders et al. (eds) The Europeanization of National Polities? Citizenship and Support in a Post-Enlargement Union, Oxford: Oxford University Press, pp. 1-16 Blundell-Wignall, Adrian (2012) “Solving the Financial and Sovereign Debt Crisis in Europe”. OECD Journal: Financial Market Trends, Vol. 2011, Issue 2 Bozóki, András and Gergely Karácsony (2003) “Membership Without Belonging? Hungary into the European Union: A Historic Step Passively Approved”. Central European Political Science Review, 2003/13 189 2013.01.18. 19:05 Brinegar, Adam P. and Seth K. Jolly (2005) “Location, Location, Location. National Contextual Factors and Public Support for European Integration”. European Union Politics, Vol. 6, No. 2, pp. 155–180 Caplanova, Anetta, Marta Orviska, and John Hudson (2004) “Eastern European Attitudes to Integration with Western Europe”. Journal of Common Market Studies, Vol. 42, No. 2, pp. 271–288 Cerami, Alfio and Pieter Vanhuysse (2009) (eds) Post-Communist Welfare Pathways. Theorizing Social Policy Transformations in Central and Eastern Europe, Basingstoke: Palgrave Macmillan, pp. 1-16 Christin, Thomas (2005) “Economic and Political Basis of Attitudes towards the EU in Central and East European Countries in the 1990s”. European Union Politics, Vol.6, No. 1, pp. 29–57 Cichowski, Rachel (2000) “Western Dreams, Eastern Realities: Support for the European Union in Central and Eastern Europe”. Comparative Political Studies, Vol. 33, No. 10, pp. 1243–1278 Delanty, Gerard (1995) Inventing Europe: Idea, Identity, Reality, New York: St.Martin’s Press Easton, David (1965) A Systems Analysis of Political Life, London: John Wiley & Sons Eichenberg, Richard C. and Russel J. Dalton (1993) “Europeans and the European Community: The Dynamics of Public Support for European Integration”. International Organization, Vol. 47, No. 4, pp. 507–534 Esping-Andersen, Gøsta (1999) Social Foundations of Postindustrial Economies, Oxford: Oxford University Press Fuchs, Dieter and Hans-Dieter Klingemann (2006) “Democratic Communities in Europe: a Comparison between East and West”. In Klingemann et al. (eds) Democracy and Political Culture in Eastern Europe, London: Routledge, pp. 25-66 Gabel, Matthew (1998) “Public Support for European Integration: An Empirical Test of Five Theories”. The Journal of Politics, Vol. 60, No. 2, pp. 333–354 Göncz, Borbála (2011) “Perception of European integration in CEE countries”. In Füstös et al. (eds) European Social Register 2010, Budapest: L’Harmattan, pp. 261-282 Hooghe, Liesbet and Gary Marks (2004) “Does Identity or Economic Rationality Drive Public Opinion on European Integration?”. Political Science and Politics, Vol. 37, No. 3, pp. 415-420 Hooghe, Liesbet and Gary Marks (2005) “Calculation, Community and Cues. Public Opinion on European Integration”. European Union Politics, Vol. 6, No. 4, pp. 419–443 190 KadarKrisztian_16_belivek.indd 190-191 Inglehart, Ronald (1970) “Cognitive Mobilization and European Identity”. Comparative Politics, Vol. 3, No. 1, pp. 45–70 Inglehart, Ronald (2006) “East European Values Systems in Global Perspective”. In Klingemann et al. (eds) Democracy and Political Culture in Eastern Europe, London: Routledge, pp. 67-84 Inglot, Tomasz (2009) “Czech Republic, Hungary, Poland and Slovakia: Adaptation and Reform of the Post-Communist ‘Emergency Welfare States’’. In Cerami and Vanhuysse (eds) Post-Communist Welfare Pathways. Theorizing Social Policy Transformations in Central and Eastern Europe, Basingstoke: Palgrave Macmillan, pp. 73-95 Loveless, Matthew (2010) “Agreeing in Principle: Utilitarianism and Economic Values Support for the European Union in Central and Eastern Europe”. Journal of Common Market Studies, Vol. 48, No. 4, pp. 1083–1106 Magone, José M. (2011) “Centre-Periphery conflict in the European Union? Europe 2020, the Southern European Model and the euro-crisis”. In Ágh, A. (ed.) European Union at the crossroads: the European perspectives after the global crisis, Budapest: Budapest College of Communication, Business and Arts, pp. 71-122 McLaren, Lauren M. (2006) Identity, Interests and Attitudes to European Integration. Basingstoke: Palgrave Macmillan Menard, Scott (2010) Logistic Regression. From Introductory to Advanced Concepts and Applications, London: Sage OECD (2012) “General Assessment of the Macroeconomic Situation”. OECD Economic Outlook. Chapter 1. Vol. 2012, Issue 1 Optem S.A.R.L. (2001) Perception of the European Union. A qualitative study of the public’s attitudes to and expectations of the European Union in the 15 member states and in 9 candidate countries. Summary of results Rohrschneider, Robert (2002) “The Democracy Deficit and Mass Support for an EU-wide Government”, American Journal of Political Science, Vol. 46, No. 2, pp. 463–475 Rohrschneider, Robert and Stephen Whitefield (2006) “Political Parties, Public Opinion and European Integration in Post-Communist Countries. The State of the Art”. European Union Politics, Vol. 7, No. 1, pp. 141–160 Rokkan, Stein (1999) “State Formation, Nation-Building, and Mass Politics in Europe”. In Flora et al. (eds) The Theory of Stein Rokkan, Oxford: Oxford University Press Sánchez-Cuenca, Ignacio (2000) “The Political Basis of Support for European Integration”, European Union Politics, Vol. 1, No. 2, pp. 147-171 191 2013.01.18. 19:05 Sanders, David, Paolo Bellucci, and Gábor Tóka (2012) “Towards an Integrated Model of EU Citizenship and Support”. In Sanders et al. (eds) The Europeanization of National Polities? Citizenship and Support in a Post-Enlargement Union, Oxford: Oxford University Press, pp. 187-216 Smith, Anthony D. (1991) National Identity, London: Penguin Books Steenbergen, Marco R., Erica E. Edwards, and Catherine E. De Vries (2007) “Who is Cueing Whom? Mass-Elite Linkages and the Future of European Integration”. European Union Politics, Vol. 8, No. 1, pp. 13–35 Steenbergen, Marco R. and Bradford S. Jones (2002) “Modeling Multilevel Data Structures”. American Journal of Political Science, Vol. 46, No. 1, pp. 218-237 Steenbergen, Marco R. and Gary Marks (2004) “Introduction: Models of Political conflicts in the European Union”. In Marks and Steenbergen (eds) European Integration and Political Conflict, Cambridge: Cambridge University Press, pp. 1-10 Szikra, Dorottya and Béla Tomka (2009) “Social Policy in East Central Europe: major trends in the Twentieth Century”. In Cerami and Vanhuysse (eds) Post-Communist Welfare Pathways. Theorizing Social Policy Transformations in Central and Eastern Europe, Basingstoke: Palgrave Macmillan, pp. 17-34 Szűcs, Jenő (1983) “The Three Historical Regions of Europe: An Outline”. Acta Historica Academiae Scientiarium Hungariae. 29 (2-4), pp. 131-184 Therborn, Goran (1995) European Modernity and Beyond: The Trajectory of European Societies, 1945-2000, London: Sage Tóka, Gábor, Andrija Henjak, and Radoslaw Markowski (2012) “Explaining Support for European Integration”. In Sanders et al. (eds) The Europeanization of National Polities? Citizenship and Support in a Post-Enlargement Union, Oxford: Oxford University Press, pp.187-216 Tverdova, Yuliya V. and Christopher J. Anderson (2004) “Choosing the West? Referendum Choices on EU membership in east-central Europe”. Electoral Studies, Vol. 23, No. 2, pp. 185–208 Tucker, Joshua A., Alexander C. Pacek and Adam J. Berinsky (2002) “Transitional Winners and Losers: Attitudes Toward EU Membership in Post-Communist Countries”. American Journal of Political Science, Vol. 46, No. 3, pp. 557–571 Van Ingelgom, Virginie (2010) Integrating Indifference: A Comparative, Qualitative and Quantitative Approach to the Legitimacy of European Integration, PhD dissertation Université catholique de Louvain and Sciences Po. To be published in 2013 at ECPR Press Monographs Series, ECPR Jean Blondel PhD Prize 192 KadarKrisztian_16_belivek.indd 192-193 Data used in the analysis European Commission (2007) Eurobarometer 67.2, April-May 2007. TNS OPINION & SOCIAL, Brussels; GESIS Data Archive: ZA4530, dataset version 2.1.0 (2012), doi:10.4232/1.10984 European Commission (2011) Eurobarometer 75.3, May 2011. TNS OPINION & SOCIAL, Brussels; GESIS Data Archive: ZA5481, dataset version 1.0.0 (2012), doi:10.4232/1.10768 (Endnotes) Notes 1 The focus of this paper is the difference between new member states from Central and Eastern Europe (CEE10) with a communist past and older member states which joined before the 2004 enlargement (EU15). Cyprus and Malta, although they also joined the EU in 2004, are for the purposes of this discussion not included among the new member states of Central and Eastern Europe. 2 ’Don’t know’ answers were not taken into account in the regression models. However, even when coded together with the ’neither good nor bad’ answer category, results are very similar. 3 For original sample sizes see Table 3 in the Appendix. Further weighting based on population size by countries was also used in the case of the aggregated level of analysis to properly represent the ”European demos”. 4 Equations of the trend lines between 2000 and 2011 are as follows: ’A good thing’ y = 0,061x + 51,481; ’A bad thing’ y = 0,1971x + 11,961; ’Neither good nor bad’ y = 0,0141x + 27,883; ’DK’ y = -0,2552x + 8,3896. 5 It has been measured with the Democracy Index as calculated by the Economist Intelligence Unit. 6 In Eurobarometer surveys education is measured through a question about the age when one left school. 193 2013.01.18. 19:05 7 Several objective measures of a country’s economic and political performance were considered (GDP in PPS, GDP compared to the EU average, openness to trade, financial transfers from the EU, general government total debt, unemployment rate). It has to be noted, however, that these measures are highly correlated with each other and are highly correlated with the fact that a country has a communist past. GDP growth rate was chosen in order to avoid redundancy in the models. 8 Variables originally coded as dichotomous (’tend to trust’ and ’tend not to trust’) were first standardized and summed up into two indices, one measuring trust in national institutions and another measuring trust in European institutions. 9 These are somewhat different measures than those normally used for measuring the general importance of preferences towards democracy and the free market. However in this case only data regarding the ’meaning’ of the EU was available – whether it is associated with democracy and economic prosperty or not. 10 Clustering by countries (i.e. examining the nested character of the data) or/and using data of hierarchical or multilevel character such as individuals in different countries represents a challenge for statistical analysis. Consequently, a multilevel or hierarchical modelling approach has already been used in a few studies which deal with attitudes towards the EU (Hooghe and Marks, 2005, Brinegar and Jolly, 2005, Steenbergen and Jones, 2002). These studies have all shown that the nested character of attitudes towards the EU should not be ignored. Nevertheless, an alternative method that provides statistically accurate results is to include dummy variables that capture any clustering by subgroups (Steenbergen and Jones, 2002). All models presented in this paper were also run including dummy variables for the different countries. However, because the hypotheses involves contextual variables, the models presented in the analysis did not contain a country control. Results, however, are very similar. 3) The likelihood ratio R2L = ((-2LL0) – (-2LLM)) / (-2LL0), where –2LL log-likelihood function is a variable with an approximately Chi2 shaped distribution and only has nonnegative values. This measure shows the proportional reduction of that function after the inclusion of the explaining variables compared to the ‘empty’ model. 4) The adjusted likelihood ratio R2LH = (((-2LL0) – (-2LLM)) -2K)/ (-2LL0), where the previous measure is corrected with the number of parameters in the model (K). 5) R2O is the squared correlation between the observed and the predicted dependent variable. This is calculated based on a categorical regression where the explaining variable is the original variable and the one explained is the predicted variable. 12 Separate models for Eastern and Western countries were also run before they were pooled in order to check whether the drivers determining attitudes towards the EU were similar in the two country groups. Results confirmed that drivers were very similar, although some slight differences existed regarding the effect of occupation and the left-right political self-identification of respondents. While occupation and political self-identification were important drivers in Western countries, they made no difference in Eastern ones. 13 Predicted probabilities for the three categories of the dependent variable add up to 1. They are calculated based on the pooled regression model (Model 3), and are ceteris paribus values with regards to the baseline model: a 44-54 year-old male manual worker who finished his education at 16-19 years of age who has average satisfaction with his country’s economic performance and positions himself in the centre in terms of the leftright political ideology scale. For the regression models the following measures were used to test the “goodness” of the model (Menard, 2010): 1) The Chi-squared result for the model (similar to the F-test in OLS). 2) The predictive efficiency of the model: the percentage of the cases (dependent variable) correctly estimated by the model. 11 194 KadarKrisztian_16_belivek.indd 194-195 195 2013.01.18. 19:05 Annexes Figure 1. Perception of the European Union in member states, 2000-2011 (%) Figure 3. Predicted probabilities of attitudes towards the EU (based on the parameters of Model 3) Source: Eurobarometer Note: 2000-2003: 15 member states, 2004-2006: 25 member states, 2007-2011: 27 member states. Figure 2. Perception of the European Union by country groups (%) Table 1. Variables used in the analysis Individual level East-West divide (H1) Utilitarian (H2a) Country level CEE countries Individual: GDP growth Education Occupation Socio-tropic: Perception of national economic performance Domestic cues (H2b) Institutional trust (national, European) Group threat (H2c) Symbolic: EU as threat to cultural identity Economic: EU as threat to employment Normative preferences (H3) EU representing democracy, economic prosperity Left-right ideology Socio-demographic control variables Gender Age Source: Eurobarometer 67.2 (2007.1) and Eurobarometer 75.3 (2011.1) 196 KadarKrisztian_16_belivek.indd 196-197 197 2013.01.18. 19:05 Table 2. Question wording and variables used Individual-level Eurobarometer 67.2 (2007 Spring) / Eurobarometer 75.3 (2011 Spring) Support for the EU QA9a/QA10a. Generally speaking, do you think that Table 3. Perception of the European Union by country (%) 2007 2011 EU membership is… (OUR COUNTRY)’s membership of the European Union is...? 1 - A good thing A EU membership is… Neither 2 - A bad thing Sample good A bad good 3 - Neither good nor bad size thing thing nor bad DK A A Neither Sample good bad good size thing thing nor 4 – Don’t know (DK) DK bad Satisfaction with QA49/QA4a. How would you judge the current situation in each of the followings? EU-27 26717 57.3 14.5 25.0 3.1 26713 46.6 18.5 31.1 3.8 national economic 1. The situation of the (NATIONALITY) economy. 1 - Very good 2 - Rather good EU-15 20873 56.6 16.4 23.9 3.1 21024 46.2 20.0 29.8 4.0 situation 3 - Rather bad 4 - Very bad 5 - DK NMS-12 5844 59.9 7.9 29.0 3.1 5689 48.1 12.8 35.8 3.2 Trust in institutions QA15/QA17. And for each of them (For each of the following European bodies), CEE-10 5782 60.1 7.8 28.9 3.1 5624 48.2 12.7 35.8 3.2 please tell me if you tend to trust or tend not to trust it? 1. The European FR - France 1013 51.4 21.1 26.3 1.2 1022 46.0 19.2 32.8 2.0 Parliament BE - Belgium 1011 69.7 10.1 19.4 .8 1020 64.7 11.2 23.1 1.0 2. The European Commission 3. The Council of the European Union 4. The NL - 1009 77.1 7.9 14.3 .7 1016 67.6 11.6 19.5 1.3 European The Netherlands central Bank QA16/QA13. For each of the following institutions, please tell me if DE-W - 1005 66.0 11.1 20.4 2.5 1012 56.4 15.5 24.3 3.8 you Germany - West tend to trust or tend not to trust it. 5. The (NATIONALITY) Government IT - Italy 1010 51.4 13.6 29.3 5.7 1039 41.3 17.4 35.7 5.6 6. The (NATIONALITY PARLIAMENT) 1 - Tend to trust 2 - Tend not to trust LU - 511 74.0 9.8 13.9 2.3 501 71.9 12.8 13.2 2.2 3 - DK Luxembourg Normative QA12/QA15. What does the European Union mean to you personally? DK - Denmark 1002 66.2 14.9 17.6 1.4 1007 55.1 15.8 28.1 1.0 Preferences 2. Economic prosperity IE - Ireland 1000 76.1 6.9 13.3 3.7 1015 63.3 12.3 18.0 6.4 3. Democracy GB-GBN 1015 38.5 30.0 26.7 4.7 1009 25.6 32.0 37.3 5.0 304 52.0 16.4 26.3 5.3 300 37.3 18.3 36.3 8.0 - Great Britain Group threat Political ideology QA12/QA15. What does the European Union mean to you personally? GB-NIR 9. Unemployment Northern Ireland 12. Loss of cultural identity GR - Greece 1000 54.4 11.3 34.3 .0 1000 37.7 33.5 27.9 1.0 D1. In political matters people talk of “left” and “right”. ES -Spain 1000 73.0 9.9 13.1 4.0 1010 54.5 17.4 22.0 6.1 How would you place your views on this scale? 1 - Left 10 - Right PT - Portugal 1011 54.8 15.0 27.1 3.1 1048 39.3 26.1 29.3 5.2 DE- 508 58.7 10.2 29.3 1.8 523 47.1 18.4 31.0 3.4 1038 42.3 24.4 32.6 .8 1003 47.1 19.3 32.4 1.2 Country-level Growth rate Real GDP growth rate – volume, percentage change on previous year. E Germany East Source: Eurostat FI - Finland 198 KadarKrisztian_16_belivek.indd 198-199 199 2013.01.18. 19:05 Table 3. continuation SE - Sweden 1005 50.1 23.5 25.5 .9 1044 56.0 16.5 25.1 2.4 AT - Austria 1011 36.5 24.9 36.0 2.6 1018 36.9 25.1 35.6 2.4 CY - Cyprus 502 44.0 16.9 37.5 1.6 501 37.3 25.3 35.7 1.6 1043 45.8 12.3 40.8 1.2 1022 30.9 18.6 48.5 2.1 EE - Estonia 1005 65.5 6.5 26.3 1.7 1000 48.6 9.4 40.5 1.6 HU - Hungary 1006 37.4 17.2 42.8 2.6 1019 31.8 22.0 43.8 2.5 LV - Latvia 1013 36.8 14.3 46.4 2.6 1007 25.1 21.0 51.1 2.8 LT - Lithuania 1018 63.4 6.8 26.5 3.2 1026 49.3 15.6 31.1 4.0 Very good 6.4 7.8 1.4 MT - Malta 500 51.4 17.2 29.4 2.0 500 41.7 18.0 37.1 3.2 Rather good 45.9 49.7 32.1 PL - Poland 1000 67.3 5.5 24.4 2.8 1000 53.1 9.8 33.5 3.6 SK - Slovakia 1106 64.3 6.4 27.8 1.5 1010 52.0 10.6 36.7 .7 SI - Slovenia 1013 57.6 8.5 33.6 .3 1018 38.7 20.8 39.3 1.2 DK 3.6 3.7 3.3 BG - Bulgaria 1039 54.9 7.6 29.1 8.4 1000 48.0 9.7 37.8 4.5 Very good 3.2 4.0 .3 RO - Romania 1019 67.1 5.5 23.7 3.7 1023 57.4 10.7 28.1 3.8 Table 4. Perception of a country’s economic situation in the EU (%) (Republic) CZ - Czech Republic Source: Eurobarometer 67.2 (2007.1) and Eurobarometer 75.3 (2011.1) Note: East-West difference (Cramer’s V) 2007: 0.102****; 2011: 0.084**** NMS-12: New member states including Cyprus and Malta. EU27 EU15 CEE10 East-West difference (Cramer’s V) 2007 2011 Rather bad 35.2 31.4 49.0 Very bad 8.8 7.4 14.1 Rather good 27.4 29.8 18.3 Rather bad 43.1 41.6 48.5 Very bad 24.4 22.8 30.7 DK 1.9 1.8 2.2 0.212**** 0.145**** Source: Eurobarometer 67.2 (2007.1) and Eurobarometer 75.3 (2011.1) Note: the exact wording of the question was: “How would you judge the current situation in each of the following? The situation of the (NATIONALITY) economy.” 200 KadarKrisztian_16_belivek.indd 200-201 201 2013.01.18. 19:05 Table 5. Trust in European and national institutions (%) East-West EU27 EU15 CEE10 difference Tend to trust 56.0 54.5 61.5 Tend not to trust 27.8 30.4 18.4 DK 16.2 15.1 20.1 Tend to trust 44.8 42.5 53.2 Tend not to trust 38.5 41.0 29.2 DK 16.7 16.5 17.6 Tend to trust 51.7 49.8 58.4 Tend not to trust 27.4 30.0 18.2 European DK 20.9 20.2 23.3 Commission Tend to trust 39.6 36.7 50.3 Tend not to trust 37.5 40.1 28.0 DK 22.9 23.2 21.7 Tend to trust 40.5 45.3 23.0 Tend not to trust 53.0 48.3 70.4 National govern- DK 6.5 6.4 6.6 ment Tend to trust 31.7 33.6 24.5 Tend not to trust 63.3 61.4 70.4 Source: Eurobarometer 67.2 (2007.1) and Eurobarometer 75.3 (2011.1) DK 5.0 5.0 5.0 Note: the exact wording of the question was: “What does the European Union mean to you personally?” Tend to trust 42.9 49.4 19.5 Tend not to trust 49.9 43.3 73.7 DK 7.2 7.3 6.8 Tend to trust 32.8 35.8 21.7 Tend not to trust 60.3 56.9 73.1 DK 6.9 7.3 5.1 (Cramer’s V) 2007 European Parliament 2011 2007 2011 2007 2011 2007 National parliament 2011 0.114**** Table 6. Meaning of the European Union by country groups (%) 0.103**** EU27 EU15 CEE10 East-West difference (Cramer’s V) 0.110**** Economic prosperity 0.120**** Democracy Unemployment 0.190**** Loss of cultural identity 2007 20.3 17.9 29.0 0.114**** 2011 13.7 13.1 15.9 0.033**** 2007 22.3 20.6 28.2 0.076**** 2011 19.7 18.6 23.4 0.050**** 2007 14.1 15.0 10.6 0.051**** 2011 14.0 14.1 13.5 0.003 n.s. 2007 11.6 12.8 7.1 0.073**** 2011 11.0 11.7 8.1 0.045**** 0.078**** 0.255**** 0.134**** Source: Eurobarometer 67.2 (2007.1) and Eurobarometer 75.3 (2011.1) Note: the exact wording of the question was: “And for each of them (For each of the following European bodies), please tell me if you tend to trust or tend not to trust it? / For each of the following institutions, please tell me if you tend to trust or tend not to trust it.” 202 KadarKrisztian_16_belivek.indd 202-203 203 2013.01.18. 19:05 Table 7. Determinants of support for the EU (2007) (multinomial logistic regression model – reference category: ‘Bad thing’) Table 7. continuation Domestic cues: Trust in national .055 .014 **** 1.056 .125 .013 **** 1.133 .190 .014 **** 1.209 .454 .013 **** 1.574 institutions Trust in European Model 1: 2007 institutions Neither good nor bad Group threats: A good thing Std. Std. B Error Sig. Intercept .469 .140 **** Male -.358 .045 **** Exp(B) .699 B Error Sig. 1.323 .136 **** -.148 .045 *** Exp(B) EU: unemployment -.426 .050 **** .653 -1.077 .054 **** .341 EU: cultural loss -.694 .053 **** .500 -1.404 .057 **** .246 .072 .081 1.075 .936 .074 **** 2.550 **** Normative preferences: .862 Female EU: economic prosperity EU: democracy .462 .075 1.587 1.106 .070 Left -.003 .056 .997 .080 .055 1.083 Right -.069 .060 .934 -.040 .060 .961 .146 .062 ** 1.157 .163 .062 *** 1.178 2.154 .575 .063 **** 1.777 15 - 24 years .614 .109 **** 1.848 .573 .108 **** 1.774 25 - 39 years .188 .077 ** 1.207 .175 .076 ** 1.191 Don’t know 40 - 54 years .190 .072 *** 1.210 .144 .071 ** 1.155 Center **** 3.024 55 years and older East vs West divide: Utilitarian drivers: CEE10 .767 .063 **** Self-employed .445 .150 *** 1.560 .248 .143 * 1.282 Chi-squared (d.f.) 8451.4 (48) **** Managers .411 .143 *** 1.509 .237 .135 * 1.268 Predictive efficiency 0.335 Other white collars .457 .140 *** 1.580 .157 .134 1.170 R2L 0.267 Manual workers .197 .129 1.218 -.057 .123 .945 R LH 0.264 House person .421 .147 1.523 .103 .142 1.108 R2o 0.211 Unemployed .203 .143 1.225 -.050 .138 .951 N 25333 1.066 Notes: Reference categories are in italics. Statistical significance: **** < 0.001, *** < 0.01, ** < 0.05, * < 0.1. Retired .328 .143 Education finished: <15 -.100 Education finished:16-19 *** ** 1.388 .064 .137 .069 .905 -.688 .068 **** .503 .073 .062 1.076 -.335 .059 **** .716 -.054 .046 .948 .391 .045 **** 1.479 2 Students Education finished: 20+ National economy: Very/ rather good 204 KadarKrisztian_16_belivek.indd 204-205 205 2013.01.18. 19:05 Table 8: Determinants of support for the EU (2011) (multinomial logistic regression model – reference category: ‘Bad thing’) Table 8 continuation Trust in national institutions .036 .014 *** 1.036 .125 .014 **** 1.133 Trust in European institu- .219 .014 **** 1.245 .538 .014 **** 1.713 EU: unemployment -.513 .047 **** .599 -1.091 .056 **** .336 EU: cultural loss -.597 .049 **** .551 -1.470 .062 **** .230 EU: economic prosperity .096 .079 1.100 .827 .075 **** 2.285 EU: democracy .410 .066 1.507 1.003 .064 **** 2.727 Left -.075 .050 .928 .086 .052 * 1.090 .670 -.253 .055 **** .776 .955 .105 .058 * 1.111 1.679 .213 .055 **** 1.237 tions Group threats: Model 2: 2011 Neither good nor bad A good thing Std. Std. B Error Sig. Intercept .923 .127 **** Male -.241 .039 **** Exp(B) .786 B Error Sig. 1.608 .129 **** -.004 .041 Exp(B) .996 Female Normative preferences: **** Right -.400 .053 15 - 24 years .726 .094 **** 2.067 .660 .099 **** 1.935 Don’t know -.047 .054 25 - 39 years .263 .065 **** 1.301 .190 .069 *** 1.209 Center 40 - 54 years .271 .061 **** 1.312 .200 .065 *** 1.222 CEE10 .518 .052 **** Chi-squared (d.f.) 8918 (48) **** .668 Predictive efficiency 59.50% 1.021 R2L 0.279 55 years and older **** East vs West divide: Utilitarian drivers: Self-employed -.011 .132 .989 -.404 .133 Managers .148 .130 1.159 .020 .130 Other white collars .050 .127 1.051 -.240 .128 * .786 R LH 0.276 Manual workers -.027 .120 .973 -.318 .120 *** .728 R2o 0.233 House person .041 .137 1.042 .000 .140 1.000 N 25375 Unemployed -.226 .125 .798 -.252 .125 Retired .108 .130 1.114 -.137 .132 Education finished: <15 -.188 .062 .828 -.856 .064 **** .425 Education finished:16-19 -.040 .053 .961 -.427 .053 **** .652 -.041 .047 .960 .180 .048 **** 1.197 * *** ** .777 .872 2 Notes: Reference categories are in italics. Statistical significance: **** < 0.001, *** < 0.01, ** < 0.05, * < 0.1. Students **** Education finished: 20+ National economy:Very/ rather good Domestic cues: 206 KadarKrisztian_16_belivek.indd 206-207 207 2013.01.18. 19:05 Table 9: Determinants of support for the EU (pooled data - multinomial logistic regression model – reference category: ‘Bad thing’) Table 9 continuation Group threats: EU: unemployment -.473 .034 **** .623 -1.090 .039 **** .336 EU: cultural loss -.642 .036 **** .526 -1.419 .042 **** .242 EU: economic prosperity .097 .057 * 1.101 .899 .053 **** 2.458 EU: democracy .436 .049 **** 1.547 1.056 .047 **** 2.876 .956 .083 .038 ** 1.087 **** .773 -.158 .040 **** .854 Normative preferences: Model 3 Neither good nor bad A good thing Std. Std. B Error Sig. Intercept .740 .094 **** Male -.286 .030 **** Exp(B) .752 B Error Sig. 1.387 .093 **** -.065 .030 ** Exp(B) .937 Female Left -.045 .037 Right -.258 .039 Don’t know .040 .041 1.041 .128 .042 *** 1.137 .961 .183 .033 **** 1.201 Center 15 - 24 years .685 .071 **** 1.983 .624 .073 **** 1.867 Effect of the crisis: 25 - 39 years .238 .049 **** 1.269 .190 .051 **** 1.209 2007 -.039 .032 40 - 54 years .236 .047 **** 1.266 .172 .048 **** 1.188 GDP growth .051 .009 **** 1.053 .041 .010 **** 1.042 **** 1.785 .400 .071 **** 1.492 1.652 **** 1.265 55 years and older East vs West divide: Utilitarian drivers: CEE-10 2007 .579 .070 Self-employed .215 .099 ** 1.240 -.081 .097 .922 CEE-10 2011 .502 .051 **** Managers .284 .096 *** 1.328 .137 .093 1.147 Chi-squared (d.f.) 17863.6 (54) **** Other white collars .251 .094 *** 1.285 -.044 .092 .957 Predictive efficiency 62.40% Manual workers .089 .088 1.093 -.182 .086 House person .251 .100 Unemployed -.026 .093 Retired .225 .096 Education finished: <15 -.140 .046 Education finished:16-19 .000 .040 -.100 .034 .041 .205 ** ** .833 1.285 .054 .100 1.055 .974 -.134 .092 .874 ** 1.252 -.028 .095 .973 *** .869 -.765 .046 **** .465 1.000 -.389 .040 **** .678 *** .905 .254 .034 **** 1.289 .010 **** 1.042 .120 .009 **** 1.127 .010 **** 1.227 .496 .009 **** 1.642 N .235 .053 R2L 0.236 R2LH 0.235 R2o 0.231 50709 Notes: Reference categories are in italics. Statistical significance: **** < 0.001, *** < 0.01, ** < 0.05, * < 0.1. Students Education finished: 20+ National economy: Very/ rather good Domestic proxies: Trust in national institutions Trust in European institutions 208 KadarKrisztian_16_belivek.indd 208-209 209 2013.01.18. 19:05 The Nordic view: impact of the economic crisis on the domestic politics and EU-policies of the Nordic countries Tamás POLGÁR Assistant Professor Budapest Corvinus University, Institute of Political Science Introduction The Nordic countries have traditionally been regarded as the most stable and prosperous region in Europe. Though the Nordic countries were far from being unaffected by the economic crisis, its impact was far less detrimental than for most other EU countries, and also when compared to the severe economic depression especially in Sweden and Finland in the early 1990s. This paper is part of a large-scale project, the objective of which is to conduct a systematic comparative analysis of all EU27 Member States: the impact of the European (global) economic crisis on domestic politics is under investigation, following the same structure for each country or group of countries. This paper focuses on the three Nordic EU members (Denmark, Finland and Sweden), but occasionally Norwegian observations will also be mentioned.1 In the first part of the paper, I will attempt to gauge the magnitude of the economic crisis on the three (four) Nordic economies, based on standard macro-economic indicators. For at least two of these countries, the experiences from the crisis of the early 1990s are of high relevance, and therefore some of the main conclusions from the crisis management of that period will briefly be analysed. Then I turn to a discussion of the social and political impact of the economic crisis, namely an assessment of the extent to which the voters of the Nordic voters perceived the crisis to be a major cause for concern, and if so, if these perceptions have led to any significant change in their attitudes, such as increased Euroscepticism, anti-immigration sentiments, or diminishing trust in democratic institutions and the political elite. This question is to a large extent related to the way in which 210 KadarKrisztian_16_belivek.indd 210-211 211 2013.01.18. 19:05 political parties frame the nature of the crisis, and as a result how they shape the political agenda, e.g. whether issues of European integration (e.g. the EU’s crisis management proposals, the bailout packages, or the currently on-going negotiations on the Multiannual Financial Framework) are politicised. In the final part of the paper I examine whether the above analysed tendencies have had a direct, and possibly lasting, impact on the traditionally stable party systems of these countries. A brief analysis of the adaptation strategies of some of the most important parties will be given: due to the large number of relevant parties in these countries, I will focus mainly on the declining Social Democratic parties, on the main parties of the centre-right, and on the most successful new and/or radical/ populist/Eurosceptic parties. I. The magnitude of the economic crisis in the Nordic Countries Contrary to the stereotypes and wide-spread popular beliefs, the Nordic countries (even Norway, which will be used here as a „control case”, where it is relevant) were not impervious to the devastating effects of the global/European financial and later economic crisis, and suffered its consequences quite severely, despite the fact that only Finland (as the sole EMU-member within the group) was directly affected by the debt-crisis of the eurozone. As a matter of fact all three Nordic EU-members experienced an even larger recession in 2009 than the EU27/EU17 average. Figures 1 through 4 provide a brief overview of the main macroeconomic indicators of the countries under scrutiny since the beginning of the crisis. (Figure 1.) Finland, the only EMU-member among the Nordic countries, exhibits by far the largest swings, starting from GDP-growth levels almost double the EU27 before the crisis (2007), suffering a staggering 8.5% contraction in 2009, bouncing back to a healthy 3% growth rate in 2010-11. Sweden and Denmark (the two non-EMU EU members) moved roughly together with the EU-average in 2007-9, experiencing more severe drops in their respective GDP-levels (5-6%) than the EU average in 2009, but Sweden, possibly due to the lessons learnt from the crisis of the early 1990’s (see below), and the sound fiscal policies of the Reinfeldt-government quickly regained momentum, and produced a respectable 6.2% growth in 2010 and 3.9% in 2011. What the figures hide, however, is that Denmark turned into recession already before the global economic turmoil in 2008, which can be 212 KadarKrisztian_16_belivek.indd 212-213 interpreted as evidence that the significant recession in 2009 was at least partly caused by domestic economic factors, largely independent of the international credit crunch (see below). Norway, which is the most (but by no means totally) independent among the Nordic countries of the EU and the eurozone, exhibited - mostly due to its oil revenues - a more stable GDP-growth dynamic, starting from slightly below the other Nordics and the EU average, but not falling to below -2% in 2009. Since 2010, Norway has bounced back to a modest but accelerating growth rate of around 1-2%. In any case, the GDP-decline in Denmark, for example, is unprecedented in the last 200 years of the country’s economic history, despite the economic difficulties of the 1930s and later in the 1970s/1980s. Sweden, and especially Finland experienced a severe economic crisis in the early 1990s, and the impact of the two crises in these two countries are comparable in magnitude. Therefore, it will be instructive to briefly recall the lessons drawn from that period of recession. Sweden and Finland suffered a much more damaging economic crisis in the early 1990s, though some of its main characteristics and causes were comparable to those experienced today by e.g. Ireland and Spain. In Sweden, following the dynamic expansion of the welfare state and robust economic growth in the decades after 1950, a period of stagnation entered in the 1970s-1980s. Finland, after a decade of fast catching-up in the 1980s started showing signs of overheating and was then hit by a very severe economic crisis (depression) in the early 1990s, partly due to the collapsing Soviet market, but to a large extent also caused by domestic factors, including policy mistakes (Honkapohja and Koskela, 1999). The early 1990s represented the worst recession since the 1930s, with three successive years of economic contraction in 1991-93 (of which the Finnish figure for 1991 was by far the worst with a GDP-decline of 6%), which had devastating effects on unemployment. This was regarded as extremely harmful, as maintaining the traditionally low level of unemployment was a priority of the Nordic Model. The causes of the crisis were of course manifold, including both external shocks (most notably the collapse of the Soviet market in the case of Finland), but also undeniable policy mistakes in both countries. The liberalisation of the financial markets in the 1980s led to an explosion of bank credit and large capital inflows, which was coupled with a monetary policy that was based on a fixed exchange rate regime, where the national currencies were pegged to the ECU. Due to the exponentially increasing external indebtedness of the private sector (in a foreign currency), the lending boom led to a growing bubble on the domestic market (e.g. on the real estate market), with banks assuming excessive risks (as a re213 2013.01.18. 19:05 sult of moral hazard), resulting in an increasingly bad loan-portfolio and over-leveraging. Once the bubble burst, and capital started flowing out, either the fixed exchange rate, or the low domestic interest rate had to be abandoned, inevitably hurting some sectors of the economy. This, in turn caused depression and rising unemployment. These negative developments were coupled with unfavourable external factors, especially for Finland, the most important export market of which, the Soviet Union, was collapsing. The ensuing three successive years of recession increased the unemployment to very high levels (peaking at over 18% in Finland in 1994, and at 8.2% in Sweden in 1993) which persisted for a long time even after the crisis. (This situation was remarkably similar to some of the crisis-stricken countries at the EU’s periphery after the turmoil of 2008.) Furthermore, the real appreciation of their currencies and rising real wages (due to the wage drift caused by the transforming system of wage bargaining) led to a loss of competiveness and thus of exports, which adversely affected economic growth. As a result of the automatic stabilisers, which were an inherent part of the system, as well as one-off burdens on the budget (notably the acute need to recapitalise banks, which would have fallen victim to the real estate crisis), the levels of government lending (budget deficit) jumped to alarmingly high levels: around 14% in Sweden and 7% in Finland. These were obviously unsustainable.2 According to Lars Calmfors and his colleagues (Calmfors, 2012 and EEAG, 2012), the most important lesson to be drawn from the crisis of the early 1990s were the following. Firstly, that well-defined fiscal objectives and fiscal transparency, not to mention the broad consensus on the merits of budget discipline, informed to a large extent by input from economic research, are more effective in reaching a stable fiscal position than binding rules (including sanctions), or automatic correction mechanisms. These Swedish lessons are rather interesting from the EU’s perspective, as the abovementioned elements of rule-based fiscal policy constitute the basis of the EU’s current crisis-management recipes, such as the Fiscal Compact. In other words, while it is true that the Swedish economic philosophy, as regards fiscal conservatism seems to be rather close to the dominant German approach, this assertion needs to be qualified: in the Swedish case it is transparency and consensus, rather than coercion that guarantees fiscal restraint. Furthermore, high output growth in addition to strict fiscal measures (austerity) is necessary to achieve fiscal sustainability, which requires both short-term real exchange rate depreciation (either through devaluation, or in the absence of such possibilities, through flexible wages/wage restraints) and growth-enhancing structural reforms, investments in the knowledge economy, etc. 214 KadarKrisztian_16_belivek.indd 214-215 It is not a coincidence that especially Swedish voters agree to a very large extent with the approach and objectives of the Europe 2020 Strategy, especially when it comes to boosting investments in innovation and the knowledge economy, including research in climate change and energy efficiency, and even consider the Europe 2020 goals to be too modest (see special issue of Eurobarometer on the Economic governance in the EU, Eurobarometer 2011). Transparency cannot be stressed enough. By relying to a large extent on a continuous use of economic analyses, projections and evaluations by independent and semi-independent bodies, the government’s economic policy becomes more transparent and credible, and – perhaps equally importantly from the point of view of democracy – more suited to effective scrutiny by voters. Perhaps this is the main reason for the persistently high and even increasing trust of Swedish voters in their own government (see 3.1 and 3.2), and the fact that the Reinfeldt-government, which was considered to be competent in managing the economic problems, was voted back into office in 2010. It is therefore argued that Sweden and Finland were better equipped than most other EU countries to cope with the effects of the economic crisis after 2008 not only because they started from a more favourable position, but also because their positive experiences from the successful crisis management of 15 years ago proved quite useful. The relatively fresh memory of the previous crisis has helped to maintain the broad consensus around fiscal discipline. While Denmark (and Norway) were much less affected by the crisis of the early 1990s (though Denmark was struggling with higher levels of unemployment already in the 1980s), Denmark suffered the greatest decline among the Nordic countries in terms of its industrial production (Goul Andersen, 2010), and the GDP-decline in Denmark was not much smaller than in Finland in the aftermath of the 2008 financial crisis. The crisis was probably more nationally rooted in Denmark than in the other Nordic countries, as Denmark had for years been losing competitiveness mostly as a result of excessively increasing wage levels, and therefore Denmark was the first country in the whole EU27 to turn into a recession already in the last quarter of 2007, a surprising fact the Danish public opinion was painfully unaware of (see point 3.1 below). Furthermore, among the Nordic countries, Denmark was most exposed to an (internally generated) real estate bubble, which further exacerbated the effects of the crisis. In Norway the greatest concern was perhaps that the population was completely unaware of the crisis, and still considers it to be some kind of distant phenomenon, with no implications for the welloff and non-EU member country (Sandbu, 2012). (Figures 2-4.) 215 2013.01.18. 19:05 All the other main macroeconomic indicators paint a broadly similar picture. The Nordic countries (especially Norway) performed significantly better in terms of the unemployment, budget deficit and gross public debt than the EU/eurozone average, although in 2008-2010 unemployment and public debt levels deteriorated in all three EU members. Apart from a modest Swedish deficit in 2009, both Sweden and Norway maintained their budget surpluses throughout the whole period (Norway, notably, achieved extremely large surpluses in 2007-2008 due to its oil revenues, and even during the crisis years the surplus remained over 10% of GDP), whereas Finland and Denmark ran modest deficits after 2009, but remaining under both the EU average and the Maastricht-criterion of 3%. In short, none of the Nordic countries, and especially not the EU members remained unaffected by the crisis, and therefore one could expect that crisis management had a central place in these countries’ political agendas. The precise framing of the crisis management, and the impact these had on voters’ assessment of the situation and thus on their political preferences will be the focus of the following sections. II. Social and political changes as a result of the crisis 1. Issues on the campaign agenda related to the economic crisis, and the citizens’ perception of the crisis The financial crisis had a marked impact on the citizens’ perception of the status of the economy, and – probably not independently of a significant deterioration in this respect -, on how they assess the benefits and disadvantages of European integration. It is instructive to compare Eurobarometer data from 2007, the year before the crisis started, and the most recent available survey. Without providing an exhaustive list of all available indicators, some of the most relevant changes will be analysed below. Furthermore, there is no space (or need) here to include a large number of countries in the following discussion, as this will be done in a larger comparative study. However, data for two crisis-stricken countries, one old (Greece) and one new member state (Hungary) will be included here only for the sake of comparison, without going into any detail regarding these countries. The three Nordic EU-members (Norway is not included in the Standard Eurobarometer surveys) will be compared to the EU27 averages. (Figure 5) 216 KadarKrisztian_16_belivek.indd 216-217 Before, and even at the beginning of the crisis, economic prospects in the Nordic countries were extremely favourable in the eyes of the citizens, especially in Denmark, where basically every (!) respondent agreed that the national economy was in good or very good shape. In Denmark 6 in 10 respondents felt that things were generally going in the right direction, which was by far the highest share in the EU27. (Sweden, and Finland were also well over the EU27 average in this regard.) Compared to the EU27, Nordic citizens still have a much more positive view on the state of the national economy, despite very significant drops in Finland and especially Denmark. Swedish voters, after a serious recession in 2009 (see above), and a relatively modest deterioration of the citizens’ perception in 2010, are by now almost as positive about the state of their economy, as they were before the crisis. When it comes to the assessment of the European economy, Nordic citizens have changed their views much more dramatically than the EU27 average: from an overwhelmingly positive attitude in all three countries, the general mood has swung to a very pessimistic one, especially in the two non-EMU countries. (Figure 6.) Interestingly enough, citizens of the Nordic countries were already in 2007 rather pessimistic about the prospects of the national economy. Whereas there was a gradual turn towards a markedly more pessimistic attitude amongst EU27 citizens on average by 2011, Finnish and Swedish citizens assessed the prospects after the first wave of the economic crisis to be much better, only to be disillusioned again in 2011. Denmark is the only exception, which was, and has remained, more optimistic than the average. In general, citizens of the Nordic countries had a relatively positive assessment of their country’s economic performance, and even if they did consider the crisis to be serious, they tended not to blame their respective governments for the economic problems. There are several factors that could explain these observations. (Figure 7.) In the case of Sweden and Finland, the experiences of the crisis in the early 1990s were, as discussed, not only important for generating a broad consensus on the necessity of sound public finances and a responsible economic policy in general, but these probably also explain why Swedes and Finns – in comparison – were less concerned about the economic crisis than a decade-and-a-half ago. Denmark, on the other hand, had lacked the experiences of the kind of economic shock the other Nordic countries suffered in 1991-93: there had been a continuous and uninterrupted economic growth for almost two decades, historically low unemployment levels and almost euphoric optimism about the state of the economy until 2008, despite the fact that the Danish economy had turned into reces217 2013.01.18. 19:05 sion already in the fourth quarter of 2007. Neither the voters, nor the general political discourse (including the parties and the mainstream media) were concerned about, or even aware of the economic ills. In fact, before the autumn of 2008, Danes were by far the most “satisfied” nation in the EU, with basically everyone agreeing that the national economy was in a good shape, and a solid majority feeling that “things in general were going in the right direction” (see Eurobarometer data reported in Figures 5-7). A sense of crisis did not reach the Danish public until after the autumn of 2008 (Goul Andersen, 2010: 19). At the elections in the wake of the severe economic downturn, managing the economic crisis (either in direct relation to the EU`s crisis management and economic governance proposals, or independently of it) and fighting unemployment once again dominated the political agendas. (Albret, 2008, Knudsen, 2011, SCB, 2011, Aylott, 2010 and Raunio, 2011). Interestingly enough, in Sweden, rising unemployment was a significant factor explaining voter choice and the resultant change of government already in 2006 (Oscarsson and Holmberg, 2008), whereas the economic crisis failed to give the same result in the 2010 elections. A possible explanation is that unemployment levels between 2002 and 2006 were between 7% and 8% (reaching its peak, at 7.7% in the pre-election year, i.e. 2005), which was in fact not much lower than the unemployment rates in the crisis years (see Figure 2). This has probably contributed to the positive reputation of the centre-right government in the field of managing the economy, spurring growth and creating jobs. As a result, the Swedish electorate generally tended not to blame the detrimental effects of the crisis on the national government, but rather on the international environment (see Aylott and Sundström, 2009: 3). Quite untypically, Swedish voters were not only not blaming their own government for the economic problems, but have even deemed the Reinfeldtgovernment’s performance to be better in 2010 than they did in 2007 (Holmberg and Weibull, 2010: 20). This is reflected both in Swedish survey results, which show that the share of voters assessing the government’s performance as good increased from 32% in 2007 to 59% in 2010 (SCB, 2011: 38), which would be a rather commendable, even extraordinary performance even in a period of economic growth, and also in Eurobarometer data, which astonishingly show that the trust of Swedes in their own government increased significantly, whereas in almost all other EU countries it was the other way around (see sub-section 3.2, as well as Figures 8. and 9.). 218 KadarKrisztian_16_belivek.indd 218-219 This did not mean, however, that Swedish voters did not prioritise economic questions after 2008: indeed, challenges related to the management of the economic crisis gained some importance since the 2006 elections, but, again, were far from the level of the 1994, when economic management was the second most important issue for voters. Unemployment and welfare/healthcare have persistently been the two most important issues in recent elections, and this remained the case also in 2010 (SCB, 2011: 60), but as in Denmark, these did not reach the level which was characteristic during the previous crisis, i.e. the early 1990s. It proved to be crucial that the Moderates have caught up with, or even overtaken the Social Democrats in the ‘issue ownership’ regarding unemployment, an area traditionally regarded as the Social Democrats’ domain. In the eyes of voters, Moderates clearly had the upper hand in managing the economy. These two factors explain to a large extent why the Reinfeldt government was elected in 2006 and then kept in office four years later (SCB, 2011: 86). In Denmark, voters only gradually started to appreciate the depth of the crisis, after the media started to pay more attention to it, and eventually also the Prime Minister acknowledged that the situation was far from the rosy picture painted just months earlier. But even then, the gloomy economic situation was unambiguously framed as a global “financial crisis”, implicitly implying that it was caused by external factors, and basically confined to the realm of large financial corporations, greedy banks, etc. (Goul Andersen, 2010: 19). Even once the attention turned towards the “economic” crisis, and its possible domestic causes (like the decreasing competitiveness and the vulnerability of the real estate market), the discourse remained fairly forward-looking, and lacked putting too much blame on the incumbent Liberal-Conservative government, even by the main opposition party, the Social Democrats (ibid.). The general perception was that, even if there was a crisis in Europe (which some of the indicators, such as increasing Danish wage levels failed to reflect), the Danish economy was strong enough and well-equipped to mitigate its effects. Despite the gradually more pessimistic prospects voiced by leading government politicians and the media, the general public was not at all that pessimistic, and the relatively low level of pessimism was mostly connected to the state of the national economy, not to one’s individual economic prospects, such as job situation or income (Albret, 2008). This is confirmed by the Eurobarometer data reported above (see Figure 7), which shows that the Danish electorate remained generally more optimistic than the EU27 average or the citizens of the other Nordic countries, with regard to the prospects of the national economy for the coming year. 219 2013.01.18. 19:05 Also, according to a large international survey in July 2009 (World Public Opinion Survey, reported in Goul Andersen 2010 and Søndagsavisen), the Danish electorate was least likely to put the blame on their own national government (only 15% saying the Danish government `largely contributed` to the economic downturn), blaming instead the excessive risks assumed by banks. Nevertheless, after a long period of prosperity, the Liberal Prime Minister, Lars Løkke Rasmussen was forced to implement austerity measures and even break political taboos in order to tackle the economic challenges. Despite unavoidable disagreements regarding the concrete measures to be taken, there was a general consensus, at least among the mainstream parties, and even a large part of the electorate, on the necessity of reforms and austerity measures. The Finnish voters were obviously concerned about the economic crisis at the 2011 elections, although the main focus was not so much on the domestic economic policy, as on the EU bailout packages (see 3.3 and 5.2). There was a relatively broad consensus on the need to implement a strict fiscal policy, including austerity measures (such as cutting support to the local governments) in order to keep the budget deficit at acceptable levels, and there were no significant voices to be heard that would have contested the basic principles of the capitalist market economy and the Nordic Model. “Overall the debates about economic policy and the welfare state were quite cautious, as the economic uncertainties and the generally accepted need to introduce cuts to the national budget impacted on party discourses.” (Raunio, 2011: 4). This broad consensus needs to be seen against the background of two important country-specific factors. First, due to the tradition of broad „rainbow”-type grand coalitions, the mainstream parties rarely advocate fundamentally diverging economic or European policies. Secondly, important economic policy decisions are often taken, or at least are to a great extent shaped not by the political leadership of the government, but by senior levels of the bureaucracy, or as a result of negotiations in typical neo-corporatist settings, such as the Economic Council. Finally, the opposition is to a large extent involved in the formulation of European policies (first and foremost within the Grand Committee of the Eduskunta), which contributes to the broad pro-EU consensus, and reduces the probability of fundamental policy changes in case of a new government. Therefore, the voters are not only generally not presented with very clear policy/coalition alternatives, and have very little influence on policy outcomes at the elections, but the parties themselves are uninterested in campaigning on European issues (Raunio, 2005). This „one truth politics”, not merely in EU affairs, is exactly what the emerging populist opposition attacked vehemently (and successfully) at the 2011 election (Arter, 2010, Raunio, 2011, see also Section 5.2). 220 KadarKrisztian_16_belivek.indd 220-221 2. Democratic attitudes, anti-politics, anti-establishment sentiments The Nordic countries have traditionally been known for their stable, consensus oriented democracies, characterised by a generally high support for, and satisfaction with, the way democracy works at the national level, as well as a comparatively very high level of trust in national political institutions. These observations are also borne out by the Eurobarometer data. The level of satisfaction with domestic democracy has remained considerably higher than the EU average. Whereas in most European countries the level of satisfaction has decreased during the years of the economic crisis (Greece being an extreme example), it has not happened to a significant extent in any of the Nordic countries. (Figure 8-9.) In Sweden, it even seems to have increased between 2007 and 2011, as did trust in the national government. (The same general observations could be made based on data pertaining to trust in various other national institutions, such as the parliaments: trust in national parliaments has remained considerably higher in the Nordic countries than the EU average.) In the case of Sweden, it is striking that a general positive assessment of the Reinfeldtgovernment’s crisis management performance induced a continuation of a rather unusual phenomenon in Europe: a continuous increase in voters’ trust in politicians, which is reflected in more or less all indicators from survey results to election turnout. Swedish voters’ trust in politicians has been on the rise during the 2000s, and continued to increase in all voter groups between the 2006 and 2010 elections (SCB, 2011). It would then seem somewhat of a paradox that the openly anti-establishment Sweden Democrats achieved a breakthrough at the 2010 elections. It is clear that the SD’s voter profile shows a disproportionately high share of voters with low trust in politicians. In other words, the SD managed to capture most of the voters with no confidence in the political elite, whereas the government parties, especially the Moderates benefitted greatly from a generally increased voter confidence (SCB, 2011: 39). Thus, from a democracy-perspective, Sweden can be regarded as a clear (and rare) positive exception among the EU27 in times of a severe economic crisis: in most other EU27 countries, the economic situation was conducive to plummeting confidence in politicians and political institutions, potentially leading to destabilization in some of them. In Finland, on the other hand, the landslide victory of the True Finns Party at the 2011 elections can hardly be interpreted as anything else than a revolt against the ruling political elite and the mainstream political parties. Apart from criticising the concrete crisis 221 2013.01.18. 19:05 management measures of the EU, as well as the supranational nature of the European integration in general, the main message of the party was undoubtedly the anti-establishment rhetoric, which appealed to the ordinary people, who were disappointed by the performance of the established political parties, and especially the corruption scandals that surrounded the National Coalition, but most of all the Centre Party since 2007. Nevertheless, Eurobarometer data reported in Figures 8 and 9 seem to indicate that it would be difficult to talk about an overwhelming distrust in the political elite, or a general dissatisfaction with the democratic institutions in the case of Finnish voters. 3. Attitudes towards the EU, its crisis management and European issues on the domestic party political agenda related issues high on the political agenda, nor did such positions explain the voters’ party choice due to their low salience. (For example, in each year since 2005 only 1% of Swedish voters thought that EU-issues were among the three most important questions or social problems – see Holmberg and Weibull, 2010: 11). The main reason for this was that the parties, apart from those (very few) which had strong and unambiguous views on integration, which in addition coincided with the views of their electorate (most notably Eurosceptic parties), were themselves not interested in politicising the EU issue, because they usually had far more to lose than to win on it. This was especially the case for parties which were internally divided, such as the Centre Party in Sweden and Finland, the Social Democrats in Sweden, or the Socialist People’s Party in Denmark. For the leaderships of these parties, the only viable option was to play down the EU issue in its entirety so as not to emphasise internal disagreements and alienate their constituencies (Aylott, 2002, 2007). The citizens of the Nordic countries, with the partial exception of Finland, have traditionally been regarded as being among the most Eurosceptic ones in Europe. Danish voters have rejected the Maastricht Treaty in 1992 (later approving it as a result of the agreed opt-outs), as well as the Euro in 2000 (Downs, 2001). The accession of Finland, and especially Sweden was approved by a small majority of the electorate (while rejected for the second time in Norway) at the referendums in 1994, whereas Swedish voters rejected the introduction of the euro in 2003 (Widfeldt, 2004 and Aylott, 2005). In Sweden, public opinion was split between supporters and opponents of the country’s EU membership for a decade after its accession (with firm “no” majorities in the second half of the 1990s), and only since the mid-2000s have pro-EU voters consistently and comfortably outnumbered its opponents (Holmberg, 2011). Reflecting the sceptical public opinion, the political parties have also been split on the issue (again, with the exception of Finland): several mainstream parties have been openly against the EU, while some of the main government parties (most notably the Social Democrats in Sweden and Norway, and to a lesser extent the Centre Party in Finland) were split on the issue, with their leadership and official position favouring the EU, but several backbenchers, not to speak of the parties’ constituents staunchly opposing it. Therefore, the governments were forced to pursue cautious EU policies, with only Finland aiming explicitly at being in the core of the EU, by quickly and actively embracing its fundamental initiatives, such as the EMU (Raunio and Tiilikainen 2003; and Tiilikainen 2006). Another – occasionally employed - strategy by the political elites to avoid detrimental electoral effect of internal dissent and opinion gaps between the party elites and their voters, was to submit particular issues – most notably the EMU, or treaty reforms – to national referendums. Whereas these referenda in Denmark (1986, 1992 and 2000) and Sweden (2003) more or less successfully removed the EU issues from the general party political discourse, they nevertheless very clearly showed the gap between party elites and their electorate (ibid.). Where EU issues were inescapable, mostly at EP elections (though even those were often fought on genuinely domestic issues), the elites of several parties left it to the individual candidates to pursue their own individual campaigns. All three Nordic countries (especially Finland) employ a degree of personal voting in their EP elections, and this also facilitates the above mentioned personalised campaigns. As a result, several parties have rather heterogeneous EP delegations, with several Eurosceptic MEPs among the representatives of the Danish or Swedish Social Democrats, or the Finnish Centre Party. General issues pertaining to economic management have of course always occupied a central position in the parties’ election programmes and the voters’ priorities, but these have rarely, if at all, been directly influenced by the EU’s crisis management measures. Before we turn to the EU-related debates in the individual countries, we first examine the main attitudes towards the EU in the Nordic countries based on Eurobarometer and other survey data. Perhaps paradoxically, apart from elections which were held close to crucial EU-related referendums (such as the 1973 and 1993 elections in Norway), positions and issues related to the EC/EU have traditionally not played an important role in the elections. Neither were EU- It is quite interesting to note that the dichotomous yes-no dimension of EU membership has more or less disappeared from the party-political agenda in both Denmark and Sweden during the last decade, whereas it has never existed in Finland. This is of course not to 222 KadarKrisztian_16_belivek.indd 222-223 223 2013.01.18. 19:05 imply that there is a consensus among voters about the merits of the EU: in fact, according to Eurobarometer surveys (reported in Figures 10-12 below), Finnish voters are the most Eurosceptic (even compared to the EU27 average), except when it comes to the assessment of the merits of the common European currency. Still, while the country’s EU membership in general, or even central EU policies and developments (such as Treaty changes) have never been a salient question in Finnish party politics (e.g. election campaigns) – due to the above-mentioned elite-consensus on the pro-EU stance -, in both Denmark, and especially Sweden the demand for exit from the Union has all but disappeared from the mainstream parties’ manifestos (Tallberg et al. 2010: 90-92).3 (Figures 10-12.) Instead of EU-membership per se, the debates now rather revolve around either the vertical distribution of powers between the nation state and the supranational levels (the classical clash between intergovernmentalists and federalists), or around specific policy issues, such as social and employment policy, or the role of the states vs. the EU in managing the economic crisis. In other words, the EU is more and more taken for granted by both the parties and their voters, and EU-related issues/policies have gradually become much more internalized (as opposed to treated as areas of foreign policy). One of the main characteristics of classical foreign policy is that there is usually a much broader consensus surrounding it than in the case of domestic policy, and the opposition is often more self-restrained when criticizing its government, as this could harm the government’s position abroad (Johansson et al. 2010). EU policy has tended to resemble classic foreign policy in most cases and countries, even in countries such as Denmark and Sweden, where Eurosceptic parties have always had a nonnegligible representation in the respective parliaments (Hegeland, 2011). The Eurosceptic parties have always tended to be modest in their critique, or at least try to confine these to committee meetings behind closed doors. Even in the case of Denmark, where the Danish People’s Party has traditionally been a vehement critic of the EU, the party – probably not independently of its ambition to present itself as a responsible external supporter of the centre-right governments – has in fact tended to vote in favour of an overwhelming majority of EU-initiated or EU-related bills in the Folketing (Christiansen – Pedersen, 2011: 77, 80). Therefore, the emergence of Eurosceptic parties is not necessarily a bad thing from a normative perspective, as they put highly relevant issues, ones that the established parties have not, on the agenda. Issues, that previously were considered as matters of foreign policy, which typically fall under a domain characterized by consensus across mainstream parties and political blocks (and where even the Eurosceptic opposition is reluctant to limit the government’s room for manoeuvre by tying their hands at home, see 224 KadarKrisztian_16_belivek.indd 224-225 Johansson et al. 2012), have become politicised, as evidenced by recent election campaigns (e.g. the Swedish EP elections in 2009, or the Finnish general elections in 2011), as well as the lack of a formal “party truce” in the case of the recent Swedish EU-presidency (Aylott and Sundström 2009 and Johansson et al. 2010), although less so in the case of Denmark, where EU policies, especially EU presidencies receive relatively broad parliamentary support once issues are settled in the powerful EU Affairs Committee, even in times of very weak and unpopular governments, as was the case in 2012 (Adler-Nissen et al. 2012). Thus, voters are increasingly faced with important EU-related policy choices which were practically absent from earlier elections, and the crystallization of policy alternatives may be conducive to higher awareness and ultimately to higher legitimacy for EU-related decisions. From a democratic point of view (“democratic deficit”) this may be a welcome development, however it remains to be seen whether this will be a lasting trend, leading to higher awareness of (and perhaps even higher trust in) the EU and its institutions, or of a more ephemeral character. Another possible indirect consequence of the crisis is the further drifting apart of political parties from their electoral base on the issue of EUintegration (Raunio and Mattila, 2012). This is probably due to the fact that this “drift” is measured in terms of dissenting opinions on the respective country’s EU membership, and not on concrete policy positions. As noted above, a general pro-EU consensus seems to have been emerging even in Sweden, whereas differing opinions on EU-related policies (e.g. in connection to the abovementioned Laval case) are more difficult to capture empirically. Furthermore, the observations by Raunio and Mattila are based on data from the 2009 EP elections (compared to the 2004 results), which obviously cannot indicate the longer term impacts of the crisis on the electorate’s positions on EU-related issues. Still, more recently we see signs of increased (renewed?) Euroscepticism among voters in Sweden, Finland and Denmark, but this is yet to be documented (if it exists) in the parties’ EU-stances, at least when it comes to official party manifestos. Nevertheless, more reserved positions of Nordic governments, and critical statements from Prime Ministers, and other leading politicians, even in Finland testify to an emergence of a more cautious EU-policy in the Nordic countries (see below). It is interesting to note that, despite common beliefs about Danish citizens being among the most Eurosceptic Europeans mainly due to the “democratic deficit” and the sovereignty arguments (Sørensen, 2006), Danish respondents expressed a much higher level of satisfaction with the way democracy works in the EU, than both the EU27 average and 225 2013.01.18. 19:05 the two other Nordic countries. It is also worth mentioning that citizens in all three countries were apparently more satisfied with democracy in the EU in 2011, than they were in 2007, and in all three countries they were at least as satisfied, or more satisfied with it, than the EU average. These figures, as well as the ones reported below (on general assessment of the country’s EU-membership) demonstrate that generalising statements about Nordic citizens being the most Eurosceptic ones in the EU need to be qualified. What is on the other hand quite clear is that Swedish and Danish citizens feel that their earlier sceptical attitude towards the common currency (both countries having rejected the euro in referenda in 2000 and 2003, respectively) has been reaffirmed by the unfolding events. In both countries there have been voices advocating a possible reconsideration of their earlier positions in the pre-crisis years, and at that time public opinion was more or less equally divided between pro- and anti-euro voters, by 2011 public opinion has markedly shifted in favour of the own national currencies. As other, national polls in 2011 and 2012 (Figure 13) also confirm, there is now a considerable majority in both countries against the adoption of the Euro. Finland, by contrast has always been among the most enthusiastic eurozone members, and the perception of the single currency is still rather favourable there, albeit less so than before the bailout packages. (Figure 13.) In Sweden, there has been a very visible and unambiguous decline in voters’ anti-EU sentiments, and the Swedish electorate has generally become markedly less Eurosceptic than before (Holmberg, 2009, 2011). Not only has the gap between those saying that the EU is beneficial for Sweden and those disagreeing become significantly larger - and the number of those advocating Sweden’s secession from the EU much smaller than before -, but the mainstream political parties have also converged towards a generally much more pro-EU position (see below). As late as in 2010, Holmberg reported that the economic crisis apparently had no impact on the growing support for the EU among Swedish voters, and that the question of EU-membership as such had all but disappeared from the public discourse (Holmberg, 2011). Likewise, at the 2009 EP elections, the Swedish voters seemed to have blamed the contracting export markets for the decline in Swedish industrial production and exports (and hence the significant GDP decline), and not the EU as such, nor the performance of their own government (see Aylott and Sundström, 2009: 3). As a result, Eurosceptic parties performed much worse than five years earlier, and the populist right-wing party, the Sweden Democrats with its strong anti-EU and anti-establishment and anti-immigration rhetoric failed to win a seat in the EP and to surpass the 4% margin (which is the threshold for national elections). This led Aylott to conclude at the time that a major breakthrough for 226 KadarKrisztian_16_belivek.indd 226-227 the radicals, which could potentially place them in a pivotal position after the 2010 Riksdag elections seemed unlikely (Aylott, 2009). As it turned out, this prediction was false. The 2009 EP elections in Sweden were fought on traditional economic issues, however in a much more “Europeanised” context than before. Whereas earlier the main EU-related questions revolved around Sweden’s EU membership as such, or the classical debates of vertical distribution of powers (intergovernmentalist vs. federalist approaches), in the 2009 EP-elections several policy-related issues emerged. One such issue was the so-called Laval case where traditional Left-Right arguments regarding social/labour issues were fought in an explicitly European context. (Aylott and Sundström, 2009, Johansson et al. 2010: 238). These conflicts revolved around one of the core elements of the Nordic/Swedish model, namely the system of centralized wage bargaining (Johansson et al. 2010: 238).4 In both Finland and Sweden a new rhetoric emerged as a direct consequence of the economic crisis. The distinction between „us” (the well-performing, responsible, disciplined Northern MS) and „them” (the problematic Southern periphery) has not been widely employed by mainstream Nordic parties, especially not by politicians of the governing parties. However, such arguments have become central in the political discourse not only by clearly Eurosceptic parties such as the (True) Finns and the Danish People’s Party, but even by the conservative Swedish and Finnish Prime Ministers.5 In both countries the Conservative parties have traditionally been among the most ardent supporters of the EU and, especially in Finland, of further European integration. However, the economic crisis and, in the case of Finland, the emergence of a previously non-existent Eurosceptic party has induced several critical statements even from Conservative political leaders. The clear intention of these quite bold formulations was to distance their own countries from the EU/eurozone crisis, as well as to take back the “ownership” of this issue from the strengthening Eurosceptic parties. Finnish PM Katainen has for example expressed at several occasions that every country is responsible for overcoming its own economic problems and has also suggested that Finland’s views are currently heard due to its AAA credit rating (Jokela – Korhonen, 2012: 5). More recently, the Swedish PM went even a step further, when he made it clear that it was no longer Sweden’s ambition to be part of the EU’s core, namely it is not the aim of the Swedish government to participate in the eurozone’s crisis management activities (such 227 2013.01.18. 19:05 as the Euro Plus, or the proposed banking union, at least in its form as proposed by the Commission) (Aftonbladet, 2012). However, Stockholm does not wish to veto or in any way hinder that other Member States continue their enhanced cooperation. The message is clear: the Swedish people should not be made to pay for the economic ills of other European countries, such as the recapitalisation of banks. Apart from the fact that Sweden is already left out of major political decisions that are being taken in EU17-format (by the Eurogroup), Sweden has deliberately opted to remain outside new initiatives of a deepening Europe, and has, through this approach resembling the traditional UK-stance, significantly contributed to a developing multi-speed Europe. This new rhetoric is probably a consequence of renewed Euroscepticism among Swedish voters, as well as the traditionally strong protection of Swedish sovereignty and member state competences in key areas, such as the national budgets, taxation, etc., but undoubtedly also the fact that the Swedish economy is perceived to be doing much better outside the eurozone, than the most Euromembers. As a consequence of the earthquake election results, which have undoubtedly put an end to the longstanding stability and predictability of the Finnish party system, a new oversizedmajority coalition was formed after unusually lengthy negotiations, encompassing, once more, all the major parties on both sides of the political spectrum, excluding only one major party, the Centre, as well as the True Finns. Despite the fact that Soinen and his party did not openly advocate Finland’s secession from the EU or the eurozone, it has been fundamentally opposed to the current structure and developments of the European Union, and has voted against Finland’s participation in the eurozone bailout packages. As a result, it could not be seriously reckoned with when forming a traditionally pro-EU government coalition, whose aim is to conduct a constructive, flexible and pragmatic stance towards the EU, aiming at securing a core position for Finland within the EU (Tiilikainen, 2006). It is indeed too early to assess whether the breakthrough of the True Finns will lead to any substantial modifications in Finnish EU-policies. The sheer size of the populist opposition would not necessarily dictate such a change of course, despite the fact that the True Finns are currently one of the strongest populist parties across Europe with their almost 20% share of votes/mandates. However, as we have seen in the case of the Hungarian Jobbik, with its comparable electoral strength, it is not necessarily sheer size that matters, especially when the governing party (in Finland’s case, government coalition) has such a broad parliamentary base. Rather, it is its indirect impact that could induce a shift in the government’s 228 KadarKrisztian_16_belivek.indd 228-229 policy, possibly using it as a tool to marginalise the radical opposition by “borrowing” some of its core policies, such as a more critical, or at least reserved approach to European integration. Only time will tell whether it would be this scenario, namely a more “nationalistic” EU policy, or on the contrary, a “domestication” of the populist opposition would prevail. Early signs from the first year after the 2011 earthquake elections seem to indicate that the True Finns have indeed had a marked indirect impact on Finland’s EU-policies. Finland has always been considered as - and aspired to be a consensus-oriented, constructive member within the EU’s core (Raunio and Tiilikainen, 2003 and Tiilikainen, 2006). This was to a large extent due to the prevailing very strong pro-EU consensus and the fact that EU-related issues, including Finnish positions in the Council have never raised controversies among the mainstream parties and the electorate, and have thus been de-politicised. EU policies were debated behind closed doors in the Eduskunta’s Grand Committee, which usually reached a broad consensus on the issues, and controversies rarely reached the broader public (Jokela and Korhonen, 2011). This consensus was abruptly broken as a result of the eurozone crisis, more specifically the EU’s bailout package for Greece and Portugal via the European Financial Stability Facility, which the majority of Finnish voters, and even backbenchers of the government parties, were firmly against (ibid). Not only was the Social Democratic opposition strongly against Finland’s participation, arguing against the arrangements in the Eduskunta and in the 2011 election campaign, demanding a number of guarantees in exchange for a Finnish ratification, but a much more radical critique of the prevailing “one truth politics” was provided by the populist anti-EU True Finns party. (Raunio, 2011) As a result of the 2011 elections, and the uncharacteristically long and complicated coalition negotiations, the True Finns were left in opposition due to their radically antiEU statements during the campaign regarding the bailouts. The presence and possibly the threat of the new Eurosceptic opposition resulted in a somewhat more cautious EU policy on the part of the Finnish government than before, which was also reflected in the compromise between the two major coalition parties (the National Coalition and the Social Democrats) that emphasised the importance of conditionality in the field of EU policy, such as the need for (bilateral) collaterals in exchange for agreeing to eurozone loan packages (to Greece, and later also to Cyprus). The impact of this more cautious EU policy has immediately become visible, when Finland for the first time found itself in opposition to practically all the other (Euro) Member States, as Helsinki remained the 229 2013.01.18. 19:05 only government staunchly opposing the idea that banks can be directly recapitalised using ECB resources. Even though the Prime Minister tried to defend the decision of the June 2012 European Council Summit at home by insisting that it only creates the possibility for such a move in the future, this has apparently not appeased the Finnish Eduskunta, especially the opposition (the former senior coalition partner, the Centre Party, and the Eurosceptic Finns). The prevailing view in Helsinki is that the Parliament did not sanction such a mandate for the government, which is thus seen to have exceeded its mandate at the Summit. Other examples could also be cited from the period after April 2011, when Finland clearly broke with its earlier “eminent student” approach. Finland’s staunch opposition to the entry of Romania and Bulgaria into the Schengen area in the autumn of 2011, or the constitutional concerns raised in connection with the set-up of the European Stability Mechanism (ESM) are clear indications of its more reserved EU-policy, though it would be premature (or outright false) to assert that Finland has become a Eurosceptic member (á la UK, Vaclav Klaus, or even Sweden – see below). Finland has every intention to stay in the core of the EU, and was therefore quick to join both the Euro Plus and the Fiscal Compact. The major concern remains the hollowing out of the ‘community method’ where small but active states such as Finland have much better chances of being heard, than the increasingly dominant Franco-German leadership (Jokela and Korhonen, 2012:6). EU issues have thus become more visible on the political agenda, with the government (and the still dominantly pro-EU parties) increasingly having to defend their positions at the plenary sessions of the Eduskunta. The strength of the True Finns has therefore fluctuated mostly corresponding to the visibility and salience of the EU-issues, notably the situation in the “problematic” member states, such as Greece and Spain. Furthermore, whereas the Finnish electorate has become more positive towards the EU in general, they have become much more reserved about the way the EU is actually functioning.6 Denmark is probably an outlier in this respect, as EU-related topics have been only marginally, or not at all, present on the agendas of either national or even EP elections (see Knudsen, 2005, 2009, 2011). Despite the fact that several of these elections took place very close to crucial EU decisions, like the European Council deciding on the Lisbon Treaty in 2007, or the Summit decisions regarding financial bailout packages in 2011, the EU was largely absent from the campaign, as the parties and their leaderships, due to the abovementioned counter-incentives, were uninterested in engaging in EU-related 230 KadarKrisztian_16_belivek.indd 230-231 debates. In this light, it could at a first glance seem somewhat of a paradox that it was in Denmark that a “dual” party system emerged (Andeweg, 1995: 70-72), with EUspecialised parties only contesting in EP elections. Perhaps the reason is to be found in the successful attempt of the mainstream parties to depoliticise the EU: voters prioritizing the EU issue are instead offered the opportunity to vote for both “hard” (People’s Movement against the EU) and “soft” (June Movement) EU-sceptic parties at the EP elections. According to recent polls, the majority (ca. 55-60%) of Danish voters are in favour of Denmark’s participation in the Financial Compact (agreed upon by the heads of state and government at their Summit in January 2012). Only the Danish People’s Party, the Liberal Alliance and the Unity List opposed it openly, whereas all the parties in the current and the previous government coalition supported it, therefore the Treaty was ratified in May 2012 with a comfortable majority. However, there was some confusion as to the direct implications of the Fiscal Compact for non-EMU members, and especially the Socialist People’s Party (SF) and their leader, the Minister of Foreign Affairs was eager to point out that Denmark’s formal opt-out in this area must be respected. His views were in concurrence with the majority of the voters. Thus, there was a considerable distance between the most pro-EU party of the government, the Social Liberals and the SF on this issue. Initially, the majority of Danes seemed to favour a referendum to be held on the question, but this idea was later dropped (thanks to a relatively broad government-opposition consensus). However, the question of Denmark’s formal opt-out from the EMU has recently gained renewed significance, as the efforts to complete a “genuine” Economic and Monetary Union, namely the planned creation of a European banking union will further isolate non-EMU members. After the October 2012 European Council, it has become even more apparent that the conditions and economic consequences (costs) of Denmark’s opt-out have significantly changed since its inception in 1992 (Kragh, 2012).7 On the other hand, the government was ‘forced’ to abandon its plans (also manifested in their coalition agreement) of putting three of the four Danish opt-outs to a referendum, originally planned for the Autumn of 2012, i.e. after the Danish EU Presidency (Adler-Nissen et al. 2012: 18). However, probably in a large part due to the economic struggles of the EU, public opinion has turned markedly against abolishing the opt-outs. Whereas opposition against the EU citizenship has permanently been high (between 60 and 70%), support for the euro was 58% as late as in January 2009, and support for abolishing the opt-outs for the other two areas even higher. By early 2012 (as also corroborated by Eurobarometer data, presented above), 231 2013.01.18. 19:05 opposition to the euro increased significantly, and by February 2012 65% of Danish voters wished to uphold the opt-out regarding the euro. On the issue of military cooperation and asylum policy, the proponents have only retained a very narrow majority (Data reported in Berlingske Tidende, on 1 February 2012). Seeing these figures, the government announced in June 2012 that the planned referendum on the three opt-outs would not be held during this parliamentary term, thereby abandoning yet another one of its pledges. 4. Social crisis, ethnic tensions and xenophobia Income inequalities had increased more in the Nordic countries than the OECD average already before the crisis (in fact, both Sweden and Finland were among the countries where income inequality increased the most between the early the 1990s and 2007/2008), although the Nordic countries remained among the most equal societies in this respect (OECD, 2011: 6). The crisis has further strengthened this trend: income inequalities (as well as poverty) have increased in Denmark more than in any other EU country (de Beer, 2012), especially due to the increased unemployment rate and the deterioration of the situation of the unemployed (cuts in welfare spending etc.). Furthermore, the tax policy of the successive Liberal-Conservative governments in Denmark was much more favourable to the higher-income groups, whereas the tightening of unemployment benefits clearly harmed the needy. Taken together, average real wages continued to increase even during the crisis, but income inequalities became much larger between rich and poor, employed and unemployed (de Beer, 2012: 31). Despite the economic downturn in 2009 and the significantly rising unemployment levels, none of the three Nordic countries experienced severe social crises, let alone social unrest. There were no major social tensions or mass demonstrations, at least by European standards, apart from occasional protests, usually by anti-globalisation and other radical-right movements in Denmark (e.g. the Occupy Denmark Movement), or sporadic anti-racist (i.e. anti-Sweden Democrats) rallies in Sweden. It could very well be that the Nordic countries are an exception among the EU countries, but based on an analysis of the 2009-2011 election results, we have to conclude that, if anything, ethnic tensions and anti-immigration sentiments have declined or at least temporarily (?) disappeared from the political agenda in the Sweden and Denmark. This can be interpreted as a paradox, or rather a rejection of the hypothesis that the economic crisis necessarily leads to increased xenophobia and intolerance, especially in countries with large ethnic minorities. In the case of the Nordic countries, the proportion of immigrants (including non-Western 232 KadarKrisztian_16_belivek.indd 232-233 minorities) has increased steadily. Though these countries have traditionally advocated an active integrationist approach towards immigrants, and especially Sweden and Norway have embraced the notion of multiculturalism, in all countries there have been numerous signs of ethnic tensions in the past decades (e.g. in connection to the Mohammed-caricatures in Denmark and Norway, or racially motivated murder cases in Sweden).8 In Denmark, immigration was one of the main issues on the political agenda most of the time since 2001. Probably due to the uninterrupted growth of economic prosperity since the 1980s, elections in the 1990s, and especially since 2001. were decided first and foremost by non-economic issues, such as immigration and other post-material conflicts (including welfare). Among the Nordic countries the party choice of Danish voters was most strongly correlated with the so-called New Politics dimension, which at several elections explained an even larger proportion of voter choice than the traditional Left-Right dimension (Borre, 2003, Knutsen and Kumlin, 2003 and Goul Andersen, 2010: 26). However, since the beginning of the economic crisis, the issue seemed to have lost much of its salience, and even the Danish People’s Party, the main advocate of stricter immigration policies, kept a remarkably low profile on the issue during the 2011 election campaign, especially in the wake of the terrorist attack of Anders Behring Breivik in Norway on 22 July 2011. By contrast, immigration issues and asylum policy in Sweden and Finland have never been in the centre of public debate, or among the most salient issues at elections. In Finland, the True Finns Party has always kept a lower profile on immigration issues than the Danish People’s Party or the Sweden Democrats (see 5.2). Whereas all the other parties desperately wanted to avoid the immigration issue dominating the campaign (due to their internal divisions on the issue), the TFP probably did, to a certain extent, capitalise on immigration gaining salience, though not dominance (Raunio, 2011 and Helsingin Sanomat, 2012). Though in Sweden the salience of the immigration issue was modestly higher in 2010 than in 2006 (after several years of stagnation), it was still not among the seven most important issues in the eyes of the voters, and was in fact lower than at its peak in 2002 (SCB, 2012: 60, Holmberg and Weibull, 2010: 11). Interestingly enough, protests were mostly visible not on the part of anti-immigration forces, but quite the contrary, by anti-racist, often radical left organisations, both before and after the 2010 elections. Some of the more aggressive rallies by such groups aimed to obstruct meetings of the Sweden Democrats, which evidently backfired and probably contributed to the increased support for the radical right (Aylott, 2010: 7). 233 2013.01.18. 19:05 This does not mean, however, that anti-immigration sentiments are completely absent in Sweden. According to Jensen and Thomsen (2011), the Swedish electorate has been at least as sceptical of immigration as the Danes, but the Swedish bourgeois parties (so far?) have chosen not to politicise the issue, as opposed to Anders Fogh Rasmussen in Denmark in the early 2000s, probably as a result of the growing influence of the Danish People’s Party at the time. Rather, it has been the focus of scholarly attention (e.g. Rydgren, 2002) why Swedish parties have chosen not to politicize the issue, and why, as a result, the Radical Right in Sweden had remained a failure for such a long time. III. Election results – changes in the Nordic party systems The Nordic countries have traditionally been characterized by their extremely stable and durable party systems, even after the gradual transformation of the Nordic “five party systems” (Berglund and Lindström, 1978, Heidar, 2004, and Demker and Svåsand, 2005). Despite some obvious exceptions (most notably the “earthquake elections” in Denmark and Norway in 1973), and some visible tendencies, such as the strengthening and (by now) institutionalization of the radical/populist Right in Denmark and Norway, elections in these four countries rarely feature major drama. With the exception of Finland, the last two decades saw the stabilization of the two blocks competing for office: the centre-right (with the external support of the populist right in the case of Norway and Denmark), and the centre-left, where the Social Democrats have all but lost their once predominant status, and are dependent on the more or less formal support of smaller (usually centrist, left and/or green) parties. In all three of these countries minor voter swings between the two blocks have decided the fate of governments in the 2000s, most recently in Denmark in 2011. The situation in Finland is somewhat different. Especially since the so-called “Rainbow Coalition” (in office between 1995 and 2003), oversized majority coalitions encompassing the full spectrum have become the norm, and despite the fact that the composition of the government coalitions have changed a number of times over the years, the tendency is that election results rarely (if at all) decide the exact composition of the next government, and basically no variations can be excluded a priori (Raunio, 2004). Nevertheless, the relative strength of the individual parties has remained remarkably stable during the last decades, with the three major parties (Conservatives, Social Democrats and the agrarian-based 234 KadarKrisztian_16_belivek.indd 234-235 Centre Party) alternating as the strongest party, but often governing together. Another constant feature of the Finnish party system – clearly distinguishing it from the other Nordic countries – is that there has been a broad consensus among all mainstream parties regarding Finland’s EU-membership, and with the exception of the (until 2011) insignificant True Finns, all parties in the Eduskunta were strongly pro-EU. Several authors have noted in the 2000s (Rydgren 2002, Kitschelt 2007) that Sweden and Finland were among the few EU countries where the populist/radical right has failed to make a significant breakthrough/headway in national politics. Though their lasting impact remains to be seen, the Sweden Democrats (SD) and the True Finns Party can definitely no longer be ignored, as they both have achieved historic results at the elections in 2010 and 2011, respectively. It is safe to assert that their breakthroughs cannot be explained save for the consequences of the economic crisis and its impact on domestic politics.9 (Tables 1 and 2.) Since the beginning of the crisis, all four countries have held one general election (see results in Table 1.) It is safe to conclude that the elections in Norway and Denmark were totally undramatic from a systemic point of view. The Norwegian voters sustained the Red-Green coalition headed by Jens Stoltenberg (since 2005), and even slightly reinforced the social democratic Labour Party, whereas in Denmark the only major change was the dismal performance of the junior government party (the Conservatives), which resulted in a new Centre-Left coalition government despite the fact that the Social Democrats lost votes since the last elections. Nevertheless, it would be hard to argue that there was a major resentment among voters with the incumbent government, as the Liberals even gained support compared to 2007. What is worth mentioning, however, is that the only truly anti-establishment party left in the field, the leftist Unity List was one of the two parties with a major electoral gain since 2007 (the other one being the centrist Social Liberals), thereby securing a narrow majority for the Red block in the Folketing. The situation in Sweden after the 2010 was somewhat more complicated, although the centre-right “Alliance for Sweden”, led by the conservative PM, Fredrick Reinfeldt became the first non-Social Democrat government in modern Swedish political history to be re-elected after a full term in office. Polls before the election predicted a quite comfortable victory for the coalition, and the main government party, the Moderates became for the first time since the 1920s almost as large as the Social Democrats. The only big question was whether the populist and expressly anti-immigration (xenophobic) Sweden 235 2013.01.18. 19:05 Democrats would, for the first time, jump the 4% threshold, and thereby enter the Riksdag. In this case, it was foreseen that the SD could hold the balance between the two blocks (as their predecessors, the New Democracy did in 1991-94), a situation all other parties desperately wanted to avoid. As it turned out, the Sweden Democrats received 5.7% of the vote (roughly doubling their support in 2006), and their 20 mandates were enough to deny the Reinfeldt-government an absolute majority. Still, as a result of the Swedish constitutional framework (negative parliamentarism, a typical feature of Nordic parliaments, see Rasch, 2011), the centre-right government could remain in office without an absolute majority actively supporting it. The undisputed winner of the elections in Finland were the True Finns, recording the highest ever gain in election results between two elections in Finnish political history, capturing 19.3% of the vote, compared to their 4.1% result just four years earlier (and 9.8% at the EP elections in 2009). In the meanwhile all the other parties represented in the Eduskunta lost votes, most notably the incumbent Prime Minister’s Centre Party, which suffered its biggest election defeat ever. Without going into details regarding the analysis of the individual parties’ results, it has been a straightforward interpretation of the election results that the main competition emerged between the established, moderate parties in the Eduskunta – irrespective of government-opposition divisions and on either side of the traditional Left-Right spectrum – and the self-proclaimed populist, Eurosceptic True Finns Party, and their charismatic leader, Soinen. This observation is underpinned by both the characteristics of the election campaign, namely that the debates for the first time revolved around EU issues, but also by a deeper analysis of the electoral preferences (both at the 2009 EP elections and the 2011 Eduskunta elections). The pattern that emerges from these is rather clear-cut: the main conflict and division emerged between the established parties, among which there has traditionally been a rather broad consensus on EU-related issues (despite the Social Democrats’ tactical opposition and critique towards the Irish, later Portuguese and Greek bailout packages) on the one hand, and the only party which has unequivocally and consistently opposed not only the recent bailout packages, but the Finnish EU-consensus as a whole (especially further federalisation), the True Finns. The established parties, especially the three main ones were even willing to downplay the differences between them, i.e. their traditional policy positions and issues on welfare and economic issues, in order to collectively and jointly discredit the strengthening populist party (Raunio, 2011, 2012). 236 KadarKrisztian_16_belivek.indd 236-237 IV. Adaptation strategies of the political parties Due to the moderate-to-polarised multiparty nature of the Nordic party systems, the individual adaptation strategies of the almost 20 “relevant” parties will not be analysed in great detail. Focus will be on the main party families, as well as the most significant winners of the elections in the wake of the economic crisis, including some new parties. 1. Traditional parties Social democrats It is safe to say that the once “pre-dominant” Social Democrats in the Nordic countries are predominant no more. In both Finland and Denmark they have been relegated to second or third place – and this took place long before the economic crisis –, whereas in Sweden they have only just managed to hang on to their status as largest party by the skin of their teeth. In all three countries their support at the latest elections has fallen to historically low levels, although in Denmark they have managed to forge a majority in the Folketing with their two coalition partners and – initial - external support from the far-left, thus securing a change of government in 2011. Since the government took office in October 2011, it has persistently and quite dramatically been losing support (dropping to historically low levels, below 20%), and has (deservedly or not) been stamped as the “government of broken promises” (Andersen, 2012). The Social Democrats in Finland based their election strategy on criticising the government’s unconditional support of the EU’s crisis management measures, and demanded guarantees, namely bilateral collateral. Otherwise, the rather conventional emphasis on creating jobs and protecting the welfare state (e.g. pensions) were not particularly new. In these areas, they were not so much contested by the centre-right parties, but by the True Finns, who had rather similar economic proposals. The Social Democrats have been struggling to find their new identity that would resonate with the voters, and the renewal strategy of the party leader, Jutta Urpilainen, proved to be largely unsuccessful. Their Swedish counterparts had also been struggling following the 2006 elections, as their leader at the time, Mona Sahlin failed to renew the party and establish a credible electoral coalition with the Left Party and the Greens, despite the fact that the Reinfeldt government’s popularity was rapidly deteriorating at the time. The Social Democrats did make some attempts in the 2010 campaign to portray the Moderates as insensitive to the 237 2013.01.18. 19:05 problems of the less well-off in the wake of the economic crisis. However, this strategy proved to be rather unsuccessful as the conservatives managed to maintain the image of responsible crisis managers. In brief, Social Democrats in all three countries failed to find innovative and credible answers to both the economic crisis, and the failure to adapt to the new social and economic environment has led to a situation where the once dominant Social Democrats are weaker than they had been for at least half a century. Centre-right In both Sweden and Denmark the centre-right (led by the Conservatives in Sweden and the Liberals in Denmark) had embarked on a decisively centrist path long before the 2008 crisis, and had abandoned their earlier neoliberal economic policies that were unattractive to the Social Democratic voters. The Danish Liberals (Venstre) under Fogh Rasmussen adopted the Hjort-doctrine (see below), whereas the Swedish Conservatives restyled themselves as the “New Moderates”, which was embodied in a new and institutionalised alliance with not only the Liberals and the Christian Democrats, but also the Centre Party, which had traditionally been cooperating with the Social Democrats, especially on economic and welfare issues. This did not mean however that the differences between the blocks have totally disappeared: the bourgeois parties in both countries implemented policies, such as tax cuts, that favoured those with higher incomes, but the economic boom made it possible to implement such measures without having to cut back on welfare spending, or in other ways hurt the less well-off. The crisis has not induced any major changes in the fundamental principles of the parties, although a much stronger emphasis has been put on responsible fiscal policy, including austerity, if need be. The centre-right in all three countries tried to capitalise on their reputation of crisis management and fiscal discipline, in other words on their competence. This strategy proved to be very successful in Sweden, where the government, especially the Moderates enjoyed improving approval ratings towards the end of the 2006-2010 term. As a result, the 2010 elections were deemed historic for yet another reason: for the first time, the Moderates became the “party of those trusting politicians”, and the Social Democrats the “party of the mistrusting”, whereas this has traditionally been the other way around (SCB, 2012: 37). The Danish Liberal Party is another case in point: after a long period of prosperity, the Liberal Prime Minister, Lars Løkke Rasmussen was forced to abandon his predecessor’s successful “Hjort-doctrine”, which had been the cornerstone of the Liberal Party’s policy since its turn away from its hardcore neoliberal economic stance in 1998. The doctrine basically 238 KadarKrisztian_16_belivek.indd 238-239 meant that the “everyday Dane” should not be worse off as a result of any economic policy decision. The Liberal-Conservative governments since 2001 had the necessary economic growth to secure this persistently increasing prosperity, but the crisis after 2008 inevitably led to fiscal austerities, including breaking political taboos, such as the major reform of the early retirement scheme (“efterløn”) (Reiermann and Andersen, 2011). Despite unavoidable disagreements regarding the concrete measures to be taken (e.g. the practical elimination of the early retirement system), there was a general consensus, at least among the mainstream parties, and even a large part of the electorate, on the necessity of reforms and austerity measures. Like his Swedish colleague, Lars Løkke Rasmussen, the Liberal PM attempted to position himself as a responsible leader who is not afraid to break political taboos (like the efterløn-system), in order to successfully manage the economic crisis. As the 2011 election results indicate, this strategy can by no means be considered as a failure, despite the fact that the “Red-bloc” managed to win a narrow majority. Quite the contrary, Venstre remained the largest party, and has increased both its and the “Blue Bloc’s” support since the 2011 elections, and will most probably return to the helm after the next elections. A big difference between the centre right-parties in Denmark and Sweden is that the Danish Liberals, under the leadership of Anders Fogh Rasmussen in the early 2000s chose to politicize the immigration issue, which proved to be a very successful strategy, the Swedish Moderates have not followed the same path, and immigration has remained a non-issue in Swedish political discourse. (Jensen and Thomsen, 2011) Given the somewhat counterintuitive, but proven fact that the salience of immigration diminished in both countries in the wake of the economic crisis, this could be one of the factors explaining why the Swedish centre-right managed to remain in power, as opposed to the Danish Liberals. On the other hand, it will be interesting to see whether the presence (and possible further strengthening) of the Sweden Democrats will force the Moderates and the other mainstream parties to reconsider their low profiles on the immigration issue, despite their willingness to totally ignore the radical right (see next section). 2. New and anti-establishment parties The Nordic countries are still overwhelmingly characterized by their stable party systems. Comparatively few new parties have successfully emerged and played a lasting and significant role in the political life both before and after the economic crisis. In fact, the only 239 2013.01.18. 19:05 major success achieved by any “new” party was the landslide victory of the True Finns Party. All three parties that are labelled as “radical right” (Arter, 2010 and Polgár, 2011) have to varying degrees capitalized on anti-immigration sentiments, although this issue, perhaps paradoxically, has lost salience in the wake of the economic crisis (see above). Still, these parties have by far the highest profiles attached to the issue: for example the Sweden Democrats were the only party where more than 5% (68%) of the voters identified “immigration/asylum policy” as a key issue for the party (SCB, 2012: 58). Also common for the three parties is the anti-establishment rhetoric, although it is obviously less marked (and probably less credible) for the Danish People’s Party after 10 years of institutionalised cooperation with successive Liberal-Conservative governments. On the other hand both the True Finns and the Sweden Democrats could claim that they were against the misdeeds of the ruling political elite and the established parties, and this is clearly reflected in their voter profiles. The voters of the Sweden Democrats, for example, had markedly less trust in the political institutions, than the rest of the population, which otherwise has been increasingly positive towards the functioning of democracy in Sweden (SCB, 2012: 38). The same can be said about the constituency of the True Finns. However, it is only the Sweden Democrats which is practically in a political quarantine: either due to parliamentary mathematics, or to the relatively moderate positions and the prevailing consensual style of politics, both the DF and the TFP are to be reckoned with when it comes to formal or informal alliances in parliament. The Danish People’s Party failed to keep its main issue (anti-immigration) high on the agenda, and even its strong anti-EU sentiments were received less favourably than at earlier elections. Therefore, the DPP has for the first time in more than a decade lost votes (though not dramatically) since the previous election, and was for the first time left without any major influence on the coalition formation, government policy, and even agenda-setting. This was a rather new situation, as the party had a major influence even from opposition on the successive Liberal-Conservative governments’ policies, especially in the area of immigration policies, which has been markedly tightened in the years after 2001 (Polgár, 2011). The True Finns Party was by far the most successful at profiting from the effects of the economic crisis, by advocating the need to put an end to the Liberal, pro-EU consensus, what they refer to as “one truth politics”, which has characterized basically the whole Finnish political elite. Their opposition was directed first and foremost against the EU, but they also dismissed consensus around the prevailing socio-economic policies of the established political parties, namely a generally liberal, permissive social policy, the “con240 KadarKrisztian_16_belivek.indd 240-241 sensus alliance” of big business and big unions, the (alleged) retrenchment of the welfare state justified by the need for austerity, etc. (Arter, 2010). Explicitly interpreted as the opposition to this prevailing consensus, and distinguishing “populist” democracy from the “elitist” version of democracy advocated by the mainstream parties, Soini, and official party documents deliberately use the term “responsible populism” to characterize the TFP, which is rather atypical among Western-European populist parties, which usually desperately try to avoid and reject the label due to its negative connotations (Raunio, 2012). The main campaign issue was undoubtedly the staunch opposition to the EU’s bailout packages, more precisely using Finnish taxpayers’ money to save problematic governments, as well as Finland’s participation in the EU-integration project in general. “Where the EU is, that’s where you get problems” – sounded the famous slogan, indicating that the TFP was strongly dissatisfied with the general direction in which the EU was heading, as well as Finland’s role in it. Though not explicitly advocating Finland’s secession from the EU, a strong opposition to the diminishing role of the nation-state and creeping supranationalism was apparent, and this justifies that the party should be classified as (hard?) Eurosceptic. Not surprisingly, the party’s MEPs joined the Europe of Freedom and Democracy in 2009, together with the Danish People’s party and Nigel Farage’s UK Independence Party. It is in any case important to underline that the TFP’s opposition to a supranational EU, as well as the bailout packages was much more a question of principles than in the case of the Finnish Social Democrats or the Left Alliance, who (in opposition!) also opposed Finland’s unconditional participation in the bailouts, but rather as a result of opportunistic behaviour, in other words government-opposition dynamics. This conforms rather well to the concept of party-based Euroscepticism put forward by Nick Sitter (Sitter, 2001). The True Finns did not have a pronounced anti-immigration or xenophobic agenda, at least when compared to the Danish People’s Party, the Sweden Democrats, or the Austrian Freedom Party, although its party manifestos since 2007 formulated a strong condemnation of liberal and multicultural immigration policies on both cultural and welfare chauvinistic grounds (Arter, 2010). It is worth mentioning, however, that despite the party leader’s and the official programme’s relatively moderate stance on immigration, and the party’s official statement condemning all forms of racism, discrimination (including positive discrimination, see Helsingin Sanomat, 2011), several of the party’s candidates expressed openly racist views, and the constituency of the TFP is significantly more hostile towards immi241 2013.01.18. 19:05 grants than the average (Borg, 2012). Further, the TFP seemed to be the only party where the party elite’s stance on the need for stricter immigration policies was in line with that of both the party membership and the electorate at large (Helsingin Sanomat, 2012).10 The TFP was very successful in shaping and setting the agenda of the campaign, and all the other parties were forced to play down the differences among themselves (even more!) in order to jointly discredit Soini and his party. As a result, Soini could credibly present himself and his party as the only one opposing the traditional political elite. This strategy of the TFP had already functioned well at the EP elections in 2009, and even more perfectly in 2011. Interestingly enough, even this tough anti-establishment rhetoric was not a sufficiently strong argument to totally rule out the possibility of the TFP entering the government coalition in 2011. But in the event, the party decided to stick to its campaign pledge of not under any circumstances supporting the EU’s bailout packages, and chose, in other words, a policy-seeking (and vote-seeking) strategy, instead of an office-seeking one.11 The Sweden Democrats entered for the first time the Swedish Riksdag, but are – as opposed to the Danish People’s Party and the True Finns – totally isolated and quarantined within the Swedish political sphere, as they are regarded as xenophobic and anti-democratic, and all of the mainstream parties categorically exclude the possibility of cooperation with them, and desperately seek to avoid even the appearance of any such cooperation. As opposed to the populist right in both Denmark and Norway, who capitalise on anti-immigration sentiments first and foremost as a tactical instrument, the SD has its roots in openly racist movements which have only recently opted for a strategy of gradual moderation that could be acceptable for a sufficiently large share of the electorate (Aylott, 2010: 6). Despite the fact that they have held the balance between the two blocks since 2010, currently there are no signs that they would be making a strong impact on the government’s policies, or on the Swedish attitudes in general. Though by no means new, the only truly ‘anti-establishment party’ left in Denmark was the Unity List (UL, also referred to as “Red-Green Alliance”). The party was basically the only visible political force rejecting the prevailing consensus since the 2008 economic crisis on the necessity of bailout packages and campaigned, in line with its Programme of Principles from 2003, on a platform entailing a radical shift towards environmentalism and away from capitalism, the protection of the Danish welfare state, for a much higher 242 KadarKrisztian_16_belivek.indd 242-243 taxation of banks (as well as financial transactions), as well as Denmark’s secession from the EU, mostly on anti-capitalist and anti-globalist grounds (Enhedslisten, 2004).12 In the event, the significant strengthening of the UL proved to be decisive for the outcome of the elections, as the “Red bloc” did not have a majority without them. The UL decided to support the three-party coalition, and voted even for the 2012 budget (which was the first time ever the Unity List has supported a state budget). However, in June 2012 the government chose to strike a deal on tax reform with the “Blue bloc” instead, which not only prompted the Unity List to declare that they no longer supported the Social Democratic government, but was also met with resistance within the ranks of the SD and the SF. Several members of the two left-wing parties defected and became members of the UL, and the party’s support has also been steadily increasing as a reward for its staunch opposition to economic austerity (Politiken, 2012a). Opinion polls taken after the tax-deal with the „Blue bloc” in June 2012 revealed a massive voter defection of Social Democrat (and SF) voters benefiting first and foremost the Unity List. The party’s support reached record levels in the second half of 2012, peaking at almost 12% in August 2012, and – in the short term, at least - stabilising at around 10-11%, which is an extraordinary figure compared to any previous election result. In any case, the Unity List is clear about not helping Løkke Rasmussen back into power, but the government will have to pay a high price for the external support of the UL: the objective is to ”pull the government to the Left” (Jyllands Posten, 2012).13 Though not directly related to the effects of the economic crisis, the surprising performance of the Swedish Pirate Party at the 2009 EP elections has to be mentioned. The party, founded in 2006, gained sudden popularity when the Swedish founders of Pirate Bay, a website facilitating digital file-sharing were convicted by a Stockholm district court in April 2009. This has induced massive opposition among Swedish youth, who have started to join the Pirate Party by the thousands. Despite having more or less coherent views on a number of other issues (such as the Lisbon Treaty) since 2010, it is obvious that the PP can be regarded as a single-issue party, aiming to liberalise the system of copyrights, thereby decriminalising file-sharing on the internet. The timing of the 2009 EP elections was very favourable, only two months after the court verdict, when digital piracy was one of the main stories of the day not only in the Swedish, but also in the international media. The PP could therefore capitalise significantly on the visibility of the issue, and won a remarkable 7.1% of the votes and 2 seats in the EP.14 243 2013.01.18. 19:05 Apart from the high profile of the piracy issue at the time, the PP clearly benefited from the “second-order” nature of the EP-elections: only a year later, when the fate of the government was at stake at the national elections, the PP only received 0.65% (roughly the same as four years earlier), but their presence and the threat posed by their growing membership (peaking at over 50,000 members in 2009!) prompted senior politicians from both the Moderates and the Social Democrats to make statements hinting at the possibility of decriminalising digital file-sharing. Though both the Sweden Democrats (who fared considerably worse at the 2009 EP elections than a year later at the general elections) and the Pirate Party were clearly anti-establishment parties in the sense of appealing to voters not attracted by the mainstream parties and campaigning on issues completely outside the normal political agenda, their electoral bases were rather different. Not surprisingly, the PP’s core voter base was the young generation, capturing the majority of votes in the youngest group (18-21), and faring significantly better among the 18-30 generation, than among older voters. Their libertarian, anti-bureaucratic messages appealed to the young generation more or less evenly throughout the country, whereas the voters of the SD were considerably older, with typically ultra-nationalistic attitudes concentrated in the Southern Sweden (Aylott and Sundström, 2009: 11). Conclusions The economic crisis left none of the Nordic EU members’ economies unaffected, and crisis management has once again become the main issue on the political agenda of Denmark, Finland and Sweden after 2008. Due to the uninterrupted growth and economic prosperity for about 15 years in Finland and Sweden, and even longer in the case of Denmark, this has induced changes in a number of areas, as shown in this paper. Swedish and Finnish voters have drawn clear conclusions from the shocking experiences of the early 1990s: a sound, transparent and predictable fiscal policy, based on broad consultations and academic input is more important than anything else, including mere austerity. Whereas joining the EU, and thereby the EU itself was an important part of the solution in the early 1990s, the perspective is rather different in 2012: seen from Stockholm, the crisis is to a large extent caused by the EU’s inability to deal with irresponsible and debt-generating fiscal policies of various member state governments (see 244 KadarKrisztian_16_belivek.indd 244-245 moral hazard), as well as with low competitiveness, low employment levels, and insufficient investment in the knowledge economy (e.g. research in new energy resources, climate change etc.). Therefore, mainly in line with the British vision, the solution should be based on strengthening the Single Market and better spending at the EU level aimed at increased competitiveness, and not on mere fiscal austerity, let alone loss of economic sovereignty (increased EU-competences in the fields of financial supervision or budgetary oversight). Though Denmark was the only one among the three Nordic EU-members where the economic recession had started earlier (and was thus to a large extent caused by domestic factors), even there the government managed to frame the issue as stemming primarily from European or global challenges. Still, neither in Denmark, nor in Sweden did the economic crisis or its EU-related aspects result in major electoral shifts after 2008. Though the centreright Danish government was ousted by a slim margin in 2011 (due to the weakness of the junior coalition party), the Liberal Prime Minister managed to retain his and his party’s reputation as perhaps the most responsible and competent manager of the economic crisis, and Venstre has remained by far the strongest within the Danish party arena. Likewise, in Sweden the incumbent centre-right coalition, especially the Prime Minister and the Minister of Finance has been given credit by the voters (and even the international community) for a successful management of the crisis, as a result of which Sweden is clearly among the best performers within the EU in 2012. Only in Finland did the voters punish the largest incumbent government party – and to a smaller extent all the established parties -, and give a huge electoral victory to the anti-EU and anti-establishment True Finns Party. Yet even there a broad pro-EU coalition of established parties remained in power. As shown in this paper, the economic crisis, despite its negative effects on economic equality, has not led either to major social or ethnic tensions, or a major resentment with the political system and political elite in the Nordic Countries. If anything, antiimmigration sentiments and distrust with the democratic political institutions seem to have decreased, or at least temporarily lost salience, especially in Denmark and Sweden. Even the major electoral victory of the True Finns can be explained more by opposition to the EU’s concrete crisis-management measures, i.e. the bailout packages and its ramifications for the Finnish taxpayers, and by a general dissatisfaction with the country’s prevailing “one truth politics” when it comes to EU-affairs, than by increased antiimmigration attitudes. 245 2013.01.18. 19:05 Nevertheless, the old-new governments in all three countries were forced to take into account the increasingly Eurosceptic public opinion (and in Finland’s case, the presence of a new, but rather strong EU-sceptic party), and pursue a more cautious approach in EUaffairs than before. In hindsight, October 2012 might even be regarded as a turning point in this regard, at least for Denmark and Sweden. In line with Fredrik Reinfeldt’s remarks about being prepared to remain at the EU’s periphery, the Danish PM, at the College of Europe in Bruges, also spoke quite openly about the reality of a multi-speed Europe, where development takes place along several “paths”, and where small, non-Euro members must face the possibility and consequences of marginalisation. Thorning-Schmidt, co-authoring with her Swedish colleague published a commentary in one of the major Danish political dailies (Politiken, 2012b), where they opened a joint front, and reaffirmed this new, more reserved approach, by a constructive opposition to the banking union, as proposed by the Commission. The continued process of deepening integration needs to remain flexible so that the doors are open to non-euro countries who wish to participate, but the two governments do not support the idea of the taxpayers recapitalising banks, especially when it comes to the banks of other member states. The timing of this article was of course no coincidence, either: it was published on the first day of yet another crucial European Council Summit (18 October 2012), the first one after Denmark handed over the EU Presidency to its successor, Cyprus. Although the Conclusions of this particular European Council clearly reflected that the demands from Stockholm and Copenhagen were being heard, the two traditionally reluctant European countries have in any case even more clearly expressed their preparedness of being sidelined, and not joining those member states who aim for a much deeper and strengthened cooperation, i.e. a “genuine” Economic and Monetary Union, let alone a political one. Also due to the rising Eurosceptic sentiments, the Danish PM openly threatened to veto the Multiannual Financial Framework (2014-2020) at the extraordinary European Council Summit in November 2012, unless Denmark is offered a rebate of roughly EUR 135 million, an announcement that practically all Danish parliamentary parties applauded, with the exception of the largest opposition party, the Liberals. Stalling the MFF-talks would have been an unusually strong move even from a Eurosceptic country, like Denmark (Euractiv, 2012). In the event, the veto was not used, as the talks broke down despite Van Rompuy’s best effort to broker an agreement based on a 246 KadarKrisztian_16_belivek.indd 246-247 combination of concessions to a number of MSs and a series of bilateral meetings in the run-up to the Summit. The breakdown of the MFF negotiations in late 2012 came neither as a surprise, nor as a particularly inconvenient development for the Nordic countries. Especially for Denmark and Sweden, no deal (at least in the short run) is better than a bad deal. Furthermore, though all three Nordic countries are among the largest (per capita) net contributors of the EU, and are active members of the group (together with the Netherlands, Great Britain, Germany, etc.) advocating a leaner budget and “better spending”, there are a number of details in the MFF (e.g. Denmark’s rebate claim, Sweden’s insistence on increased spending on innovation at the expense of CAP, or Finland’s interest in preserving specific parts of today’s cohesion policy), where their positions, or at least their emphases differ from one another. Hence, as is the case with the CEE countries, or even the V4, these countries, contrary to the widespread perceptions, cannot be considered as a unified lobby group within the EU (for a regional comparison, see Vida, 2012). This, on the one hand, makes the MFF-negotiations more complex, but on the other hand may contribute to avoiding a final deadlock in the talks, as the boundaries of the blocks – e.g. between net payers and net beneficiaries – may not be frozen, after all. These gradual changes in Denmark and Sweden notwithstanding, the results of the Finnish elections in April 2011 provide possibly the clearest example of how the EU – or, more concretely, the questions related to the eurozone crisis and the bailout packages – impacted directly on domestic politics in EU member states. Namely, among the Nordic countries it was only in Finland, where the economic crisis, albeit framed in a Eurosceptic, anti-establishment perspective, had a major impact on the outcome of a general election, and on the country’s party system. As a result of the breakthrough of the populist True Finns Party, the pro-EU Finnish government was forced to take a more reserved and cautious approach to European issues and even be the naysayer in certain questions, which is certainly a new situation for Helsinki. However, its role as a firm supporter of Merkel’s strict, fiscal conservative approach to the EU’s crisis management efforts has become perhaps even more pronounced, even in the face of increased opposition from other heavyweight EU-members, most notably France. This new situation does not change the fact that Finland continues to be the most enthusiastic one among the Nordic countries when it comes to the deepening integration process, mainly as a consequence of being, and for the foreseeable future remaining, the sole EMU-member within the group. 247 2013.01.18. 19:05 References Adler-Nissen, Rebecca – Nielsen, Julie Hassing – Sørensen, Catharina (2012) The Danish EU Presidency 2012: A Midterm Report. Vol. 2012/1 op. Swedish Institute for European Policy Studies (SIEPS) Aftonbladet (2012) „Viktigt vara rak och tydlig” – Reinfeldt mötte Hollande i Paris. Aftonbladet, 1 October 2012 Albret, Poul (2008) Krisen har ændret vælgernes politiske dagsorden. Mandag Morgen, 15 December 2008, 15-20 Andersen, Torben K. (2012) ”Løftebrudsregeringen” er en myte. Mandag Morgen. 20 June 2012, 44-58 Andeweg, Rudy B. (1995) The reshaping of national party systems. West European Politics, Vol. 18 (3), 58-78 Arter, David (2008) Scandinavian Politics Today. Manchester: Manchester University Press Arter, David (2010) The Breakthrough of Another West European Populist Radical Right Party? The Case of the True Finns. Government and Opposition, Vol. 45/4, 484-504 Aylott, Nicholas (2002) Let’s Discuss This Later: Party Responses to Euro-division in Scandinavia’. Party Politics, Vol. 8, 441–64 Aylott, Nicholas (2005) Lessons Learned, Lessons Forgotten: The Swedish Referendum on EMU of September 2003.Government and Opposition, Vol. 40/4, 540-564 Aylott, Nicholas (2007) A Long, Slow March to Europe: the Europeanization of Swedish Political Parties. In. Poguntke, Thomas et al.(eds.): The Europeanization of National Political Parties. Power and organizational adaptation. London and New York: Routledge, 162-189 Aylott, Nicholas (2010) Election Briefing No. 59. Europe and the Swedish Election of September 19th 2010. Sussex: European Parties Elections and Referendums Network (EPERN) Aylott, Nicholas and Sundström, Malena Rosén (2009) 2004 European Election Briefings No. 37. The European Parliament Election in Sweden June 2009. Sussex: European Parties Elections and Referendums Network (EPERN) Bengtsson, Rikard – Elgström, Ole and Tallberg, Jonas (2004) Silencer or Amplifier? The European Union Presidency and the Nordic Countries. Scandinavian Political Studies. Vol. 27/3, 311-334 Berglund, Sten and Lindström, Ulf (1978) The Scandinavian Party System(s): A Comparative Study. Lund: Studentliteratur 248 KadarKrisztian_16_belivek.indd 248-249 Bolin, Niklas and Aylott, Nicholas (2006) Election Briefing No. 30.The Swedish Parliamentary Election of September 2006. Sussex: European Parties Elections and Referendums Network (EPERN) Borg, Sami (ed.) (2012) Muutosvaalit 2011. Helsinki: Oikeusministeriö. Oikeusministeriön julkaisu; 16/2012. http://www.vaalitutkimus.fi/sv/julkaisut.html (Accessed: 15 August 2012) Borre, Ole (2003) To konfliktimensioner. In: Borre, Ole – Goul Andersen, Jørgen (eds.) Politisk forandring. Verdipolitikk og nye skillelinjer ved folketingsvalget 2001. Århus: Systime Academic Calmfors, Lars (2012) Sweden - from Macroeconomic Failure to Macroeconomic Success. Draft paper to be presented at Confindustria, 20 January 2012. http://people. su.se/~calmf/confindustria120120.pdf (Accessed: 5 August 2012) Christiansen, Flemming Juul and Pedersen, Rasmus Brun (2011) „Europeanisation” and Coalition Patterns in a Minority Parliamentary System. In: Persson, Thomas – Wiberg, Matti (eds), Parliamentary Government in the Nordic Countries at a Crossroads: Coping with Challenges from ‘Europeanisation’ and ‘Presidentialisation’. Stockholm: Santerus, 63-83 Demker, Marie and Svåsand, Lars (2005) Partiernas århundrade. Fempartimodellens uppgång och fall i Norge och Sverige. Stockholm: Santérus Förlag Downs, William M. (2001) Denmark’s Referendum on the Euro: The Mouse That Roared Again. West European Politics. Vol. 24/1, 222-226 EEAG (2012) The Swedish Model. In: Sturm, Jan-Egbert et al. (eds.): The EEAG Report on the European Economy. Munich: CESifo, 99–114 Enhedslisten (2004) Enhedslistens principprogram: kapitalisme og socialisme i det 21. århundrede. www.enhedslisten.dk/files/principprogram.pdf (Accessed 1 May 2012) Euractiv (2012) Denmark ready to veto EU budget unless it gets a rebate. Euractiv, 26 October 2012. http://www.euractiv.com/specialreport-budget/denmark-readyveto-eu-budget-get-news-515680 (Accessed: 29 October 2012) Eurobarometer (2011) Economic Governance in the European Union. Eurobarometer 74. (Autumn 2010) Eurostat (2011) Population and Social Conditions. Statistics in focus, 34/2011 Goul Andersen, Jørgen (2010): „It’s the economy, stupid!” – eller „Crisis? What Crisis?” Danske vælgere undervejs med den økonomiske krise 2008-2009. Tidsskriftet Politik, Vol. 13/1, 16-32 249 2013.01.18. 19:05 Hegeland, Hans (2011) The European Union as Foreign Policy or Domestic Policy? EU Affairs in the Swedish Riksdag. In: Persson, Thomas – Wiberg, Matti (eds). Parliamentary Government in the Nordic Countries at a Crossroads: Coping with Challenges from ‘Europeanisation’ and ‘Presidentialisation’. Stockholm: Santerus, 139-160 Heidar, Knut (2004) Nordic Party Systems. In: Heidar, Knut (ed.) Nordic Politics: Comparative Perspectives. Oslo: Universitetsforlaget. 40-60 Helsingin Sanomat (2011) True Finns renounce racism, discrimination, and favouritism. Helsingin Sanomat, 26 May 2011. http://www.hs.fi/english/article/True+Finn s+renounce+racism+discrimination+and+favouritism/1135266444787 (Accessed: 1 September 2012) Helsingin Sanomat (2012) Public immigration debate remained tepid before last parliamentary election. Helsingin Sanomat, 8 May 2012. http://www.hs.fi/english/article/Public+immigration+debate+remained+tepid+before+last+parliamentary+electi on/1329104030926 (Accessed: 1 September 2012) Holmberg, Sören (2009) EU alltmer accepterat. In: Holmberg, Sören – Weibull, Lennart (eds) Svensk höst. Göteborg: SOM-institutet, Göteborgs universitet, 299-314 Holmberg, Sören (2011) Swedish Opinion on the Swedish Membership in the European Union. SOM-report no. 2011:5. Göteborg: SOM-institutet, Göteborgs universitet. Holmberg, Sören (2012) Försvagat opinionsstöd för EU. Europapolitisk Analys, Vol. 2012/5. Svenska Institutet för Europapolitiska Studier (SIEPS) Holmberg, Sören and Weibull, L (2010) Nordiskt ljus. In: Holmberg, Sören – Weibull, Lennart (eds.) Nordiskt ljus. Göteborg: SOM-institutet, Göteborgs universitet, 9-33 Honkapohja, Seppo and Koskela, Erkki (1999) The Economic Crisis of the 1990s in Finland. Economic Policy. Vol. 14/29, 399-436 Jensen, Carsten and Thomsen, Jens Peter Frølund (2012) Can Party Competition Amplify Mass Ideological Polarization Over Public Policy? The Case of Ethnic Exclusionism in Denmark and Sweden. Party Politics. Forthcoming. (Available online as of August 2011) Johansson, Karl Magnus – Langdal, Fredrik and von Sydow, Göran (2010) Mellan konflikt och samförstånd: Ordförandeskapet i inrikespolitik och ledning. In. Bengtsson, Rikard (ed.) I Europas tjänst – Sveriges ordförandeskap i EU 2009. Stockholm: SNS Förlag, 224-264 Jokela, Juha and Korhonen, Kaisa (2011) No longer a model pupil in European politics? Finland’s EU policy after the general elections. European Policy Institutes Network – Commentary No. 6 250 KadarKrisztian_16_belivek.indd 250-251 Jokela, Juha and Korhonen, Kaisa (2012) A Eurosceptic Big Bang - Finland’s EU Policy in Hindsight from the 2011 Elections. FIIA Briefing Paper 106. Helsinki: The Finnish Institute of International Affairs Jyllands Posten (2012) Enhedslisten: Vi vælter ikke regeringen. Jyllands Posten 9 July, 2012 Kitschelt, Herbert (2007) Growth and Persistence of the Radical Right in Post-Industrial Democracies: Advances and Challenges in Comparative Research. West European Politics, Vol. 30/5, 1176-1206 Knudsen, Ann-Christina L. (2005) Election Briefing No. 19. The Danish General Election of February 2005. Sussex: European Parties Elections and Referendums Network (EPERN) Knudsen, Ann-Christina L. (2009) Election Briefing, The European Parliament Election in Denmark 7 June 2009. Sussex: European Parties Elections and Referendums Network (EPERN) Knudsen, Ann-Christina L. (2011) Election Briefing No. 67. Europe and the Finnish Parliamentary Election of 15 Septemer, 2011. Sussex: European Parties Elections and Referendums Network (EPERN) Knutsen, Oddbjørn and Kumlin, Staffan (2003) Value Orientations and Party Choice – A Comparative Longitudinal Study in Five Countries. Paper presented at the 2nd ECPR Conference in Marburg, 18 - 21 September 2003, Section No.14: Current Issues in Voting Behaviours at Mass Elections, Panel on “Social Cleavages” Kragh, Claus (2012) EUs bankunion isolerer Danmark. Mandag Morgen. 22 October 2012 Lánczi, András (ed.) (2011) Nemzet és radikalizmus. Egy új pártcsalád felemelkedése. Budapest: Századvég OECD (2011) Growing Income Inequality in OECD Countries: What Drives It And How Can Policy Tackle It? Paris: OECD Forum on Tackling Inequality, 2 May 2011 Oscarsson, Henrik and Holmberg, Sören (2008) Regeringsskifte. Väljarna och valet 2006. Stockholm: Nordstedts Juridik Polgár, Tamás (2011) Az adóellenes neoliberalizmustól az idegenellenes nemzeti konzervativizmusig. A Dán Néppárt felemelkedésének története. In: Lánczi, 93-116 Politiken (2012a) Medlemmerne vælter ind hos Enhedslisten. Politiken, 26 June, 2012 Politiken (2012b) Skatteborgerne skal ikke bøde for bankernes fejlskud. (Af Helle Thorning-Rasmussen of Fredrik Reinfeldt). Politiken, 17 October 2012 251 2013.01.18. 19:05 Rasch, Bjørn Erik (2011) Why Minority Governments? Executive-Legislative Relations in the Nordic Countries. In: Persson, Thomas – Wiberg, Matti (eds) Parliamentary Government in the Nordic Countries at a Crossroads: Coping with Challenges from ‘Europeanisation’ and ‘Presidentialisation’. Stockholm: Santerus, 41-61 Raunio, Tapio (2004) The Changing Finnish Democracy: Stronger Parliamentary Accountability, Coalescing Political Parties and Weaker External Constraints. Scandinavian Political Studies, Vol. 27/2, 133-152 Raunio, Tapio (2005) Hesitant Voters, Committed Elite: Explaining the Lack of Eurosceptical Parties in Finland. Journal of European Integration, Vol. 27/4, 381‑395 Raunio, Tapio (2011) Election Briefing No. 63. Europe and the Finnish Parliamentary Election of April 17, 2011. Sussex: European Parties Elections and Referendums Network (EPERN) Raunio, Tapio (2012) ‘Whenever the EU is involved, you get problems’: Explaining the European policy of The (True) Finns. SEI Working Paper No 127, EPERN Working Paper No 26 Raunio, Tapio and Tiilikainen, Teija (2003) Finland in the European Union. London: Frank Cass Reiermann, Jens and Andersen, Torben K. (2011) Seks måneder der ændrede dansk politik. Mandag Morgen. 27 June 2011, 21-25 Rydgren, Jens (2002) Radical Right Populism in Sweden: Still a Failure, But for How Long? Scandinavian Political Studies, Vol. 25/1, 27-56 Sandbu, Martin (2012) Krise? Hvilken krise? Samtiden, Vol. 2012/1, 4-17 SCB (2011) Åttapartivalet 2010 - Allmänna valen (Valundersökningen). Stockholm: Statistiska Centralbyrån Sitter, Nick (2001) The Politics of Opposition and European Integration in Scandinavia: Is Euro-Scepticism a Government-Opposition Dynamic? West European Politics Vol. 24/4, 22-39 Sørensen, Catharina (2006) Elsker, elsker ikke? Euroskepsis i foranding. København: Dansk Institut for Internationale Studier Tallberg, Jonas and Aylott, Nicholas – Bergström, Carl Fredrik – Vifell, Åsa Casula – Palme, Joakim (2010) Europeiseringen av Sverige. Demokratirådets Rapport 2010. Stockholm: SNS Förlag Tiilikainen, Teija (2006) ‘Finland – An EU Member with a Small State Identity’, Journal of European Integration 28:1, pp. 73-87 252 KadarKrisztian_16_belivek.indd 252-253 Vida, Krisztina (2012): Summary. In Krisztina Vida (ed.) (2012) Strategic Issues for the EU10 Countries - Main Positions and Implications for EU Policy-Making. Brussels and Budapest: Foundation for European Progressive Studies and Hungarian Academy of Sciences, Institute of World Economics. 279-311, http://www.vki.hu/ news/news_565.html (Accessed: 1 December 2012) Widfeldt, Anders (2004) Elite Collusion and Elite Defiance: Sweden’s Euro Referendum in 2003. West European Politics. Vol. 27/3, 503-517 Zahn, Rebecca (2008) The Viking and Laval Cases in the Context of European Enlargement. Web Journal of Current Legal Issues, http://webjcli.ncl.ac.uk/2008/issue3/zahn3. html (Endnotes) Notes 1 An earlier draft of this paper was presented at the Annual Conference of the Central European Political Science Association, Budapest, 25-26 October 2012. I am thankful for the helpful comments of Professors Attila Ágh, Máté Szabó, Cirila Toplak, Krisztina Vida, as well as Kjetil Gammelsrud Aasland. All views expressed here and any remaining errors remain my own. An edited, restructured version of this paper will be part of a larger comparative research project on impact of the economic crisis on the domestic politics of EU Member States. The research has been financially supported by TÁMOP-4.2.2/B-10/1-2010-0023. 2 The total fiscal cost of public support to the banking industry in the years 1991-94 were estimated at around 7.5% of GDP in Finland (Honkapohja and Koskela, 1999: 409). 3 The Danish Socialist People’s Party and the Swedish Greens have officially abandoned their opposition to their country’s membership. In both countries parties of the far-right and far-left continue to advocate hard-Eurosceptic positions (see Table 2). 4 In the so-called Laval case (2007), the EU Court ruled against the Swedish trade unions who argued that the Latvian company contracted for the renovation of a school building in Växholm (near Stockholm) paid lower wages to its Latvian employees than the minimum wage agreed in the trade union’s collective agreement. The Court ruled that such minimum wages should have been regulated in a more precise manner in a national 253 2013.01.18. 19:05 law in order for the Swedish trade union’s actions (blockades) not to be considered as an infringement of the free provision of services, and more concretely the provisions of the EU’s Posted Workers Directive. (Zahn, 2008) 5 A clear example was the speech of PM Fredrik Reindfeldt in a parliamentary debate (13 June 2012), where he used a much clearer distinction between the Northern „growth corridor”, with its sound public finances, and its centre in Sweden and Germany, which transfers resources to the economically hard-hit Southern Europe. “The Swedish EUcontribution is 30 billion [Swedish Crowns]...Will the Swedish people pay even more in transfers to others in Europe? (...) We can also ask the question in the following way: How interested are all those, who have just received signals that we in Sweden will have to work more so that the pension-age can be lowered in France?” (Full transcript of Parliamentary debate available at www.riksdagen.se/sv/debatter--beslut). 10 The strongly personalised electoral system in Finland favours individual campaign messages and agendas, and hinders unified party positions (Raunio, 2009: 5). 11 Even before the elections - then PM - Kiviniemi stated openly that it would be hard and undemocratic to exclude the True Finns from a future coalition in case they received 20% of the votes. Even though the TFP fell slightly shy of the 20%, the idea of inviting them was not totally far-fetched. 12 The Socialist People’s Party (SF) has for a long time been the main left-wing opposition of Social Democrat-led governments, but in recent years the party could not be considered as anti-establishment, primarily because it openly opted for an office-seeking strategy (aiming to join a coalition government led by the Social Democrats), and gave up several of its earlier positions, such as opposition of Denmark’s EU membership. 6 At the time of writing – in December 2012 – it has bounced back to the level achieved at the 2011 elections, after several months of diminishing support. 13 It is so according to the so called Berlingske Barometer, which calculates averages of several polling institutes. 7 As a result of the Edinburgh Summit in 1992, Denmark, after Danish voters rejected the Maastricht Treaty, was granted four opt-outs, where it was left up to later decisions of the Danish government (in practice the voters) whether and when to fully participate in the EUs cooperation in the fields of EMU (third stage, i.e. the introduction of the Euro), the EU citizenship, the EU’s Common Security and Defence Policy (military cooperation), and the EU’s cooperation in justice, police, asylum and immigration affairs, respectively. The pledge of the new government in 2011 was to put the latter three questions to a referendum, i.e. the introduction of the Euro was not on the table. 14 Originally the PP only received one mandate, but after the entry into force of the Lisbon Treaty, the number of Swedish MEPs was raised from 18 to 20, with one of the additional seats going to the PP. 8 According to comparable figures by Eurostat, the proportions of foreign citizens and foreign-born residents living in the respective countries were: 6% and 9% in Denmark, 2.9% and 4.3% in Finland, 6.3% and 14.3% in Sweden, and 6.8% and 10.8% in Norway. This means that the proportion of residents with foreign backgrounds is around the EU average in Norway and Denmark, higher than the EU average in Sweden, and much lower in Finland (Eurostat, 2011: 2). 9 Accordingly, the earlier edited volume on the emergence of the European Radical Right (Lánczi (ed.) 2011) did not have individual chapters on either Finland or Sweden. 254 KadarKrisztian_16_belivek.indd 254-255 255 2013.01.18. 19:05 Annexes Figure 1: Annual real GDP growth rates in the Nordic countries compared to the EU27 (2007-2013) Figure 3: Gross government debt as a percentage of GDP in the Nordic countries, compared to the EU27 and the Euro-zone (2007-2011) Source: compiled by the author based on Eurostat data (accessed: 1 August 2012). Source: compiled by the author based on Eurostat data (accessed: 1 August 2012). Data for 2012 and 2013 represent latest available forecasts by the Eurostat. Figure 2: Unemployment rates in the Nordic countries compared to the EU27 (2007-2011) Source: compiled by the author based on Eurostat data (accessed: 1 August 2012). 256 KadarKrisztian_16_belivek.indd 256-257 Figure 4: General government budget deficit/surplus as a percentage of GDP in the Nordic countries, compared to the EU27 (2007-2011) Source: compiled by the author based on Eurostat data (accessed: 1 August 2012). 257 2013.01.18. 19:05 Figure 5: Perception of current economic situation* in own country (Autumn 2007, Spring 2010 and Autumn 2011) Figure 7: Expectations for the next twelve months* in own country (Autumn 2007, Spring 2010 and Autumn 2011) Source: Eurobarometer (Standard EB 68.1 for 2007, EB73.4 for 2010 and EB 76 for 2011) *Difference between percentage of respondents answering “very good” or “rather good” and those saying “rather bad” or “very bad”. Figure 6: Perception of current economic situation* in Europe (Autumn 2007, Spring 2010 and Autumn 2011) Source: Eurobarometer (Standard EB 68.1 for 2007, EB73.4 for 2010 and EB 76 for 2011) *Difference between percentage of respondents answering the economic situation in own country will be “better” and those saying it will be “worse” in the next twelve months. Source: Eurobarometer (Standard EB 68.1 for 2007, EB73.4 for 2010 and EB 76 for 2011) *Difference between percentage of respondents answering “very good” or “rather good” and those saying “rather bad” or “very bad”. 258 KadarKrisztian_16_belivek.indd 258-259 259 2013.01.18. 19:05 Figure 9: Trust* in national Government (Autumn 2007, Spring 2010 and Autumn 2011) Figure 8: Satisfaction* with the way democracy works in own country (Autumn 2007, Spring 2010 and Autumn 2011) Source: Eurobarometer (Standard EB 68.1 for 2007, EB73.4 for 2010 and EB 76 for 2011) *Difference between percentage of respondents answering “tend to trust” and those saying “tend not to trust”. Figure 10: Satisfaction* with the way democracy works in the EU (Autumn 2007, Spring 2010 and Autumn 2011) Source: Eurobarometer (Standard EB 68.1 for 2007, EB73.4 for 2010 and EB 76 for 2011) *Difference between percentage of respondents answering “very satisfied” or “fairly satisfied” and those saying “not very satisfied” or “not at all satisfied”. Source: Eurobarometer (Standard EB 68.1 for 2007, EB73.4 for 2010 and EB 76 for 2011) *Difference between percentage of respondents answering “very satisfied” or “fairly satisfied” and those saying “not very satisfied” or “not at all satisfied”. 260 KadarKrisztian_16_belivek.indd 260-261 261 2013.01.18. 19:05 Figure 11: General assessment* of own country’s EU membership (Autumn 2007, Spring 2010 and Spring 2011) Figure 12: Percentage of respondents saying own country has benefited from EU-membership (Autumn 2007, Spring 2010 and Spring 2011) Source: Eurobarometer (Standard EB 68.1 for 2007, EB73.4 for 2010 and EB 75.3 for 2011) Source: Eurobarometer (Standard EB 68.1 for 2007, EB73.4 for 2010 and EB 75.3 for 2011) *Difference between percentage of respondents answering the country’s membership is a “good thing” and those saying it is a “bad thing”. 262 KadarKrisztian_16_belivek.indd 262-263 263 2013.01.18. 19:05 Table 1: Election results in the Nordic countries (last three national- and last EP-elections compared) Figure 13: General opinion* on the EMU with one single currency (Autumn 2007, Spring 2010 and Autumn 2011) Denmark 2005 2007 2011 EP (2009) Social Democrats (S) 25,9% 25,5% 24,8% 21,5% Liberals (V) 29,0%g 26,2% g 26,7% g 20,2% g Conservatives (K) 10,3% g 10,4% g 4,9% g 12,7% g 13,2% 13,8% 12,3% 15,3% Party (SF) 6,0% 13,0% 9,2% 15,9% Social Liberals (RV) 9,2% 5,1% 9,5% 4,3% Unity List (EL) 3,4% 2,2% 6,7% 2,8% 5,0% Danish People’s Party (DF)r,s Socialist People’s r,s Liberal Alliance ( June Movement 2,4% People’s Movement 7,2% Against the EU s Source: Eurobarometer (Standard EB 68.1 for 2007, EB73.4 for 2010 and EB 76 for 2011) *Difference between percentage of respondents answering “for” and those saying “against” it. Grabbe, Heather (2001) “How does Europeanization Affect CEE Governance? Conditionality, Diffusion and Diversity”, in: Journal of European Public Policy, 8, No. 6, pp. 1013-1031 264 KadarKrisztian_16_belivek.indd 264-265 Finland 2003 2007 2011 EP (2009) Centre Party 24,7% 23,1 g 15,8% 19% g Social Democrats 24,5% g 21,4 g 19,1% 17,5% National Coalition 18,6% 22,3 20,4% 23,2% g Left League 9,9% g 8,8 8,1% 5,9% Green Alliance 8% 8,5 7,3% 12,4% g Christian 5,3% 4,9 4% 4,2% Swedish People’s Party 4,6% g 4,6 g 4,3% 6,1% g The (True) Finns r 1,6% 4,1 19,1% 9,8% g g Norway 2001 2005 2009 Labour Party (AP) 24,3% g 32,7 35,4% g - Conservative Party (H) 21,2% 14,1 17,2% - Progress Party (FrP) r 14,6% 22,1 22,9% - g 265 2013.01.18. 19:05 Table 2: Impact of crisis on Nordic elections Table 1 continuation - Christian People’s Party (KrF) s Liberal Party (V)s 12,4% 6,8 g 5,5% 3,9% 5,9 g 3,9% - 5,6% 6,5 6,2% Socialist Left (SV)s 12,5% 8,8 6,2% g - Sweden 2002 2006 2010 EP (2009) Denmark Social Democrats (S) 39,9% 35,0 30,7% 24,4% (2007) Moderates (M) 15,3% 26,2 30,1% g 18,8% g Denmark Liberal People’s Party (F) 13,4% 7,5 7,1% g 13,6% (2011) Centre Party (C) 6,2% 7,9 6,6% g 5,5% g Finland Greens (MPG) 4,7% 5,2 7,3% 11% (2007) Left Party (V) 8,4% 5,9 5,6% 5,7% Finland 9,2% 6,6 5,6% Centre Party (Sp) s g - Vote-loss of Results of radical/ Results of Euro- Results of Results of Right- parties in populist parties sceptic parties Left-of-centre of-centre parties -1% 16,6% 16,6% 44,5% 52,5% -2,7% 16% 16% 45,8% 50,4% (-0,6%) (-0,6%) 19% 19% 50,2% 43,9% (+3%) (+3%) 4,1% 4,1% 38,7%** 59** (+2,5%) (+2,5%) 19,1% 19,1% 34,5% ** 63,6% ** (+15%) (+15%) 2,9% 14% 46,1% 48,2% (+1,5%) (-0,5%) 5,7% 11,3% 43,6% 49,4% (+2,8%) (-2,7%)* 22,1% 28% 48% 48,9% (+5,5%) (-6,4%) 22,9% 21,8% 47,8% 49,5% (+0,8%) (-6,2%) government Denmark parties (2005) s g g g Christian Democrats (KD) -4,7% -10,7% (2011) g 4,7% g Sweden Democrats Sweden -4,9% (2006) 3,3% Sweden June List s 3,6% (2010) Pirate Party 7,1% Norway (SD)r, s -5% 1,4% 2,9 5,7% Source: Compiled by the author., g: party in government when entering election, r: parties classified as radical/populist/anti-establishment, s: parties classified as Euro-sceptic -1,2% -10,7% (2005) Norway (2009) 0,2% Source: Compiled by the author. Figures in parenthesis indicate change since previous elections. Rows in bold indicate elections where a change of government (defined here as a change in the person of the PM and a change in the party composition of the government coalition) took place. * The Swedish Green Party was classified as Euro-sceptic until 2008, when an internal party referendum decided that the MPG should officially abandon its earlier anti-EU stance. ** The classification of Finnish parties along a simple Left-Right dimension is not straightforward, but even with that caveat the 2011 elections can undoubtedly be regarded as a major electoral defeat for the Left. Despite reasonable objections, in this table the Centre Party was classified as “Left”, and the True Finns as “Right”, although the True Finns’ ideology on traditional socio-economic issues can be characterized as centrist or even centre-left (Raunio, 2011). 266 KadarKrisztian_16_belivek.indd 266-267 267 2013.01.18. 19:05 Czech Republic in the Context of Central Europe: Post-Enlargement Successes and Failures Zdenka Mansfeldova and Petra Guasti Institute of Political Science at the Johannes Guttenberg University of Mainz Introduction The main aim of the chapter is to assess democracy in the Czech Republic after the EU accession with special attention paid to successes and failures and to their possible structural causes. Functioning of Czech democracy is evaluated according to the accepted international comparative methodology – Bertelsmann Transformation Index (BTI) and the Worldwide Governance Indicators (WGI). This approach has allowed the authors to analyse democratic processes in the Czech Republic in terms of comparative and theoretically grounded criteria while at the same time contextualizing the overall domestic development within the setting of Central and East European (CEE) and other “new democracies”. The main emphasis is placed on the basic aspects of the quality of democracy in the Czech Republic framed within the CEE context after the EU accession and on its strengths and weaknesses – while the Czech Republic has developed a stable political system and institutions as well as a clear separation of the individual institutions, it is still struggling to strengthen the relationship between the top levels of governance and the citizens. This fact can potentially endanger the legitimacy of the entire democratic order. Building social cohesion and eliminating social exclusion are thus burning and topical issues, in particular in the context of global economic crisis, slacking economic growth and severe austerity measures, affecting disproportionally marginalized groups of the society. The last section contextualizes Czech democracy within Central Europe - the broad principle of the metaphorical ”Return to Europe” was a guiding torch of the democratic change, 268 KadarKrisztian_16_belivek.indd 268-269 269 2013.01.18. 19:05 while the prospect of joining the European Union was the instigator of democratic transition and consolidation. In practice, this meant that all CEE countries were eager to become members of international institutions and organizations; not only the EU but a great number of other multi-national organizations (in particular NATO, OECD, etc.). Yet the process of these complex changes was not linear or unidirectional in the least. Progress towards democracy might, and in CEE in some cases did, come to a standstill or even reverse its direction. I. Theoretical framework democracy, democratization and Europeanization 1. Conception of democracy and measurement models The concept of democracy has undergone many changes since its emergence. In this section, our aim is to draw attention to the necessity of combining the theoretical and empirical study of democracy. Scholarly literature on transitions and democratic consolidation only rarely emphasizes the need for a normative and theoretically grounded definition of democracy. In this respect, a very important attempt to overcome this stalemate is the work of Wolfgang Merkel, a German political scientist, who coined the terms “embedded and defective democracies”. Merkel introduced his approach by an analysis and critical assessment of the democratic concepts by his predecessors such as Schumpeter (1972), Dahl (1975) and Przeworski (1991). He argued that these authors provided only a limited insight into the concept as they prioritized the role of elites and left out the structural conditions of democracy. In contrast, Merkel brings other aspects, such as the rule of law, civil rights and horizontal accountability, into the picture (Merkel, 2004; Merkel and Croissant, 2004; Merkel, 2007; Schumpeter, 1972; Dahl, 1975, 1989). Merkel incorporates not only the dimension of inputs as political participation, but also outputs as equality, social and political inclusion. In his view, democratic regimes are to be evaluated based on the following five criteria: 1. procedural effectiveness (rule of law); 2. accountability; 3. responsiveness of the elected representatives; 4. equality of political liberties and civil rights (citizenship); and 5. elimination of socioeconomic inequalities. The concepts of embedded and defective democracies are not only theoretical but also analytical. They were operationalized and 270 KadarKrisztian_16_belivek.indd 270-271 further elaborated upon for the purposes of a wide-scale international comparative assessment called the Bertelsmann Transformation Index (BTI).1 Its aim is to provide researchers with an analytical tool to find answers to the following four questions: 1. What is good and what is defective democracy? 2. What are the structural and functional commonalities of defective democracies? 3. What are the causes and paths leading to the emergence of defective democracies? 4. How stable are defective democracies, and what trajectories can be expected for them in the future? (Merkel and Croissant, 2004: 200). According to Merkel, the quality of democracy needs to be determined by the procedures, content and outcomes of democratic governance, which forge the conceptual framework for the BTI. Political management and progress on the way to democracy and a market economy are measurable and comparable worldwide. BTI is an international ranking of 128 developing and transition countries. According to the BTI, the theoretical concept and its operationalization, the quality of democracy, need to be determined by the procedures, content, and outcomes of democratic governance. The core of the empirical analysis of democracy, integrated in the BTI, is the evaluation of the following five dimensions: 1. procedural – rule of law; 2. accountability; 3. responsiveness of the elected representatives to the impulses coming from the public; 4. implementation of new political liberties and civil rights; and 5. substantive integration of society – progressive reduction of social and economic inequalities. Based on these five dimensions, effective and more or less defective democracies can be described and their defects recognized. Our contribution to the topic will rely on this approach in order to assess some selected aspects of the effectiveness of Czech democracy, set into the wider context of Central and Eastern Europe. 2. Europeanization The process of European integration is a reaction to the challenges of globalization, when the process of globalization is further deepened. For the purposes of this paper it is defined as “the formation of a whole out of parts, increasing interaction of member states with one another, removal of obstacles to flows of goods and factors, emergence of an independent entity at the supranational level” (Caporaso, 2004). Similar to globalization, the process of European integration is a broad process embracing all three major areas of political-legal structures, economy, and civil society (Ágh et al., 2004). Although the processes of European integration (EI) and Europeanization are interrelated, they are not interchangeable. According to 271 2013.01.18. 19:05 Caporaso, the term Europeanization was invented to fill in “the conceptual difficulty of talking about the effects of integration on domestic structures”. He further added that “like globalization, Europeanization is not one thing” (Caporaso, 2004). But what do we understand by Europeanization? There are wider interpretations of Europeanization that include, “processes of (a) construction (b) diffusion (c) institutionalization of formal and informal rules, procedures, policy paradigms, styles, ‘ways of doing things’ and shared beliefs and norms which are first defined and consolidated in the making of EU decisions and then incorporated in the logic of domestic discourse, identities, political structures and public policies” (Radaelli, 2000: 4; Bulmer and Radaelli, 2004: 4, Howell, 2004: 4). Ongoing Europeanization is, in both quantitative and qualitative terms, a source of transfer of power and legislature from the national to the supranational level. According to Caporaso (Ibid.), the changes caused by the process of Europeanization take place in five different areas: 1. Policy – Europe has the capacity, as shown on the example of CEE, to act as a domestic political resource (see for example Grabbe, 2001 and Vachudova, 2005). 2. Structure – starting with the changes of banks and financial structures through changing functions of NPs via its leverage, the EU is a source of major structural changes in its member states. 3. Norms – the changes in conceptions of national identity and national citizenship represent a shift in value orientation among the EU citizenry. 4. State-society relations – in some member states, important changes in the relationship between state, its institutions and societal actors can be seen, such as the growing participation of organized civil society in EU matters. 5. Constitutional design – the constitutionalization process at the European level has important consequences for the constitutional system of the member states. For the arguments presented here, one of the most important effects of Europeanization is the so-called adaptation pressure, which the European actors exercise over individual member states in all of the areas described above. In the case of European integration in CEE, the role of national parliaments was gradually shifting from the founding institutions of legal states and later the channels of harmonization with the EU legislative in the pre-accession period to watchdogs (mediating and overseeing legislative rather creating it) after the accession. However, it is important to note that, whereas in many policy areas the EU demands upon the governments of CEE states were quite high (see Grabbe, 2001 and Vachudova, 2005), demands in the area of institutional setup and in the field of the relationship to national parliaments can be described as “minimum democracy” requirements. From this point of view, parliaments of all CEE states can be considered as fully functional. 272 KadarKrisztian_16_belivek.indd 272-273 3. Effects of International Institutions and Norms? American political scientist Milada A. Vachudova divides the post-1989 transformation in CEE region into two phases (Vachudova, 2001). In the initial period of 1989-1994, it was domestic factors that shaped democratization in a decisive way. International factors played a marginal role in the composition and the policy choices of the first post-communist governments (Vachudova, 2001: 23). Nonetheless, the overall goal of “returning to Europe” and becoming part of European structures provided some important “normative targets” to CEE states in the form of what Vachudova called “passive leverage”. In the second period of 1995-1999, the international aspect became much more salient as international actors and institutions facilitated the design of democratization processes. During this second period the character of the elites no longer or not exclusively depended on domestic factors. In brief, it was characteristic of the second half of the 1990s that international factors influenced the development of domestic politics in CEE (Vachudova, 2001) Moreover, one also needs to stress the role of international institutional environment and the significant role of organized interests in the European integration. The existing system of interest representation in the EU affected national structures of interest representation and policy making. In CEE the most important factor accelerating the changes in the rule of law, initiated during the transition, was the process of accession to the European Union (EU). EU together with other international organizations fostered major changes in the judiciary sector, primarily concentrating on judicial reforms and anti-corruption legislative (Sadurski, 2005 and Sadurski et al. 2006). However, the EU conditionality, as well as its leverage varied across the region. The effect of the EU push mostly depended on the degree of domestic compliance with the rules. Therefore, as Mungiu-Pippidi (2006) suggested, it is necessary to concentrate on identifying key factors and assessing not only the quantity of conditionality but also its quality in the individual cases across the CEE region in a comparative perspective. II. Impact of European Integration on Domestic Structures Membership in the EU is not the end of the democratization process, or more precisely the end of the process of creation of a sustainable democratic system. In CEE membership in 273 2013.01.18. 19:05 the EU was a facilitating process of the democratic transformation, which was conducive to a cumulative process of economic and political integration. There are several factors which influence the impact of the European integration on domestic structures: 1. Path dependency – not only communist past but also the quality of bureaucracy represent the limits of the change absorption. If the bureaucracy is well functioning and strong, it can take in more reforms. 2. Capacity for the implementation of reforms; 3. Restricted power of the EU leverage (forces of influence/ EU pressure); 4. Different impact of the European integration on domestic structures; 5. The mismatch between European and domestic institutional structures as key catalyst for domestic change (Héritier et al. 1996 and Héritier et al. 2001). It is argued that the potential of the EU to exert influence on processes of domestic change can be expected to be different, i.e. usually higher in countries that have already reached candidate status and have good prospects for membership than in non-member states that have little hope for joining the EU in the foreseeable future (Bauer et al. 2007). The ambition of a country to become an EU member may accelerate reforms, though. The Central and Eastern European states in the EU are predominantly influenced by the length of their membership, their size, and their human resources management in the EU affairs. “In the personnel policy, several NMS [New Member States] revised their conditionality-influenced legislation on civil service after becoming EU members, which seems to have had influence on the high level of turnover in the EU bureaucratic positions” (Lastic, 2010: 33). Lastic further notes that “when the implementation of legal norms is an inevitable precondition for a country to gain EU membership, influencing policy-making at the EU level is closely tied to efforts of each country to lower costs for future implementation by decreasing the misfit between the exiting EU policies and domestic. This further exerts pressure on the institutional adaptation of domestic structures” (Lastic, 2010: 34). The theoretical framework for studying the influence of the EU on member countries is the existing misfit between norms, traditions, and rules of the EU and the member states. As Lastic notes, the greater the misfit, the higher the pressure for changes at the national level and the other way around. When there are mediating factors, actors and institutions at the national level initiate or hinder a change, even if that meant being submitted to political or other sanctions from the EU. “Although all dominant theoretical approaches that are based on neo-institutionalism acknowledge the existence of some sort of a misfit, they differ in their explanations of what influences a change or its lack on the national level.” (Lastic, 2010: 35). Similarly, “During the implementation phase, 274 KadarKrisztian_16_belivek.indd 274-275 small states have a number of strategies at their disposal how to mitigate the impact of norms and increase the level of success. Such strategies can be institutional or adopted ad hoc to solve particular issues. Previous research prior to 2004 on small member states has pointed towards such strategies (Laffan, 2003 and Bunse et.al. 2005). These strategies can be divided into six groups: 1. institutional coordination with other countries; 2. strategic bilateral alliance with a larger state; 3. priority setting; 4. relations with the European Commission; 5. functioning as a mediator (honest broker) in the European Council; 6. presidency of a country as an opportunity to assert national interests (Panke, 2008 and Lastic, 2010: 37). III. Assessing the Quality of Democracy in the Czech Republic 1. Empirical Assessment of Democracy in the Czech Republic A complex analysis of the quality of democracy in the Czech Republic by national researchers has so far been quite limited. Czech scholars mostly tend to focus on some selected aspects of democracy such as the suffrage or electoral engineering (Filip, 1997 and Klíma, 2001), the development of the party system (Novák, 1997; Fiala and Strmiska, 1998 and Kunc, 2000), elections and electoral campaigns (Šimíček, 2000), and the civil society (Rakušanová, 2007). Our aim is to summarize some of these aspects and provide an overall evaluation of the quality of the Czech democracy. In the course of nearly twenty years of its existence, the Czech Republic has undergone three key transformational phases: 1) Political – building a system of democratic governance; 2) Economic – transition from the centrally planned economy to market economy; 3) Constitutional – after the break-up of Czechoslovakia in 1993, the accession to the EU in 2004 and the joining of the Schengen zone in 2007, the concept of statehood was redefined. From an international comparative perspective, the Czech Republic belongs to a category of countries with a successful political transformation and a consolidated market economy. The negative trends, symptomatic of the development in the second half of the 1990s, were later overcome and in many respects turned into a positive development. It can be claimed that the transformation process had clear aims and proceeded in a consecutive manner. However, some fluctuations appeared, which are not important for the sake of 275 2013.01.18. 19:05 comparative studies, but they had a strong impact on domestic politics (this will be later demonstrated on the BTI data). The basic features of democratic political life are firmly established in the Czech Republic. There is reasonable fairness in competition between parties and access to a variety of sources of information and opinions on government actions. Civil rights are generally protected, although the record on antidiscrimination measures suggests that this issue is not given much priority. Executive actions are increasingly governed by the rule of law, and a gradual build-up of case law is defining the limits of power more precisely. The record, however, is less satisfactory when it comes to corruption, as there is an evident reluctance to tackle the issue in a serious manner or at least to dedicate more attention to fighting it. Limited executive capacity has limited the adoption of reforms. The Czech Republic has had a series of fragile coalition governments with narrow majorities. In the 1992–2012 period the Czech Republic has experienced 12 cabinets, however one of them did not pass a parliamentary inauguration vote. There were five minority coalition cabinets and six cabinets with minimal winning coalition. In the case of the centre-left government, both the Senate, the second chamber of parliament, and President Václav Klaus made ample use of their veto capabilities. Weak planning capacities and an underdeveloped use of scientific advice further limit the strategic capacities of Czech governments. Inter-ministerial coordination suffers from the lack of strong gatekeepers in general and the weak position of the Office of the Government in particular. Regulatory impact assessments were introduced only in 2005 and have only slowly developed since then. There has been no systematic monitoring of the institutional arrangements of governing. Under the centre-left government, little institutional reform has taken place. Executive accountability has suffered from citizens’ limited knowledge of government policy. In contrast, the Czech parliament is substantially equipped to serve as a check on the government’s power. It also has an auditing office, which undertakes well-publicized investigations of controversial issues. There is also an ombudsman, known as the Public Defender of Rights, who is empowered to investigate cases, although the office has only limited powers to enforce its recommendations. The capacities of intermediary organizations have also been relatively high. Media coverage of government decisions is satisfactory, the programs of the main Czech parties are coherent, and the competence of interest associations is relatively high. Despite an elaborate consultation process and a functioning tripartism, though, the political influence of interest associations has been limited, largely depending on links to ruling parties. 276 KadarKrisztian_16_belivek.indd 276-277 In recent years, after the 2006 and the 2010 general elections, the political situation in the Czech Republic has been marked by a continuous struggle between a weak centre-right coalition government and a strengthened opposition as well as by growing internal divisions within the major political parties. The two major cleavages of both the inter-party struggle and the internal divisions within the parties represent a political context that has framed economic reforms such as pension and health care reforms and the debates on the depth of the European integration process. This political development has been accompanied by an ever-growing disenchantment of citizens with political parties and the performance of the government. In the most recent surveys the percentage of citizens satisfied with the current political situation in the country ranged from 6% to 3%, the percentage of dissatisfied from 71% to 81%. It is not only the performance of the government and parliament that underpins such low satisfaction rates; it is also a lack of information about public policy making and ineffective communication between the government and citizens. More than half of the Czech citizens share the opinion that has no influence over the government.2 The Czech Republic was governed from January 2007 to March 2009 by a weak centreright coalition, which was able to command only the narrowest of majorities. This coalition was able to implement some key policies, but divisions led to inaction in many areas. It was defeated in a parliamentary vote and in April 2009 succeeded by a caretaker government made up of experts proposed by the parties and supported by a solid parliamentary majority, which was nevertheless unable to take any substantial policy initiatives. The basic features of a democratic system are firmly established. Parties compete with the aid of state support that depends on their electoral strength, and all significant political opinions gain coverage in the media. Civil rights are respected, with the final passage of a form of anti-discrimination legislation secured following insistence from the European Union. Executive actions are controlled by law, and the Constitutional Court has been very active in constraining parliamentary decisions. Corruption remains a worrisome issue, with politicians from all sides linked to doubtful business practices. Existing laws have not proven effective in this regard, but the media frequently exposes corrupt practices. Strategic vision from governments has been hampered by the nature of coalition governments with narrow majorities. Much has depended on detailed coalition agreements, after which ministers are left with considerable discretion and can in practice be removed only with the approval of their party. Conflicts are then either resolved informally or allowed to block decision-making. There is no systematic thinking about institutional reforms. 277 2013.01.18. 19:05 Methods to improve efficiency, such as regulatory impact assessments, are only introduced in response to EU prompting. Democracy in the Czech Republic in the Context of Central Europe What is then the state of Czech democracy in terms of the BTI and WGI criteria? Given the focus of this chapter and the comprehensiveness of the entire concept of the BTI, we shall concentrate on the democratic development through the lens of the particular evaluation criteria. It needs to be noted that the situation in the Czech Republic will be assessed in comparison to other countries in the region and in its entirety, i.e. a shift (towards progress or regress) records the change in situation compared to other transforming countries in the region. The Czech political transition towards consolidated democracy has been very successful from its outset in the early 1990s, and the country has even improved its position over time (see Table 1). The BTI evaluation tool, used in this study and described above, works with the assumption that a successful transformation must be pursued in the political as well as the economic dimension and any complex analysis of this topic must include both of these aspects. However, in a comparative analysis of the CEE region, the political dimension received significantly less attention; therefore, our study, while acknowledging the importance of the economic dimension, concentrates on the political aspects of the transformation and consolidation of democracy in the Czech Republic. Assessing the Czech Republic in a global context, we can evaluate its development as unequivocally successful, especially given the fact that the Czech Republic ranked first among 125 transforming countries studied in the 2008 as well as in the 2010 BTI. A more detailed comparison provides Table 1. The Czech Republic has been able to keep its high ranking among countries in transitions. In some aspects, though, the development has been slowed down and the rectification of defects has taken longer than at first assumed at the end of the 1990s, especially in the realm of political and social integration. A more detailed look at the composition of the index and the differences in profile between the individual countries provides Table 2. An analysis of the findings from the four time periods allows us to divide the studied transforming countries into five groups depending on their level of development: 1. consolidated democracies; 2. countries with a good prospect for consolidation; 3. countries with some defects; 4. countries with very unfavourable initial conditions; and 5. countries 278 KadarKrisztian_16_belivek.indd 278-279 with serious limitations. The first group of consolidated democracies consists of eight EU member states from CEE, including the Czech Republic, which has over time attained the first place. Turning our attention to the two East European countries that joined the EU in 2007, Bulgaria and Romania, it is noticeable that they have gradually, though slowly, improved their positions in the ranking. We can assume that the EU conditionality was one of the driving forces behind political and social reforms. Status Indices from 2006, 2008 and 2010 clearly show that the group of countries with a high level of political and economic transformation remains nearly identical. However, the implementation of reforms is also conditioned by high degree of good governance. Transitions to democracy and market economy can proceed in many ways. The success thus depends mainly on reliable actors that are willing to steer this process in the most effective manner. In this respect, as shown by the ‘Management Index’ and its development, the Czech Republic still needs to catch up in many areas (see Table 1). As will be demonstrated later, management issues made it more difficult for the Czech Republic to cope with the impact of the most recent economic crisis. In the evaluation of government performance, the Czech Republic significantly lags behind some countries in the region in terms of capability of political actors to implement reforms and reach consensus. Over time, its position has worsened in comparison with other countries, which resulted in resuming the starting position in the period after 2008. In this area, the best progress has made Estonia; even Slovakia has a higher ranking than the Czech Republic in this area. A closer analysis of democratic development reveals that democracy in the Czech Republic is consolidated. The country has functioning democratic structures, the existing institutions are further refined and the process of administrative decentralization has been brought to an end. Nonetheless, there is space for improvements not only in the political realm but also in civil life. The rule-of-law criteria remain one of the main problems, which is also the major weakness of all other Central and East European states. As Merkel noted, a very good level of political participation and insufficient rule of law is symptomatic of this region (Merkel, 2007: 425). In any case, there are also differences among the CEE states – Slovenia, Lithuania, Slovakia, Czech Republic, Poland, Hungary and Estonia come near to the West European standards whereas the others are rather sluggish in this respect. When comparing 18 CEE states in his BTI analyses, Merkel identified three factors that account for the greater success of the first group on its way to consolidated democracy: 1. Level of modernization; 2. Territorial integrity, effective state structures ensuring 279 2013.01.18. 19:05 the functioning of the state and administration; and 3. External factors, i.e. integration in regional and international structures and organizations (Merkel, 2007: 426–9). 2. Impact of the EU Accession Process on Democracy in the Czech Republic The Czech Republic’s key goal of “a return to Europe” and integration into the existing European structures has been achieved. In March 1999, the Czech Republic became a member of NATO and in May 2004 it became a member of the EU. Rapid progress was made in the 1990s on the way towards democracy and efficient rule of law. The country has been considered stable since the mid-1990s. The citizens’ relationship with the democratic state has radically improved. The Czech Republic passed a law regarding free access to information in 1999, and data protection and privacy have been legally secured since 2001. The central constitutional institutions are quite similar to their Western European counterparts with respect to their stability. At the time of the EU accession, the Czech Republic was evaluated as a consolidated representative democracy with a complex power structure (BTI 2003). Since 1990 seven parliamentary elections have been organized (including one extraordinary) and we have witnessed power shifts from leftist to rightist governments and vice versa. After the 2006 general elections, the political situation in the Czech Republic has been continuously marked by a power struggle between a weak centre-right coalition government and a strengthened opposition as well as by growing internal divisions within the major political parties. Another problem is the tension between the President and coalition governments. The two major cleavages of both the inter-party struggle and the internal divisions within the parties represent a political context that has framed economic reforms such as pension and health care reforms, church restitutions in the Czech Republic and the debates on the depth of the European integration process. This political development has been accompanied by an ever-growing disenchantment of the citizens with political parties and the performance of the government (Mansfeldová and Guasti, 2010). These developments resulted in the loss of support for the major political parties in the 2010 elections. As of now, the main problems remain unresolved. However, as already noted, a stable institutional system does not need to be conducive to perfect functioning. Many politicians talk about immature democracy where impunity is quite common and corruption omnipresent. Although old elites have gradually been ousted and 280 KadarKrisztian_16_belivek.indd 280-281 replaced by new ones, unwritten rules and behavioural patterns from the former regimes such as corruption, disrespect for formal rules, and relying on informal channels have remained. In the Corruption Perception Index (CPI), compiled by Transparency International, the Czech Republic regularly falls within EU countries with the worst ranking. In 2010 its overall TI score dropped and the country’s global ranking declined from 45th in 2008 to 53rd place. The Czech Republic was and ranked 23rd among EU countries. These consistently poor CPI scores and rankings stem from a general acceptance that corruption is part and parcel of daily life and perceptions that the government has attempted to undermine judicial independence.3 Another negative aspect is outsourcing of the state power, i.e. transfer of power to private subjects such as private executors. At present, the Czech government and the ministry of interior are trying to establish a supervisory institution to oversee financial budgets of political parties. The proposed law on public supervision over the financing of political parties and associations is meant to secure a more transparent system of expenditure of political parties and associations and establish effective control over their budgets, including funds allocated for electoral campaigns. 3. Successes and Failures One of the problems during the accession negotiations was that law adoption did not translate into its implementation, whereby no reliable measurement tools were designed. This subsequently led to the creation of a phenomenon, which we could call a “Potemkin Europeanization”. In other words, adoption of the acquis communautaire does not automatically translate into real changes on the ground, but efforts are made to make the EU belief not only that the changes were undertaken, but also, that they yield positive effects. The state strategies were to formally meet the EU requirements, while minimizing institutional adaptation costs. Although candidate states are obliged to adjust to the prescriptive rules of the European law, they are free to decide on how to implement them in the national systems. Good examples provide legislative norms regarding the rule of law. Building strategic alliances (such as the Visegrad Group, V4) helps small countries to increase their negotiating capacities. V4 countries irregularly meet before the sessions of the European Council in order to discuss possible coordination of their activities during the negotiations.4 The character of the accession process, when small states have only a very limited negotiating power, could also lead to a reassessment of the pre-accession commitments on the 281 2013.01.18. 19:05 part of New Member States after the accession has been granted, as stressed by Dimitrova (Dimitrova and Steunenberg, 2004 and Dimitrova, 2007). Some NMS revised their institutional frameworks and rules that had been adopted under the EU pre-accession pressure. However, it also needs to be acknowledged that adopting European norms into national legislatives was an enormous burden for the legislature that were under a significant time pressure, which took its toll on the quality of the adopted legal norms. As shown in our research in the Czech Republic, the number of submitted and passed bills increased tremendously between 1998-2001. This increase was generally due to an influx of bills related to the adoption of Czech laws transposing European Union directives and decrees into the Czech legal system. The average number of debated bills increased from 10 to 16 per month. In 2000 when the process of harmonizing the Czech legislative peaked, the average session lasted more than eight days and 530 votes on average occurred in each session (Linek and Mansfeldova, 2006). Therefore, the EU pressure was in many cases counter-productive. conditions for the EU accession (and assessed by the European Commission) but are not part of the set of binding rules that member states must respect (Lastic, 2010:47). In a similar way, Hix and Goetz (2000) identified the European integration as an independent variable and change in domestic systems (or Europeanization) as the dependent variable. This is a useful distinction if Europeanization is the outcome of a change at the domestic level. However, if the domestic level initiates changes in the EU and affects the European integration, then the variables are reversed (Howel, 2004: 3). Insufficient implementation at the national level brings many problems and negatively affects democratic development in CEE. The most common problems in these countries are high corruption levels, great levels of impunity, and poor rule of law. The case of Central and Eastern European countries demonstrates how closely interlinked the concepts of rule of law and corruption are with the process of democratization. This is very well demonstrated in the Graph 1. comparing the control of corruption in the CEE region between 1996 and 2011. (Graph 1.) One of the EU conditions for accession was building and maintaining administrative capacities based on professional civil service and depoliticized public services. Czech government took steps to improve the functioning of the central government by adopting the Public Services Law in May 2002, an ambitious law that provided a framework for a professional and independent public administration. The law foresaw a gradual implementation process that lasted until 2006. However, the development of a modern, efficient, and transparent public administration generally requires a wide political consensus among all citizens. Regional and local government officials were governed by a 2002 law that was supposed to guarantee professional public administration at the regional and local level. Despite these pledges, the Public Services Law (No. 218/2002 Coll.) has still not been implemented in the Czech Republic. There has not been any systematic approach to defining the role and duties of civil servants in particular. Similarly, there has also not been established a qualified and independent group of employees with specific tasks within a particular sector that would be independent of economic, social, and political development. As a result, there is always a great turnover in public services after each set of parliamentary elections and recruiting is very opaque and politicized. In assessing the role of the European Union and its leverage in countries under study in the pre-accession period, we can summarize the role of key aspects as follows. In terms of cultural factors, until 2006 the European Union failed to recognize the substantial variation in regard to the quality of democracy among the CEE countries. The ‘Return to Europe’ did not come without baggage - the regime type existing prior to the initiation of democratization plays a crucial role in the persistence of corruption and clientelism as well as in determining dominant political culture and the strength of the rule of law. For example, the “sultanic regime” of Ceausescu’s Romania (patrimonial communism) with its embedded corruption and clientelism provided significantly better conditions for the persistence than for change. Furthermore, cultural heritage together with structural conditions played crucial role both in the regime change and in shaping the political competition in the transitional era – here the Czech Republic and other countries, which were formerly part of the Austro-Hungarian Empire benefited from bureaucratic and legal culture of the empire (for similar argumentation see also Burduja, 2006). Meyer-Sahling (2009) shows that Estonia, Latvia and Lithuania had continued reforming their administrative systems after the EU accession, while Slovakia, Poland and the Czech Republic had cancelled or revised the changes made during the pre-accession period. Reassessing the former commitments in this case touched upon rules that were in fact pre282 KadarKrisztian_16_belivek.indd 282-283 The narrow political elites combined with low effective scrutiny by media, troublesome media ownership, low intensity citizenship and weak civil society resulted in particularization of the society and persistence of strong informal institutions, predating formal institutions. As a result, the new democracies in the CEE region have been dealing with extensive rent-seeking practices among the relatively narrow political elites, which both in the pre-accession and post-accession periods continue targeting EU structural funds 283 2013.01.18. 19:05 and aiming at gaining and maintaining control of the redistribution process. Both prior and post-accession, public procurement is the most often targeted area ; political corruption, clientelism, and elite agreements are all prevalent in redistribution of the European structural funds representing yet another challenge to be overcome by the CEE democracies. This is true not only in countries such as Romania, but also in the Czech Republic, where from the nine ministers of the current government, led by the Prime Minister Petr Nečas, six had to resign between 2010 and 2012 due to the fact that their closest collaborators or the ministers themselves were involved in large scale political corruption scandals. Furthermore, the troublesome relationship between the politics and the office of the State Prosecutor resurfaced in 2012, suggesting even deeper political interference with corruption cases. The situation was partially resolved by the appointment of the new State Prosecutor and prosecutor for the capital Prague in 2012. The institutional setup was firmly established prior to the commencement of the accession process. However, in certain periods prior to the EU entry, the separation of powers was problematic in all countries under study – in particular the relationship between the President and the Prime Minister in the case of Poland and Slovenia (and also the Czech Republic). In the Czech Republic the problem is historical – Czech presidents starting from the first one, T.G. Masaryk, to Vaclav Havel and Vaclav Klaus have been highly influential and charismatic figures with a penchant for reinterpreting their constitutionally granted competences in a very pro-active manner, often bordering on political inference with powers of the Czech Prime Ministers. During the accession process, the main aim of the EU leverage was strengthening the capacity of the CEE institutions. A stable institutional setup was presumed; however, in all countries under study the judicial branch was the weakest institution throughout the process, as well as the most resistant one to the systematic change. Furthermore, in all CEE countries, the accession process weakened the role of national parliaments which were overburdened by the adoption of the acquis communautaire and lacked the capacity to be active in the legislative process (hence most bills originated in the government). The main weakness of the judicial branch in the CEE countries is both structural (related to the unfinished and inconsistent legal order, i.e. lack of legal certainty) and in terms of lacking capacities due to resource and personnel constraints. Another issue is the independence of judiciary, which has been most pronounced in Romania, where the Highest Council of Magistrates fought against the political control of the judiciary by the Ministry of Justice, which by controlling 284 KadarKrisztian_16_belivek.indd 284-285 the budget and its allocation, effectively exercised control over the judiciary. As highlighted above, the Czech Republic was facing similar issues, the main difference being that the core of the struggle in the Czech Republic was prosecution (or non-prosecution) of corruption. The incumbent Minister of Justice was in close contact with the state prosecutor and in several cases prosecution of high-level corruption was re-assigned to a “reliable” prosecutor, which made sure the case will not reach the court. The individual aspects of the rule of law reforms were fragmented. Various experts with different background (in terms of law as well as of legal traditions) contributed to selected aspects. This was again most pronounced in Romania, where the reform processes sometimes resulted in institutional paralysis of the judicial branch (several respondents illustrated this fact by pointing to the case of abolition of the regional branches of the Court of Appeals, which was centralized; the pending case files transferred to the Court of Appeals in Bucharest and resulted in a six-month halt in the work of the court). For more detailed information see Graph 2. below. (Graph 2.) According to Sedelmeier (2008), in 2004 the eight post-communist states outperformed old members in respect to the adoption of the EU law as well as dealing with infringements. The external pressure thus led to a higher level of general compliance in the CEE countries in comparison to the old member states (Sedelmeier, 2008 in Vachudova, 2009). The key problem continues to be the lack of political will for the implementation of extensive rule-of-law reforms, as well as low capacities for absorbing the changes. The case of Romania, where several intervening endogenous factors aggravated the situation, can again serve as an example of the need to concentrate on implemented rather than (merely) adopted reforms. Although in most of the CEE countries insufficient administrative and financial capacities and a lack of legal personnel played an important negative role, the EU was quite successful in addressing this issue by providing assistance and support in running trainings and educative sessions for judges and attorneys. However, while the newly educated judges and state attorneys brought about the change in the judiciary, the executive branch has continued to greatly influence the recruitment and administratively dominate the process. As courts are severely understaffed, the majority of the newly appointed judges did not take part in the established educational activities. All of the above described causes have an effect on the overall quality of the rule of law, trust in law by citizens as well as on the low ability of the CEE formal institutions to fight bad informal institutions effectively. In particular the high-level corruption cases 285 2013.01.18. 19:05 involving politicians tend to lead nowhere, as these processes are prolonged and end in lacunae of formal legal aspects without delivering outcomes. Furthermore, in particular in Poland and Romania the anti-corruption agencies are often considered to be part of the political struggle, as majority of the prosecuted cases target politicians of opposition parties. As for the Czech Republic, there is still no independent Anti-Corruption Office in the country and the police unit dealing with high-level political corruption cases is often under direct political pressure; political representatives had ignored the issue altogether until recently. Only in 2012 when faced with public pressure due to the numerous scandals, did the Czech Government establish a position of Vice-Prime Minister for Corruption; however, this seems to have been a mere gesture rather that an actual effective tool how to tackle the thorny issues. Several former high-level police officers offered their testimonies and described the political pressure they faced during investigation of high-level corruption scandals. Another key element in further improving the rule of law in CEE is ensuring the independence of courts and the functioning of the system of checks and balances. After the EU accession, numerous cases appeared in CEE, where the government attempted to exert influence over imminent prosecution of highly profiled figures (Romania, Poland, and the Czech Republic). In summary, the European Commission pays less attention to issues related to the state of democracy than to the institutional integration of the acquis communautaire, which forms the core of negotiations. Some institutions, such as the media, fall out entirely out of the EU negotiation agenda (Mungiu-Pippidi, 2007). However, to concentrate on law adoption without law implementation has proven to be very short sighted. As many analyses from NMS have shown, political representatives have a tendency to postpone implementation, avoid it completely, or modify the original law (see Lastic, 2010; Malova et al. 2010). On the eve of the EU membership negotiations, almost all political parties adopted an EU-compatible agenda. Subsequently, all ruling political parties assisted in bringing the negotiations to a close (Vachudova, 2008). Now that membership has been achieved, the obvious externally imposed costs of adopting reforms and complying with EU rules have diminished. When the preferences of powerful partisan veto players run against the reforms adopted before accession, those institutional changes risk turning into empty shells, or even being reversed (Dimitrova, 2010 and Sedelmeier, 2012). 286 KadarKrisztian_16_belivek.indd 286-287 The incentive of EU accession led countries to achieve remarkable scores in the early 1990s, when great progress was made in just a few years. However, the EU’s coaching and assistance (provided by the Commission and twinning programs with member countries during negotiations) did not deliver much. Enlargement as such is nearly miraculous as an incentive, but quite sluggish and ineffective as an assistance process (Mungiu-Pippidi, 2007). In addition, not all of NMS from CEE have achieved the same relative success. Severe problems with corruption, judiciary, and state capacities remain unresolved in many of the new EU members. The cause can be found not only in the different starting positions at the start of the political and economic transformation but also in their capacities to implement these changes. As Spendzharova and Vachudova emphasize, “during the preaccession process, strict enforcement in some areas was limited to the adoption, not the implementation, of EU rules. In other areas, especially related to corruption, there were few specific rules to enforce. These problems have prompted the EU to implement a novel monitoring instrument, called the Cooperation and Verification Mechanism (CVM), in an attempt to trigger reform by extending the EU leverage into the post-accession period” (Spendzharova, Vachudova, 2012: 40). The authors show on the case of Bulgaria and Romania that even 20 years of democratizing efforts later, these two countries are struggling with similar issues. According to the Freedom House, Bulgaria and Romania belong to semi-consolidated democracies – in contrast to the other eight post-communist EU members that are assessed as consolidated (Freedom House 2010). Conclusions The last two decades have witnessed some of the most profound political, social and economic changes in European history. The fall of communism at the end of the 1980s not only reshaped relations within the continent in the context of rapidly accelerating globalization, but also provided fascinating insights into the potential for, and limitations of, the large-scale reshaping of society. Today Central and East European countries have clear and stable institutional structures, which doubtlessly facilitated their accession to the EU. Clear and functioning structures had been put in place established, which was effectively conducive to the European integration. However, there are still several important shortcomings in how these societies function. It remains equivocal whether CEE will set off towards Western liberal democracies or cling to the old post-communist East European concept of democracy, where politics is at the service of business interests and related structures5. 287 2013.01.18. 19:05 According to Jacques Rupnik (2007), the political landscape of Central and Eastern Europe is marked by vivid contrasts even almost two decades after the fall of communism. The good news is that ten former Soviet-bloc countries are now firmly anchored within the European Union. The bad news is that several CEE countries in which democracy is allegedly consolidated have recently displayed signs of backsliding. However, we can also notice an attempt to improve these systems and their judiciaries. Fighting corruption is not only one of the major issues CEE countries need to tackle today but it is also one of the main political topics in electoral campaigns. Anti-corruption institutions established out of EU directives have become burdensome and there has been an attempt to replace them by other agencies that would yield to higher political influence. In Poland the anticorruption office has been under the influence of the President. In Slovenia, there has been an attempt to replace the anti-corruption office by a parliamentary investigative commission, where the parliamentary majority would have an upper hand. In the Czech Republic, the on-going economic crisis is mirrored in deepening governance issues and decline of governance indicators (SGI, WGI, BTI, etc.). However, there is no unidirectional causal relationship between the economic decline and the deterioration of democratic performance. Unlike authors such as Levitz and Pop-Eleches, who see the cause of the backsliding in the CEE region in the alleged lack of the external pressure after the EU accession (Levitz and Pop-Eleches, 2010), we see the root of the problem in the Czech Republic in the bureaucratic nature of the accession process itself. This combined with the current downslide in democratic and economic indicators as interrelated consequence of the lacking political will to implement the EU-required norms in the legal systems of the CEE countries can account for the negative trend. In the most recent literature, we find prominent arguments that a number of the new EU member states are backsliding in political reforms, their protraction and modification (Mungiu-Pippidi, 2007; Gati, 2007; Lastic, 2010 and Malová et al. 2010 etc.). Gati highlights the following four main worrying trends in the CEE region: 1. Populist Demagoguery as xenophobia, anti-communism; 2. A Leadership Vacuum - after the politicians from nineties (Havel, Walesa, and others.) such principled and visionary leaders articulating national needs, interests, and aspirations are now in short supply. Many of those in prominent positions today are pragmatic politicians seemingly interested only in gaining and holding on to power; 3. Resistance to Reform - people who are used to “free” health care and “free” education oppose the introduction of such reforms. They are nostalgic for the meagre benefits of 288 KadarKrisztian_16_belivek.indd 288-289 the welfare state, preferring to listen to the siren song of populist politicians who promise a better life without additional taxes or fees and without pain; 4. On-going radical transformation of Central and East European international environment. International factors have played and still play an important role in supporting democratization and democratic consolidation in the post-communist democracies of CEE (Gati, 2007). Another attempt to describe the current situation offers Mungiu-Pippidi (2007). She describes five distinct features and problems, which are apparent in the CEE countries at the turn of the millennium: 1. The electoral advance of populist groups, whether extremist or relatively democratic, to the detriment of classic “ideological” parties (as in Bulgaria, the Czech Republic, Romania, Poland, and Slovakia, Hungary); 2. Political radicalization on both sides of the main political cleavage – generally the left-right one, though ideological borders are sometimes fuzzy - resulting in a lack of cooperation across the cleavage line and in political instability (as in the Czech Republic, Hungary, and Romania); 3. Electorates evenly split between the two electoral coalitions, resulting in weak majorities and unstable minority governments (as in the Czech Republic, Poland, and Romania); 4. Factional behaviour, leading to poor cooperation within electoral coalitions and bringing further instability to governments (as evidenced nearly everywhere); 5. Occasional acts that violate democratic standards or are on the margins of doing so - such as attempts to influence justice, rig elections, or restrict the rights of political opponents - which are generally limited in time and end in public scandal. These five features, characteristic of the current crises in Central and Eastern Europe, are often interrelated, yet they can still be distinguished from one another quite clearly (Mungiu Pippidi, 2007). The on-going economic and financial crisis is exacerbating a number of these issues, in particular undermining the trust to governments and emphasizing the sensitivity towards any reforms. This paper highlighted several similarities among the CEE countries; however, there are also important differences that can be partially explained by path-dependency. In respect to the EU, we accept, that the lack of mechanisms to intervene into the domestic politics of the EU member state in the case that democracy and democratic institutions are jeopardized, represents one of the key unresolved issues in the European governance. Furthermore, three examples from the CEE region point out to the fact, that new mechanisms can and are developed and successfully implemented to safeguard the ever-fragile democracies of the Central and Eastern Europe. First, the example of Austria and the accent of the radical right Freedom Party of Austria led by Joerg Heider to power after the 289 2013.01.18. 19:05 1999 elections. The coalition between the Freedom Party and People’s Party was initially subjected to sanctions from the European Union, these were however rather symbolic and their impact limited. The case of Austria shows, that the hands of the EU and of its institutions are bound, even if its basic democratic values are endangered, as long as no formal criteria are infringed.6 The second example of the recent development in Hungary goes one step further and demonstrates, that the hands of the EU are bound even in cases when democratic institutions are in danger. As long as the institutional changes are constitutional, the only instrument the EU can use is an external pressure. However, externally imposed actions have only a limited impact and often meet with domestic resistance and counter-attacks from the EU-critical voices. Therefore, such EU interference with the domestic issues of the member-state is often greatly condemnable. The third example offers the summer 2012 unsuccessful coup d’état in Romania, which renders a more positive picture as well as possible solution for the future enlargement. In the case of Romania, and the PM Ponta’s attempt to impeach the president by unconstitutional means was successfully reversed both by the pressure of the EC (which threatened to suspend the voting rights of Romania in EU institutions) and the support of the international community which upheld the independence of the Romanian Constitutional Court. And although democracy and the rule of law in Romania is still a long way from the state of consolidation, the Romanian case provides us with several insights. It has shown that after the 2004 accession, the EU has undergone a successful learning process. It also demonstrates that the implementation of the Cooperation and Verification Mechanism for the 2007 accession countries (Bulgaria and Romania) is crucial in unconsolidated democracies and has the potential to contribute to safeguarding (and improving) the quality of democracy in the CEE countries. And what about the Czech Republic? The presented chapter has shown that although the Czech Republic cannot be regarded as a backsliding democracy, it has nonetheless undergone a negative transformation from a leading economic and democratic performer among the CEE EU accession countries into a reluctant and critical EU member state consumed with domestic issues such as corruption, abuse of office, rule of law and low government effectiveness. The main factor hindering the quality of democracy in the Czech Republic is the unwillingness and inability of the political elite to address key reforms (party finance, 290 KadarKrisztian_16_belivek.indd 290-291 state administration, health care and pension system to name just a few) and to abandon the existing practices of individual corruption and party clientelism, rendering electoral campaign resources. References Ágh, Attila (ed.) (2004) Europeanization and Regionalization: Hungary’s Accession, Hungarian Centre for Democracy Studies, Budapest Bauer, M. W., Knill Ch. and Pitschel, D. (2007) “Differential Europeanization in Eastern Europe: The Impact of Diverse EU Regulatory Governance Patterns.” European Integration, Volume 29, No. 47, 405-423, September 2007 Bertelsmann Stiftung (ed.) (2009) Sustainable Governance Indicators 2009. Policy Performance and Executive Capacity in the OECD. Gütersloh: Verlag Bertelsmann Stiftung Bertelsmann Stiftung (ed.) (2004)Bertelsmann Transformation Index 2003: Towards Democracy and a Market Economy. Gütersloh: Bertelsmann Foundation Publisher Bertelsmann Stiftung (ed.) (2008) Bertelsmann Transformation Index 2008. Politische Gestaltung im internationalen Vergleich. Gütersloh: Verlag Bertelsmann Stiftung. Bertelsmann Stiftung (ed.) (2010) Transformation Index BTI 2010. Political Management in International Comparison. Gütersloh:Verlag Bertelsmann Stiftung Bertelsmann Stiftung (ed.) (2012) Transformation Index BTI 2012. Political Management in International Comparison. Gütersloh:Verlag Bertelsmann Stiftung Bulmer, S. and Radaelli, C. (2004) ‘The Europeanization of National Policy?’ Queen’s Papers on Europeanisation, No 1. Bunse, S., Magnette, P. and Nikolaïdis, K. (2005) Is the Commission the Small Member States’ Best Friend? Swedish Institute for European Policy Studies, No. 9, URL (accessed 8. 9. 2009) http://www.sieps.se/files/download-document/50-20059.html Burduja, S.I. (2006) “Assessing Corruption in Romania: An Integration Story”. in: Stanford’s Student Journal of Russian, Eastern European and Eurasian Studies, Spring 2006, pp. 51-69 Caporaso, J.A. (2004) „Third Generation Research and the EU: The Impact of Europeanization. Paper presented on the conference Impact of Europeanization on Politics and Policy in Europe. Toronto, Canada, 7.-9.5.2004 Dahl, R. (1989) Democracy and Its Critics, New Haven: Yale University Press Dahl, R. (1975) Modern Political Analysis, New Delhi: Prentice Hall 291 2013.01.18. 19:05 Dimitrova, A. L. and Steunenberg, B. (2004) “Conclusions: The ‘end of history’ of enlargement or the beginning of a new research agenda?” in Dimitrova, Antoaneta L. (ed.) Driven to Change: The European Union’s Enlargement Viewed from the East , pp. 179-193. Manchester; New York: Manchester University Press Dimitrova, A., 2007: Institutionalization of Imported Rules in the European Union’s New Member States: Bringing Politics Back in the Research Agenda. European University Institute, EUI Working Papers 2007/37 Dimitrova, A.(2010) ‘The New Member States of the EU in the Aftermath of Enlargement: Do New European Rules Remain Empty Shells?’, Journal of European Public Policy, 17:1, 137–48 Fiala, P. and Strmiska, M. (1998) Teorie politických stran, Brno: Barrister & Principal Filip, J. (1997) “Volební právo ČR z hlediska zkušeností voleb do Poslanecké sněmovny.” in V. Šimíček (ed.) Právní a politické problémy voleb, Brno: Iuridica MU Freedom House(2010) Freedom in the World. New York: Freedom House, 2000–2008. http://www.freedomhouse.org Gati, Charles. (2007) Backsliding in Central and Eastern Europe. Statement prepared for the U.S. House of Representatives, Foreign Affairs Committee. July 25, 2007 Goetz, K.H. and Hix, S. (2000) “Europeanized Politics? European Integration and National Political Systém“. West European Politics 23 (4) Grabbe, Heather (2001) “How does Europeanization Affect CEE Governance? Conditionality, Diffusion and Diversity”, in: Journal of European Public Policy, 8, No. 6, pp. 1013-1031 Héritier, A., Knill, Ch., Mingers, S. (1996). Ringing the Changes in Europe: Regulatory Competition and Redefinition of the State. Britain, France, Germany: Berlin/New York: de Gruyter Héritier, A., Kerwer, D., Knill, Ch., Lehmkuhl, D., Teutsch, M., Douillet, A.-C. (2001) Differential Europe: The European Union Impact on National Policymaking, Lanham, MD: Rowman & Littlefield Howell, K. E. (2004) “Developing Conceptualisations of Europeanization: Synthesizing Methodological Approaches.” Queen´s Papers on Europeanization. No 3/2004 Kaufmann, D., Kraay, A. and Mastruzzi, M. 2010. The Worldwide Governance Indicators: Methodology and Analytical Issues (September 2010). World Bank Policy Research Working Paper No. 5430. Available at SSRN: http://ssrn.com/abstract=1682130 Klíma, M. (2001) Kvalita demokracie v České republice a volební inženýrství, Praha: Radix Kunc, J. (2000) Stranické systémy v re/konstrukci, Praha: Sociologické nakladatelství 292 KadarKrisztian_16_belivek.indd 292-293 Laffan, B. (2003) Managing Europe From Home: Impact of the EU on Executive Government A Comparative Analysis. OEUE Phase I, Occasional Paper 0.1 – 09.03, available onhttp://www.oeue.net/papers/managing_europe_from_home_impa.pdf Láštic, Eric (2010) “Päť rokov po vstupe: Nové členské štáty a ich pôsobenie v EÚ.” Sociológia, Vol. 42, No. 1, pp. 33-53 Levitz, Philip and Pop-Eleches, Grigore (2010)Why No Backsliding? The EU’s Impact on Democracy and Governance Before and After Accession. Comparative Political Studies, 43, 4 Linek, L. and Mansfeldová, Z. (2007) ‘The Parliament of the Czech Republic, 1993– 2004’, Journal of Legislative Studies, 13(1): 12–37 Linek, L. and Mansfeldová, Z. (2006) The Parliament of the Czech Republic 1993–2004, unpublished ms Malová, D. et al. (2010) From Listening to Action? New Member States in the European Union”, Bratislava: Devin Printing House Mansfeldová, Z. and Rakusanova Guasti, P. (2010) “The quality of democracy in the Czech Republic.” RECON online working paper 2010/14, August 2010 Meyer-Sahling, J.-H. (2009) “Sustainability of Civil Service Reforms in central and Eastern Europe Five Years after EU Accession. Sigma Paper No. 44. Available online at http:// rcpar.org.server320.dnpserver.com/mediaupload/publications/2009/20100311_ SIGMA_sustainability_of_CSR_in_CEE.pdf (last visited 15.10.2012) Merkel, W. (2004) ‘Embeded and Defective Democracies’, Democratization, 11(5): 33–58 Merkel, W. (1998) ‘Theorien der Transformation: Die demokratische Konsolidierung postautoriärer Gesellschaften‘, in K. von Beyme and C. Offe (eds.) Politische Theorien in der Ära der Transformation,Sonderheft der Politischen Vierteljahresschrift. Opladen Merkel, W., and Croissant, A. (2004) ‘Conclusion: Good and Defective Democracies’, Democratization, 11(5): 199–213 Merkel, W. (2007) ‘Gegen alle Theorie? Die Konsolidierung der Demokratie in Ostmitteleuropa‘, Politische Vierteljahresschrift,48(3): 413–33 Mungiu-Pippidi, A. (2006) “Corruption: Diagnosis and Treatment”, Journal of Democracy Vo. 17, No. 3, pp. 86-99 Mungiu-Pippidi, A. (2007) „Is East-Central Europe Backsliding?EU Accession Is No “End of History”“ . Journal of Democracy Volume 18, Number 4, October 2007, pp. 8-16 Novák, M. (1997) Systémy politických stran, Praha: Sociologické nakladatelství Przeworski, A. (1991) “Democracy and the Market”. New York: Cambridge University Press 293 2013.01.18. 19:05 Panke, D. (2008) “The Influence of Small States in the EU: Structural Disadvantages and Counterstrategies.” Working Paper 08-3, UCD Dublin European Institute, May 2008 Radaelli, C. M. (2000) “Whither Europeanization? Concept Stretching and Substantive Change.” European Integration online Papers 4 Radaelli, C. M. (2004) Europeanisation: Solution or problem? Available on: http://eiop.org. at/eiop/texte/2004-016a.htm Rakušanová, P. (2007) Povaha občanské společnosti v České republice v kontextu střední Evropy, Praha: Sociologický ústav AV ČR, v.v.i. Rupnik, J. (2007) Is East-Central Europe Backsliding? From Democracy Fatigue to Populist Backlash. Journal of Democracy, October 2007, Volume 18, Number 4, pp. 17-25 Sadurski, W. (2005) Rights Before Courts. Dordrecht: Springer Sadurski, W, Ziller J and Zurek K. (2006) Après Enlargement: Legal and Political Responses in Central and Eastern Europe. Florence: Robert Schuman Centre Schumpeter, J. (1972) [1942] Capitalism, Socialism and Democracy, New York: Harper & Row Sedelmeier, Ulrich (2008) ‘After Conditionality: Post-accession Compliance with EU Law in East Central Europe’, Journal of European Public Policy, 15:6, 806–25 Sedelmeier, Ulrich (2012) ‘Is Europeanisation through Conditionality Sustainable? Lockin of Institutional Change after EU Accession’, West European Politics, 35:1, 20–38 Simicek, V. (ed.) (2000) Volební kampaň v České republice, Brno: MPÚ Spendzharova, A. B. and Vachudova, M. A. (2012) “Catching Up? Consolidating Liberal Democracy in Bulgaria and Romania after EU Accession.” West European Politics. Vol. 35, No. 1, January 2012, pp. 39–58 Vachudova, Milada Anna (2005) Europe Undivided: Democracy, Leverage and Integration after Communism. Oxford: Oxford University Press Vachudova, Anna Milada. (2008) “Centre-Right Parties and Political Outcomes in East Central Europe.” Party Politics 14 (4): 387-405 Vachudova, M. A. and L. Hooghe. (2009) “Postcommunist politics in a magnetic field: How transition and EU accession structure party competition on European integration.” Comparative European Politics, Vol. 7, No. 2: 179-212 Vachudova, M. A. (2001) The Leverage of International Institutions on Democratizing States: Eastern Europe and the European Union. EUI Working papers, RSC No. 2001/33, European University Institute 294 KadarKrisztian_16_belivek.indd 294-295 Notes 1 The BTI is based on a qualitative expert survey and the key purpose is to review, evaluate and reform policies towards a market based democracy. The BTI publishes two rankings, the Status Index and the Management Index. The Status Index ranks the countries according to the state of their democracy and market economy, while the Management Index ranks them according to their respective leadership’s management performance. 2 Centre for Public Opinion Research, the September 2012 data are covering the period of September 2011 to September 2012. 3 A good examples provides a recent corruption scandals in Central Bohemia, where the former Minister of Health and Regional Governor of Central Bohemia, David Rath, was apprehended in possession of 8 million CZK (EUR 320,000) hidden among bottles of wine while walking out of a meeting with lobbyists. Some others were corruption scandals at the Ministry of Defence (summer 2012) or Ministry of Employment and Social Affairs (September 2012) resulting in a series of prosecution cases. 4 The Visegrád Group, also called the Visegrád Four or V4, is an alliance of four Central European states – Czech Republic, Hungary, Poland and Slovakia – for the purposes of cooperation and furthering their European integration. The Group originated in a summit meeting of the heads of state or government of Czechoslovakia, Hungary, and Poland that was held in the Hungarian castle town of Visegrád on 15 February 1991. The Group‘s name in the languages of the four countries is Visegrádská čtyřka or Višegrádská skupina (Czech); Visegrádi Együttműködés or Visegrádi négyek (Hungarian); Grupa Wyszehradzka (Polish); and Vyšehradská skupina or Vyšehradská štvorka (Slovak). It is also sometimes referred to as the Visegrád Triangle, since it was an alliance of three states at the beginning – the term is not valid now, but appears sometimes even after all the years since the dissolution of Czechoslovakia in 1993. 5 According to Jan Hartl, the director of the Czech Centre for Empirical Research, the struggle over the character of the Czech democracy has still not come to its close (Lidové noviny 31.3.2012, p. 22). 6 http://www.wsws.org/articles/2000/feb2000/haid-f22.shtml. 295 2013.01.18. 19:05 Annexes Country Bulgaria Czech Table 1: BTI Status Index and Management Index 2003, 2006, 2008, 2010 and 2012 SI Value 2006 2008 2010 2012 2003 2006 2008 2010 2012 7.7 8.0 8.4 8.4 8.3 6.4 6.5 6.7 6.7 6.6 (20) (18) (16) (15) (14) (14) 9.6 (2) 9.2 9.6 9.7 9.6 (3) (1) (1) (1) Republic Estonia Hungary Latvia Lithuania Poland Romania Slovakia Slovenia MI Value 2003 9.5 (6) 9.7(1) 9.3 9.4 9.3 9.3 (2) (3) (4) (5) 9.2 9.2 9.00 8.5 (5) (5) (8) (12) 8.7 8.2 8.6 8.5 8.3 (12) (14) (13) (13) (13) 9.6 (2) (20) (21) (13) (14) 6.7 7.0 6.6 6.7 (12) (10) (20) (9) 7.9 (1) 7.3 (7) 7.4 7.3 (2) (3) 6.7 6.5 6.7 6.8 (12) (15) (18) (20) 6.3 6.8 6.9 6.7 (10) (13) (21) (16) 7.7 (2) 7.0 (9) 9.0 9.2 9.0 9.0 (7) (6) (7) (7) (15) (10) 8.9 8.8 8.9 9.1 6.6 6.4 5.3 6.5 (9) (11) (10) (6) (14) (23) (53) (19) 7.3 7.9 8.3 8.2 8.2 5.7 6.3 6.5 6.3 (21) (19) (17) (16) (16) 9.6 (2) 9.1 9.1 9.1 8.9 (6) (7) (6) (8) 9.4 (7) 9.6 (2) 9.05 9.5 9.5 9.5 (1) (7) (2) (3) KadarKrisztian_16_belivek.indd 296-297 6.9 (25) (24) (22) (25) 7.4 (6) 7.3 (6) 7.2 7.0 (5) (8) 6.8 6.6 (12) (18) 7.4 (10) 296 6.7 7.4 (4) 6.6 (18) Note: in parenthesis is ranking of new EU member states from East and Central Europe in the sample Source: http://bti2003.bertelsmann-transformation-index.de/fileadmin/pdf/BTI-Tabelle.pdf http://www.bertelsmann-transformation-index.de/fileadmin/pdf/BTI_2006_Detailed_Ranking.pdf http://www.bertelsmann-transformation-index.de/fileadmin/pdf/Anlagen_BTI_2008/BTI_2008_Ranking_EN.pdf http://www.bertelsmann-transformation-index.de/fileadmin/pdf/Anlagen_BTI_2010/BTI_2010__ Rankingtabelle_D_web.pdf N 2003 = ; N 2006 = 118; N 2008 = 125; N 2010 = 128; N 2012 = m128. Table 2: Comparison of dimensions of Status Index of the new EU CEE member states 2003, 2006, 2008, 2010 and 2012 7.4 (3) Country 7.2 (5) 6.8 (13) 6.4 (23) 6.8 (12) 6.6 (19) Economic Transformation 2003 2006* 2008 2010 2012 2003 2006* 2008 2010 2012 Hungary 5.0 9.40 9.35 9.25 8.35 4.7 8.93 9.00 8.75 8.61 Lithuania 5.0 9.25 9.35 9.30 9.35 4.6 8.79 8.96 8.78 8.71 Slovakia 5.0 9.20 9.20 9.35 9.00 4.6 8.93 9.07 8.93 8.75 Slovenia 5.0 9.55 9.70 9.75 9.65 4.6 9.35 9.29 9.29 9.25 CzechRepublic 5.0 9.45 9.55 9.80 9.65 4.6 9.00 9.57 9.50 9.57 Estonia 4.8 9.40 9.55 9.60 9.55 4.7 9.18 9.29 9.07 9.00 Poland 5.0 9.20 8.80 9.00 9.20 4.4 8.61 8.71 8.71 8.89 Latvia 4.4 8.30 8.70 8.85 8.80 4.3 8.11 8.50 8.18 7.82 Bulgaria 4.0 8.45 8.70 8.75 8.65 3.7 7.50 8.18 7.96 7.93 Romania 4.0 8.20 8.55 8.50 8.55 3.7 7.57 8.07 7.96 7.79 5.5 (48) 6.8 (11) Political Transformation * Change in the scoring scale. Source: http://bti2003.bertelsmann-transformation-index.de/fileadmin/pdf/BTI-Tabelle.pdf http://www.bertelsmann-transformation-index.de/fileadmin/pdf/BTI_2006_Detailed_Ranking.pdf http://www.bertelsmann-transformation-index.de/fileadmin/pdf/Anlagen_BTI_2008/BTI_2008_Ranking_EN.pdf http://www.bertelsmann-transformation-index.de/fileadmin/pdf/Anlagen_BTI_2010/BTI_2010__ Rankingtabelle_D_web.pdf 297 2013.01.18. 19:05 Graph 1: Control of Corruption in CEE region (WGI data 1996-2011 ranked by percentile) Note: The Worldwide Governance Indicators (WGI) are a research dataset summarizing the views on the quality of governance provided by a large number of enterprise, citizen and expert survey respondents in industrial and developing countries. These data are gathered from a number of survey institutes, think tanks, non-governmental organizations, international organizations, and private sector firms. The WGI do not reflect the official views of the World Bank, its Executive Directors, or the countries they represent. The WGI are not used by the World Bank Group to allocate resources. Source: Kaufmann D., A. Kraay, and M. Mastruzzi (2010), The Worldwide Governance Indicators: Methodology and Analytical Issues 298 KadarKrisztian_16_belivek.indd 298-299 Graph 2: Rule of Law in CEE between 1996 and 2011 (in percentile) Rule of Law (2011) Comparison between 2011, 2008, 2006, 2004, 2002, 2000, 1998, 1996 (top-bottom order) Source: Kaufmann D., A. Kraay, and M. Mastruzzi (2010), The Worldwide Governance Indicators: Methodology and Analytical Issues Note: The Worldwide Governance Indicators (WGI) are a research dataset summarizing the views ont he quality of governance provided by a large number of enterprise, citizen and expert survey respondets in industrial and developing countries. These data are gathered from a number of survey institutes, think tanks, non-governmental organizations, international organizations, and private sector firms. The WGI do not reflect the official views of the World Bank, its Executive Directors, or the countries they represent. The WGI are not used by the World Bank Group to allocate resources. 299 2013.01.18. 19:05 Quality of democracy in Slovenia: The (dis)trust in political institutions and rule of law Miro Haček and Simona Kukovič Associate Professor at the Faculty of Social Sciences, University of Ljubljana Research and teaching assistant at the Faculty of Social Sciences, University of Ljubljana Introduction: Democracy, democratic consolidation and quality of democracy There is not only one theory, concept or model of democracy, but clearly a plurality of different theories and models. Partially these varying theories or concepts could be integrated by a meta-theory; at the same time, however, it also should be acknowledged that some of those theories and concepts of democracy clearly contradict each other. This undoubtedly complicates every attempt of trying to set up and establish on a meta-level a process of theory/concept integration. Representatively, we may cite Bühlmann et al. (2008: 5): “There is an abundant literature relating to democracy theory, with countless definitions of what democracy should be and what democracy is.”. We can add on by referring to Laza Kekic (2007: 1): “There is no consensus on how to measure democracy, definitions of democracy are contested and there is an ongoing lively debate on the subject.” What is exactly quality of democracy? Starting from the definitions above, Diamond and Morlino (2004: 4) consider a quality or good democracy to be one that provides its citizens a high degree of freedom, political equality, and popular control over public policies and policy makers through the legitimate and lawful functioning of stable institutions. A good democracy is thus first a broadly legitimated regime that satisfies citizen expectations of governance (quality in terms of result). Second, a good democracy is one in which its citizens, associations, and communities enjoy extensive liberty and political equality (quality in terms of content). Third, in a good democracy the citizens themselves have the sovereign power to evaluate whether the government provides liberty and equality according to the rule of law. 300 KadarKrisztian_16_belivek.indd 300-301 301 2013.01.18. 19:05 Citizens and their organizations and parties participate and compete to hold elected officials accountable for their policies and actions. They monitor the efficiency and fairness of the application of the laws, the efficacy of government decisions, and the political responsibility and responsiveness of elected officials. Governmental institutions also hold one another accountable before the law and the constitution (quality in terms of procedure). transition, transforming the political institutions is particularly important, because the positive outcome of the whole democratisation effort largely depends on how these institutions are seen to be successful in the eyes of the public. The transition itself is a unique process. For a successful transition towards a more effective society, every country first has to define two elements and then define a third one. Since every country has its own tradition, the realisation of its success lies, on the one hand, on the starting point of its development and the development of its surroundings and, on the other hand, on the capacity to understand the development of the society. There are many different ways and approaches on how to measure the quality of democracy. In a review of approaches on the quality of democracy and “good governance”, Diamond and Morlino (2004) emphasize that this would imply freedom, equality and control, and offer a three-fold quality structure: “quality of results”, “quality of content”, and “procedural quality”. Diamond and Morlino (2004: 22) state: “The multidimensional nature of our framework, and of the growing number of democracy assessments that are being conducted, implies a pluralist notion of democratic quality.” Diamond and Morlino (2004: 22–23) stress “eight dimensions of democratic quality”: (1) rule of law; (2) participation; (3) competition; (4) vertical accountability; (5) horizontal accountability; (6) freedom; (7) equality; and (8) responsiveness. Diamond and Morlino (2004: 23) qualify the first five dimensions as “procedural dimensions”. It is obvious that this multidimensional framework goes beyond the minimum standards of an electoral democracy and matches easily the necessary demands for a liberal democracy. These dimensions identify high quality standards for advanced democracies, pinpointing challenges for contemporary western liberal democracies and the whole further future evolution of democracies in global context. Does a high quality democracy develop substantially beyond the thresholds of a liberal democracy? Robert Dahl (1971) indicated the two dimensions of participation and contestation (competition) as key for the dynamics of democracies (democratic polyarchies). Diamond and Morlino emphasize eight relevant dimensions. This means that the twofold dimensional democracy structure of Dahl is being extended to an eightfold dimensional structure. I. Public (dis)trust towards political institutions In all post-socialist countries, democratisation was a process that resulted in the establishment of a democratic political system similar to that of Western European countries. It is a process of changing the regime from the beginning to the end and includes the concepts of transition and consolidation. The consolidation of democracy is a process that encompasses the complete establishment of new democratic institutions, the adoption of democratic rules and procedures, and the general acceptance of democratic values. Political changes that stem from the top can also play an important role in accelerating democratic processes, yet they can also repress the political socialisation of citizens. For countries in When thinking and analysing of the legitimacy of democratic systems, we cannot avoid a discussion regarding the (dis)trust in political institutions. Since they focus on the institutionalisation of society’s actions - which become more efficient, stable, and predictable under their influence - they represent the core foundations of society. Citizens rely on political institutions since there is a belief that not all of our fellow citizens can be trusted. Institutions act as mediators that, within the legal framework, force all citizens to respect certain legal and ethical norms, which consequently results in a higher level of trust. The greatest threat to the trust established between institutions and citizens is the 302 KadarKrisztian_16_belivek.indd 302-303 Elster, Offe, and Preuss (1998: 307) point out that the concept of democratic consolidation is not identical to economic success, because economic effectiveness is also possible in non-consolidated democracies or even in non-democracies. Political scientists therefore focus above all on political indexes of democratic consolidation. Gasiorowski and Power (1998) offer three basic criteria of successful democratic consolidation: successful execution of second parliamentary elections, successful swap of the executive branch with the usage of constitutional means (peaceful exchange of political power), and successful survival of the democratic system for twelve straight years. Additional criteria are frequently added: the relationship of citizens with democratic institutions, wide concordance on the rules of the political game, rule of law and trust in political institutions (Fink Hafner, 2000: 13–14). We are putting emphasis of our analysis on latter two criteria, which are not only used for evaluating successfulness of democratic consolidation, but also for measuring the quality of democracy in specific country, as the rule of law is often seen (Diamond and Morlino, 2004 and O’Donnel, 1994) as the pre-condition of good (quality) democracy. 303 2013.01.18. 19:05 systematic misuse of democratic principles. According to Sztopmka (1999), citizens who live in a democracy develop trust in democracy that is the highest form possible for the system. When this basic trust is misused, the level of trust in all other ideals connected to democracy decreases. Our standpoint is that trust in political institutions and the legitimacy of the democratic system are closely dependent on each other. No government in the world enjoys the absolute trust of its citizens. Since the power of every government dwarfs that of any individual citizen, even the most benevolent government represents a threat to individual freedom and welfare. Still, for a government to operate effectively, it must enjoy a minimum of public confidence (Mishler and Rose, 1997: 418–419). Gamson (1968: 42) argues that trust in political institutions is important, because it serves as the “creator of collective power,” enabling government to make decisions and commit resources without having to resort to coercion or obtain the specific approval of citizens for every decision. When trust is extensive, governments “are able to make new commitments on the basis of it and, if successful, increase support even more” (Gamson, 1968: 45–46), creating, in effect, a virtuous spiral. When trust is low, governments cannot govern effectively, trust is further undermined, and a vicious cycle is created (Muller and Jukam, 1977). Trust is especially important for democratic governments because they cannot rely on coercion to the same extent as other regimes and because trust is essential to the representative relationship (Bianco, 1994). In modern democracies, where citizens exercise control over government through representative institutions, it is trust that gives representatives the leeway to postpone short-term constituency concerns while pursuing long-term national interests (Mishler and Rose, 1997: 419). For example, when inflation is severe, citizens must have sufficient trust in economic and political institutions to accept temporary economic pain in return for the promise of better economic conditions at some uncertain future date (Weatherford, 1989). Trust is necessary so that individuals may participate voluntarily in collective institutions, whether in political institutions or in civil society’s institutions. Trust in civil institutions does not diminish democracy but completes it, enhancing the effectiveness of political institutions, creating what Dahl (1956: 83) refers to as the „social separation of powers,” which checks the emergence of an overly strong state. Trust, however, is double-edged sword. Democracy requires trust but also presupposes an active and vigilant citizenry with a healthy scepticism of government and a willingness, should the need arise, to suspend trust and assert control over government by replacing the government of the day (Mishler and Rose, 1997: 419) (Table 1.) 304 KadarKrisztian_16_belivek.indd 304-305 Political institutions should act as the representatives of certain values of society or, what is more, they sometimes even create a new set of norms and values. According to Offe (in Warren, 1999: 71), the trust we have in others also generates the trust we have in institutions. He defines values that generate trust in institutions through two parameters: truth and justice. Consequent actions of both are categorised by their use: passive or active (see Table 1.). Institutions generate trust based on interactive truth-telling, which means that the institutions create an assumption that they express only the truth (in contacts with citizens). When reacting actively, institutions change the truth-telling into promise-keeping, which is most profoundly expressed through jurisdiction or by realising a political programme. If we observe the role of institutions as representatives of justice in society, then institutions passively express justice when treating all individuals equally (fairness) and actively when they express some solidarity to marginalised individuals (Offe in Warren, 1999: 73). If trust is generated through the trust we have in individuals who work in an institution, there are two options: either we trust every individual working for the institution that they will act according to the preset rules of the institution and in accordance with the law, or we trust that the rules and procedures within the institution will, in a way, force all employees (especially those in high ranking positions) to be trustworthy. None of the abovementioned options is possible in the trust relationship between citizens and modern political institutions. The complexity and number of employees in the institutions is too big for the first possibility, while the other option would require individuals’ great knowledge of all administrative structures, their procedural rules and sub-structures, which is highly unlikely. The only legitimate reason for the citizens’ systematic mistrust is evidence of the misuse of administrative power in institutions. When institutions are deliberately misusing their power or merely overseeing malfunctions in the administrative process, one can conclude that they are unable to fulfil their mission and are consequently not trustworthy (Offe in Warren, 1999: 75). Trust is closely linked to the phenomenon of (political) responsibility. 1. (Dis)trust in the political institutions: empirical analysis In the Central and Eastern European (CEE) post-communist countries, excessive trust was never a real concern. The immediate problem is overcoming the abiding cynicism and distrust that are the legacies of the half-century long non-democratic rule. Citizens in CEE have good reason to distrust political and social institutions. Most have lived their entire lives under authoritarian regimes, some more totalitarian than others, but all inclined to 305 2013.01.18. 19:05 subjugate individual interests to those of the Communist Party (Clark and Wildavsky, 1990). The Communist system created a variety of civil institutions, but as Shlapentokh (1989: 9) has emphasized, “such organizations as the trade unions, the Young Communists’ League could be regarded as pertaining to civil society, but in fact they are parts of the state apparatus” (Sartori, 1993). Instead of voluntary participation, citizens in CEE were forced to make a hypocritical show of involvement or at least compliance (Mishler and Rose, 1997: 420). The consequence was massive alienation and distrust of the Communist regime and a lingering cynicism toward both political and civil institutions. The new CEE democratic regimes have not existed long, but they have existed long enough for many citizens to differentiate contemporary institutions from those of the past and to form at least preliminary judgments about the differences. This, by itself, can create a measure of trust or, at least, a tempering of distrust. In the short term, popular trust in government may be inherited. In the longer term, however, trust must be earned; it must be performance-based. The extent of public (dis)trust into the CEE post-Communist regimes is clearly important for democratic consolidation. It also is an empirical question, about which the supply of speculation greatly exceeds that of systematic research. Even less is known about the sources of trust and distrust in post-Communist societies, although an understanding of underlying causes is vital for assessing the prospects for establishing civil society and consolidating stable democratic rule (Mishler and Rose, 1997: 420). This paper draws upon survey data from the European Social Survey and Slovenia’s national survey Politbarometer to examine the structure and determinants of public (dis)trust predominately in Slovenia, but also in over twenty European countries, with some from CEE. In Slovenia, one periodical public opinion survey is the Politbarometer, which has been conducted by the Public Opinion and Mass Communication Research Centre and by the Institute for Social Science at the Faculty of Social Sciences in Ljubljana since 1995. The survey obtains the opinions of 900 to 1,000 randomly selected citizens of Slovenia aged over 18 years. The research focuses on opinions on the work of different institutions in Slovenia as well as on general assessments of the quality of life in the country. In connection to this, the main goal of the Politbarometer is to present average assessments of the satisfaction of citizens with democratic institutions, personal finances, and economic conditions in the country. If we compare the surveys over the years, then, some changes in satisfaction can be detected. In general, one of the most common observations is that 306 KadarKrisztian_16_belivek.indd 306-307 in all new democratic systems there is a high level of dissatisfaction with democracy itself. Similarly, in Slovenia, more than half the citizens are not satisfied with democracy in the country (see Table 2.). The question remains as to how much of such dissatisfaction fragile post-socialist regime can withstand before this dissatisfaction changes into a denial of the legitimacy of the whole political system and legitimacy of various political institutions. Nevertheless, this dissatisfaction could also be connected to the outcomes of the democratic transition and consolidation processes and not democracy as a type of socialpolitical relations itself. In this case, dissatisfaction can also be expressed through the existing mechanisms like elections, referendums and so forth.1 (Table 2.) As we see in Table 2. from 1998, when we can already speak of the normalisation of conditions in the country and of the establishment of democratic values, the trust in democracy was on the rise up to 2002 when it reached its historical peak of 44 per cent. After 2002 it slowly started to decrease, while dissatisfaction slowly has been growing, peaking in 2010 and 2011. Sometimes, the distrust does not apply solely to the democratic system but the personification of democracy, the political institutions (parliament, government, and political parties). Besides dissatisfaction with political institutions, another very important factor is the economic climate in the country. After the end of socialism, the safety net of social care has more or less been deteriorating, leaving many marginalised. However, in Slovenia, economic stability prevented any greater dissatisfaction with democracy all the way until 2009, when consequences of the global economic crisis hit the country and the safety net of social care started to crack. General trust in the country is also reflected in the trust in major political institutions (see Table 3.). There is some minor deviation in the measurements between the years, but it is not very significant all the way until 2010, when the level of trust in all five major political institutions in the country drops quite significantly. However, if we observe a longer time period of this survey, we can detect some differences in the level of expressed trust. In 2000, we can see the peak of trust in government, political parties, and the prime minister, as this was the year of parliamentary elections that followed the publicly noted unsuccessful reign of the right-wing government that took over when the previous left-wing government broke apart in spring 2000. The drop of trust we can see from 2007/2008 to 2011 is significant and visible in all five institutions stated in Table 3., and also in total accordance with the dissatisfaction with democracy observed earlier in the same period. 307 2013.01.18. 19:05 The same survey also occasionally measures trust in the state administration (Table 3.). The results of the survey indicate that it is obvious that trust in the state administration in Slovenia is more stable than trust in mainstream political institutions and that the drop in trust, which we observed in 2010 and 2011, is not so dramatic regarding the state administration. The reason for this is almost certainly the meritocratic nature of the state administration, which is seen as professional and non-partisan, although sometimes unpopular due to the protected status of civil servants, especially over the last years of the economic crisis. We can also observe that in the middle of the first decade of the twenty-first century, the state administration scored lower grades than the Slovenian government, prime minister, and president. One can perhaps link such low levels of trust with two factors: (1) the inheritance of the administrative system of the former regime, making it very rigid, or (2) the slow and unproductive reform of the public administration system in general. If we compare public trust in institutions measured in other European countries in 1995 and 2010, the conclusion is that the level of trust is much lower in new democracies of CEE than the level of trust in established democracies of Western Europe. The survey covered a range of questions, and in Table 4. we can see the level of trust in national parliaments, political parties, and politicians in all of the observed countries. Even among CEE countries, there is a significant difference in levels of trust. In Slovenia, for example, the level of trust is among the lowest in the region. This indicates that the variations in levels of trust show how different the political systems are and that the level of trust in the region is much lower than in other Western European countries, probably because of the systemic change (Kasse, Newton and Toš, 1999). If we compare trust levels in the national parliament from data sets of 1995 and 2010, we can clearly ascertain that levels of trust have fallen quite significantly, except in Norway, Sweden, and the Netherlands, where trust in the national parliament was actually higher in 2010 than in 1995. The average level of trust was 4.63 in 1995 and 4.32 in 2010; the level of trust was measured on a scale from 1 to 10. Only two of the observed countries’ parliaments scored a lower level of trust in 1995 than in Slovenia (Poland and the Czech Republic), with two such examples again in 2010 (Bulgaria and Portugal). Besides that, we can see that the Scandinavian countries, on average, have a much higher level of trust, which could also be linked to their high levels of social capital that could play some role in their relatively high trust levels in general. (Table 4.) 308 KadarKrisztian_16_belivek.indd 308-309 II. Rule of law as a precondition for quality (good) democracy “The rule of law” means literally what it says: the rule of the law (Raz, 1979: 212). Taken in its broadest sense this means that people should obey the law and be ruled by it. But in political and legal theory it has come to be read in a narrower sense, that the government shall be ruled by the law and subject to it (Skaaning, 2010: 452). An effective rule of law is indispensable for a quality democracy, in part because it guarantees, through the mechanism of a politically neutral and independent judiciary, the defence of citizens’ rights and of the equal status, before the law and in the political arena, of all citizens (Diamond and Morlino, 2004: 7). In democracy, the confidence of citizens in repressive institutions such as the police and the judiciary is of paramount importance. In a democratic political system, these institutions not only have the function of deterrence and forced submission, but also are important for the maintenance of the rule of law and the defence of a democratic regime against its advertisers. The police and the judiciary, which some label as the fundamental institutions of the rule of law (Linde and Ekman, 2005), refer in this case to the processes of informed consent, which is tied to trust in the political system rather than in the legal system alone. Namely, it is equally important that citizens embrace these institutions as those with a legitimate right to exercise authority. Confidence in these institutions obviously bears significance for the legitimacy of a political system. Citizens expect these institutions to be just, impartial, efficient, and effective, and their operation has to be based on professionalism, procedural justice, and the provision of equal justice and protection to all of society. Guillermo O’Donnell (1994: 60–62) explains, under a rule of law all citizens are equal before the law, which is fairly and consistently applied to all by an independent judiciary, and the laws themselves are clear, publicly known, universal, stable, and are not retroactive. These characteristics are fundamental for any civil order and a basic requirement for democratic consolidation, along with other such cognate features of a constitutional order as civilian control over the military and the intelligence services and an elaborated network of other agencies of horizontal accountability that complement the judiciary. More comprehensively, a “good” (or in essence, a liberal) democracy has a strong, vigorous, diffuse and self-sustaining rule of law in the following respects: • The law is equally enforced toward everyone, including all state officials; no one is above the law. 309 2013.01.18. 19:05 • The legal state is supreme throughout the country, leaving no areas dominated by organized crime, local oligarchs, or political bosses who are above the law. • Corruption is minimized, detected, and punished, in the political, administrative, and judicial branches of the state. • The state bureaucracy at all levels competently, efficiently, and universally applies the laws and assumes responsibility in the event of an error. • The police force is professional, efficient, and respectful of individuals’ legally guaranteed rights and freedoms, including rights of due process. • Citizens have equal and unhindered access to the justice system to defend their rights and to contest lawsuits between private citizens or between private citizens and public institutions. • Criminal cases and civil and administrative lawsuits are heard and resolved expeditiously. • The judiciary at all levels is neutral and independent from any political influence. • Rulings of the courts are respected and enforced by other agencies of the state. • The constitution is supreme, and is interpreted and defended by a Constitutional Court. What further distinguishes and completes a “democratic rule of law,” O’Donnell (1994: 60–62) argues, is that the legal system defends the political rights and procedures of democracy, upholds everyone’s civil rights, and reinforces the authority of other agencies of horizontal accountability that ensure the lawfulness and propriety of official actions. The rule of law is the base upon which every other dimension of democratic quality rests (Diamond and Morlino, 2004: 9). When the rule of law is weak, participation of the poor and marginalized is suppressed; individual freedoms are tenuous and fleeting; civic groups may be unable to organize and advocate; the resourceful and well connected have vastly more access to justice and power; corruption and abuse of power run rampant, as agencies of horizontal accountability are unable to function properly; political competition is distorted and unfair; voters have a hard time holding rulers to account; and thus, linkages vital to securing democratic responsiveness are disrupted and severed. 1. (Dis)trust in the rule of law: empirical analysis From a wider comparative aspect, Europeans trust the police (42 per cent) and the judiciary (41 per cent) more than political representatives (six per cent) and EU institutions (five per cent), as far as fighting corruption is concerned (Special Eurobarometer 374, 310 KadarKrisztian_16_belivek.indd 310-311 2011: 111). Compared to 2009, the police gained an additional eight per cent, whereas the judiciary lost two per cent. Of all the bodies, the police enjoy the highest confidence in 14 EU member states, with the greatest level of trust in Denmark (65 per cent) and the lowest one in Slovenia (27 per cent). Apart from Denmark, only in Ireland do a majority of survey respondents claim the police to be the most trustworthy institution (61 per cent). The percentage of respondents who mention the judiciary system as the body they trust the most regarding problem solving varies from 62 per cent in Denmark to 20 per cent in the Czech Republic, with Slovenia being just ahead of the latter with 21 per cent (Special Eurobarometer 374, 2011: 103). Other than Denmark, there are seven other EU Member States where a majority of survey respondents mentioned the judiciary, namely Germany (59 per cent), Austria (57 percent), Sweden (53 per cent), Luxembourg (53 per cent), France (52 per cent), and Finland (51 per cent). The judiciary enjoys the highest levels of confidence in 13 EU member states, with the highest one recorded in Germany (59 per cent) and the lowest one in Latvia and Lithuania (34 per cent). As a rule, the degree of confidence in the aforementioned institutions of the rule of law is lower in the Central and Eastern European states than in the consolidated Western democracies within the EU. Slovenia, however, has recently been among the states with the lowest levels of trust in these institutions. It has already been mentioned that the percentage of respondents in the EU who trust the police has increased (by eight per cent) since 2009 and in this manner has left behind the judiciary, albeit only by one per cent. In all but two EU member states, the percentage of respondents who say the police are the most trustworthy institution has increased. The greatest increase has been recorded in Great Britain (plus 21 per cent), Ireland (plus 17 per cent), Austria (plus one per cent), Bulgaria, Italy, Spain and Malta (plus two per cent), and in the Czech Republic (plus three per cent). The two states that have witnessed a decline in confidence in the police are Portugal (minus nine per cent) and Slovenia (minus six per cent) (Special Eurobarometer 374, 2011: 104). The differences in the degrees of trust in the police are to a great extent related to the differences between states, historical roles of the police, social orientation of the states, financial resources available for the police, the performance of other state institutions, the stratification of societies, and so forth. The degree of confidence in the police is to a great extent influenced by levels of corruption in state institutions and the status of institutions in charge of citizen security within the system of public ser311 2013.01.18. 19:05 vices as a whole. Additionally, the comparison of the average values of the estimated confidence in the police on a scale of 0–10 - zero stands for “don’t trust at all” and ten stands for “trust completely” - shows significant differences between individual parts of Europe. At the top, there are predominantly northern European countries (Finland 7.9, Denmark 7.58, Norway 7.04), followed by western European countries (Germany 6.58, Netherlands 6.34, Great Britain 6.24). The other half of the scale generally contains Mediterranean countries and new EU member states (Spain 6.1, Estonia 6.05, Cyprus 5.94; France 5.78) and at the lowest end of the scale, there are eastern European countries (Russia 3.7, Bulgaria 3.29). With an average value of 5.05, Slovenia does not significantly diverge from comparable states (Poland 5.12; Slovakia 4.8), as far as trust in the police is concerned. According to the results of Slovenian public opinion polls (Political Barometer Survey, 2011), the police is ranked among those institutions where trust prevails over distrust, namely 34 per cent versus 28 per cent (the army enjoys an even greater level of confidence - 52 per cent - and is not trusted by 12 per cent of survey respondents). According to the public opinion poll performed in 2009 by the School of Advanced Social Studies, trust in the police is fairly high, as the average value of response for this survey was 3.50 and the police was trusted or completely trusted by 51.7 per cent of all the respondents. Later on, the Political Barometer Survey (May 2011) showed an even greater percentage of distrust (31 per cent) than trust (30 per cent) in the police. The average values of responses concerning trust in the police were calculated as follows: May 2010 (3.05), October 2010 (3.13), December 2010 (2.96), and March and May 2011 (in both cases 2.92, respectively), which showed a negative trend (Political Barometer Survey, 2011). Compared to the police, the judiciary ranks much lower, and its trust percentages are lower than the percentages of distrust (54 versus 15 per cent). However, from among all three branches of power, the legal courts still enjoy the highest level of trust. Considering the fact that there is usually no formal connection between judges and citizens, this is somewhat surprising. Contrary to the executive and legislative, the judiciary has no institutionalised mechanisms that would guarantee the accountability of judges. Thus, the legitimacy of the judiciary is not ensured through institutionalised procedures, but is based on individual trust (Bühlmann and Kuntz, 2011: 317). In any case, these data show that the legitimacy of all three branches of power is exceptionally low, including the judiciary.2 312 KadarKrisztian_16_belivek.indd 312-313 The bodies of all three branches of power are at the bottom of the (public opinion) scale of confidence, as are the (Catholic) Church and political parties; therefore, political institutions have undergone an extremely deep plunge in Slovenia. However, this is not to say that there is ubiquitous distrust or that this is a general atmosphere in the society, as people are nevertheless able to express their trust, even their utmost trust in, say, firefighters, who were ascribed average marks of 4.60 (of the maximum 5.00) in December 2010 (Political Barometer Survey, 2010: 23). Additionally, oversight institutions of the state, the educational system, the military, the police, and its head also enjoy high levels of trust. “This nevertheless has something to do with the question of a predominant political culture and its proponents who are embedded in political institutions,” (ibid.). In a majority of countries, of all the three branches of power, the highest level of trust is usually associated with the judiciary. Before 2000, this was characteristic of Slovenia, too. However, the confidence in the courts began its decline afterwards and by the end of 2003. Public opinion surveys showed that trust in the courts was lower than trust in the government and the National Assembly (Political Barometer Survey, 2007). Confidence in the courts began its rise only in 2005 (to just over 32 per cent) and 2006 (just over 37 per cent); hence, the average level of trust in the courts for the entire post-independence period was 32.6 per cent (Slovenian Public Opinion Survey, 1996–2006), which is just a little more than the trust in the government and over 50 per cent more than the trust in National Assembly. A marked decline of trust in both the judiciary and the remaining two branches of power began after 2007, which allows us to speak of the “emptying” of this space, of the contempt for political institutions, and, in general, of the “crisis of democracy” (Political Barometer Survey, 2010: 23). In 2006, trust in the courts was still at a good 37 per cent, whereas in 2007, it already dropped to 24 percent; afterwards, it went down further to 15 per cent in 2008 and bounced back slightly to 18 per cent in 2009. Even though confidence in the work of the courts decreased by that much - from the 1991–2006 average of 32.6 per cent to 18 per cent in 2010 and a mere 15 per cent in 2011 - the Slovenian judicial system still enjoys higher levels of trust than the National Government (8 per cent) and the National Assembly (5 per cent). The reasons for this may rather be found in the peculiarities of the decrease of trust in political institutions than in the courts themselves. In spite of all this, the paradox remains that the number of new cases before the courts is inversely proportional to the rates of decline of trust in Slovenian courts. There were 313 2013.01.18. 19:05 “only” 530,056 new cases in 2001, whereas 824,562 new cases were submitted to courts in 2009 and 969,955 in 2010 (The Ministry of Justice of the Republic of Slovenia, 2010). Together with judicial backlogs and delays accumulated over the preceding years, Slovenian courts had to deal with 1.45 million cases in 2010 alone. In the past, courts were unsuccessful in regular and timely resolution of cases, and the number of unsolved cases increased especially during the 1991-1998 period; the number of new cases, solved and unsolved alike, did not significantly change from 1998 to 2005; since 2005, the number of new and solved cases has been increasing, and the number of unsolved cases has been increasing somewhat faster, yet the total number of unsolved cases has been declining (Audit Report of the Audit Court of the Republic of Slovenia, 2011). Actually, the projects for the elimination of judicial arrears have been fairly successful in providing better conditions for the work of the courts, but they have not solved the problems of arrears as such. With the implementation of the projects for the elimination of judicial backlogs and the results they produce, the so-called systemic reasons for judicial backlogs have been diminishing and the subjective liability of the chairs of legal courts, judges, and judicial personnel has been coming to the forefront. The number of unsolved cases and the associated scope of judicial arrears are primarily affected by two factors: the inflow of new cases and the efficiency of case resolution. The average performance rate of judges and all employees in the judicial system somewhat decreased in the period of 1990-2009. The total number of solved cases per every employed person in the judiciary declined from 274 in 1990 to 173 in 2002 and in 2009, it amounted to 216 solved cases per every employee (Audit Report, 2011: 18). Slovenia is among the EU member states that have the highest number of judges and other personnel employed at legal courts relative to the number of inhabitants. In 2009, the total number of judges employed at Slovenian legal courts was 1076, and in 2010, this figure was 1024. Therefore, Slovenia, having just over 50 judges per 100,000 inhabitants (in 2009, there were 52.6 and in 2008, 53.5 judges), grossly exceeds the EU average (17.4 judges per 100,000 inhabitants). However, it must be mentioned that Slovenia is the second most burdened EU member state as regards matters of land register and their execution. Furthermore, in terms of matters belonging to the scope of criminal law, it is ranked seventh (Audit Report, 2011: 12). According to the evaluation performed by the International Institute for Management Development of Lausanne (IMD), Slovenia is ranked 45th in the judiciary category worldwide (mark 3.55 on a scale of 0–10). For the purpose of comparison, we list some other cases: Germany is 11th (mark 7.94), Estonia is 314 KadarKrisztian_16_belivek.indd 314-315 24th (6.22), and Romania is 51st (2.32) (Commission for the Prevention of Corruption of the Republic of Slovenia, Regular Annual Report, 2011: 7). The mission of the judicial system - which should guarantee versatile, just, public, and timely legal services; the resolution of interests, obstacles, discord, or disputes; whose services would be accessible to everyone, performed by a due process of law, efficiently and within reasonable deadlines, protecting people’s rights and freedoms, keeping and interpreting the law - is hence not implemented in the manner envisioned. The causes behind this are multiple; from judicial backlogs to unpredictability of judicial decisions, bad legislation featuring unclear procedures, and absence of practical measurement of the effects, negative images of the judiciary in the media, a lack of understanding of the roles of the courts on the part of the public, the strike of the judges, poor management, and mechanisms too weak to enforce accountability within certain sub-systems of the judiciary, and so forth. The fundamental long-term objectives of Slovenia as regards the judicial system, hence, include a maximum possible level of legal safety (reliability and predictability based on lawfulness and impartiality) and the assurance of the right to be judged within a reasonable period of time, plus the achievement of greater confidence in the judicial system through increased openness and transparency of operation and enhanced orientation towards service users. As noted above, the degree of confidence in institutions of the rule of law in Slovenia has undergone an especially drastic decline after 2007 and poses serious problems from the aspect of political and legal culture. A low level of trust in the judicial system can cause great problems for the democratic regime. The judiciary needs a high degree of legitimacy, that is, public trust, as this is its main political capital. The support of the rule of law is a presumption of any democratic regime, whereas confidence in the judiciary is essential for the implementation of the rule of law. Hence, it is no coincidence that the doctrine and the practice of the rule of law place trust in the institutions of the latter among the very top legal values. However, the rule of law does not exist solely by itself, since it is connected to society, and so the values of the former have to be as present as possible in the latter; merely referring to them on the part of legal experts is thus insufficient. The rule of law entails a rule of common laws, equal for each and everyone, whereas a jurist state stands for a condition in which those with enough money and power can buy legal services. The characteristic of the jurist state is its legal system that is more or less a reflection of some kind of, mostly political, voluntarism that is, of a will dictating how reason 315 2013.01.18. 19:05 should follow it. The degree of the judiciary’s independence influences its legitimacy and the public trust it enjoys. The decisions of judges have to be based on the law and not on political and/or other interests. The confidence in the judicial branch of power is based on its independence, that is, on the impartiality, autonomy, and power of judicial institutions to assure their own de iure and de facto independence. Conclusion The paper analyses qualitative the conception of quality democracy with an emphasis on public (dis)trust towards political institutions and rule of law and tests main research question, whether relatively low public trust towards Slovenian political institutions is related to the relatively low trust towards the rule of law, especially when compared to other countries in the EU. General trust in the country is also reflected in the trust in major political institutions. There is some minor deviation in the measurements between the years, but it is not very significant all the way until 2010, when the level of trust in all five major political institutions in the country drops quite significantly. Similar trend can be observed when analysing public (dis)trust towards rule of law. Compared to the police, the level of trust to the judiciary ranks much lower, but it is still the highest of the three branches of government. Data shows that levels of trust remained relatively stable from 1991 to 2007, but then began to fall quite rapidly (from 37 per cent in 2006 to the 15 percent in 2011); this phenomenon is most likely connected to the inflow of new cases and judicial backlogs. One of the main goal of the paper is to establish the correlation between the (dis)trust in the political institutions, (dis)trust to the rule of law and good (quality) democracy. As established, levels of trust in judiciary, executive and legislative authority began to drop after 2007 and continues to do so till today, when trust is at historically the lowest levels. The question of good (quality) democracy is best illustrated with the data of general dissatisfaction of Slovenians with the democracy as social and political system, which shows, that dissatisfaction began to increase after 2002, but more intensively in last three years, when 86 percent of citizens express dissatisfaction with democracy. It is evident that there is connection with general dissatisfaction with democracy and observed levels of distrust with political institutions and the rule of law; this fact enables consideration on the crisis of democracy. The comparison of the EU member states shows, that levels of trust in the 316 KadarKrisztian_16_belivek.indd 316-317 political institutions and judiciary are higher in Western Europe compared to Central and Eastern Europe. Slovenia is no exception in this matter, as levels of distrust towards the political institutions and the institutions of rule of law are one of the highest in the EU. The definite answer to the question of why trust in political and judiciary institutions is decreasing in modern democratic systems remains elusive, although we can search for at least partial answers in recent drops of trust in political and judiciary institutions in the global economic crisis. One can also wonder if this means that trust in democratic values, in general, is not seen as important as it once used to be. Instead of an answer, we can offer the opinion of Ronald Inglehard, who claims on the basis of empirical research that societies that are increasingly critical of hierarchical authorities are at the same time more participative and claim a more active role in the policy-making process. Political leaders and senior civil servants are interacting with ever more active and more informed and educated citizens, who are simultaneously more critical of their actions. An alternative approach reveals that sympathy does not necessarily mean trust, but it can also be interpreted as some sort of obvious predictability, meaning that citizens do not a priori trust the institution but, since we can foresee its reactions and behaviour in the future, which should be consistent with those in the past, we trust the bureaucratic processes instead. The dimensions of trust between citizens and political institutions cannot be measured only through the parameter of trust–mistrust, but at best as a relationship of “inductive anticipation” (Warren, 1999). We can conclude that the legitimacy of the system increases with the level of trust in political institutions. However, is complete trust in favour of democracy, or could it be that a constant ongoing critique and sober judgment of the everyday actions of political bodies is, in fact, in the best interests of a consolidated democracy? Documents Politbarometer (Political Barometer Survey) (2007) Ljubljana: Public Opinion and Mass Communication Research Centre, Faculty of Social Sciences, University of Ljubljana SPO (Slovenian Public Opinion) (2007) Surveys of 1996–2006. Ljubljana: Public Opinion and Mass Communication Research Centre, Faculty of Social Sciences, University of Ljubljana Public opinion research on police work (2009) Nova Gorica, School of Advanced Social Studies 317 2013.01.18. 19:05 Court Statistics (2010) Ljubljana: Ministry of Justice of the Republic of Slovenia Politbarometer (Political Barometer Survey) (2010) Ljubljana: Public Opinion and Mass Communication Research Centre, Faculty of Social Sciences, University of Ljubljana Audit Report of the Audit Court of the Republic of Slovenia (2011) Ljubljana: Court of Audit of the Republic of Slovenia Regular Annual Report (2011) Ljubljana: Commission for the Prevention of Corruption of the Republic of Slovenia Politbarometer (Political Barometer Survey) (2011) Ljubljana: Public Opinion and Mass Communication Research Centre, Faculty of Social Sciences, University of Ljubljana Raziskava Demokracija v Sloveniji (Democracy in Slovenia Survey) (2011) Nova Gorica: School of Advanced Social Studies Special Eurobarometer (2011) 374/Wave EB 76.1 European Social Survey (2012) Available at: http://www.europeansocialsurvey.org (29 August 2012) Politbarometer (Political Barometer Survey) (2012) Ljubljana: Public Opinion and Mass Communication Research Centre, Faculty of Social Sciences, University of Ljubljana. References Beetham, D., Carvalho, E., Landman, T. and Weir, S. (2008) Assessing the Quality of Democracy: A Practical Guide. Stockholm: IDEA Bianco, T. W. (1994) Trust: Representatives and Constituents. Ann Arbour: University of Michigan Press Bühlmann, M., Merkel, W. and Wessels, B. (2008) The Quality of Democracy. Democracy Barometer for Established Democracies. National Centre of Competence in Research: Challenges to Democracy in the 21st Century: Working Paper No. 10a. Available at http://www.nccrdemocracy.uzh.ch/nccr/publications/workingpaper/10 (29 August 2012) Bühlmann, M. and Kuntz, R. (2011) Confidence in the Judiciary: Comparing the Independence and Legitimacy of Judicial system. West European Politics 34 (2): 317‑345 Clark, J. and Wildavsky, A. (1990) The Moral Collapse of Communism: Poland as a Cautionary Tale. San Francisco: ICS Press 318 KadarKrisztian_16_belivek.indd 318-319 Dahl, R. A. (1956) A Preface to Democratic Theory. Chicago: University of Chicago Press Dahl, R. A. (1971) Polyarchy. Participation and Opposition. New Haven: Yale University Press Diamond, L. and Morlino, L. (2004) The Quality of Democracy. An Overview. Journal of Democracy 15 (4): 20–31 Elster, J., Offe, C. and Preuss, U. K. (1998) Institutional Design in Post-communist Societies. Cambridge: Cambridge University Press Fink Hafner, D. (2000) Teoretske premise proučevanja demokratičnih prehodov (Theoretical premises of democratic transitions studies). In: Fink Hafner, D. and Haček, M. (eds.) Demokratični prehodi I. Ljubljana: Založba FDV Gamson, W. A. (1968) Power and Discontent. Homewood: The Dorsey Press Gasiorovski, M. J. and Power, T. J. (1998) The Structural Determinants of Democratic Consolidation. Comparative Political Studies 31 (6): 740–771 Kaase, M., Newton, K. and Toš, N. (1999) Zaupanje v vlado (Trust in government). Ljubljana: Liberalna akademija and Znanstvena knjižnjica FDV Kekic, L. (2007) The Economist Intelligence Unit’s Index of Democracy. The World in 2007. London: The Economist. Available at: http://www.economist.com/media/pdf/ DEMOC RACY_INDEX_2007_v3.pdf (29 August 2012) Linde, J. and Ekman, J. (2005) Sources of institutional trust in Central and Eastern Europe, Arbeitsrapporter, Working Papers, No. 96. Uppsala: Department of East European Studies, Uppsala University Mishler, W. and Rose, R. (1997) Trust, Distrust and Scepticism: Popular Evaluations of Civil and Political Institutions in Post-Communist Societies. The Journal of Politics 59 (2): 418–451 Muller, E. N. and Jukam, T. O. (1977) On the Meaning of Political Support. The American Political Science Review 71 (4): 1561–1577 O’Donnell, G. (1994) Delegative Democracy. Journal of Democracy 5 (January 1994): 60‑62 Raz, J. (1979) The authority of law: Essays on law and morality. Oxford, UK: Clarendon Sartori, G. (1993) Totalitarianism, Model Mania and Learning from Error. Journal of Theoretical Politics 5 (1): 5–22 Shlapentokh, V. (1989) Public and Private Life of the Soviet People. New York: Oxford University Press Skaaning, S. E. (2010) Measuring the Rule of Law. Political Research Quarterly 63 (2): 449-460 319 2013.01.18. 19:05 Sztompka, P. (1999) Trust: a sociological theory. Cambridge, New York, Melbourne: Cambridge University Press Warren, M. E. (ed.) (1999) Democracy and Trust. Cambridge: Cambridge University Press Weatherford, M. S. (1989) Political Economy and Political Legitimacy: The Link between Economic Policy and Trust. In: Clarke, H. D., Stewart, M. and Zuk, G. (eds.) Economic Decline and Political Change. Pittsburgh: University of Pittsburgh Press Notes 1 2 This emphasis is supported by a number of public opinion polls. For instance “Democracy in Slovenia” survey, carried out in March 2011 among 907 respondents across the country, asked whether democracy is the best possible form of governance and whether democracy in spite of its imperfections, is still better than other types of socialpolitical relations. Respondents strongly agreed with both statements; on the scale from 0 to 4, where 0 represents “strongly disagree” and 4 “strongly agree”, first statement got estimation 3.49 and the second one 3.38. Legal courts 18 per cent in 2010, 15 percent in 2011; National Government 12 percent in 2010, 8 percent in 2011; National Assembly 11 per cent in 2010, 5 per cent in 2011. See Political Barometer Survey (2010; 2011). Annexes Table 1. Values that generate trust in institutions TRUTH JUSTICE PASSIVE Truth-telling Fairness ACTIVE Promise-keeping Solidarity Source: Offe in Warren (1999, 73). Table 2. Satisfaction with democracy in Slovenia (in per cent) Year SATISFIED UNSATISFIED N.A. 1998 31 58 11 1999 39 49 12 2000 40 48 12 2001 42 46 12 2002 44 46 10 2003 38 55 7 2004 41 51 8 2005 34 59 7 2006 39 51 11 2007 36 58 6 2008 39 55 6 2009 32 62 6 2010 11 86 3 2011 12 84 4 Source: Politbarometer; http://www.cjm.si/PB_rezultati (January 2012). We used the last survey conducted in each stated calendar year. The question was as follows: “Are you generally satisfied or unsatisfied with the development of democracy in Slovenia?” 320 KadarKrisztian_16_belivek.indd 320-321 321 2013.01.18. 19:05 Table 3. Trust in political institutions in Slovenia Year Table 4: Trust in politicians, political parties, and national parliaments in Europe (1995 and 2010) GOVERN- PRIME- GENERAL PRESIDENT POLITICAL STATE MENT MINISTER ASSEMBLY OF THE PARTIES ADMINI- 1998 2.7 3.2 2.6 3.6 2.3 n.a. 1999 2.9 3.4 2.8 3.8 2.4 n.a. BELGIUM 3,86 2000 3.3 3.7 3.1 3.9 2.7 n.a. DENMARK 5.04 2001 3.1 3.5 2.9 3.9 2.6 n.a. FINLAND 4,43 4,54 5,38 5,8 2002 3.1 3.4 3.2 3.7 2.7 n.a. FRANCE 3,19 3,07 4,15 4,5 2003 2.9 3.2 2.9 3.3 2.5 n.a. GERMANY 3,29 3,26 4,18 4,5 2004 3.1 3.4 3.1 3.6 2.6 3.0 GREAT BRITAIN 3,40 3,50 4,05 4,7 2005 2.8 3.0 2.8 3.5 2.5 2.9 ISRAEL 2,95 2.95 3,64 4,7 2006 2.9 3.2 2.8 3.2 2.6 n.a. NEDERLANDS 5,22 5,23 5,34 5,2 2007 2.8 2.7 2.9 4.0 2.6 3.1 NORWAY 4,96 4,93 6,03 5,7 2008 3.0 3.2 3.0 3.4 2.5 3.0 PORTUGAL 2,01 2,02 2,91 4,4 2009 2.7 2.9 2.7 3.5 2.4 2.9 SPAIN 2,72 2,70 4,30 4,8 2010 2.1 2.1 2.1 3.1 2.0 2.7 SWEDEN 5,04 5,11 6,28 5,9 2011 2.0 2.2 2.1 3.1 1.9 2.6 SWITZERLAND 5,01 4,81 5,81 5,8 REPUBLIC Country STRATION Source: Politbarometer; http://www.cjm.si/PB_rezultati (January 2012). We used the last survey conducted in each stated calendar year. Shaded windows indicate change in office. The question was as follows: “How much do you trust the listed institutions? Assess your trust on a scale from 1 to 5, with 1 meaning no trust and 5 absolute trust.” Trust in politi- Trust in political Trust in the na- Trust in the na- cians (2010) parties (2010) tional parliament tional parliament (2010) (1995) 3,85 4,46 5,0 5.17 5,83 6,2 BULGARIA 1,99 2,01 2,38 - CZECH REPUBLIC 2,63 2,69 3,27 3,6 ESTONIA 3,62 3,43 4,24 4,4 HUNGARY 3,12 3,14 4,22 5,0 POLAND 2,66 2,55 3,44 3,5 RUSSIA 3,09 3,11 3,58 - SLOVENIA 2,25 2,24 2,98 4,0 Source: European Social Survey; http://www.europeansocialsurvey.org (January 2012). The question was as follows: “Tell me on a scale from 0 to 10 how much you personally trust each of the institutions. 0 means you do not trust institution at all, and 10 means you have complete trust.” 322 KadarKrisztian_16_belivek.indd 322-323 323 2013.01.18. 19:05 Poland’s politics and the world crisis Jerzy J. WIATR European School of Law and Administration, Warsaw Since 2008, the crisis of world economy affected political life in several European states and resulted in the collapse of several cabinets, particularly in the economically less prosperous states of the European Union. Poland, so far, has been able to avoid the most drastic consequences of the economic crisis, but has experienced a political malaise of a different type. Its roots are mostly ideological even if the social and economic cleavages do play a role as well. Ideological character of the Polish political crisis has its roots in the complicated political history of last two decades but it also reflects much deeper divisions in the Polish society between traditional, conservative and nationalistic tradition on the one hand and the modernizing, westernizing tendencies on the other. This does not mean that social and economic factors do not play any role. They are, however, secondary factors only. The primacy of non-economic causes makes the Polish political crisis a special case. I. Successful economic transformation and its social consequences The main reason for which economic factors are not the main source of the Polish crisis is the successful – at least for the time being – management of Poland’s economy. While the present government under Prime Minister Donald Tusk deserves credit for such management, the main reason for Poland’s economic success must be traced to the consequences of the radical economic reform initiated in 1990 by the government of Tadeusz Mazowiecki and identified with the name of the powerful deputy Prime Minister and Minister of Finance Leszek Balcerowicz. Radicalism of Polish economic reform made the Polish transformation different from the way in which most of the post-communist states moved from command economy to free market one. Poland’s transition from Communist dictatorship and command economy began earlier than in the other countries of the region and took place in conditions that made Polish transformation in some respects a spe324 KadarKrisztian_16_belivek.indd 324-325 325 2013.01.18. 19:05 cial case, different from the transformation in other countries of East-Central Europe. The two most important traits of the Polish transformation were (a) the political formula of the process and (b) the radical character of economic reform. Politically, the change of the regime in Poland had its roots in the long history of democratic opposition, particularly of a powerful “Solidarity” movement, and of the persistence of the reformist wing in the ruling party. The combination of these two factors made Poland the first state in the then Soviet empire to break away from the communist system. There were two consequences of the timing of the Polish transformation. First, Poland being the first to depart from the communist rule had to travel through untested roads. There had never been a peaceful transformation of the communist dictatorship and Polish reformers had no previous pattern to learn from. Moreover, the beginning of the transformation took place when the Soviet Union was still a mighty power with its military forces stationed on the Polish territory. These considerations dictated prudence, particularly in the relations between new and old political forces. Second, both because of the uncertainty of the possible reaction of the other communist states and because of the experience of successful negotiations of the Polish “Round Table”, the early stage of the political transformation took the form of power sharing. Soon after the first, partially free, election of June 1989 (overwhelming won by the democratic opposition), Adam Michnik - in a famous article “Your President, our Prime Minister” (Michnik, 1989) - suggested a formula of power sharing, which while rejected at first, soon became the political formula for the transition. It was not a totally new idea having been suggested by reformers during the earlier stages of Poland’s protracted conflict between the communist regime and the democratic opposition, but after the election of June 1989 the time has come when it could materialize. Power sharing has never been considered a permanent arrangement but it gave Poland a precious time for early reforms. Politically, it meant the gradual transformation from the party rule to parliamentary democracy through a temporary system of “contractual democracy” (Wiatr, 1982) – a negotiated political arrangement under which power was shared by the reformist elements of the ancient regime and the moderate wing of the democratic opposition. Such temporary political arrangement lasted two years: from the formation of Tadeusz Mazowiecki’s Cabinet in September 1989 to the fully democratic parliamentary election of October 1991. During these two years the reform program was supported by the broad de facto coalition of all political forces represented in the first (“contractual”) Parliament (1989-1991), including the parliamentarians of the Polish United Workers 326 KadarKrisztian_16_belivek.indd 326-327 Party and president Wojciech Jaruzelski. The reforms received, therefore, the broadest political support possible. For two years political reforms were implemented gradually and the Mazowiecki cabinet enjoyed the political support of all forces represented in the Parliament. Only in 1990 (the first election of new president by universal ballot) and in 1991 (the first fully free election to both houses of the Parliament) was the power sharing abandoned and power fell fully in the hands of former democratic opposition. The gradual character of political transformation in Poland has been later on criticized by those who see in it a “conspiracy” between elites of both sides, but it gave the government sufficient political support for painful and difficult economic reform. I seriously doubt if such radical reform would have been possible without very broad pro-reform political alliance. Contrasted with the gradual character of the political change was the radical economic reform introduced by the Mazowiecki Cabinet and known as the Balcerowicz Plan. On December 17, 1989 the government submitted to the Parliament eleven bills, which aimed at radical transformation of Polish economy. In less than two weeks, the legislative process was completed and on 27 December the lower house (Sejm) adopted all acts of the Balcerowicz Plan. They were promptly accepted by the Senate and signed into law by President Jaruzelski. The economic reform became effective on 1 January 1990. It was the most radical jump from command economy to free market one, more radical than reforms undertaken in the other formerly communist states in the years to come. The radical nature of Polish economic reform was conditioned by the dramatic crisis of the Polish economy. No other communist state started the reform of its system in so deep economic crisis. The economy was in chaos. In 1989, monthly inflation reached 39.5% in August, 34.4% in September and 54.8% in October (Dudek, 2002: 88) and the accumulated inflation for the whole year was close to 400 percent. The consumer market was plagued by widespread lack of basic commodities. The budget deficit for 1989 was 8% of the gross national product and Poland’s foreign debt reached the level at which its servicing became out of question. Poland had to negotiate with Western creditors and with the World Bank, all of whom demanded meaningful change in the structure of the economic system. The objectives of the Balcerowicz Plan were three: (1) balancing the national budget, (2) introducing market mechanisms and (3) changing the property structure of the economy (Dudek, 2002: 89). All changes were introduced in the radical version, high social cost 327 2013.01.18. 19:05 notwithstanding. The radical reform was painful. During the first two years Polish GNP fell by 25 percent and unemployment became a serious social problem. Dissatisfaction was massive and public opinion surveys registered pessimism concerning the future. Public opinion surveys demonstrated that in 1992 the evaluation of one’s own economic situation by the Poles steadily went down and 76 percent of respondents predicted that the standard of living would continue to decline (Wiatr, 1995:127). Sociologist pointed to the contrasts between the effects of the radical economic reform and the traditional egalitarianism of the Polish society (Kolarska-Bobińska, 1988). Many commentators expressed fears about the future of Poland’s young democracy. Polish sociologist Grzegorz Ekiert predicted even that to reconstruct the economy in conditions of severe socio-economic dislocations some form of ‘coercive policy’ would become necessary (Ekiert, 1991). The international study group on East-South Systems Transformations (established by the IPSA in 1988) in its final report concluded, that “the danger of collective violence is not limited to those countries that face challenges to their territorial integrity. They are also caused by the political, educational, and social inequalities that exclude large segments of the population from effective exercise of the rights and obligations of citizenship” (Przeworski, 1995:111). The American political scientist David Ost argued that the frustration of the working class, abandoned by the parties of the Left, would produce a radical populist backlash, which could be exploited by the Right wing parties (Ost, 2005). Contrary to the worst-case scenarios, Polish democracy survived the most difficult period of radical economic reform without serious problems. Social explosion, widely feared of, has not taken place. Instead, the parliamentary election of 1993 gave power to two political parties of the opposition: the post-communist Alliance of Democratic Left and the Polish People Party, both with its roots in the former regime. Economy began to recover, with recession stopped in 1993 and the pre-transition level of GNP achieved in 1997. Unemployment, while still high, went down. Budget deficit in relation to GNP went down: from 2.8% in 1993 to 1.7% in 1997. The radical economic reform was a success. This success was due to two factors: the ability of the economy to overcome the initial problems and resume the high level of growth and the ability of the political system to channel public dissatisfaction into politically safe direction. The existence of two political parties which constituted an alternative to the politically conservative and economically liberal governments of 1991-1993 years allowed Poles to express their dissatisfaction at the ballot 328 KadarKrisztian_16_belivek.indd 328-329 boxes rather than on the streets. Democracy worked. All cabinets, regardless of their political colouring, continued the policy of economic transformation even if the Left-of-Centre ones (1993-1997 and 2001-2005) added to it stronger elements of social policy. In the later years, these achievements have not been wasted. Poland’s economy continues to grow, even during the time of the world crisis. In the years 1990-2008 the relation of Polish GNP per capita to that in the “old” member states of the European Union grew from 31 to 53 percent. Poland’s economy continued to grow during the world financial crisis, even if more slowly than before. In 2008 the GNP grew by 5.1%, in 2009 by 1.6%, in 2010 by 3.9% and in 2011 by 4.3%. Since the beginning of the financial crisis of 2008, Poland’s economy grew by 15.5 per cent. In no single year has Poland suffered economic decline. For the first time in modern history the distance between Poland and the more developed countries of Western Europe has narrowed. Sociological surveys register the growth of satisfaction and optimism – another contrast with the prevailing public mood in most of the countries of the European Union. In 2005, according to public opinion surveys conducted by the Centre for Social Opinion Research (CBOS) 49% of Poles declared satisfaction with their life and only 24 % declared the feeling of unhappiness. Such, generally optimistic perception of their life prevailed in the later years as well This does not mean, however, that Polish society and its economy are free of serious problems. The most serious of them are the growing social inequality and the existence of large stratum of people living in poverty. Measured by the Gini indicator, the economic differentiation in the Polish society grew to 0.34 in 2006 (from 0.22 in the last years of the old regime) and continues to grow ever since. Sharp differences in income distribution result in the widespread feeling of alienation among the poorest strata of the population. The poverty - while statistically less massive than in the first years of transformation - remains a very serious social problem. The number of people living in poverty fell from 13 million in 2006 to 5 million in 2012, but it still means that 14.2% of Polish citizens live in poverty and that 12.5% of all poor people in the European Union are Poles. This, however, has not resulted in the emergence of a strong political force challenging the existing economic and social system. Economically deprived in great majority abstain from politics, contributing to the record low electoral participation.1 Politically, Poland is a stable democratic state. The ruling (since 2007) coalition of the Citizens’ Platform and the Polish People Party won the parliamentary election of 2011 – 329 2013.01.18. 19:05 the first such success since the restoration of democracy in 1989. However, the paradox of contemporary Poland is that in spite of a stable economic situation the political conflict is sharper than it was before. The nature of this conflict is not economic, although socioeconomic cleavage plays some role in it. II. The nature of new political conflict The explanation of the political conflict in contemporary Poland calls for an analysis of the role played by ideological and psychological factors. It does not mean that economy and social structure lost their importance but that they no longer fully explain Polish politics. The social and economic issues can play a more important role in the near future, particularly if the economic crisis affects the standard of life of the Polish families. Such scenario cannot be ruled out but for the time being Poland’s political conflicts focus on ideological rather than economic issues. Until 2005 Poland’s politics was dominated by what has been called “the post-communist cleavage” (Grabowska, 2004). Elections were being won either by the political coalitions based on the former democratic opposition (from the communist era) era by the coalitions of left-of-centre parties with their roots in the communist system. The “post-communist cleavage” was strongly correlated with the secularization cleavage as the voters more closely identified with the Catholic Church tended to support parties of the anti-communist side of the cleavage. Cabinets were formed by coalitions formed either by the parties with their roots in the former democratic opposition (1991‑1993 and 1997‑2001) or by the parties with their roots in the old regime (1993-1997 and 2001-2005). The two presidents of this period: Lech Wałęsa (1990-1995) and Aleksander Kwaśniewski (1995-2005) were leaders of the “Solidarity” and of the post-communist Left respectively. Poland’s politics lived in the shadow of history. One of the most important consequences of the “post-communist cleavage” was that the other cleavages, while important, have not affected the coalition building. On the highly controversial issue of Poland’s access to the European Union, the anti-communist side of the cleavage was strongly divided between enthusiastic supporters of the integration and its strong opponents. When cabinets were being formed, however, history prevailed over current issues. This has changed in 2005 when the Left suffered crushing defeat (both in the parliamentary and in the presidential elections) and two parties from the Right (Law and Justice and Citizens’ Platform) became the dominant political forces. The catastrophic defeat of the 330 KadarKrisztian_16_belivek.indd 330-331 Left was in a sense a paradox. The economic situation was quite good, with the unemployment reduced and the standard of living improved. The referendum on Poland’s accession to the European Union (June 2003) resulted in the solid support for the EU and on 1 May 2004 Poland became one of the new members. In the same time, however, public opinion surveys registered a steady decrease of the support to form the government and for the ruling Alliance of Democratic Left.2 The reasons for this paradoxical situation were two. The first, and probably the most important, was the series of corruption scandals in which some middle level officials were implicated. While the leader of the Democratic Left Alliance and Prime Minister (after the 2001 election) Leszek Miller was not personally accused of any irregularities, his lack of initiative in the fight against corruption and nepotism resulted in the rapid decline of his popularity. In May 2004, he was forced to resign and was replaced by a technical cabinet led by the economist Marek Belka, but this change failed to reverse the negative trend in the political standing of the Left. The second reason was more complex. The Left has lost a considerable part of its previous strength because of a series of compromises on issues, which for its supporters were crucial. Social policy failed to produce any meaningful program aimed at reduction of growing economic inequalities and such ideological issues as liberalization of the restrictive antiabortion law of 1993 were sacrificed on the altar of obtaining the support of the Catholic Church for the European integration. Dissatisfaction with the policy of the government resulted in a split within the Alliance of Democratic Left and the formation of the Socialdemocracy of Poland, which never became a serious political force but weakened the main party of the Left. Consequently, in the 2005 elections (both presidential and parliamentary) the main dividing line was between two parties of the opposition: Citizens’ Platform and the Law and Justice. In the presidential election the candidate of the Law and Justice Party Lech Kaczyński narrowly defeated the leader of Citizens’ Platform Donald Tusk, and in the parliamentary election Law and Justice won a plurality. The two strongest parties shared several characteristics and were seen as most likely coalition partners. Both have their roots in the former democratic opposition and their main leaders had been active in Gdansk - the citadel of “Solidarity”. In the 1990 presidential election their present leaders supported Lech Walesa against Tadeusz Mazowiecki. They advocated the policy of “retrospective justice”, supporting the “lustration law” and 331 2013.01.18. 19:05 opposing the political compromise with post-communist forces. Their failure to form a coalition was due more to the political ambitions of the leaders than to serious policy differences. When negotiations over the formation of the coalition government based on the two strongest parties failed to produce an agreement, Law and Justice decided to rule in coalition with the extreme Right (the League of Polish Families) and the populists (Self Defence). The centre-right Citizens’ Platform remained the strongest party of the opposition. Gradually, relations between two strongest parties became more and more acrimonious, which was paradoxical in the sense that both the political background of their leaders (“Solidarity” activists prior to 1989) and their programs should have made them the most logical allies. In 2007, after the collapse of the ruling coalition an early election gave the Citizens’ Platform a plurality and opened the way for the formation of a new coalition of the Citizens’ Platform and the tiny Polish People Party. Four years later, this coalition won parliamentary election and remained in power for the second term – something that never happened before in democratic Poland. Between the two strongest parties sharp conflicts accumulated and created the political climate of a cold civil war, particularly after the air crash of 10 April 2010 in Smolensk in which President Lech Kaczynski, his wife and a large group of political and military personalities died. Almost immediately after the crash leaders of Law and Justice accused the government and personally Prime Minister Tusk for having caused the catastrophe. Originally, the accusation was formulated only in terms of indirect, political responsibility, but recently the Law and Justice leaders went so far as to accuse the government for conspiracy to murder the late president. Relations between two main parties reached, therefore, the point when any cooperation between them, or even normal working relations, became impossible. The new cleavage has become deeper and more radical than the old (“post-communist”) one. In no other period of the democratic Third Republic, were relations between the ruling party and the main opposition party so bad. The main reasons for the radicalization of political conflict in Poland are not economic, but economic factors do play some role as well. The main areas of conflict are: (a) interpretation of human rights, including the rights of minorities and the issue of “retrospective justice”; (b) Poland’s relations with her strongest neighbours – Germany and Russia; (c) conflicting views on the future of the 332 KadarKrisztian_16_belivek.indd 332-333 EU (strong or weak), and (d) the issue of social and economic polarization and the direction of economic policy of the government. The last two issues are likely to become even sharper in the next few years. Relatively good financial situation of Poland does not mean that there is no need for painful means directed at reducing public debt and balancing the state budget. Who will pay for this, is likely to become a very divisive issue. Changes taking place in the European Union will also contribute to the deepening of political cleavage in Poland, as the Law and Justice party is strongly opposed to any change which would increase the prerogatives of the EU at the expense of the prerogatives of the national governments. The main dividing line, however, is ideological and cultural rather than social and economic. The Citizens’ Platform supports the process of European integration, stands for reconciliation with Poland’s traditional enemies – Germany and Russia – and is moderate on such issues as gender equality, the rights of minorities (including homosexuals) and accepts the constitutional principle of neutrality in relations between the state and the churches, particularly the powerful Catholic Church. As such, the Platform is a party of modernization and has its main support among better educated (as well as economically better-of ) strata of the population. The Law and Justice party cultivates its image as the party of Polish nationalism and identifies it with strong links to the Catholic tradition. It is openly hostile toward Russia, whom some of its leaders blame for the Smolensk crash of 10 April 2010. Repeatedly, party leaders, including its chairman Jarosław Kaczyński, blame the government for having accepted the “German-Russian condominium” over Poland. Toward the European Union the Law and Justice keeps a distance. While it does not postulate Poland’s withdrawal from the Union, it strongly opposes all moves directed at strengthening the Union. As such, the party represents the conservative, nationalistic and clerical tradition of the Polish Right. The paradox of the Law and Justice role in Polish politics is its inability to form broader political alliances. This is not a consequence of the party’s program, elements of which one can find in the position taken by some other parties, particularly the Polish People Party. It is rather the consequence of a bitter experience of the short-lived government of Jarosław Kaczyński (2006-2007), when Special Forces were being used to harass not only political opposition but also even leaders of the smaller parties of the ruling coalition. The political isolation of the Law and Justice (zero coalition capability) makes it unlikely that this party would return to power in the 2015 parliamentary and presidential elections. If, however, 333 2013.01.18. 19:05 the Citizens’ Platform loses a considerable part of its strength, the broad coalition of proEuropean parties may emerge as the only solution to the protracted political crisis. One must, however, be aware of the possibility of a pessimistic scenario. If the European crisis deepens and Poland suffers from it more than before, a radical shift in Polish politics cannot be excluded with the Law and Justice or some new radical populist force benefiting from the crisis. Such scenario, while not very likely, cannot be ruled out. After all, we sail in the same boat on the stormy waters of European politics and economy. Notes 1 Eurostat data, quoted in Gazeta Wyborcza February 9, 2012. 2 After having served two terms, Aleksander Kwasniewski was no longer eligible for the presidency and the only candidate of the Left Marek Borowski finished fourth in the first round of the presidential election. References Dudek, Antoni (2002) Pierwsze lata III Rzeczpospolitej, 1989-2001 (First years of the III Republic 1989-2001), Krakow: Arcana Publishers Ekiert, Grzegorz (1991) “Democratization Processes in East-Central Europe: A Theoretical Consideration”, British Journal of Political Science, vol.21, no.3, pp.285-313 Grabowska, Mirosława (2004) Podzial postkomunistyczny. Spoleczne podstawy polityki w Polsce po 1989 roku (Postcommunist cleavage: social bases of politics in Poland after 1989), Warsaw: Scholar Publishers Kolarska-Bobińska, Lena (1988) “Social Interests, Egalitarian Attitudes and the Change of Economic Interests”, Social Research, 55, pp. 111-139 Michnik, Adam (1989) “Wasz prezydent, nasz premier”, Gazeta Wyborcza, July 3, 1989 Ost, David (2005) The Defeat of Solidarity: Anger and Politics in Postcommunist Europe, Ithaca: Cornell University Press Przeworski, Adam et al. (1995) Sustainable Democracy, Cambridge: Cambridge University Press Wiatr, Jerzy J. (1982) “Die polnische politische Krise: Erfahrungen aus Geschichte und Perspektiven des Kompromises” (“The Polish political crisis: lessons from the past and perspectives of compromise”), Journal für Socialforschung, Vienna, Vol. 22, Nos 1-2, pp. 60-70 Wiatr, Jerzy J. (1995) “Social Conflicts and Democratic Stability: Poland in Comparative Perspective”, in: Egbert Jahn and Rudolf Wildenmann (eds), Stability in East Central Europe?, Baden-Baden: Nomos Verlagsgesellschaft, pp. 124-140 334 KadarKrisztian_16_belivek.indd 334-335 335 2013.01.18. 19:05 Farewell to the Carpathian Tiger: Impact of the Global Crisis on Slovakia1 Zsolt GÁL Department of Political Science, Comenius University, Bratislava Introduction Slovakia was one of the fastest growing economies in the EU when hit by the crisis in late 2008. The structure of this growth was healthy, the financial sector stable, and public finances consolidated thanks to the run up to euro accession. There was no bank with the need of government bail-out, the share of nom performing loans remained relatively low and public debt was one of the lowest within the EU. Thus, there was basically no financial or debt crisis in Slovakia. However, the collapsing foreign demand resulted in a dramatic decrease of industrial production which has been highly dependent on export. The small and open Slovak economy, vulnerable to external shocks faced a deep recession and fast decline of employment in 2009. On the other hand, within a year Slovakia recovered strongly and at a more rapid pace than most other economies is has become one of the fastest growing EU member states once again. In spite of this remarkable resilience, the future prospects are rather bleak. The return to growth was not followed with significantly decreasing unemployment, and the expansionary budgetary policies resulted in sharp increases of public debt wiping out the fiscal room gained before the euro accession. Slovakia also faces particularly serious long-term sustainability problems due to the combination of rapid aging process and the increasing share of Roma population with disastrously low labour market participation rates. The once beneficiary membership in the euro zone became more problematic because of the various rescue funds. These not only imposed a heavy short-term burden on public finances but represent a permanent risk of losses if any of the countries bailed out goes to sovereign debt default. Finally, they were no major structural reforms since 2006. On the contrary, the current government – because of its This work was supported by the Slovak Research and Development Agency under the contract No. APVV0413-11. 1 336 KadarKrisztian_16_belivek.indd 336-337 337 2013.01.18. 19:05 desperate attempt to consolidate public finances but also for purely ideological reasons – is systematically destroying all the structural reforms which made Slovakia the successful country, nicknamed Carpathian or Tatra Tiger. I. The Slovak economy was healthy and therefore resilient to the crisis The Slovak economy was the fastest growing EU economy in the decade between 2001 and 2010 (Unicredit Bank, 2012: 1). The driving force of growth (of almost a half of the growth) was undoubtedly the manufacturing which managed to increase labour productivity by almost 12% annually and it ensured for Slovakia the highest labour productivity in manufacturing among all CEE countries (Ibid).Before the full “arrival” of the crisis in 2009, economic growth was driven by a strong inflow of FDI in export oriented manufacturing, in particular in automotive sectors and consumer electronics (flat screens) – since the crisis, the inflow of large, wage-cost sensitive and job-creating FDI projects has come to a standstill and price competitiveness has deteriorated somewhat (OECD, 2012: 15). The economic openness has been increasing almost every year since the existence of independent Slovak Republic (1993) – the notable exception is again 2009 – and in 2010 it reached 168% of the GDP (Kavický, 2011: 249). The export to GDP ratio above 80% has been one of the highest levels within the EU. Up to 2009 the export oriented economic expansion fuelled by the increased inflow of FDI (mostly green field investments) led to strong economic convergence, created more than 300 thousand new jobs, halved the unemployment rate and facilitated fiscal consolidation paving the way to the euro accession.(Table 1.) The Slovak industrial production was not only increasingly dependent on foreign demand, particularly in the case of its two leading sectors but also highly concentrated. The top ten exporters (usually large multinational companies) accounted for almost 40% of the total merchandise export and in the case of the automotive and electronics companies the share of export revenues on total revenues was over 98 percent (see Table 2.). To put it simple: the strength of the Slovak economy became also its vulnerability – they are two sides of the same coin. In 2009 the collapsing foreign demand resulted in deep recession. The export of goods – used to double digit growths during the previous years – first slowed to a mere 4.6 per cent increase in 2008 and then plummeted by 19.8 per cent during 2009 but was 338 KadarKrisztian_16_belivek.indd 338-339 back to almost 23% growth a year later (Morvay et al. 2011: 70). The industrial production went through a similar roller coaster.1 (Table 2.) The vulnerability of the Slovak economy to external shocks is well illustrated by the inability of the government to prevent the deep recession. The first Fico government (2006-2010) allowed the sharp increase of budget deficits to around 8% of the GDP (or 5 billion euro) in 2009-2010 but it barely helped. Given the structure of the economy and its dependence on foreign consumers, it is plain to see that expansionary domestic fiscal policy cannot possibly substitute the role of exports. In simpler terms, the Slovak Government cannot purchase 600,000 cars and 9 million LCD TV sets instead of foreign consumers. On the other hand, thanks to increasing foreign demand from 2010 Slovakia recovered strongly and at a more rapid pace than most other economies becoming one of the fastest growing EU member states once again. In other words, shrinking foreign demand was the only major reason of economic problems, there was no financial or sovereign debt crisis in Slovakia. The financial sector remained remarkably stable and public finances were consolidated thanks to the run up to euro accession. Apart from the foreign demand only decreasing labour migration and inadequate government policies deepened the economic problems (for the later see the last part of the chapter). Regarding labour migration, between 2004 and 2007 it helped to ease the tensions at the domestic labour market, that time about half of the employment growth was due to the increase in the numbers of Slovak citizens working abroad (Gál, 2012: 236-237). The labour migration from Slovakia reached its top during 2007 when approximately 250 thousand people (roughly one tenth of total employment) worked in foreign countries, mostly in other EU member states (ibid).From 2008 their number started to decline due to various reasons and it contributed to the increase of unemployment.2 There has been no sign of banking crisis in Slovakia. Nothing can illustrate better the stability of the banks than the fact that in 2011 the Slovak banking sector celebrated its highest profit ever at 674 million € (Kláseková, 2012). The share of non-performing loans (NPL) in total loans in spite of its rise after 2008 remained relatively low: NPLs to households reached 4.8% in 2011; in the case of mortgage loans the corresponding share was still fewer than 3 per cent (Národná banka Slovenska, 2012: 31-33.) The average share of NPLs (companies and households together) was around 5% and falling since 2011; this is one of the three lowest rates (with the Czech Republic and Estonia) among 339 2013.01.18. 19:05 the 10 Central and Eastern European new member states of the EU (CEE-10), other countries of the group had two or three times higher NPL rates (Čech et al. 2012: 3 and OECD, 2012: 15). According to the latest Vienna Initiative Report Slovakia was the only CEE-10 country which has not witnessed funding withdrawal by large Western banks, on the contrary, it had both funding and credit growth between 2010 and mid-2012 (Vienna Initiative 2012: 2).3 Deleveraging and related fund withdrawal by parent banks from the euro area (they largely control the CEE banking sectors) could result in credit contraction affecting the overall economic developments as many examples show it. But the “countries with banking sectors which largely rely on the domestic funding base (low loan-to-deposit ratios) and also have relatively sound loan portfolios (i.e. low NPL ratios) should be hit less severely” (Čech et al. 2012: 3). This description perfectly matches Slovakia; with a loan to deposit ratio at around 90%, the banking sector does not rely on foreign funding (OECD, 2012: 15). In the CEE10 region bank loans are more than fully covered by deposits only in the Czech Republic and Slovakia and to an almost full extent also in Poland, the excess of lending over deposits in all the other countries is largely funded by the Western parent banks. “Finally, banks operating in the three euro-area CEE countries (i.e. Slovenia, Slovakia and Estonia) can directly participate in Euro system refinancing operations, which should largely facilitate their funding situation and costs” (Čech et al. 2012: 7).4 II. Comprehensive in-depth structural reforms behind the success The pre-crisis economic boom was mostly the consequence of the in-depth structural reforms of two consecutive governments (led by Mikuláš Dzurinda) especially the second Dzurinda government’s (2002-2006) comprehensive and ambitious package of reforms.5 Its most important parts were the following:6 Tax reform: From 2004 the government implemented a fundamental tax reform which unified the rate structure of the tax system introducing a flat tax by setting the tax rates of the personal income tax (PIT), the corporate income tax (CIT) and the value added tax (VAT) all equal to 19% (Brook and Leibfritz, 2005: 5). This reform has made the tax system much simpler and more transparent because together with the introduction of the flat 340 KadarKrisztian_16_belivek.indd 340-341 tax most exceptions, exemptions and special regimes were eliminated. The reform shifted the tax burden from direct to indirect taxes and the declining income tax rates were also partially compensated by broadened tax bases to achieve fiscal neutrality. To end with the double taxation of one income (where possible) the reform eliminated dividend tax, gift tax, inheritance tax and real estate transfer tax. Using the words of Ivan Mikloš; minister of finance during the reform: “concept of the tax reform was based on principles of justice, neutrality, simplicity, exactness, effectiveness and elimination of double taxation. Thus, on principles that are highlighted in almost each tax theory textbook but hardly any country adheres to these principles in its tax system” (Mikloš, 2008: 64).7 Pension reform: A three-pillar pension system was created, while the first pillar was the continuation of the former pay-as-you-go system with some modifications and the second obligatory capitalization pillar (based on pension savings) was newly created. The third pillar of voluntary pension savings was added and supported with some increased tax advantages. Half of old-age social security contributions (9% from 18% - deducted from the gross wage) had been transferred to the new pension fund management companies (PFMC) in the second pillar which was obligatory for everybody, who entered the labour market after 30 June 2005 for the first time but free to choose for those who already were on the market (they had to decide until the same date).Interest in entering the second pillar was relatively high, more than 1.5 million people opted for one of the six new PFMCs. The transitional deficit in the first pillar (around 2% of the GDP annually) was covered from privatization revenues.8 Health-care reform: The reform tried to consolidate the financial situation of the sector by bailing out the indebted providers but transforming them to nonprofit or joint-stock companies and facing them with hard budget constraints to avoid the accumulation of new debts. The government also tried to privatize the providers or placed them to the ownership of local or regional governments or nonprofit organizations to ensure that real and responsible owners will look over their finances. Health insurance companies were also transformed into joint-stock companies. Small, rather symbolic fees were introduced for consultation with physician (primary care) or visiting a specialist, for drug prescription, for staying in a hospital (i.e. room and board) and for transport. The main reason was to decrease the excess demand, give additional resources to doctors/hospitals (they kept the fees) but also to demonstrate that health-care is not free of charge and give incentives to the people to improve their lifestyles.9 341 2013.01.18. 19:05 The reform was not completed as the government failed to transform the largest university hospitals into joint-stock companies, and the state General Health-care Insurance Company remained the single dominant player on the (insurance) market, controlling approximately two-thirds of the population – so there was no effective competition. In spite of this half-way ending many economic indicators improved significantly.10 Reform of the social system and the labour market: The main philosophy under the motto “working will pay off” was to motivate people to actively seek jobs instead of passively waiting for welfare benefits. A more Flexible Labour Code was adopted to liberalize labour market, conditionality and incentives (activation benefits) were strengthened in the welfare system and various measures were adopted to decrease the possibilities to abuse it (Beblavý, 2007: 3-5). “A principle of income differentiation between those who work and those who do not and also between those who want to work and be active and those who do not was a significant part of the reform.” (Mikloš, 2008: 76).11 Fiscal decentralization: More than 90% of the personal income tax was assigned to local (70.3%) and regional (23.5%) governments (responsible for local hospitals, social services, planning, roads and culture as well as primary and secondary education) which received complete autonomy concerning the local and regional taxes, primarily the real estate tax at the local level and vehicle tax at the regional level (Beblavý 2005: 34). Concerning the political economy of the reforms it is important to note that the (centre right) political parties that implemented the reforms never had the support of the majority of Slovak voters. It is a paradox that the majority was against the political parties with the reform agenda but not against the reforms themselves. At least according to many public opinion surveys, like the one conducted in December 2005 by the Institute for Public Questions (Inštitút pre Verejné Otázky). In this survey the respondents viewed all the reforms in Slovakia, with the notable exception of the healthcare reform, as being positive although in need of fine-tuning (Jevčák 2006: 1-2). The healthcare reform was perceived much more negatively and was rejected by a clear majority of respondents (74% of them saying that the reform is wrong, it should be substantially revised). However it remains a fact that in 2002 the four parties of the reform coalition (second Dzurinda government) managed to ensure the majority of parliamentary seats by gaining just 42.5% of the popular vote. It was possible only because the anti−reform populist, nationalist or left wing parties saw too many of their voters’ ballots (over 13% of all ballots) forfeited as 342 KadarKrisztian_16_belivek.indd 342-343 their fragmented forces failed to get over the prescribed 5% threshold to the parliament. After almost four years in government the same reform parties ended up with 39.76% of the votes (one of them did not make it to the parliament with only 1.42% of the votes). Therefore, interpretations like they lost the elections because of the reforms are much misleading. Actually, they could not lose as they never really won before. And a little 2.5 percentage point loss after four difficult years in power is rather a very good result.12 To put it simply, the political feasibility problem of structural reforms in Slovakia is not that the reform-parties tend to lose elections after they implemented the reforms but rather that these parties never had a majority support from the electorate. Their success in the 2010 general elections was similar to that in 2002: they gained 44.2% of popular vote and this was enough to a small majority in the parliament, again, due to forfeited votes for small parties under the threshold. But this time the (Radičová) government was not able to survive with its tiny majority because of internal conflicts and a strong, unified opposition, and in late 2011 it collapsed over the vote on the issue of Slovak agreement with the euro rescue fund (EFSF) enlargement – the vote was also a confidence vote against the ruling cabinet. The majority of the Slovak population was never supportive towards structural reforms and the neoliberal free-market ideology behind them; it rather shared paternalist, statist and egalitarian attitudes (and voted accordingly). Opinion polls also revealed that paternalism usually coincides with values such as authoritarianism, ethnic intolerance and antiWestern attitudes. Many surveys carried out by the Institute for Public Affairs have documented the continuously high prevalence of paternalism and egalitarianism in Slovakia during the last two decades. Paternalistic values for example were embraced by 65.4% of respondents in October 1997, 66.1% in January 1999 and 63.9% in March 2000; as far as egalitarianism is concerned, identical surveys produced the following figures: 51.7%, 58.9% and 55.8% (Krivý, 2001: 300). During a 2003 survey, to the question of “to what degree was it inevitable to change the economic model from before 1989?” most respondents (particularly older ones) answered “none” or “cosmetic”, while only a minority of respondents preferred free market economy.13 (Table 3.) Hence, there has been in important paradox in Slovak politics during the transition years: reformers were building market economy in an environment where the majority actually opposed it. They preferred something very different, ensuring a fertile soil for populism 343 2013.01.18. 19:05 (but also nationalism and authoritarian tendencies). The paternalist, statist and egalitarian attitudes and values remained remarkably stable during the years, in spite of clear economic successes that followed the market reforms. The change after the 2002-2006 reforms was dramatic. During the late 1990s Slovakia was lagging behind its neighbours from the so-called Visegrad Four group (Czech Republic, Hungary, Poland and Slovakia) in democratic transition, Euro-Atlantic integration (OECD, NATO, and EU) and economic development. At the turn of the millennia all Slovak economic indicators (GDP growth, public deficit, public debt, credit rating, interest paid on government bonds, employment rate, FDI inflows etc.) were the worst or the second worst within V4. After the reforms almost all indicators became the best or second best. Slovakia joined OECD and NATO later than its V4 neighbours, entered the EU at the same time (2004) but was first in euro adoption (from 2009). While in 2000 Slovakia had definitely the worst rating among all V4 countries after 2006 Slovakia ranked first in the region (Mikloš, 2008: 60). However this development did not change the attitudes, values and political preferences of the voters and in 2006 the majority of them voted against the reform-parties once again. There were no major structural reforms since then. In spite of the past performance and the remarkable resilience of the Slovak economy during the crisis, currently there is no chance for the return of the Tatra Tiger (strong economic growth and fast convergence) without another set of deep (and often unpopular) structural reforms. In the absence of new reforms the effect of the old ones (together with the competitiveness of Slovakia) would gradually evaporate anyway let alone the fact that the current government decided to systematically destroy them. Although the growth returned after 2010, it has been solely driven by increasing foreign demand while Slovakia is coping with its unsustainable public finances (sharp increase in government debt) and a frozen labour market. Actually, the situation on the labour market continued to deteriorate in 2010 and stabilized only during the following year but there were strong sings of another negative development from late 2012. “The unemployment rate rose significantly during the crisis and is now the fifth highest among OECD countries at 13.8%. Long-term and youth unemployment rates are particularly high by OECD standards. The incidence of long-term unemployment was twice the OECD average and the youth unemployment rate was the third highest in the OECD in 2011. The share of low educated workers in total unemployment amounts to around 60% and the skills mismatch has been aggravated. The Roma population is de facto excluded from the labour market with an unemployment rate above 70%” (OECD, 2012: 17). It is not surprising that un344 KadarKrisztian_16_belivek.indd 344-345 der these conditions the domestic demand has remained weak. The rise of precautionary saving, the increase in the VAT rate, the wage cuts in the public sector and stagnation of wages in the private sector as well as higher inflation also contributed to weak demand of the households. Under these conditions the growth remains exclusively dependent on the increasingly uncertain foreign demand.14 III. First the euro zone was a safe haven but later also the source of risks The robust economic growth and related convergence and consolidation of public finances enabled Slovakia to fulfil the Maastricht Criteria and join the monetary union as the first V4 country. As Figure 1 illustrates Slovakia was the first country adopting the euro whose currency has followed a trend nominal appreciation over several years (European Central Bank, 2008: 5). The appreciation process was so strong that even the central parity within the Exchange Rate Mechanism (ERM II) was revaluated – also the first precedent within the EMU. The continuous appreciation increased the relative purchasing parity of Slovak wages and put downward pressure on inflation but also questioned future competitiveness. The neighbouring countries experienced significant depreciations during late 2008 and 2009 (up to 20-25%) but Slovakia (first with a fixed conversion rate and later as a member of the euro area) was unable to adjust to the foreign trade shock this way. Thus, the relatively strong conversion rate (and previous appreciation) could theoretically seriously harm the Slovak export and decrease its competitiveness vis-à-vis its neighbours (except the EMU member Austria). In reality, however Slovakia recovered a bit earlier and at a more rapid pace after the 2009 recession than its two neighbours, Hungary and the Czech Republic (they have similar degree of economic openness; Poland with a large domestic market with 38 million consumers is a different category). The Slovak economy managed to maintain its competitiveness in spite of the euro entry. The main cause behind was the above mentioned very strong labour productivity growth (especially in manufacturing) but also wage moderation from 2009. The structure of V4 economies, notable the dependence on imports which cannot be substituted (import of inputs in the case of many industrial producers, but also the import of energy sources like oil, natural gas and nuclear fuel) also limited the positive effects of depreciations.15 345 2013.01.18. 19:05 What is crucial for the small, open and therefore vulnerable Slovak economy; the introduction of the euro eliminated transaction costs, exchange rate volatility and the possibility of speculative attacks on the currency (previously guarded by the Slovak national bank’s relatively minor foreign reserves). Big multinational investors producing almost exclusively for export were strongly in favour of euro adoption knowing these advantages. Another, usually forgotten benefit related to the euro accession was the fact that Slovakia managed to avoid large indebtedness in foreign currencies. In other new member states – with the exception of the Czech Republic – the share of loans denominated in foreign currencies (to households, public and private sectors) increased significantly posing a critical challenge to the stability of financial sector, effectiveness of own monetary policy but very often also to the financial situation of households and the sustainability of public finances. Thanks to structural reforms and the run up to euro accession Slovakia successfully cut inflation, consequently there were no major differences in the interest rates between loans denominated in domestic or foreign currencies. Indebtedness in foreign currencies remained low but it would not be a problem anyway as the country joined the euro zone in 2009. At the beginning of the crisis the euro accession was rather a stabilizing force but the deterioration of the euro area sovereign debt crisis made it more problematic by increasing the pressure on and the risks for Slovak public finances. On the one hand the crisis increased the Slovak public debt due to various guarantees and capital injections to the newly created rescue funds (EFSF, ESM); on the other it resulted in increased risks of direct immediate financial losses. The temporary euro rescue fund EFSF (European Financial Stability Facility) issues are backed by guarantees given by the 17 euro area Member States for up to € 780 billion in accordance with their share in the paid-up capital of the European Central Bank, thus the Slovak guarantees amounted € 7,728 billion (EFSF, 2012: 2). Under the agreement on the permanent euro rescue fund, the European Stability Mechanism (ESM), Slovakia has the obligation to put € 659.2 million in cash. As Slovakia’s total obligation is 5.8 billion, it could be asked to put additional (“callable”) capital to the new fund.16 If any of the countries which were bailed out defaults on its debts, the losses to the Slovak budget will be huge. The most discussed issue has been the possibility of Greek default. The possible direct losses from it might be up to 701 million € from the second Greek bailout package provided by the EFSF according to the estimates of the Institute for Financial Policy at the Slovak ministry of finance (Bugyi and Franek, 2012). While the fact that 346 KadarKrisztian_16_belivek.indd 346-347 Slovakia was the only Eurozone country that did not take part on the first 110 billion Greek bailout package (Greek Loan Facility, GLF), provided by EMU members (80 billion) on a bilateral base and the IMF, would limit the possible further damage to Slovak public finances; there are other channels through direct immediate losses can appear: • Losses due to the ECB’s direct exposure to Greek government bonds. The ECB purchased these bonds on the secondary market as part of its Securities Market Programme. In case of Greek default ECB might have some losses, which can decrease its capital, EMU members – as its shareholders – could be asked to increase it. Share of Slovakia on ECB’s capital is 0.6934%, (without Greece 0.71%). • Losses due to the ECB’s indirect exposure to Greek government bonds. The European Central Bank accepted Greek government bonds as collateral to its loans to (mostly but not necessary exclusively) Greek commercial banks (these banks borrowed over € 80 million from the ECB using its Long Term Refinancing Operation facility). If they fail to pay back the loans, the collateral goes to the ECB but in the case of Greek sovereign default this collateral might be more or less worthless. • Losses as a consequence of the ELA (Emergency Liquidity Assistance) program used by the Greek national bank (member of Euro system – the European System of Central Banks) to provide liquidity to Greek commercial banks hit by the crisis. • Although there is very low possibility but the losses of the IMF (and Slovakia as a shareholder) cannot be excluded from the list. • The direct costs of Greek sovereign debt default alone are somewhere between few hundred million and 2 billion euro for Slovakia. Any other default might have similar or even bigger, basically devastating consequences for Slovak public finances. IV. Long-term sustainability problems in Slovakia The combination of rapid aging process with the rising share of Roma ethnic community characterized by disastrously low labour market participation rates poses a particularly serious challenge to the long-term sustainability of public finances in Slovakia, especially to the pay-as-you-go state pension system. Since the existence of the independent Slovak Republic (1993) the number of public pensioners is increasing by around a thousand every single month. Between 1994 and 2011 the number of old age pensions increased by more than 200 thousand. In the future the aging process will accelerate. As the Table 4. demonstrates, Slovakia will face drastically worsening old age dependency and economic 347 2013.01.18. 19:05 support ratios. According to the projections of the Ageing Working Group (within the European Commission’s Economic Policy Committee) Slovakia will have the second largest increase of the old-age dependency ratio within the European Union (EU-27) as well as the worst ratio between contributors for public pensions and pensioners in 2060 (European Commission, 2012: 324, 338). While today there are more than 160 contributors for 100 pensioners (actually it means that the ratio is already below 2 to 1) in 2060 only 74 contributors are expected to finance 100 pensioners on average.17 (Table 4.) With such a dramatic future prospects one would expect comprehensive government policies fostering parametric and paradigmatic changes in the pension system. These should include a strong second pillar with pension funds where contributions are gradually accumulated in personal saving accounts. This pillar is much less dependent on demographic changes and therefore contributes to the long-term sustainability of the pension system. In reality the Fico government was doing just the opposite: in 2012 within its consolidation package it more than halved the contributions to the second pillar from 9 to 4 per cent of the gross wage (see Table 5. about the consolidation package below). Further reductions cannot be excluded as cutting these contributions is the easiest way to reduce the budget deficit. Every reduction by one percentage point keeps an additional 100 million euro in the pockets of the public Social Insurance Company. Of course the positive shortterm effects for public finances are made at the expense of long-term sustainability as they increase future liabilities of the first pillar. The second challenge to the long-term sustainability of public finances is the rising share of the underemployed Roma ethnic community. The share of Roma in Slovakia is one of the highest in the world. In the 2011 Census 105.738 Slovak citizens (2 per cent of the total) identified themselves as Roma (Štatistický úrad Slovenskej republiky, 2012: Sčítanie). However estimates based on perception (identification by others) put much higher numbers. The Open Society Foundations Data Set estimated the number of those perceived (identified by others) as Roma between 350,000 and 370,000 (around 6.67% of the population), Slovakia with this percentage is among the top five countries with the highest share of Roma to total population.18 The 2011 UNDP/WB/EC survey observed much worse Roma employment and unemployment rates than the averages for Non-Roma populations in every surveyed country. The labour market performance of Roma in Slovakia was particularly alarming. With 15% employment 348 KadarKrisztian_16_belivek.indd 348-349 and 70% unemployment Slovakia had the worst rates within the group of former communist Central and Eastern European countries with large Roma populations. A study carried out in Slovakia showed a similarly dark picture. According to its estimates, between 2006 and 2010 the Roma employment rate was about 10% compared with 60% of non-Roma and the Roma unemployment rate was about 46% compared to 10% of non-Roma (Marcinčin and Marcinčinová, 2009: 4). The staggering cost of non-inclusion of the Roma was estimated between 7 to 11 per cent of GDP; interestingly the majority of it is not due to the potential savings on social benefits (although the Roma “consumed” 30% of the total), but the potential increase of employed workforce in Slovakia and the related jump in GDP (ibid. 4-5).19 The share of Roma population has been increasing in Slovakia during the last decades due to above-average (although also declining) fertility rates. The total fertility rate of Roma women in Slovakia is estimated to be between 2.0 and 2.5 (children per woman), considerably higher as the national average around 1.3 (Šprocha, 2011: 124).Considering that Roma fertility rates are going to stay well above the average, the share of Roma is estimated to rise in the future. A projection by the Demographic Research Centre projected an increase of Roma population (based on identification by others) from 385 thousand (7.2%) to around 520 thousand (9.6%) between 2002 and 2025 (Vaňo, 2002: 9-11). The rising share of Roma – taking to account that their low labour market participation (and related welfare-dependence) is likely to remain unchanged – will probably limit the needed employment growth and put rising pressure on welfare expenditure. Only comprehensive policies might have the potential to alter the development. These should include various steps supporting large scale job creation for people with low education and increased incentives in the welfare system to make work much more preferable than welfare benefits. However, currently the development is going the opposite direction (high and increasing tax wedge on labour cost, adaption of more rigid Labour Code, increasing minimum wage and no major push toward conditionality and work incentives in the welfare system). V. The consolidation of public finances with questionable effects The newly established Fiscal Responsibility Board in its first report on long-term sustainability of public finances (late 2012) concluded that under a baseline scenario (all policies unchanged) the public debt in Slovakia will reach an astronomic 593% of GDP in 2061 349 2013.01.18. 19:05 (Rada pre rozpočtovú zodpovednosť, 2012/a: 5). Of course, as the report also stressed, it is highly hypothetical because financial markets would refuse to finance the Slovak government at much lower levels. But it is good to illustrate the mounting pressure on public finances. According to the Board’s report keeping the public debt under the upper debt limit prescribed by the constitutional law adopted last year (i.e. 60% of GDP gradually declining to 50% of GDP until 2028) requires an additional annual budget consolidation (decreasing the expenditure and/or increasing the revenues) at 6.8% of GDP (ibid.). Apart from long-term sustainability problems, the deficit reduction to reach the below 3% of GDP deficit target (during 2013) is essential to comply with the EU requirements, but also to prevent the public debt from reaching the upper debt limit defined in the new Fiscal Responsibility Act. Breaking the rules will result in sanctions both at EU and national level.20 It seems to be that there is no alternative to continued fiscal consolidation. Otherwise the government risks not only the possible sanctions from EU and national institutions but also exploding public borrowing costs. The spread of Slovak government bonds over German reference bonds increased to more than 300 basis points by mid-2012 (from around 100 basis points at the beginning of 2011), the sixth highest absolute rise in the euro area (OECD, 2012: 18-19). Although this happened mostly due to the decline of interest paid on German bonds (which became a safe haven for investors) and not due to significantly increased interest on Slovak bonds; the market remains volatile because of large uncertainty. Any sign of hesitating decision makers reluctant to consolidate public finances could result in a large increase of public borrowing costs. Paradoxically, the consolidation of public finances rests on the shoulders of the new, second Fico government (from 2012) which has to clean the mess after the first Fico government (2006-2010). The later inherited the economy and public finances in a very good shape (Table 1.) but was running expansionary fiscal policy from the very beginning. Although the deficits were relatively low in 2007-2008 (-1.8 and -2.1% of GDP); it is necessary to remind that this happened during the times of record economic growth and the run up to euro accession. A question arises: How high the economic growth should be to have a surplus or at least a balanced budget if a 10.5% GDP growth (2007) is still not enough? In the second part of his first term, the Fico government continued to increase public expenditure almost like during the boom years and this irresponsible policy resulted in huge deficits around 5 billion euro or 8% of the 350 KadarKrisztian_16_belivek.indd 350-351 GDP. Public debt was increasing very fast and as a percentage of GDP almost doubled between 2008 and 2012. While at the beginning of 2009 decision makers could be shocked by the unpredicted economic decline, later rather political reasons explain the missing consolidation. They were five different elections in row (presidential elections followed by elections to the European parliamentary and regional elections in 2009 and parliamentary elections followed by municipal elections in 2010), so it is quite clear why the incumbent government was reluctant to consolidate. It is also important to note that there was no bank bailout in Slovakia which could contribute to the dramatic increase of public deficit or debt. To sum up, the first Fico-government applied expansionary fiscal policies from the beginning to the end, during the times of record growth as well as during the deep economic recession and slow recovery. Although it was a coalition government of three parties, the dominant one led by the prime minister controlled all key economic ministries (like finance, economy and labour, social affairs and family) so one can hardly blame the smaller coalition partners for fiscal policy results.21 Now the second, one-party Fico-government is under increasing pressure from all sides to consolidate and it seems to be determined to do so. The problem is not effort and devotion any more, rather the structure of the consolidation package (see Table 5. below) – for many reasons: First, the whole consolidation process is conducted on the revenue side. According to the government’s budget proposal, in 2013 the revenues of the public sector are projected to increase by more than 2.1 billion euro and the expenditure by over 0.5 billion euro compared to the estimated levels in 2012 (Vláda SR, 2012: 9). Thus, there is no reduction in public spending in absolute terms, the expenditure is planned to decrease just as a share of GDP (by a mere 0.6 percentage points) – even this of course requires the planned 2 per cent GDP growth to materialize. The problem is that the great majority of international literature – underpinned with many empirical studies – suggests that successful fiscal consolidations were driven by spending cuts and to a lesser extent by revenue increases: “As for fiscal adjustments, those based upon spending cuts and no tax increases are more likely to reduce deficits and debt over GDP ratios than those based upon tax increases. In addition, adjustments on the spending side rather than on the tax side are less likely to create recessions” (Alesina and Ardagna, 2009: 1).22 (Table 5.) 351 2013.01.18. 19:05 Second, the mix of the measures on the revenue side might hinder future growth prospects because it concentrates on higher taxation of labour and companies which create jobs. The tax wedge on labour cost in Slovakia is already very high while there is some room to increase other taxes. The OECD warned the Slovak government that alternative tax measures less harmful to growth exist: “On the revenue side, tax increases should focus on the less distortive taxes, such as property, consumption and environmental taxes (...) Slovakia has fairly low tax receipts from property of around 1% of total tax revenues, a quarter of the OECD average. Increasing property taxes to the OECD average would raise government revenues by 0.6% of GDP” (OECD, 2012: 13,24). Originally a new real estate tax based on the market value of property was considered by decision makers but later it was not included in the consolidation package. On the other hand, the government decided to increase taxes and contributions to all categories of workers (the regularly employed – standard labour contracts, the self-employed and those on so-called working contracts) and employers. This can undermine employment growth while the planned higher revenues are still at question. The newly established Fiscal Responsibility Board in its first report on the proposed budget cautioned about the possible outcomes of tax increases. They were too many large changes in the legislation which might result in dynamic effects as the targeted groups will try to minimize the increase of their tax obligations (Rada pre rozpočtovú zodpovednosť, 2012/b: 5). We can expect increased tax optimization attempts in the case of bigger companies but also moves to the shadow economy in the case of SMEs and self-employed. Finally, the effective taxation of the banking sector has been increased to the level that seriously threatens properly functioning financial intermediation which is essential in a market economy (especially in a country without a relevant stock exchange).According to the analysis of the Slovak Banking Association the bank levy and the extraordinary levy will push up the average real effective tax rate of the banking sector as a whole to 54.1% in 2012-2013 (Slovenská banková asociácia, 2012: 3). From 2013 Slovakia will definitively have the highest bank levy (six times the EU average) and the highest effective taxation of banking in the whole Union (Ibid.). The Slovak government is in fact punishing one of the best performing financial sectors in the EU. It surely will limit credit growth and competition on the market but can lead even to credit contraction and destabilization of some banks. Third, the consolidation package endangers the competitiveness of Slovakia in international comparison and will seriously harm the hardly built image of investment-friendly country. Slovakia is the first new member state of the European Union which first successfully implemented the flat income tax and later abolished it. The corporate income tax was 352 KadarKrisztian_16_belivek.indd 352-353 increased from 19 to 23%. It seems to be rather a modest change but in fact it is going to be the highest tax rate among all new members of the Union from Estonia to Bulgaria (Eurostat, 2012: 36). The temporary selective extra taxes (on banks, regulated companies) increase the uncertainty of the investors. Temporary measures can be transformed to permanent solutions if further consolidation is needed and nobody knows who is going to be the next target when the government tries to fill its empty pockets again. Fourth, the second Fico-government with its consolidation package (and some other measures) is systematically destroying most of the elements of the economic model created by the centre-right reform government until 2006. This model was far from perfect but until recently it was the only working model in Slovakia which ensured high and sustainable economic growth resulting in strong convergence. After its systematic destruction it is not clear how the current government will return to sustainable growth, taking to account that it has no similar comprehensive reform plans. References Alesina, Alberto F. and Ardagna, Silvia (2009) Large Changes in Fiscal Policy: Taxes Versus Spending. National Bureau of Economic Research, Working Paper No. 15438, October 2009.http://www.nber.org/papers/w15438 Beblavý, Miroslav (2007) The political economy of comprehensive social policy reform and emergence of a social policy paradigm: the case of Slovakia, Policy Network, http:// www.policy-network.net/pno_detail.aspx?ID=1304&title=The-political-economyof-comprehensive-social-policy-reform-and-emergence-of-a-social-policy-paradigm-the-case-of-Slovakia Beblavý, Miroslav (2005) Public Administration Reform in Slovakia and Other Central European Countries and Its Implications for Ukraine, In: International Centre for Policy Studies: Recent Economic Reform Experience from Central Europe: Inspirations and Suggestions for Ukraine. ICPS, Kyiv Blöchliger, Hansjörg, Song, Dae-Ho and Sutherland, Douglas (2012) Fiscal Consolidation: Part 4. Case Studies of Large Fiscal Consolidation Episodes, OECD Economics Department Working Papers, No. 935, OECD Publishing, http://dx.doi. org/10.1787/5k9fdf5xptlq-en 353 2013.01.18. 19:05 Brook, Anne-Marie and Leibfritz, Willi (2005) Slovakia’s introduction of a flat tax as part of wider economic reforms, OECD Economics Department Working Papers No. 448, OECD, http://www.olis.oecd.org/olis/2005doc.nsf/LinkTo/NT000041BA/$FILE/ JT00190764.PDF Bugyi, Erik and Franek, Juraj (2012) Grécky bankrot by verejné financie Slovenska mohol stáť 723 mil. Eur, Komentár 2012/13, Inštitút finančnej politiky, Ministerstvo financií SR, Bratislava Čech, Zdeněk, Jevčák, Anton, and Sosdean, Weidinger Corina (2012) Potential risks for home and host countries stemming from activities of multinational banks in the CEE10 region, ECFIN Economic Brief, Issue 15, February 2012, European Commission, Directorate-General for Economic and Financial Affairs ECB – European Central Bank (2008) Convergence Report May 2008, ECB, Frankfurt am Main European Commission, Directorate-General for Economic and Financial Affairs, Economic Policy Committee, Ageing Working Group (2012) The 2012 Ageing Report: Economic and budgetary projections for the EU27 Member States (2010-2060), Brussels, http://ec.europa.eu/economy_finance/publications/european_economy/2012/pdf/ee-2012-2_en.pdf European Financial Stability Facility (EFSF) (2012) Frequently Asked Questions, http:// www.efsf.europa.eu/attachments/faq_en.pdf European Union Agency for Fundamental Rights, UNDP, (2012) The situation of Roma in 11 EU Member States: Survey results at a glance, Publications Office of the European Union, Luxembourg Eurostat (2012) Taxation trends in the European Union: Data for the EU Member States, Iceland and Norway, 2012 Edition, Luxembourg: Publications Office of the European Union Gál, Zsolt (2011) Munkaerő-migráció Szlovákiából az uniós csatlakozás után komparatív szemszögből, In: Demográfia, 2011. Vol. 54, No. 4, 236–269 Jevčák, Anton (2006) Healthcare reform – unpopular even in Slovakia, ECFIN Country Focus, Vol. 3/2, Directorate-General for Economic and Financial Affairs of the European Commission, http://europa.eu.int/comm/economy_finance/publications/countryfocus_en.htm Kavický, Radovan (2011) Celkový ekonomický vývoj, In: Kollár, M., Mesežnikov, G. and Bútora, M. (eds) (2011) Slovensko 2010. Správa o stave spoločnosti a demokracie a o trendoch na rok 2011, Inštitút pre verejné otázky, Bratislava 354 KadarKrisztian_16_belivek.indd 354-355 Kláseková, Martina (2012) Kde bolo, tam nebude. O historicky najlepší výsledok sektora sa postarali hlavne štyria najväčší hráči. Zahraničné matky si môžu gratulovať, In: TREND 13/2012, Bratislava, 05.04.2012 Krivý, Vladimír (2004) Are There Any Changes at All? In: Mesežnikov, Grigorij and Gyárfášová, Oľga (eds) (2004) Slovakia: Ten Years of Independence and the Year of Reform, Institute for Public Affairs, Bratislava Krivý, Vladimír (2001) Hodnotové a politické profily, In: Gyárfášová, Oľga, Krivý, Vladimír and Velšic, Marián et al. (2001) Krajina v pohybe. Správa o politických názoroch a hodnotách ľudí na Slovensku. Inštitút pre verejné otázky, Bratislava Lassen, David Dreyer (2010) Fiscal Consolidations in Advanced Industrialized Democracies: Economics, Politics, and Governance, Finanspolitiska rådet, Stockholm Marcinčin, Anton and Marcinčinová, Ľubica (2009) The Cost of Non-Inclusion. The key to integration is respect for diversity. Open Society Foundation, Bratislava Mikloš, Ivan (2008) Slovakia: A story of reforms, In: Bienkowski, W., Brada, J. C. and Radlo, M. J. (2008) Growth versus Security, London, NY: Palgrave Macmillan, pp. 54-88 Moore, David (2005) Slovakia’s 2004 Tax and Welfare Reforms, IMF Working Papers 05/133, IMF Washington D.C. http://www.ucu.edu.uy/Facultades/CienciasEmpresariales/ Reforma_Tributaria_documentos/Slovakia05_fmi%20wp05133.pdf Morvay, Karol et al. (2011) Hospodársky vývoj Slovenska v roku 2010 a výhľad do roku 2012, Ekonomický ústav Slovenskej akadémie vied, Bratislava Národná banka Slovenska (2012) Štatistický bulletin, December 2011, Národná banka Slovenska, Bratislava, http://www.nbs.sk/_img/Documents/_Publikacie/ BulletinMFS/2011/BulletinMFS_122011.pdf Pažitný, Peter, Zajac, Rudolf and Marcinčin, Anton (2005) Reform Models: Health Reform in Slovakia, Health Policy Institute, Bratislava, http://www.hpi.sk/images/attachments/Reform_Models_-_Health_Reform_in_Slovakia.pdf Rada pre rozpočtovú zodpovednosť (2012a) Správa o dlhodobej udržateľnosti verejných financií (December 2012). Kancelária Rady pre rozpočtovú zodpovednosť, Bratislava, http://www.rozpoctovarada.sk/download2/sustainability_report_dec2012.pdf Rada pre rozpočtovú zodpovednosť (2012b) Hodnotenie Návrhu rozpočtu verejnej správy na roky 2013 až 2015, Kancelária Rady pre rozpočtovú zodpovednosť,Bratislava, http://www.rozpoctovarada.sk/download2/rrz_rozpocet_2013rada_final.pdf Slovenská banková asociácia (2012) (Ne)primeranosť bankového odvodu, 29.06.2012 Analýzy a štatistika, http://www.sbaonline.sk/sk/presscentrum/aktuality/tema-neprimeranost-bankoveho-odvodu.html 355 2013.01.18. 19:05 Šprocha, Branislav (2011) A szlovákiai roma nők termékenységének longitudinális és keresztmetszeti vizsgálatai. In: Demográfia, 2011. Vol. 54, No. 1, 121–159 Unicredit Bank (2012) Unicredit Bank Weekly N.O.T.E.S. 09/2012, http://www.unicreditbank.sk/page/sk/Tlacove-centrum/Makroekonomika-a-trhove-analyzy/Unicreditbank-weekly-N.O.T.E.S..html Vaňo, Boris (2002) Prognóza vývoja rómskeho obyvateľstva v SR do roku 2025. Výskumné demografické centrum, INFOSTAT – Inštitút informatiky a štatistiky, Bratislava Vienna Initiative (2012) CESEE deleveraging monitor, 9 November 2012, Steering Committee of the Vienna Initiative for the Full-Forum Meeting, Brussels, http://www.worldbank.org/content/dam/Worldbank/document/Deleveraging_Monitor_110812.pdf Vláda SR (2012) Návrh rozpočtu verejnej správy na roky 2013 -2015 – nové znenie, (Rokovanie vlády: 29/2012, 10.10.2012, 1. Bod programu, Č. Uznesenia, 532/2012), http://www.rokovania.sk/Rokovanie.aspx/BodRokovaniaDetail?idMat erial=21645 Notes 1 The industrial production in Slovakia declined by 13.7% in 2009 and increased by 18.9% in the following year (Morvay et al. 2011: 32). 2 From 2008 the number of Slovak citizens working abroad started to decline, for various reasons like the strong convergence of the Slovak economy and related strong domestic employment growth (until 2009), the appreciation of the national currency (the Slovak koruna up to 2009 and the euro later) against the currencies of some major host countries of the migration or due to the quickly worsening economic conditions in many host countries (as a consequence of global financial crisis), notably in the UK, Ireland or Hungary. From 2011 the situation has stabilized but the number of citizens working abroad is still well below its 2007 peak (Gál, 2011). 3 The Vienna Initiative was established at the height of the global financial crisis of 2008/09 as a private-public sector platform to secure adequate capital and liquidity support by Western banking groups for their affiliates in CESEE (Central, Eastern, and South-eastern Europe). The initiative was re-launched as “Vienna 2” in January 2012 in response to renewed risks for the region from the euro zone crisis. Its focus is now on fostering home and host authority coordination in support of stable cross-border banking and guarding against disorderly deleveraging. Western banking groups continue to play an important role in the Initiative, both by supporting the coordination efforts and doing their own part to avoid disorderly deleveraging. 4 Since deleveraging in the CESEE countries resumed, between mid-2011 and mid-2012 „six countries have seen an exposure reduction in excess of 5 percent of GDP: Hungary and Slovenia lost between 10-15 percent of GDP in funding; for Bulgaria, Croatia, Lithuania, and Serbia the loss was between 5 and 10 percent of GDP (...) In the twelve months to June 2012, credit to households and enterprises (…) contracted in seven countries: the three Baltic countries, Croatia, Hungary, Montenegro, and Slovenia” (Vienna Initiative, 2012: 2, 4). 5 The only reason why Mikuláš Dzurinda was able to form two consecutive reformoriented administrations (1998–2002 and 2002–2006) was a favourable coincidence of political circumstances. In 1998, the entire spectrum of democratic forces (including left-wing parties) united against hard populists and formed a single ‘mother of all coali- Statistical data ECB - European Central Bank (2009) Statistical Data Warehouse – Exchange Rates, Bilateral. http://sdw.ecb.europa.eu/browse.do?node=2018794 Eurostat: http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home Open Society Foundations, International Comparative Data Set on Roma Education — 2008, http://www.opensocietyfoundations.org/sites/default/files/table_2008_0.pdf Slovstat database, http://www.statistics.sk/pls/elisw/vbd Štatistický úrad Slovenskej republiky (2012) Sčítanie obyvateľov, domov a bytov 2011. Tab. 10 Obyvateľstvo SR podľa národnosti – sčítanie 2011, 2001, 1991. http://portal.statistics.sk/files/tab-10.pdf Štatistický úrad Slovenskej republiky (2012) Volebná štatistika, http://portal.statistics.sk/ showdoc.do?docid=30 UNDP – United Nations Programme for Development: Data on Roma, http:// europeandcis.undp.org/our work/roma/show/D69F01FE-F203-1EE9B45121B12A557E1B#ROMAexplore 356 KadarKrisztian_16_belivek.indd 356-357 357 2013.01.18. 19:05 tions’. In 2002, the anti-reform bloc of populist parties saw too many of their voters’ ballots forfeited because some of these parties split up and most of their smaller successors failed to get over the prescribed 5% threshold. The coalition government formed after the 1998 parliamentary elections officially comprised the Slovak Democratic Coalition (SDK – 26.3% of the popular vote), the Party of Democratic Left (SDĽ – 14.7%), the Party of Hungarian Coalition (SMK – MKP – 9.1%) and the Party of Civic Understanding (SOP – 8.0%). The SDK itself was a coalition of five smaller parties (including the social democrats and the greens); similarly, SMK–MKP consisted of three original parties representing the country’s ethnic Hungarians. So, the ruling coalition represented the entire democratic spectrum ranging from conservatives through Christian democrats, liberals, minority parties and left-wing parties. A direct result of this was permanent conflicts within the ruling coalition between various ad hoc alliances formed by these parties. 6 7 For a more detailed description and elaboration of the reforms see for example Brook, Anne-Marie and Leibfritz, Willi (2005) Slovakia’s introduction of a flat tax as part of wider economic reforms. OECD Economics Department Working Papers No. 448, OECD, Mikloš, Ivan (2008) Slovakia: A story of reforms. In: Bienkowski, W., Brada, J. C. and Radlo, M. J. (2008) Growth versus Security. London, NY: Palgrave Macmillan, pp. 54-88; and Moore, David (2005) Slovakia’s 2004 Tax and Welfare Reforms, IMF Working Papers 05/133, IMF, Washington D.C. The new 19% flat personal income tax replaced 21 different tax rates, including a five band rate structure on wage income that ranged from 10 to 38 percent, and withholding tax rates on capital income ranging from 5 to 25 percent. The corporate tax rate decreased to 19% from 25% (in 2003/2004 after 29% in 2000/2001 and 40% before). The single valueadded tax (VAT) rate of 19 percent replaced dual VAT rates of 14 and 20 per cent, basically it was increased to achieve fiscal neutrality. A separate reform modestly reduced overall social contribution rates by 2.4 percentage points and increased the ceilings for pension and unemployment insurance contributions. (Moore, 2005: 4, and Brook and Leibfritz, 2005: 6.) To ensure political pass of tax reform the non-taxable income was increased significantly, almost 2,5 times and in addition continuously valorised. This move prevented the increase of taxation of low income groups, the real effective tax burden decreased also for them. Effective rate therefore remained progressive; people with low income do not pay anything, while high incomes are taxed almost with 19%. (Mikloš, 2008: 64). 358 KadarKrisztian_16_belivek.indd 358-359 8 Some parametric reforms tried to make the pay-as-you-go first pillar more sustainable, for example the original retirement age (for men 60 and 53 – 57 for women depending on the number of children) was gradually increased to 62 years of age for both sexes. 9 Based on Pažitný et al. (2005) Reform Models: Health Reform in Slovakia. Health Policy Institute, Bratislava. 10 Mainly due to the introduction of fees the excess demand and over-consumption significantly decreased: the visits to general practitioners fell by 10%, the first aid calls by 13%. On the other hand the visits to specialists and hospitals hadn’t decreased much (1%), this shows that the user fees didn’t prevent the access to health-care. User fees also increased the cash income of physicians by 2-300 euro per month. Another impact of fees was the drop in the corruption (its perception but also the amount of gratuities given according to the public opinion polls). The transformed health-care providers (after facing hard budget constraints) stopped to produce new debts while those remaining in state hands continued to do so. Thanks to the new standards and the prescription fee the drug expenditure in first half of 2004 declined by 11.7% on a year-on-year basis – before 2002 it used to rise by double digit rates annually. In 2005 after 10 years of continuous deficits all insurance companies were in profits. (Pažitný et al. 2005). 11 For example the unemployment benefit was made available only to those who contributed at least 3 of the last 4 years and was paid for the maximum of 6 months. A number of new benefits were created for the working poor, available to families in which the adults are either working or participating in active labor market programs (ALMPs). Sickness benefits were reformed combining lower benefits for the first three days and shifting the responsibility for first 10 days to employers. 12 For data on elections see: Štatistický úrad Slovenskej republiky 2012: Volebná štatistika. http://portal.statistics.sk/showdoc.do?docid=30. 13 Public opinion polls were carried out on a representative sample of respondents. The indicator of paternalism was their endorsement of the following assertions: “Government should strictly control prices”; “Government should be responsible for people’s jobs and standard of living”; “The most important companies should be run by the state”, but also preferred type of economy, perception of small privatization 359 2013.01.18. 19:05 and their response to the question of “to what degree was it inevitable to change the economic model from before 1989?” The indicator of egalitarianism was their endorsement of the assertion of “Income disparities should become smaller” and their opposition to the assertion of “It is correct that qualified employees should earn much more than others”. (Krivý, 2001: 298–299). 14 According to the Labour Force Survey the employment in 2010 declined by 2% (48 thousand), the number of unemployed increased by 20% compared to the previous year (reaching 389 thousand), the unemployment rate increased from 12,1 % to 14,4 % and the number of vacancies decreased by 22,4 % (Morvay et al. 2011: 50). 15 The Slovak koruna has been participating in ERM II with effect from 28 November 2005, when the central rate for the Slovak currency was originally set at 38.4550 korunas per euro, with a standard fluctuation band of ±15%.After strong appreciation following ERM II entry the central rate was re-valued by 8.5% to 35.4424 korunas per euro with effect from 19 March 2007, “in view of strong underlying economic fundamentals” (ECB, 2008: 187). Finally, the conversion rate (1€ = 30,126 Sk) was set at the upper limit of the new fluctuation band. 16 The ESM will have a total subscribed capital of €700 billion. Of this amount, €80 billion will be in the form of paid-in capital provided by the euro area Member States in five instalments of €16 billion. In addition, the ESM will also dispose of a combination of committed callable capital from euro area Member States to a total amount of €620 billion. (EFSF, 2012: 23.). 17 Between 1994 and 2011 the number of public pensions increased from 1 million 386 thousand to 1 million 605 thousand mostly due to the increase of old age pensions from 733 to 958 thousand. (Slovstat database based on the data of Social Insurance Company – Sociálna poisťovňa.). 18 Survey and expert estimates (on the perceived number and share of Roma) are accepted as more reliable than official census data due to the tendency for Censuses to underestimate the size of the Roma population as a result of respondents being reluctant to report their actual ethnic origin. Open Society Foundations, International Comparative Data Set on Roma Education - 2008. 360 KadarKrisztian_16_belivek.indd 360-361 19 For the summarized results of the survey done by the United Nations Programme for Development (UNDP), the World Bank (WB) and funded by the European Commission (EC) see: European Union Agency for Fundamental Rights, UNDP, 2012, The situation of Roma in 11 EU Member States. Survey results at a glance. Publications Office of the European Union, Luxembourg, pp. 16-17. The survey was conducted in May-July 2011 on a random sample of Roma and non-Roma households living in areas with higher density (or concentration) of Roma populations in the EU Member States of Bulgaria, Czech Republic, Hungary, Romania, Slovakia, and the non-EU Member States of Albania, Bosnia and Herzegovina, Croatia, FYR of Macedonia, Montenegro, Republic of Moldova and Serbia. In each of the countries, approximately 750 Roma households and approximately 350 non-Roma households living in proximity were interviewed. 20 According to the Fiscal Responsibility Act the gradually escalating sanctions start when the public debt reaches 50% of GDP: the Ministry of Finance should address a letter to the parliament explaining the reasons for high debt including measures for its reduction. If the debt is over 53% of GDP, the government should submit a proposal of measures for debt reduction to the parliament and the wages of government members are reduced to the level applicable in the previous fiscal year. With debt over 55% of GDP the government should submit to the parliament a general government budget proposal which freezes public expenditure (with pre-defined exemptions such as interest payments, EU funds and co-financing). I the debt reaches 57% of GDP the government should submit to the parliament a balanced (or in surplus) general government budget. With public debt over 60% of GDP the government asks the parliament for a vote of confidence (based on, and for a more detailed view, see OECD, 2012: 52-53.) The 2006-2010 three-party coalition government was made of the dominant Smer-SD (Direction – Social Democracy, which nominated the prime minister, Robert Fico) and two smaller coalition partners: SNS – Slovak National Party and HZDS – Movement for a Democratic Slovakia. 22 For similar studies see for example Blöchliger, Song and Sutherland, (2012) Fiscal Consolidation: Part 4. Case Studies of Large Fiscal Consolidation Episodes, or Lassen, D. (2010) Fiscal Consolidations in Advanced Industrialized Democracies: Economics, Politics, and Governance. 21 361 2013.01.18. 19:05 362 KadarKrisztian_16_belivek.indd 362-363 2 162 64,8 -8,2 43,4 2 123 63,6 18,8 Generalgovernment deficit, % of GDP Genera government gross debt, % of GDP Employment (thousands, LFS data) Employmentrate, % age group 20-64 Unemployment rate, % agegroup 15 to 74 4,8 18,4 63,7 2 168 41,5 -2,4 57 5,1 2004 16,4 64,5 2 215 34,2 -2,8 60 6,7 2005 13,5 66 2 302 30,5 -3,2 63 8,3 2006 11,2 67,2 2 358 29,6 -1,8 68 10,5 2007 9,6 68,8 2 434 27,9 -2,1 73 5,8 2008 12,1 66,4 2 366 35,6 -8 73 -4,9 2009 Note: Data for 2012 and 2013 are forecasts and projections from the government’s budget proposal. Source: Eurostat and Vláda SR, 2012: Návrh rozpočtu verejnej správy na roky 2013 -2015 – nové znenie, pp. 6, 9, 10. 17,7 42,4 -2,8 55 4,6 54 Real GDP growth, % GDP per capita in PPS (EU-27 100) 2003 2002 14,5 64,6 2 318 41 -7,7 73 4,4 2010 Table 1: Main macroeconomic indicators of Slovakia (2002-2013) 13,6 65,1 2 351 43,3 -4,9 73 3,2 2011 13,9 2 328 52,2 -5,3 2,5 2012 13,9 2 331 54,9 -2,9 2,1 2013 Annex 363 2013.01.18. 19:05 The CEE and SEE expansion of Austrian banks: A showcase analysis of relating media coverage Karin LIEBHART Political Science Department, University of Vienna Introduction This contribution is linked to an ongoing research project which focuses on the reconstruction of debates in selected Austrian press outlets in the period 2007 to 2013, relating to the financial crisis and its implications. The analysis includes both textual and visual material, since images do not only attract attention, but constitute a referential framework for the messages conveyed. Furthermore, in what is called the age of mass media, the effectiveness of politics is measured predominantly by its perceptibility (Vollmer, 2006). Political science too, increasingly rates politics by its presence in the media (Plasser, 2004). Thus, the project underlines the importance of political imagery and the symbolic level of politics for the perception of political issues, political agenda setting, negotiating and decision-making.1 The starting point of the research is the exposure of Austrian banks in the Central, East and Southeast European region following the system change in the former one-party states. Austrian banks such as Erste Group, Raiffeisen, Bank Austria (UniCredit) were among the first to enter the new markets in the early 1990s (cf. http://www.format. at/articles/1228/930/334459/ewald-nowotny-banken-uebernahmewelle-osteuropa), driven by geographical proximity and historical ties on the one hand, a saturated domestic market, on the other (Boss et al. 2004, Breyer, 2004). Vienna saw this as an opportunity both for financial gain and to gain back some of the influence it possessed at the height of the Austro-Hungarian Empire. It used these historical ties in the re364 KadarKrisztian_16_belivek.indd 364-365 365 2013.01.18. 19:05 gion to greatly expand its financial presence in Central and Eastern Europe by participating in the privatization of formerly state-owned banks, opening its own banks in former Soviet satellites and providing direct cross-border loans (http://politeiaeuropa. wordpress.com/2012/02/14/stratfor-austrian-banks-exposure-to-central-and-easterneurope/). Until 2005, Austrian banks gained considerable market shares in virtually all of the relevant countries. Chart 1) Today, they are active in almost all states in CEE and SEE and own a major part of the domestic banking system in many countries of the region. Their subsidiaries constitute a significant share of the banks’ total assets and also generate a good portion of their profits. Two-thirds of Austria’s exposure is concentrated in Central and Eastern Europe, with its largest claims in the Czech Republic, Romania, Hungary, Croatia and Slovakia (http://politeiaeuropa.wordpress.com/2012/02/14/stratfor-austrian-banks-exposure-to-central-and-eastern-europe/). Austrian banks are not large by international standards and Austria is not the only player in the region - however, its banking sector has gained heavy influence (Krenn et al. 2009, http://www.profil.at/ articles/0909/560/233798).2 (Chart 2) From the 1990s onwards until the second half of the last decade this strategy was appreciated in domestic public discourse as an “Austrian success story”. Moreover, Austrian banks’ exposure in the region also contributed to the revival of the traditional selfimage of the country as a gateway to the East and door opener for the CEE countries – a role that Austria had eventually not assumed in the run-up to the 2004 EU enlargement, despite previous announcements (cf. Liebhart, 2003). Though the exposure of Austrian banks in the CEE and SEE region was profitable, it was, however, not without risk. (Chart 3) The “strong regional focus” (Schürz et al. 2009: 54) required a strong risk management, which was not sufficiently provided. As highlighted in the 2009 OECD Economic Survey of Austria, the rapid and successful expansion of Austrian financial services into the newly emerging economies of Central and Eastern Europe (CEE) and South-East Europe (SEE) poses significant regulatory challenges. The global financial crisis severely affected the international portfolio of the Austrian banking sector. The impact was mainly coming through the high exposure to economies in CEE and SEE with some of them experiencing a severe downturn following a period of excessive credit growth (…). Further 366 KadarKrisztian_16_belivek.indd 366-367 risks were revealed through the high level of lending in foreign currencies, including to Austrian clients, and to a lesser degree, the participation in high-risk international investments in other regions (http://www.oecd.org/eco/surveys/economicsurveyofaustria2009facingthefinancialcrisis.htm). Thus, the global financial crisis, which erupted in the summer of 2007 and intensified a year later (cf. Alien and Gale, 2007), changed a lot: Austrian banks (and European banks in general) with units in financially instable and economically imbalanced states in Central, Eastern and South Eastern Europe came under pressure. Since 2009, at the latest, the hazard of exposure in a number of CEE countries and beyond was perceived as increasingly dramatic due to the disadvantageous economic outlook and resulting foreseeable problems. While the ensuing risks differ across the region, Austrian banks reflect the problems the above mentioned states have (cf. Beirat für Wirtschafts- und Sozialfragen, 2009, Schürz et al. 2009). The consequences of overly ambitious financial investments in CEE and SEE continue to threaten Austria’s economic performance and eventually contributed to the downgrade of Austria’s best possible AAA rating to AA+ by Standard & Poor’s in January 2012 (http://wirtschaftsblatt.at/home/ dossiers/ratingagenturen/1221284/index). Those ups and downs were continuously mirrored in news covering and reporting. I. Methodological remarks The research approach combines quantitative content analysis of textual and visual material with three qualitative methods, that is to say discourse analysis, analysis of metaphors and political iconography. Discourse analysis is an interdisciplinary, constructivist qualitative approach (Wodak and Krzyzanowski, 2008), which aims at analysing written or spoken “language-in-use”. Language is understood as a social practice, through which meaning is constructed. Against this backdrop discourse analysis attempts at understanding the conditions behind a particular problem and to reveal the underlying social and cultural patterns of a text (e.g. the motivation and politics involved in the argument for or against a topic, strategy, statement, belief, value etc.). It aims at making these assumptions and patterns explicit and providing a system of classification. Power structures as such and particularly the links between language and power, social and political inequality or domination imprinting a text are made visible. Thus, it eventually contributes to the reconstruction of representations of a social phenomenon (cf. Fairclough, 2010, Wodak and Krzyzanowski, 2008, Wodak and Meyer, 2009, Wodak 367 2013.01.18. 19:05 and Reisigl, 2001, Van Dijk, 2000). Based on these assumptions special emphasis is put on references made in linguistic realizations, particularly when it comes to the construction of a common culture and “spirit”, collective characters, mentalities, behavioral dispositions on the one side, and the affirmation of supposed equality and difference, on the other.3 underlying cultural patterns and social as well as political values. It attempts to study the identification, description, and the interpretation of the content of images and focuses on meaning instead of form. The contribution is inspired by this model, but does not follow it strictly. It helps to avoid rash and solely subjective interpretations and permits an indepth analysis of an image.4 The analysis of metaphors (cf. Cameron and Masle, 2010, El Refaie, 2003, Münkler, 1994, Schmitt, 2003 and Wesel, 2006) focuses on those “figures of speech” that use concrete images to represent more complex phenomena (e. g wolves and sheep, hawks and doves, the round table, the fortress Europe, etc.). Much of our conceptual system is structured metaphorically in order to facilitate understanding of complex experiences and issues with the help of concepts with which we are more familiar and which are therefore more easily imaginable. Against this background the contribution refers also to the analysis of essential metaphors within the respective context. The de-constructive analytical concept applies to both, textual metaphors as well as visual representations of metaphorical concepts (El Refaije, 2003), though the visual does not convey exactly the same meanings as language. By way of example: preliminary results of a pilot study in the field show that references to traditional patterns of perceptions of the „East“ (cf. Bernhardt, 2011) are represented in both, textual and visual metaphors, but they are not super-imposable. Preliminary findings of the above mentioned pilot study suggest that, among other things, the following metaphors seem to play a crucial role in the field under research: metaphors pointing to a symbolic re-unification of “the East”, metaphors recalling traditional Balkan stereotypes and metaphors establishing a paternalistic relationship. Political iconography (cf. Diekmannshenke et al. 2011, Diers, 1997, Elkins, 2003, Hofmann, 2006, Kopp-Schmidt, 2004, Mitchell, 1996, Müller, 2011, Panofsky, 1982, Paul, 2008 and Van Leeuwen and Jewitt, 2001) aims at the interpretation of visual content, in particularly when it comes to mass mediated images (Müller, 2011: 290,294). Political images which are communicated to the public feature historical and actual linkages. Actually dominant political images cannot only be “read” in the context of other contemporary images, they also refer to “antecedent” ones. It is therefore crucial for iconographic analysis to draw the attention to connections between currently circulating images on the one hand as well as between these images and previous, antecedent imagery stored in an iconic memory, on the other. Types of representation and the tradition of motifs help to reconstruct the historical context and to identify changes (Müller, 2003: 69). Political iconography implies a critical “reading” of imagery, which aims at reconstructing The heterogeneity of references, which does not always result in unequivocal interpretations of the meaning of images, is a central element in this context. Political communication obviously draws from the repository of political memory and the history of political ideas as well as associations with everyday life in order to load images with meaning. This calls for an approach that focuses on the specific systems of reference addressed in each case. The three methodological approaches described in this chapter are applied to the corpus which comprises the set of articles dealing with the exposure of Austrian banks in the CEE and SEE region as well as the financial crisis and relevant outcomes in the period from 2007 to 2013. Due to easier access the online versions of the chosen dailies (Der Standard and Die Presse) and weeklies (Profil and Format) shall be used.5 368 KadarKrisztian_16_belivek.indd 368-369 Since the contribution at hand draws on preliminary findings of an ongoing project, it mirrors “work in progress” and aims at highlighting exemplary aspects of the entire phenomenon. Therefore, only selected images and metaphors will be presented and interpreted using qualitative methodology as described above. Eventually, it has to be underlined that the before mentioned pilot study is not representative as defined by statistics.6 II. Communicating a failed success story Drawing on preliminary results of the pilot study, it can be said that - though they provide a lot of serious information, figures and analysis - even the so called quality media transport discursive patterns, metaphors and images which refer to traditional stereotypes of the “East”, when it comes to portrayal of the recent Austrian bank crisis. The “East” is painted as a uniform cultural entity, a perspective that reveals the persistence of a paternalistic or “colonialist” view of this area. The messages put across on the text and image levels do not necessarily coincide: while the textual statements tend to be more differentiated and complex in most cases, the messages conveyed by means of images can be characterized as 369 2013.01.18. 19:05 stereotyped and clichéd. As already told, Austria’s exposure in Central, East and Southeast Europe is - relative to GDP - far larger than that of other European countries: In 2005, the total assets of the five largest Austrian banks (in the region) amounted to about 16% of total assets - mostly in the form of majority-owned subsidiaries - and Austrian banks derived some 35% of their pretax profits from the region (International Monetary Fund, 2007: 156). Austrian banks were very active in a broad spectrum of CEE and SEE countries (particularly through cross-border loans and credits by subsidiaries). Naturally, Austria was also affected by recent developments due to the international crisis, such as uncertainty about the situation in relevant countries of the region and relating risks or the impact on Austria’s financial system: “Austria’s economic expansion came to a halt with the global financial crisis which erupted in the summer of 2007 and intensified in the autumn of 2008 (…).In response, the authorities put in place measures to bolster banks’ liquidity and capital, and the confidence of depositors and creditors (…) Strains arose in February 2009 (…) when the perceived riskiness of credit positions in a number of CEE countries rose sharply in light of a deteriorating economic outlook and balance of payments problems. Austrian banks have been very active across a broad spectrum of countries in the region in recent years through cross-border loans and credits by subsidiaries, which accounted for a prominent portion of their total earnings. With Austrian banks’ assets in CEE representing over 60% of Austrian GDP, the fiscal implications of a potential banking crisis raised concerns” (http://www.oecd.org/eco/surveys/economicsurveyofaustria2009facingthefinancialcrisis.htm). While the expansion process was highly profitable for almost two decades, relating operations in particular CEE and SEE countries entailed (and still entail) a number of risks as well. Numerous countries in the region exhibit macroeconomic imbalances. Thus, effective assessment tools and control structures would have been needed in order to provide sustainable risk management. Such issues were discussed in Austrian quality newspapers and magazines. However, the images used for text illustration conveyed messages of their own. The following examples are to demonstrate that, commonly, respective images told a different story. The visualization of the situation in 2008 and 2009 - after the crisis has fully reached Austria – in the quality newspaper Standard and the weekly Format testifies to this assumption. Image 1 was used as eye catcher in the weekly Format in November 2008 in order to raise attention for an article focusing on the impact of the financial crisis on several “Eastern” 370 KadarKrisztian_16_belivek.indd 370-371 states. While Russia was only one of the states mentioned in the article, the image shows a famous Russian church, Saint Basil’s Cathedral, which is located on the edging of the Red Square in Moscow (cf. image 1, http://www.format.at/articles/0847/526/225867_ s1/geplatzte-ost-traeume-waehrungsreserven-aktienerholung-sicht). This cathedral is one of the most well-known visual icons of Russia, respectively its capital Moscow. Moscow serves as a synonym for Russia and - before the end of the bipolar bloc system, the fall of the Iron Curtain and the following transformation processes in the former oneparty-states - stood interchangeably for the USSR. This associative chain leads to the assumption that Moscow/ Russia is “the East”, which is again conceived as an undifferentiated and uniform entity. The firework, which illuminates the night sky across the cathedral, symbolizes the “cracked dreams of the East”. Format was not the only weekly which used the term “dreams” to qualify recent financial politics of EU member states towards the East. Similar wording can be found in the Economist: The free flow of capital across European borders, to where it can work hardest, seems like yesterday’s dream” (http://www.economist.com/blogs/easternapproaches/2011/12/banks-central-europe). Though such “dreams” about the East eventually did not come true, the daily Standard in February 2009 reports that Austrian managers, however, keep their optimistic view and continue seeing thingsthroughrose-coloredglasses (cf. image 2, http://derstandard. at/1234355078776/Osten-Rot-weiss-rot-sieht-rosarot and also http://derstandrad. at1234508487675). The symbolic use of “rose-colored glasses” suggests a twofold interpretation: on the one hand, Austrian managers are said to behave a bit naive, the view on the “East” is qualified as an unpleasant one, if one does not wear such glasses, on the other. Furthermore, Eastern Europe is not only seen as a rather homogeneous region. It is also portrayed as dangerous and incalculable as shown in a map pictured in the magazine Format in February 2009 (images 3, http://www.format.at/articles/0909/525/234599/brandherd-osteuropa-risikodepression-50-prozent). The map put in front of the article shows part of Europe. The Baltic countries Estonia, Latvia and Lithuania, the Central European states Poland, Czech Republic, Slovakia, Hungary and Slovenia, the Southeast European state Moldova, and last but not least Russia, Belarus and Ukraine are labeled. Other states, such as Austria, Germany, Italy and Romania are not named. Some of the countries feature lit grenades, respectively small bombs, to indicate that they are close to explosion. Those countries are Hungary, Romania, Ukraine, Russia, Lithuania, Latvia and Estonia. The map as well as the caption (“Fire source Eastern Europe”) and even the text suggest that Eastern Europe 371 2013.01.18. 19:05 is a source of fire and, thus, the rest of Europe, is at risk. The first sentence of the article states that “the party is over, now, panic sprawls”. The next sentence recalls the year 1998 and the collapse in Asia and announces questions and answers concerning the “ticking bombs in the East of Europe”. Especially Austria seems to be endangered by the suggested scenario. If Eastern Europe explodes, also Austria is implicated in the crash, because the redwhite-red economy is closely entangled with the East. In particular the banking sector is in the center of the hurricane. The aftermath of the devastation is unpredictable (http://www. format.at/articles/0909/525/234599/brandherd-osteuropa-risiko-depression-50-prozent). Other dailies and weeklies use similar terms to describe the supposed dangerous situation. The weekly Profil emphasizes that “Eastern Europe sucks Austria down” (http://www. profil.at/articles/0907/560/233798). The weekly Wirtschaftsblatt, speaks of the “powderkeg Eastern Europe” (http://wirtschaftsblatt.at/home/nachrichten/europa_cee/1221693/ index). It has to be underscored that the sentences quoted above are full of metaphors relating to war. Image 4 (http://www.ibtimes.com/austrian-banks-likely-next-domino-european-debt-crisis-374230) also involves the symbol of a potentially dangerous phenomenon, admittedly linked to nature. Metaphors relating to natural phenomena, respectively natural disasters, are frequently used in political discourse. They imply that there is no individual or collective actor involved and, thus, eventually nobody is responsible. It visualizes a flash of lightening which crosses the image from the upper left side to the lower right side and is to bang in. The photography in the background of the image shows the town hall square of the Estonian capital Tallinn. Though exactly this image was not used by anyone of the dailies or weeklies analyzed, but conveyed by the European Commission, it is included because it is „typical“. Lots of related pictures can be found in different media. Moreover, it is of interest that even the European Commission uses such type of images to illustrate a quite differentiated and reflected article on the impact of the financial crisis on Central and Eastern Europe. The “natural phenomenon” of a lightning strike suggests danger but at the same time does not raise the question: “Who is to blame for the things that happened?” Hence the financial crisis, in practice the bank crisis, moves closer to destiny. Finally, an image which occurred in manifold textual and visual variations and was also used by many print and online media is the visualization of the so called domino effect, which is well known in political discourse since decades (image 5, http://www.dieeuros.eu/spip.php?page=print&id_ article=2579&lang=fr). 372 KadarKrisztian_16_belivek.indd 372-373 This image draws attention to the “domino theory”, a theory that traces back to the age of the Cold War, particularly from the 1950s to the 1980s. The basic assumption of this approach is the following: if one state in a region is affected by the crisis, naturally, the surrounding countries would follow as shown in the domino game. Austria is portrayed as one of these gaming pieces. Moreover, the strong presence of Austrian banks in an unstable region makes the country particularly vulnerable in this regard. The journalist Robert Misik actually asked in February 2009 whether Austria itself would become the crucial gaming piece which would cause the collapse of the global commercial building The article also contains the metaphor “chain-reaction”, which is used to describe the scenario of a total collapse caused by the initial crackup of a single Austrian bank (http://derstandard.at/1234507653286/Krise-in-Osteuropa-Ewiger-Pechvogel-namensOesterreich). Conclusion: Significance It goes without saying that Austrian banks could not, and still cannot, hold back from the European crisis. By means of example, Austrian banks’ exposure in the region was one of the factors behind its downgrade from the best possible estimation of AAA rating to AA+ by Standard & Poor’s in January 2012 (http://www.economist.com/node/21543158, 21 January 2012). Against this background the aim of this contribution was to shed somewhat light on the complex phenomenon „media coverage of the financial crisis“, in particular in terms of visual image constructions and the use of metaphors. Selected examples drawn from so called Austrian quality media have been presented. The choice of the examples is justified by their paradigmatic character. The latter turned out in the course of the pilot study mentioned at the beginning. The methodological approach of this study has already been introduced, while the theoretical debates relating to the iconic turn have not. The iconic turn has become a lead paradigm in the cultural sciences. Political science is still trailing behind, as visual political communication had long been sidelined in this field. In contrast to other disciplines such as the humanities or sociology, a cultural perspective of social phenomena has been accepted only hesitantly in political science (cf. Schwelling, 2004: 11). This is especially true for the political science community in German speaking countries. Though there is meanwhile a general agreement on the fact that imagery and visual impressions trans373 2013.01.18. 19:05 ported via the mass media play a decisive role in political communication, the analysis of political images, metaphors and relating discourses frequently veers towards mere critique. An appropriate approach towards the analysis of politics, which gives adequate importance to images as independent media of communication is still lacking. One can observe a tendency to juxtapose the goals of political communication to their forms of presentation, which hark back to popular image production and entertainment formats in their turn. Much less frequently can one find analyses, which focus on actual iconic images that are circulating in the political orbit, respectively in the public sphere. The research project on which this article is based aims at contributing to the analysis of circulating visual representations, taking the media coverage of the financial crisis as example. References Allen, F. and Gale, D. (2007) Understanding Financial Crises, Oxford University Press Bachmann-Medick, D. (2006) Cultural Turns. Neuorientierungen in den Kulturwissen­ schaften, Reinbek bei Hamburg Beirat für Wirtschafts- und Sozialfragen (ed.) (2009) Österreich und die internationale Finanzkrise, Die Sozialpartner 83/2009 Bernhardt, Petra (2011) Einbildung “Osten”. Persistenz und Wandel einer Raumkategorie, 1989 – 2007, Dissertation, Vienna Boss, M., Krenn, G., Puhr, C. and Schwaiger, M.S. (2004) Stress Testing the Exposure of Austrian Banks in Central and Eastern Europe, http://www.oenb.at/en/img/fsr_13_ special_topics_04_tcm16-57630.pdf Breyer, P. (2004) Central and Eastern Europe - The Growth Market for Austrian Banks, http://www.oenb.at/en/img/mop_20043_analyses5_tcm16-21311.pdf Burke, P. (2001) Eyewitnessing: The Uses of Images as Historical Evidence, London Cameron, L. and Masle, R. (eds) (2010) Metaphor Analysis: Research Practice in Applied Linguistics, Social Sciences and the Humanities. Studies in Applied Linguistics, Sheffield Diekmannshenke, H., Klemm, M. and Stöckl, H. (2011) Bildlinguistik. TheorienMethoden-Fallbeispiele, Neuburg Drechsel, B. (2005) Politik im Bild. Wie politische Bilder entstehen und wie digitale Bildarchive arbeiten, Frankfurt/M 374 KadarKrisztian_16_belivek.indd 374-375 El Refaie, E. (2003) Understanding visual metaphor: the example of newspaper cartoons, In: Visual Communication 2003; 2; 75. http://vcj.sagepub.com Elkins, J. (2003) Visual Studies: A Skeptical Introduction. London Fairclough, Norman (2010) Critical Discourse Analysis: The Critical Study of Language. Harlow/Essex Grau, O. and Veigl, T. (eds. (2011) Imagery in the 21st Century. Massachusetts Institute of Technology Grittmann, E. (2007) Das politische Bild. Fotojournalismus und Pressefotografie in Theorie und Empirie, Cologne Hofmann, W. (ed.) (2006) Bildpolitik – Sprachpolitik, Berlin http://derstandard.at/1234507653286/Krise-in-Osteuropa-Ewiger-Pechvogel-namensOesterreich (2012-12-17) http://derstandard.at1234508487675 (2012-10-23) http://politeiaeuropa.wordpress.com/2012/02/14/stratfor-austrian-banks-exposure-tocentral-and-eastern-europe/ (2012-12-16) http://wirtschaftsblatt.at/home/nachrichten/europa_cee/1221693/index (2012-12-17) http://wirtschaftsblatt.at/home/dossiers/ratingagenturen/1221284/index (2012-12-17) http://www.economist.com/blogs/easternapproaches/2011/12/banks-central-europe(2012-10-23) http://www.economist.com/node/21543158). Jan 21st 2012 (2012-12-17) http://www.format.at/articles/1228/930/334459/ewald-nowotny-banken-uebernahmewelle-osteuropa (2012-12-16) http://www.oecd.org/eco/surveys/economicsurveyofaustria2009facingthefinancialcrisis. htm (2012/10/23) http://www.photools.com/ (2012-12-14) http://www.profil.at/articles/0421/560/82297 (2012-10-23) http://www.profil.at/articles/0907/560/233798 (2012-10-23) International Monetary Fund (2007) IMF Survey. 18 June 2007, Vol. 36, No. 10, 156f. (Hilbers, P. and Tiemann, A.: Austria: Managing the eastward expansion of its banks). www.imf.org/imfsurvey Kopp-Schmidt, G. (2004) Ikonographie und Ikonologie. Eine Einführung, Cologne Krenn, G. and Puhr, C. (2009) Austrian Banks’ Activities in CESEE. http://www.oenb.at/ de/img/feei_2009_si_13_krenn_puhr_tcm14-143562.pdf Liebhart, K. (2005) Cultural Patterns of Enlargement: Do Small Central European States Share Common Values? In: Politics in Central Europe. The Journal of the Central 375 2013.01.18. 19:05 European Political Science Association. Volume 1. Number 1. November 2005. 55‑68 and http://www.kap.zcu.cz/politics/politics_2005_11.pdf Liebhart, K. (2003) Österreichische Selbstbilder und der Blick auf die mitteleuropäischen Nachbarn nach „1989“, In: Gruber, Helmut, Menz, Florian and Panagl, Oswald (eds): Sprache und politischer Wandel. Sprache im Kontext (hg. Wodak, Ruth, Stegu, Martin), Band 20, Frankfurt/M.-Berlin-Bern-Brüssel-New York-OxfordWien, 151-163 Margolies, E. and Pauwels, L. (eds) (2011) The SAGE Handbook of Visual Research Methods. Thousand Oaks California-London-New Delhi-Singapore Mitchell W. J. T (1996) What Do Pictures „Really“ Want? In: October. Vol. 77, 71-82 Mitchell, W.J. T. (1995) Picture Theory: Essays on Verbal and Visual Representation, University of Chicago Press Müller, M. G. (2011) Iconography and Iconology as a Visual Method and Approach. In: Margolies, E. and Pauwels, L. (eds): The SAGE Handbook of Visual Research Methods, Thousand Oaks California-London-New Delhi-Singapore, 283-297 Müller, M. G. (2003) Grundlagen der visuellen Kommunikation. Theorieansätze und Analysemethoden, Konstanz Münkler, H. (1994) Politische Bilder – Politik der Metaphern. Munich Neuendorf, Kimberley A. (2002) The content analysis guidebook, Sage Publications, Thousand Oaks, London, New Delhi Oesterreichische Nationalbank (2012) Facts on Austria and its banks, Vienna Panofsky, E. (ed.) (1982) Meaning in the Visual Arts, University of Chicago Press Panofsky, G. (1972) Studies in Iconology: Humanistic Themes in the Art of the Renaissance, Boulder, Colorado Paul, Gerhard (2008) Das Jahrhundert der Bilder, Vol. 1 and 2, Göttingen Pink, S. (2006) Doing Visual Ethnography: Images, Media and Representation in Research. Thousand Oaks California, London, New Delhi, Singapore Plasser, F. (2004) Politische Kommunikation in medienzentrierten Demokratien, In: Plasser, F. (ed.): Politische Kommunikation in Österreich. Vienna, 21-36 Schmitt, R. (2003) Methode und Subjektivität in der Systematischen Metaphernanalyse. Forum Qualitative Social Research. Volume 4, No.3, May 2003, http://www.qualitative-research.net/fgs/ Schürz, M., Schwaiger, M. and Übeleis, J. (2009) A Review of the Impact of the Crisis on Austria’s Financial Sector, In: Financial Stability Report 17 (June 2009, Vienna. 54-62 376 KadarKrisztian_16_belivek.indd 376-377 Schwelling, B. (ed.) (2004) Politikwissenschaft als Kulturwissenschaft. Theorien, Methoden, Problemstellungen, Wiesbaden Van Dijk, T. A. (ed.) (2000) Discourse Studies: A Multidisciplinary Introduction. Thousand Oaks California, London, New Delhi Van Leeuwen, T. and Jewitt C. (2001) Handbook of Visual Analysis. Thousand Oaks California, London, New Delhi, Singapore Vidal, S. P. (2009) Rethinking the Warburgian tradition in the 21st century, In: Journal of Art Historiography No. 1 (December 2009). http://www.gla.ac.uk/media/media_139151_en.pdf Vollmer, K. (2006) Mass Media and Political Communication in New Democracies, London and New York Wesel, R. (2006) Metapher als sprach- und bildtheoretisches Konzept zur Analyse symbolischer Politik? In: Hofmann, W. (ed.): Bildpolitik - Sprachpolitik. Berlin, 197-216 Wodak, R. and Krzyzanowski, M. (2008) Qualitative Discourse Analysis in the Social Sciences, Houndmills-Basingstoke. Wodak, R. and Meyer, M. (2009) Methods of Critical Discourse Analysis. Introducing Qualitative Methods Series. Thousand Oaks California, London, New Delhi, Singapore Wodak, R. and Reisigl, M. (2001) Discourse and Discrimination: Rhetorics of Racism and Antisemitism, London Notes 1 Liebhart, Karin: Images and metaphors of the crisis, Vienna 2012/2013. In terms of data generation, online editions of selected Austrian dailies (Der Standard, Die Presse) and weeklies (Profil and Format) are analyzed using critical discourse analysis (cf. Wodak and Krzyzanowski, 2008, Wodak and Meyer, 2009), analysis of metaphors (cf. El Refaie, 2003, Münkler, 1994, Wesel, 2006), and political iconography (cf. Grittmann, 2007, Kopp-Schmidt, 2004, Margolies and Pauwels, 2011, Müller, 2003 and 2011). 2 Experts emphasize that “(e)ven though Austrian bank groups’ CESEE exposure equals only some 20% of western banks total exposure in the region, at EUR 199 billion, it is nevertheless substantial above all in relation to GDP (about 70% at end-2008)” (Schürz et al. 2009: 56). 377 2013.01.18. 19:05 3 4 The analysis is aided by the software tools WordStat, Atlas.ti and iMatch. WordStat was developed in the late 1990s to assist, inter alia, text mining and content analysis of open-ended questions. Atlas.ti consolidates large volumes of documents and keeps track of notes, codes and memos. Atlas.ti is useful when analyzing primary material (text, images, audio, video). It further allows for visualizing complex relations between respective phenomena in the text (cf. Neuendorf 2002). See IMatchoffers remarkable organizing functions and capability for managing large collections of images. The letter can be sorted and organized in categories. IMatch also provides slideshow functions (cf. http:// www.photools.com/). The analysis focuses on the identification of specific contents or topics of the discourse on the financial crisis. The research aims at investigating discursive strategies, such as strategy of nomination (How are persons, objects, phenomena/ events, processes and actions referred to?), strategy of predication (What features are attributed to actors, objects, phenomena and processes?), strategy of argumentation (What arguments are employed?) and strategy of framing (From what perspective are these nominations, attributions and arguments expressed?). Aby Warburg and Erwin Panofsky (cf. Diers, 1995, Panofsky, 1982, Panofsky and Panofsky, 1972, Vidal, 2009) developed a practice of identification, reconstruction and classification of motifs and visual content of images at the beginning of the 20th century. In “Studies in Iconology” Panofsky and Panofsky (1972) elaborate on the concept of three levels of art-historical understanding (“three strata of subject matter or meaning” as there are: the natural subject matter or the depiction of the elements the painting, the photograph, the poster, the leaflet, etc. consists of; the conventional subject matter introducing cultural knowledge; the final question “What does it all mean?”). 5 On purpose tabloid newspapers as Neu Kronen Zeitung or Österreich were not included, because it is to be expected that such newspapers convey a lot of stereotypes and preconceptions. 6 The quantitative step, which is part of the methodological design of the project follows the pilot the study and will be undertaken during the first half of year 2013. Annexes Austrian banks in Central Europe Sources: http://www.businessinsider.com/russia-eyes-austrias-banking-empire-2011-6 (2012-12-13) The major Western banks in the East Sources: http://diepresse.com/home/wirtschaft/eastconomist/455862/CEEexpansion_Wer-leidet-mit-OesterreichsBanken-mit (2012-10-23) Eastern exposure of Austrian banks Sources: http://online.wsj.com/article/SB123499539623416645.html# (2012-12-13) 378 KadarKrisztian_16_belivek.indd 378-379 379 2013.01.18. 19:05 The Protection of Fundamental Rights in Hungary upon the New Basic Law: Main directions of the new Ombudsman system from 2011 Máté SZABÓ Ombudsman of Fundamental Rights in Hungary Introduction The institution of Ombudsman in Hungary is like a ‘ship being rebuilt on the sea’; similarly to the systems of health care and disaster management. With the creation of the new Basic Law the Ombudsman system was radically remodelled in the way I had been advocating for years as Ombudsman: one single institution for the protection of rights, with deputies responsible for the fields of the rights of national and ethnic minorities, and environment protection, respectively. During the parliamentary debate of the Basic Law and the Ombudsman Act at 2011 all the Ombudsmen had the opportunity to express their views. Although certain structural elements of the new regulation are in accordance with my original concept, I would not take responsibility for the entire normative content of the bases and final form of the new regulation, since the regulation, like all pieces of legislation, is based on a multitude of political and legal compromises that might at times even impair the unity of the original concept. The new Basic Law changed the structure and competences of certain institutions of our system based on the rule of law; among others it changed the Ombudsman, an institution of human rights protection with 15 years of history. Instead of the four Ombudsmen established upon the Swedish model, the new Basic Law opted for having just one single Ombudsman institution. One reason could be that this is the system the great majority of European countries chose, as it allowed a unified and interrelated interpretation of human rights, transparency, effectiveness and the concentration of resources to the most relevant 380 KadarKrisztian_16_belivek.indd 380-381 381 2013.01.18. 19:05 issues. In countries having more than one Ombudsman (like Sweden, Austria, Lithuania, Moldova) one of them holds, permanently or on a rotational basis, the office of head of the institution. Such coordination has been missing until now in Hungary. The Basic Law (’The State’, paragraphs 1 to 5 of Article 30) stipulates two specialised deputies within the single Ombudsman system (both were separate Ombudsmen until the end of 2011). They have now taken over the functions of the former Commissioners for National and Ethnic Minority Rights and for Future Generations. The latter was established by the amendment of the relevant Act in 2007 and started operating in 2008. The designation ‘Commissioner for Future Generations’ is misleading, as many countries in Europe and throughout the world operate as a separate Ombudsman for protecting the rights of children, and the general meaning of ’future generations’ refers primarily to this function. In Hungary, however, protection of the rights of children has always been the competence of the general Ombudsman and the term ‘rights of future generations’ has meant in reality the institution protecting the rights laid down in the Act on Environment Protection. Consequently, the Commissioner for Future Generations was the ’green’ Ombudsman. Therefore, the previously autonomous Ombudsmen operated last year on the basis of the Minorities Act and the Environment Protection Act, became the specialised Deputy Commissioners on 1 January 2012 with the very same tasks. Their competence and procedures, just like the general Ombudsman’s, are laid down in the Ombudsman Act (Act CXI of 2011 on the Commissioner for Human Rights). In accordance with the Basic Law, the single Ombudsman institution has been established, in which the Ombudsman and his or her two specialised deputies are elected for a term of six years by a two-thirds majority of the Members of Parliament. The institution has been renamed; the designation ’Parliamentary Commissioner for Citizens’ Rights” has been replaced by ’Commissioner for Fundamental Rights’. More emphasis is laid on its task to turn to the Constitutional Court for ex post review of norms, as the possibility of actio popularis ceased to exist; citizens and their organisations can turn to the Constitutional Court only via the Government, one-fourth of the Members of Parliament or the Ombudsman (item e) paragraph (2) of Article 24). Similarly to other institutions of public law and fundamental rights, the new Basic Law has not divested the institution of Ombudsman of its original character but left it unchanged; the Ombudsman is still an independent institution which aims to reveal impro382 KadarKrisztian_16_belivek.indd 382-383 prieties endangering the enforcement of fundamental rights and makes recommendations to the Government, public administration or to the Parliament for redress. The institution, which is now undergoing unification, is expected to become more effective, to have a clearer policy and to enforce fundamental rights in their context; also, according to the decision of the makers of the Basic Law, the institution will pay special attention to the rights and interests of national minorities and of environment protection, which are now represented by the specialised deputies. At present the Ombudsman’s control does not cover the activities of the courts and of the prosecution service; neither can he or she conduct inquiries into civil law entities unless their operation endangers the fundamental rights of many citizens. Where do I see further possibilities for improving the protection of fundamental rights in our more and more unified institution? In order to support the activity of the High Commissioner for Human Rights in Geneva, the United Nations started to build a network of National Human Rights Institutions in the 90’s that has became a global network by now. Previously there had not been such an institution in Hungary; therefore, in 2010 we submitted an application of accreditation to the coordinating office of the UN Human Rights High Commissioner. The application was decided favourably upon in 2011. National human rights institutions operate in various structures, and in Europe this task is often performed by the Ombudsman. The activities of the institution are varied but it mainly contributes to the enforcement of the Universal Declaration of Human Rights and of the great international treaty systems (rights of children, women, refugees, persons with disabilities, etc.) with the regular monitoring of implementation, with uncovering the obstacles and with recommendations to international organisations, governmental organs and parliaments. These UN accredited institutions cooperate with organisations of the civil society protecting rights. They take part in human right education and the gathering, classification and processing of information on human rights. In the future this function will be performed in Hungary by the unified Ombudsman institution. This may provide an opportunity for playing an intermediary role between governmental and nongovernmental organisations (NGOs) in order to establish and develop our human rights culture. Hungary has a lot to do in order to implement UN conventions; this task often comes second after current domestic and foreign policy expectations and the enforcement of the interests of various government departments. 383 2013.01.18. 19:05 I. Unaltered role of protecting fundamental rights The effective Ombudsman-type protection of rights has proved to be one of the basic cornerstones of guaranteeing fundamental rights since the first Ombudsman entered office in the summer of 1995. In accordance with the Basic Law, the Parliament adopted an Act on 11 July 2011 on the unified Ombudsman system in order to create an effective, coherent and full protection of fundamental rights. Based on previous provisions of the Constitution, Article 30 of the Basic Law clarifies that the Commissioner for Fundamental Rights performs a general fundamental rights protection task, and that anyone can initiate the Commissioner’s proceeding. As in the previous period, the Commissioner’s primary task is in accordance with the classic role of Ombudsman: he or she inquires into the improprieties relating to fundamental rights or has these improprieties inquired into, and initiates general or specific measures for redress. During the process leading to the adoption of Act CXI of 2011 on the Commissioner for Fundamental Rights (Ombudsman Act) the legislator considered several aspects: first the practice of the last 15 years, secondly the experience of the application of the previous Ombudsman Act, thirdly the processes of the Ombudsman-type protection of rights, and finally examples of success in other European countries. Due to the advantages of a unified system, to the new features of the regulation and to the differentiated procedural rules, the new Ombudsman Act (applicable as of 1 January 2012) may increase the level of protection of fundamental rights. Furthermore, it is essential for the Commissioner to continue to cooperate with all parties of fundamental rights protection: with the Constitutional Court, with the courts and with civil society organisations for the protection of rights. Concerning information rights, it brings new possibilities that the tasks and competences of the Commissioner for Data Protection (including authority-type public powers) have been taken over by an independent authority. In the single Ombudsman model specialised Deputy Commissioners are responsible for the special protection of the interests of future generations and the rights of national minorities living in Hungary, respectively. Deputy Commissioners have various tasks; their activities are based on internal professional cooperation and coordination. They monitor the enforcement of the fundamental rights concerned, regularly inform the Commissioner on their relevant experience, call his or her attention to the danger of violation of rights of larger groups of natural persons, may pro384 KadarKrisztian_16_belivek.indd 384-385 pose the starting of ex officio proceedings, contribute to the inquiry of the Commissioner for Fundamental Rights, and finally they may propose that the Commissioner turn to the Constitutional Court. In the future too, the Ombudsman’s activities will, among others, focus on the protection of the rights of individuals who are not, or not entirely capable of enforcing their rights. In the course of their work, Parliamentary Commissioners paid special attention to the situation of persons living with disabilities. The Ombudsman Act gives a legal expression to this already existing role and attitude, stipulating that the Commissioner for Fundamental Rights, in the course of his or her activities, has to pay special attention to assisting, protecting and supervising the implementation of the UN Convention on the Rights of Persons with Disabilities, especially by conducting ex officio proceedings. The situation is much the same regarding the protection and enforcement of the rights of children, where the Ombudsman has been trying to achieve results with all legal and other tools at his disposal since 2007 by launching special projects and promoting legal awareness. Furthermore, the Ombudsman Act designates other social groups to the rights of which the Commissioner for Fundamental Rights has to pay special attention, following the rights protection philosophy of previous Ombudsmen. The list of redefined and new tasks does not end here. Up until now, there have been no uniform statistical data on violations of fundamental rights. For the first time, the Ombudsman Act stipulates that the Commissioner for Fundamental Rights shall keep statistics on the violation of fundamental rights; other organs of fundamental rights protection (like the Equal Treatment Authority, the National Authority for Data Protection and Freedom of Information and the Independent Police Complaints Board) are obliged to supply data as well. This will allow us to have a comprehensive and true view of the situation of human rights and the tendencies of committed infringements in any given year. Compared to the former regulation, the competences of the Commissioner for Fundamental Rights have expanded, in exceptional cases he has the right to inquire into the activity or omission of organs other than authorities as well, if their activity or omission gravely infringes the fundamental rights of a larger group of natural persons. In such exceptional cases the Commissioner may initiate proceedings with the competent authority as a result of the inquiry. Consequently, the Ombudsman Act enables the Commissioner to act in order to protect the right to a healthy environment when this right is violated by others than authorities or by public utility providers. 385 2013.01.18. 19:05 The scope and nature of the classic tools and methods of inquiry and the applicable measures have not changed significantly. However, the Act has become more distinct in this aspect than the previous one. The detailed regulations and definitions (for instance those of authority, impropriety, and ex officio inquiries) are in accordance with the former practice of the Ombudsman and they help a flexible and effective interpretation of the Ombudsman’s tasks and competences. The regulation in the Act concerning the competence of initiating the adoption or amendment of pieces of legislation is also progressive. It ensures that the Commissioner for Fundamental Rights may propose to the law-maker the revision of a legal regulation if improprieties are established in individual cases, unless the impropriety only occurred due to the proceedings of the authority or public utility provider. The possibility of taking parallel measures greatly helps to provide a complex solution for uncovered legal problems. In order to redress improprieties, the Ombudsman Act increases the effectiveness of the protection of rights by ensuring the possibility of new, even immediate measures. For instance, the Prosecution Service is to be informed when the Commissioner’s inquiry draws the conclusion that a coercive measure has been ordered unlawfully. The possibility that the Commissioner may now refer a petition to the prosecutor if he or she established no impropriety but becomes aware of circumstances pointing to the infringement of a rule of law also contributes to the redress of injuries. Based upon the Ombudsman Act and the previous experience, the Ombudsman issued a normative order on the professional rules and methods of inquiries [See order 2/2012 (I. 20.) CFR]. The Commissioners have always considered the decisions of the Constitutional Court authoritative on the content of fundamental rights. After the entry into force of the Basic Law the Commissioner for Fundamental Rights intends to continue this practice. As a consequence of the constitutional changes, the institution of actio popularis, which made it possible for everybody to turn to the Constitutional Court, was terminated on 1 January 2012. The Commissioner for Fundamental Rights is still entitled, besides the Government or one-fourth of the Members of Parliament, to initiate an examination of a law with the Constitutional Court for their compliance with the Basic Law or for determining whether they are in conflict with international treaties. Furthermore, according to the new Ombudsman Act and the Act on the Constitutional Court, the Ombudsman’s inquiry or report are not preconditions of a petition to the Constitutional Court. Filing application petition for the ex post review of norms may not only be made as a measure: the Ombudsman 386 KadarKrisztian_16_belivek.indd 386-387 may exercise this competence of his or hers upon anyone’s complaint or ex officio, stating his reasons and requesting that the Constitutional Court examine the issue. Doing so, he or she takes on the role of a mediator, and may become a fast, flexible and active initiator of detecting and removing from the legal system those Acts and other pieces of legislation which violate the Basic Law or international treaties on human rights. According to the new regulation the Commissioner for Fundamental Rights can also act as a bridge or mediator between the national and international rights protection mechanisms in numerous important fields of fundamental rights. Only the formal framework seems to be a novelty, as Commissioners have always applied and invoked international and European human rights standards, requirements and commitments undertaken by Hungary. The new Act stipulates further tasks; it clarifies that, upon appointment, the Commissioner for Fundamental Rights performs the tasks of national mechanisms in accordance with Hungary’s commitments undertaken in international treaties. Serious preparations need to be made, since the national preventive mechanism laid down in the Optional Protocol of the UN Convention against Torture and Other Cruel, Inhuman and Degrading Treatment or Punishment (OPCAT) will be performed by the Commissioner for Fundamental Rights as of 2015. Undoubtedly, there is a solid basis to build on; the protection of the rights of detainees and the conducting of inquiries into the functioning of and conditions in penitentiary institutions have always been attributed special importance in the Ombudsman’ practice so far. The new regulation, laid down in an Act of Parliament, allows the Commissioner for Fundamental Rights to become not only an esteemed member of the mechanism for the protection of fundamental rights in Hungary but also a responsible, central and active player who can shape the practice of fundamental rights, and whose activity is based on cooperation and the persuasive power of publicity and of constitutional arguments. The Ombudsman Act confirms the Ombudsman’s philosophy, according to which – beyond the classical tasks of Ombudsmen (i.e. those of conducting inquiries and issuing recommendations in individual cases) – the promotion of preventive and proactive protection of rights, of legal awareness and of communication among the parties are also indispensable for the enforcement of constitutionality in everyday social relations. 387 2013.01.18. 19:05 II. Reasons for remodelling the Hungarian Ombudsman system Why was it necessary to remodel the Ombudsman system in Hungary in 2011? Previously different Commissioners were established at different times, out of different legislative intentions, and their cooperation was not satisfactory. In Hungary it was unclear how many and in what cases people turned to the different Ombudsmen and to other authorities with their complaints. Even though the four Ombudsmen had a common Office, there was no uniform procedure for or classification of complaints, not to speak of the ones submitted to the Equal Treatment Authority, to the Independent Police Complaints Board or to the fora of public media. The state of human rights in Hungary cannot be reconstructed from any of the annual or long-term reports of any authority or civil society organisation, as the precondition of such a report would be the interconnection and systematic processing of the databases. In the absence of such information one cannot see tendencies of development, not even those decision-makers who are committed to make changes. Consequently, in the process of making the new constitution the legislator could not build on such comprehensive surveys. Without proper information and sources that are available to everybody, the evaluations were unilateral and biased. Now a balanced and regular flow of information among different authorities may increase the effectiveness and precision of legislation and decision-making. Another problem was that the great global and European international treaty systems of the last twenty years (e.g. on the rights of children, persons with disabilities or women) did not have independent control organs in Hungary that would monitor the implementation of these international standards in our country. This would require money from the central budget and the support of new civil society organisations having the right to access and control. Government organs in Hungary were unwilling to establish such independent control organs, although the country had committed itself in these treaties to do so. To set an example, our accession to the Optional Protocol to the UN Convention on the Prevention of Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment (OPCAT) had been delayed for a long time. Accession would commit Hungary to operate a national monitoring authority within this optional international system; said delay was already criticised in the report of the parliamentary subcommittee which investigated the human rights violations of 2006. In 2011, the decision was made to accede to the OPCAT system and it was also decided that the main institution operating the control mechanism in Hungary would be the Commissioner for Fundamental Rights. 388 KadarKrisztian_16_belivek.indd 388-389 According to the Basic Law, the previous Commissioner for Data Protection ceases to operate as a separate Ombudsman from 1 January this year; his or her tasks are to be performed by an independent authority established by a cardinal Act (’Freedom and responsibility’, paragraph 3 of Article VI). The previous Hungarian system was exceptional in Europe: the protection of data and freedom of information were not performed everywhere together within one institution, and that institution was not in every case elected by and accountable to Parliament; on the other hand it had to be independent in accordance with EU law. Until 31 December 2011, however, due to their common Office, the Commissioner for Data Protection was tied to the other Ombudsmen dealing with completely different subject-matters. According to the new Act, the data protection authority is given certain public powers, like registration or even the power to impose severe fines. Such powers, however, are hardly compatible with the competence of European-type Ombudsmen, which competence is restricted to making recommendations. Therefore, the cardinal Act had to establish a new authority for the exercise of these new public powers. The regulation pertaining to the new authority called National Authority for Data Protection and Freedom of Information, operating as of 1 January, is under reconsideration as a consequence of European criticisms. As laid down in the provisions effective as of 1 January 2012, the transitional provisions designate the former Commissioner for Civil Rights, to fill the office of Ombudsman in the new, unified institution. I find it my duty therefore to do my best in this new system, to the establishment of which I have also contributed to some extent. I will endeavour to promote the successful development of the institution in cooperation with the other (also remodelled) constitutional institutions and with the specialised Deputy Commissioners. I presume the remaining period of my mandate might be enough to form the new institution’s practices and to make suggestions to the law-maker for the correction of practical problems. Legislative change have affected almost every part of our system, and they were also adopted according to a relatively hurried schedule, so it should not surprise us that this body of legislation is going to produce a series of problems that stem from internal incoherencies and which could only be partly overcome in practice. Consequently the regulations introduced as of 1 January 2012 need continuous corrections. Changes are neither ‘good’ nor ’bad’ in themselves. They should be justified by their results, about which I am optimistic. Not only the unification of the different Ombudsman’s offices but also the very significant enlargement of the Ombudsman’s competences open up wide perspectives of development instead of the dead-ends of the former fragmented 389 2013.01.18. 19:05 system. However, results should be achieved in a ’suboptimal’ and crisis-ridden climate. Therefore, organisational effectiveness should be optimised in a suboptimal environment, which is not easy, but it is not impossible either. We have been given quite a lot of means and tools to fulfil our mission. These are our new competences, the advantages of a unified management, the benefits of the integration of the formerly fragmented fields, the help of a civil society interested in working with us because of our competence to turn to the Constitutional Court, the possibility of exceptional inquiries into the fundamental rights related improprieties of private organisations, our widening competence in the institutional monitoring of the implementation of international treaties as national institutions of human rights, and mediation between domestic and international law. III. Ex officio Investigations of Systematic Problems in the Realization of Fundamental Rights: the Projects of the Hungarian Ombudsman The Commissioner since 2008 launched a new working method and a way of thinking after his election in September 2007. He examines every year topics which are especially important for the society and the enforcement of laws and have a particular significance from the aspect of rights and freedoms. Within these defined fields, he initiates special projects which have particular focus and consideration within the Ombudsman’s office (initiating particular inquiries etc), in the media and the public presentation of the Commissioner. Since there is no independent parliamentary institution for the protection of the rights of children, the Commissioner operates during his mandate also as an Ombudsperson for children’s rights. Projects in 2008: • Homelessness • Children’s Rights (awareness raising) • Freedom of Peaceful Assembly Projects in 2009: • Rights of people living with disabilities • Children’s rights (violence) 390 KadarKrisztian_16_belivek.indd 390-391 • Right to free movement and transport • Right to strike Projects in 2010: • Rights of elderly people • Children’s rights (children in care) • Consequences of THE financial crisis Projects in 2011: • Right to Health • Child Healthcare • Disaster Management Projects in 2012: • Project on Children’s Rights; Child-Friendly Justice • Project on Penitentiary System with a Human Face • “Fundamental rights in and outside the institutions” • Project on The Situation of Lawyers in Criminal Proceedings • The “Dignity of Labour” Project • Project on the “Losers of the Crisis – in the Captivity of the Legal Regulations” – 2012-2013 Main projects ongoing in 2012: 1. Project on Children’s Rights; Child-Friendly Justice The Commissioner for Fundamental Rights, as an Ombudsman for children, defends the rights of the child as well. Since 1 January 2012, based on the new Ombudsman Act (Act CXI of 2011), which prioritizes the defence of children’s rights as his main task, the Commissioner has become stronger and more effective to fulfil this responsibility. 2. Project on Penitentiary System with a Human Face- “Fundamental rights in and outside the institutions” The Commissioner for Fundamental Rights initiated the project on penitentiary institutions as a special project for the year 2012 to investigate the legal background and relations of detainees’ fundamental rights – in the systems of either the penitentiary 391 2013.01.18. 19:05 institutions or the immigration office. It should be emphasized that the Commissioner, since entering his office, has given special attention to the conditions and circumstances of persons in detention. Therefore, he has taken more on the spot inspections in several institutions. Inquires have not been initiated only by individual complaints, but he has started more ex officio examinations as well. He has also called the attention of the general public to the serious human rights violations that he has found by his activity or via the press. The Act on the Commissioner for Fundamental Rights empowers the Ombudsman to perform, as of 2015, the tasks related to the national preventive mechanism in the fight against torture and other cruel, inhuman or degrading treatment or punishment. 3. Project on The Situation of Lawyers in Criminal Proceedings The Ombudsman has started his project on the lawyer’s situation and on the protection of the rights of lawyers and their clients in 2012. The focus of his comprehensive inquiry is the constitutional monitoring of the enforcement of lawyer’s and their clients’ rights, practices of bar associations, and the related regulations. 4. The “Dignity of Labour” Project This year the Commissioner for Fundamental Rights initiated ex officio a fundamental rights project called the “Dignity of Labour”. Within the framework of the project the Commissioner examines the implementation of the right to work and other related rights such as the protection of human dignity and the requirements deriving from equal treatment and from the rule of law. During his inquiries the Commissioner pays special attention to the employment opportunities of protected groups such as women, mothers (parents) with small children and new entrants to the labour market. 5. Project on the “Losers of the Crisis – in the Captivity of the Legal Regulations” - 20122013 Within the framework of the two-year project entitled ‘The Losers of the Crisis’, the Commissioner for Fundamental Rights is conducting several comprehensive inquiries on the effects of the global crisis on human rights. Fundamental rights have been seriously affected by this hard and critical period of economic, social and moral crisis. The Ombudsman is mapping the treatment of uncovered problems and conflicts within state institutions. The project aims to propose solutions on how eventually improper practices related to fundamental rights or the deficiencies and contradictions of the 392 KadarKrisztian_16_belivek.indd 392-393 relevant legal background can be remedied by the human rights instruments of the Ombudsman. IV. International Activities of the Ombudsman in 2011 Our institution received the United Nations’ OHCHR National Human Rights Institution (NHRI) B-status from the ICC’s Sub-committee for Accreditation. The main mission, as a corollary of the status, is the independent and expert inspection of human rights in the given country on the basis of the Paris Principles of 1991. The most important tasks are: • Human rights counselling or consultation either ex officio, or on one’s own initiative, or commissioned by the government, parliament or a state organ; • Preparation of position papers, recommendations and reports and their presentation to the public on human rights issues; • Recommendation and promotion of the ratification of international agreements; • Promoting the adjustment of the domestic legal order to international human rights agreements and the effective implementation of the latter; • Active participation in the compilation of the human rights reports for the UN; • Cooperation with the UN and international or domestic human rights organisations; • Education and research into human rights; • Calling the attention of society to issues of human rights (particularly those related to discrimination) and to the violations of rights. • In the first half of 2012 our bilateral and multilateral relations were equally important, since the significant changes in the Hungarian legal system (the new Media Act, the new Basic Law, the cardinal Acts on Churches, on Informational Self-determination, the Organisation of the Courts, the Electoral Procedure, etc.) generated increased international attention focusing on human rights in Hungary. In 2012, the Office of the Commissioner for Fundamental Rights has been a rather active participant of the various international networks of Ombudsmen (IOI, EOI) of international organisations (FRA, Council of Europe, OSCE, etc.) as the exchange of information and experience have had a highly positive effect on our work. 393 2013.01.18. 19:05 V. Relations of the Commissioner for Fundamental Rights and the Constitutional Court On the basis of the Basic Law the Constitutional Court continues to be a body for the performance of constitutional protection, since it is the main organ for the protection of the Basic Law; its primary task is the review of norms, in other words the examination and annulment of laws which are contrary to the Basic Law. Moreover, in constitutional complaint proceedings citizens can now initiate not only the review of laws but also of particular judicial decisions. In the new constitutional system relations between the Hungarian Ombudsman, who performs a very important function in protecting fundamental rights , and the Constitutional Court may undergo significant changes and transformations. There is no change in that the Commissioner may not inquire into the activities or decisions of the Constitutional Court, and the decisions of the Constitutional Court are binding on the Commissioner for Fundamental Rights, as they are on all other organs. Tenets and tests set out in the decisions of the Constitutional Court on certain constitutional principles and fundamental rights continue to be authoritative for the Commissioner. It is a significant change, however, that since 1 January 2012 only certain persons and organs may turn to the Constitutional Court. Besides the Government and one fourth of all Members of Parliament, the Commissioner for Fundamental Rights may also initiate a review of the conformity of laws with the Basic Law if he or she considers that the law is contrary to it. It is noteworthy that the new regulation on the Constitutional Court does not ensure actio popularis any more, i.e. it does not allow citizens without a legal interest to initiate the review of the constitutionality of a law. On the basis of an inquiry conducted upon an individual complaint and following the establishment of a situation infringing a fundamental right, the Ombudsman, as in the past, still has the possibility to file a petition to the Constitutional Court in order to request the ex post (after adoption) review of the contested regulation. As a result of the narrowing of the right to file petitions there is a steady increase in the number of those complaints arriving to the Commissioner where the proceedings of the Ombudsman are not initiated in connection with particular cases involving an authority but complainants request him to turn to the Constitutional Court in connection with a law. According to the Ombudsman Act the Commissioner also has the possibility to file petitions with the Constitutional Court directly on the basis of submitted complaints without conducting proceedings or inquiries. For filing direct petitions one should consider especially the gravity of the existing fundamental rights 394 KadarKrisztian_16_belivek.indd 394-395 violation, the number of injured persons and the group(s) these persons belong to. Moreover, the Commissioner also has the right to initiate a review of the constitutionality of laws which have already been adopted and published but not yet entered into force. Furthermore, if there is prima facie evidence that the law is contrary to the Basic Law, the Ombudsman may request that the Constitutional Court temporarily suspend its entry into force. This measure may be taken if it is necessary to take immediate measures to avoid serious and irreparable damage or disadvantage or to protect the Basic Law or legal certainty. The Act on the Constitutional Court gives the right to the Commissioner for Fundamental Rights to initiate – besides one fourth of all Members of Parliament, the Government, the President of the Curia and the Prosecutor General – that the Constitutional Court examine whether legal regulations are in conflict with international treaties. Ombudsmen had the same right under the previous Ombudsman Act, but the new circumstances I pointed out earlier, i.e. the narrowing of the circle of those who may submit petitions, may render the application of this instrument even more significant. The Commissioner for Fundamental Rights may initiate directly, on the basis of a petition submitted, that the Constitutional Court establish not only that a law is contrary to the Basic Law, but also that it is contrary to an international treaty. Such relevant international treaties are for example the European Convention on Human Rights or the relevant case-law of the European Court of Human Rights interpreting the Convention. Other instruments belonging to this category are the Charter of Fundamental Rights of the European Union and several important human rights conventions, in particular the Convention on the Rights of the Child or the Convention on the Rights of Persons with Disabilities. Another change is that in the new system the Constitutional Court does not deal with the review of local government decrees in principle. Such a competence belongs to the Curia (the former Supreme Court). If the complainant requests the Commissioner to initiate proceedings of the Constitutional Court in connection with a local government decree which is contrary to an Act, then – considering whether the decree is directly contrary to the Basic Law or not – the Ombudsman may start an ex officio inquiry in the given case, and within its framework may ask the competent Government Office to conduct an inquiry. Pursuant to the Basic Law, if the Metropolitan or County Government Office finds that the local government decree or any of its provisions is contrary to a rule of law, it may apply to the Curia for a review of the local government decree. Thus, the Commissioner does not have the right to go to court directly in such cases. 395 2013.01.18. 19:05 I also have to point out that pursuant to the Act on the Constitutional Court neither the Commissioner, nor other organs or persons have the right and possibility any longer to initiate proceedings for the establishment of an unconstitutional situation which is manifested in a legislative omission. The establishment of legislative omissions is now exclusively in the competence of the Constitutional Court; it may do so ex officio, but external initiatives are excluded by the Act. In connection with the above it is also worth mentioning that on the basis of the Act on the Constitutional Court the Commissioner for Fundamental Rights, unlike under the previous regulation, may not request an abstract interpretation of the Basic Law: only the Parliament or its committees, the President of the Republic, or the Government have the right to initiate such proceedings. VI. Issues related to the Basic Law According to the Commissioner for Fundamental Rights of Hungary, the Transitory Provisions of the Basic Law passed by the Parliament in a separate document in December 2011 severely harms the principle of the rule of law, which may cause problems of interpretation and may endanger the unity and operation of the legal system. I had concerns as the Transitory Provisions contain many rules obviously having not transitional character. The Ombudsman requested the Constitutional Court to examine whether the Transitory Provisions comply with the requirements of the rule of law laid down in the Basic Law. An individual requested in his submission that the Commissioner should initiate the annulment of some sections of the Transitory Provisions because those are contrary to the Basic Law and to many international treaties. The submission has also raised more theoretical problems that the Commissioner found justified and using his new competence vested upon him by the Basic Law and initiated a proceeding at the Constitutional Court without any delay. This was the first occasion when the ombudsman initiated ex post examination of a legal regulation following a submission of a citizen. The Ombudsman took into consideration the fact that citizens are no longer entitled to directly request the examination of the Transitory Provisions at the Constitutional Court because of the change of filing petitions. Submitting the petition by the Commissioner to the Constitutional Court, the Ombudsman considered it particularly important that the Constitutional Court should provide a verdict in this question to prevail the principles of the rule of law and legal security. 396 KadarKrisztian_16_belivek.indd 396-397 The constitutional concerns of the Ombudsman’s petition can be divided basically into two groups. According to the Commissioner, from the point of view of prevailing the rule of law, the uncertain legal source status and the place in the legal system of the Transitory Provisions is problematic. It causes worries that the legal regulation – exceeding the authorisation of the Basic Law – classifies itself part of the Basic Law, meanwhile trying to avoid that its provisions can be compared to the guaranteed rules and principles of the Basic Law. In his petition, the Ombudsman particularly emphasized that it would entail dangers when Acts passed on the basis of the Transitory Provisions could contradict the Basic Law itself or its fundamental rules. According to the Ombudsman, a number of sections of the Transitory Provisions do not comply with the transitional requirement appearing in the title of the legal regulation: the main criteria of the transitional provisions of a legal regulation is when the transition from the old regulation into the new one necessitates its approval, therefore it always includes concrete and transitory, interim provisions connected to the transition itself. Besides formal objections and theoretical problems explained in detail, the Commissioner indicated in his petition that there are even more constitutional concerns regarding the contested provisions. VII. Court regarding new Motions to the Constitutional organic laws Student Status. The mandatory conditions of student contracts, in particular the regulation that provides for a long and general obligation to perform work in Hungary, constitute a disproportionate restriction of rights. The Commissioner for Fundamental Rights therefore requested the Constitutional Court to examine whether the government decree on student contracts is compatible with the guarantees laid down in the Basic Law. The National Conference of Student Self-governments requested the Commissioner to file a petition to the Constitutional Court since the detailed rules on student contracts were laid down in a decree instead of an Act of Parliament, and moreover the regulation puts unnecessary and disproportionate restrictions on the fundamental rights of students of higher education and infringes the requirement of equal treatment. The Ombudsman found that a considerable part of the fundamental rights concerns raised in the submission are well-founded; therefore, he initiated proceedings with the Constitutional Court and simultaneously requested the immediate suspension of the entry into force of the government decree. 397 2013.01.18. 19:05 The contested government decree stipulates that students having obtained their degrees are obliged to work in Hungary for a time twice the length of their study time within twenty years of graduating; if they fail to do so, they have to pay back in part or in full the amount of state support received. In his petition the Ombudsman pointed out that student contracts, with regard their nature, cannot be compared to traditional study contracts. The contracting parties, namely the student and the State, are not in an equal position and, being aware of the social circumstances, the often declared voluntary nature of the conclusion of the contract is a reality only for a presumably very narrow circle of young people whose families live in good financial situation and would be able to finance their higher education without state support. According to the position of the Parliamentary Commissioner, the rules on student contracts constitute a restriction on the right of students to self-determination and their right to freely choose their work and profession. The Commissioner emphasised that in order to ensure proper guarantees, the main elements of student contracts should be regulated on the level of Acts of Parliament because these contracts put restrictions on several fundamental rights of the students. The Ombudsman has also drawn attention to the fact that the social need which presumably serves as the justification of the student contracts, the domestic employment of persons with degrees, may at most qualify as an objective of legal policy. According to the Commissioner the restriction is not proportionate: in the contract the student undertakes a unilateral and long-term obligation, while pursuant to the decree the State only ‘strives’ to ensure adequate work opportunities for graduates, consequently, if necessary, they must get a job with a domestic employer even outside their professional field. The petition of the Commissioner for Fundamental Rights also mentions that when interpreting the content of the right to freely choose one’s job and profession, one cannot disregard the European Union norms on the free movement of persons and on free access to employment which are binding on Hungary. The provision of the Regulatory Offences Act making it possible to order confinement and detention for regulatory offences is contrary to the Basic Law and the UN Convention on the Rights of the Child, which has been promulgated in Hungary. Since, in spite of previous warnings of the Ombudsman, the new Regulatory Offences Act, effective as of 15 April, still allows the above sanctions, the Commissioner for Fundamental Rights has requested the Constitutional Court to review certain provisions of the Act. The Ombudsman already established in November 2010 that the provision of the Regulatory Offences Act then in force, 398 KadarKrisztian_16_belivek.indd 398-399 which terminated the prohibition of the confinement of juvenile offenders and even permitted that fines imposed on them be converted to confinement, was contrary to the right of children to care and protection, as well as to their right to personal freedom. In the particular case, three secondary school girls as parts of a dare tried to steal some costume jewellery, and when the security guard of the shop noticed what they were doing, they claimed to regret what they had done and gave back the jewellery. The police took the fifteen years old girls to the police station, detained them for a day and a half and justified their proceedings with the amended regulations. As a matter of fact, in August 2010 the Parliament repealed those provisions of the Regulatory Offences Act which in the case of juvenile offenders prohibited the imposition of confinement. The Commissioner requested the Minister of the Interior to remedy the impropriety. The Minister informed him that the measure was justified, because otherwise law enforcement would lack the necessary means against offenders and that confinement contributed to the forming of the personality of young people. The Ombudsman did not accept this response and the Minister of the Interior promised that when drafting the new Act on Regulatory Offences the Ministry would, based on the experience gained in applying these measures, reconsider the rules on the confinement and detention of juvenile offenders. Despite the Ombudsman’s concerns, however, the new Regulatory Offences Act, effective as of 15 April 2012, continues to provide for the possibility of confinement and detention for juvenile offenders and of converting fines to confinement. The absurdity of the situation is shown by the fact that while only children over sixteen years may be sentenced to community service, children over fourteen may forthwith be sentenced to confinement. Since the legislator did not take steps to redress the situation which is contrary to fundamental rights, the Commissioner has initiated the review of the contested provisions of both the former and the new Act with the Constitutional Court. In his petition we explained in detail that the concept introduced by the law-maker and retained in the new Regulatory Offences Act cannot be reconciled with either the provision of the Basic Law on the protection of the rights of children, nor with the international commitments undertaken by Hungary, and that it violates several provisions of the Convention on the Rights of the Child. The Ombudsman repeatedly points out that in regulatory offence proceedings of persons under eighteen the application of short deprivation of liberty unnecessarily and disproportionately restricts the fundamental rights of the persons concerned. In the case of juvenile persons the restriction of personal liberty 399 2013.01.18. 19:05 is harmful and may only be applied in serious cases and as a last resort. According to the Commissioner, in a democratic State under the rule of law it cannot be justified that to a short-term deprivation of liberty there is no alternative measure or instrument as restrains rights to a lesser extent, ensuring education and restoration instead of reprisal. The Commissioner for Fundamental Rights requested the Constitutional Court to annul the provisions that make it possible to deprive of their liberty juvenile offenders who commit regulatory offences. At the same time the Commissioner has indicated that the annulment in itself would not completely remedy the existing impropriety; for that it would be necessary to adequately supplement the Act. Consequently, the Ombudsman has also requested that the Court establish that the present legal situation is contrary to an international treaty, as in the Regulatory Offences Act the Parliament failed to lay down the exempting rules which would provide for the enforcement of the principles of the Convention on the Rights of the Child, guaranteeing enhanced protection for minors. The Commissioner for Fundamental Rights requested the Constitutional Court to examine and annul certain Provisions of the Media Act because the rules on the election and the termination of the mandate of the Hungarian Media Authority and of the President of the Media Council raise concern on several points. Upon the public summons of a civil society organisation more than one hundred complainants asked the Ombudsman to file a petition to the Constitutional Court on the base that the regulation does not exclude ‘the decisive influence of the governing coalition, which possesses a two-thirds majority in the Parliament, on the Media Council and therewith on the press, and thereby restricts the freedom of expression and of the press in a way that is contrary to the Basic Law’. After reviewing the problems indicated in the complaint, the Ombudsman has come to the conclusion that several provisions of the Media Act which regulates the election and the termination of the mandate of the President and of the members of the Hungarian Media Council, taken together, are meaningless and inapplicable. The internal incoherencies of the text could infringe the requirements of the rule of law and of legal certainty. On the basis of the Act it can happen for example that for a transitional period the Media Authority has two presidents in parallel so that, pursuant to the regulation, the powers of the presidents are unclear. The Ombudsman has also drawn the attention of the Constitutional Court to the fact that the lack of clarity of the relevant regulation, beyond infringing the requirements of the rule of law, may also paralyse the operation of the Media Council, which may indirectly 400 KadarKrisztian_16_belivek.indd 400-401 constitute an infringement of the obligation of the State to protect the rights related to the freedom of expression. Therefore, the Commissioner for Fundamental Rights has initiated that the Constitutional Court review and annul those provisions of the Media Act which relate to the mandate of the President of the Media Council and are contrary to the principle of the rule of law. The Commissioner for Fundamental Rights requested the Constitutional Court to examine the provision of the Act on Electoral Procedure which limits in HUF 1 million per candidate the amount that can be used during the electoral campaign for Members of Parliament. The Ombudsman has invited the Constitutional Court to examine the legislative omission in connection with the control of the utilisation of campaign funds. The upper limit of HUF 1 million cannot be observed by the political parties if they wish to comply with their obligation, laid down in the Basic Law, to participate in the formation of the will of the people – says the author of a petition requesting the Ombudsman to initiate a constitutional review of the relevant provision of the Electoral Procedure Act. According to the Commissioner for Fundamental Rights a lawful, stable and predictable electoral system is an indispensable precondition of popular representation based on the principle of democracy. An essential part of this system is the electoral campaign, which plays an important role in ensuring the possibility for voters to make responsible, conscious and informed decisions on which candidates and political parties to support. The amount that political parties may legally devote to campaign purposes has remained unchanged for almost 15 years, whereas the costs of electoral programmes and campaign costs of candidates have increased significantly. A regulation contrary to economic rationality entails that political parties now face choices which would be unacceptable in a State based on the rule of law. This regulation is especially prejudicial to parties outside the Parliament since it prevents them from competing successfully with parties represented in the Parliament and hence much better known by the public. In the opinion of the Ombudsman a mere increase of the amount for campaign purposes is not going to ensure that political parties do not exceed this legal limit. It is also necessary that the State should effectively control the utilisation of campaign funds. Consequently, the Commissioner for Fundamental Rights has invited the Constitutional Court to examine the question whether the regulation of such control provides for the all the necessary constitutional guarantees or there has been a legislative omission in this respect. The Commissioner for Fundamental Rights has filed two inter-connected petitions to the Constitutional Court on the new Acts 401 2013.01.18. 19:05 on Family Protection and on Family Support. The Ombudsman underlines in both petitions that the law-maker may not exclude existing, functioning and recognised partnership relations from the concept of family because it constitutes an infringement of the rights of the persons concerned, and at times even of the rights of their children. The Commissioner has been requested by an individual to initiate with the Constitutional Court the review of a provision of the Family Protection Act which defines the concept of family. Among partnership relations the Act specifies only marriage as a basis of the family. By doing so it excludes, contrary to the jurisprudence of the European Court of Human Rights in Strasbourg, the recognition and protection of ’marriage-like’ partnership relations of those who live in registered partnerships, i.e. of those who live in a relation with a partner of the same sex. Consequently, the Act makes a distinction not only on the basis of the forms of partnership relations but also on the basis of the sexual orientation of the persons choosing them, completely excluding from the notion of family same-sex partnership relations which cannot be considered marriage according to the Basic Law. The petition of the Ombudsman also points out that the concept of family, as stipulated by the Act, is not only detrimental for couples of the same sex-living in registered partnerships but also for other heterosexual couples who wish to live in partnership relations other than marriage. According to the Commissioner this narrow definition disproportionately restricts the right to privacy and family life of couples choosing another form of partnership relation than marriage, since they are essentially excluded from the notion of family. Thus the narrow definition of the concept of family unnecessarily and disproportionately restricts the right to equal dignity, privacy and family life of those who do not wish live in a marriage but in another form of partnership relation, and furthermore this solution is contrary to the European Convention on Human Rights. Certain provisions of the Act on National Minorities, which entered into force on 1 January 2012, are contrary to the Basic Law and restrict the fundamental rights of national minorities – the Commissioner for Fundamental Rights has requested the Constitutional Court to establish this and to annul the text parts indicated in his petition. Based on the submission of the nationality self-government of a municipality, the Commissioner summarised his objections in several points. One of them is that the requirement of equal treatment is not observed in the Act: it allows only those nationality organisations to have candidates at nationality self-government elections which are legally qualified as of ‘public benefit’. 402 KadarKrisztian_16_belivek.indd 402-403 The Act on National Minorities makes the holding of elections dependent on census data but, according to the Ombudsman, several social and political factors exert an influence on the number of those who are ready to voluntarily confess their national identity at the population census. Furthermore, at the time of the 2011 census it was not known what kind of role these data would play in respect of election rights. So there is a danger that it will not be possible to hold elections for national self-governments even in settlements where there is a significant number of nationality population. Considering the above, the regulation laid down in the Act unnecessarily and disproportionately restricts the right of nationality communities to set up their self-governments. It is a restriction of the right to use one’s mother tongue that nationality self-governments must draw up minutes of their sittings in Hungarian even if the language of the sitting is the mother tongue of the given national minority; this also infringes the obligations undertaken by the State and laid down in the European Charter for Regional or Minority Languages – says the Commissioner for Fundamental Rights in his petition to the Constitutional Court. Another problem is that the assets of nationality self-governments which cannot continue their activities after the 2014 general elections will be taken over by the local government of the settlement. These assets would only be used later for nationality related purposes. But how can the assets be used for nationality related purposes if there is no nationality community? According to the Ombudsman this regulation withdraws the right to dispose of the assets from the bodies elected by the nationalities on the one hand, and it is contrary to the provision that certain powers of terminated nationality self-governments of settlements are taken over by the national nationality self-governments on the other. Another provision of the Act is contrary to the presumption of innocence: it holds those representatives who have not taken part in the decision making responsible for any unlawful utilisation of nationality self-government assets. The resources in staff and equipment necessary for the functioning of nationality self-governments must be ensured by the local governments. Nationality representatives living with disabilities, however, may request a sign-interpreter for example only from the nationality self-government, which has a significantly lower budget. In the opinion of the Ombudsman this constitutes an unconstitutional discrimination and is also contrary to international obligations undertaken by Hungary. The Commissioner for Fundamental Rights has asked the Constitutional Court to examine the provisions of the Act on Public Education and to overview the Act on Vocational 403 2013.01.18. 19:05 Training. Failing the necessary preparation period because of the short time until the entering into force of the two Acts the principle of the rule of law might be infringed. According to the Commissioner the Act on Public Education limits the right of parents to upbringing contrary to the Basic Law and contrary to international agreements and concerning the date of starting school it does not take into account the expressed will of the parents. According to the Commissioner for Fundamental Rights the Act on Public Education does not take into account that following the principles of upbringing many parents do not wish to send their children to kindergarten in the first years of childhood. The legal regulation does not guarantee that only those children from their third year participate in kindergarten education, whose personality development is positively influenced this way and later the kindergarten education helps their integration into school education. Therefore the Act on Public Education limits the parents’ right to choose the way of upbringing for their children contrary to the Basic Law and contrary to international agreements on children’s rights – stated the Ombudsman. On the grounds of the Act on Public Education the child has to start school at the age of six or at the latest at the age of seven. The maturity for starting school is not only pedagogical or medical question but it might be influenced by numerous individual, familial factors, the judgement of which is not the task of an outside expert but of the parents having the primary right and responsibility to raise up the child. According to the Commissioner it is against the Basic Law and international agreement that by virtue of the Act on Public Education parents cannot decide that their children start school at the age of seven rather than at the age of six. The decision is made by the principal of the kindergarten and by the expert committee examining school maturity even despite of the will of the parent. In his Constitutional Court petition the Ombudsman expressed that because of the short deadline teachers, parents and children cannot be prepared in time for the consequences that the Act alters the legal and organisational system of education during the school year. They have no real opportunity to make their decisions after carefully learning the content of legal provisions or to adjust their behaviour to the regulations of law. personal reasons. According to the opinion of the Commissioner for Fundamental Rights the legal provisions regulating the recognition of churches are in contrary to the principle of separation of power, to the right to fair procedure and to the right to legal remedy. After analysing the initiatives of many religious organisations the Commissioner turned to the Constitutional Court. The Ombudsman finds the provision allowing the Parliament to make discretionary and final decision on the recognition of churches contrary to the Basic Law, as it does not consider the constitutional principle of separation of powers. The close relation to freedom of religion makes it indispensable that the decision on the recognition of the church, on rendering the religious status meets all guarantees protecting fundamental rights. If it is at the discretion of the decision-maker to give the religious status, then the aspects of deliberation have to be regulated by Act. The Act lacks such principles and provisions. The refusal should be reasoned, but the Act also lacks the requirement of reasoning in case of refusal. Thus we would never learn the reason of the refusal – stated the petition. Legal remedy has to be guaranteed against the decision on church status and the current regulation lacks it. The Ombudsman emphasises that on the basis of the principle of separation of power the Parliament cannot exercise tasks, during which it makes political decisions affecting fundamental civil rights without having appropriate constitutional guarantees. In his other petition the Commissioner for Fundamental Rights initiated that the Constitutional Court overviews the Act on Vocational Training referring to the shortage of preparation time. The Ombudsman also raised the problem whether it is in conformity with the state responsibility of ensuring free secondary school education if the gratuitousness of the first vocational education can be withdrawn without considering individual, 404 KadarKrisztian_16_belivek.indd 404-405 405 2013.01.18. 19:05 406 KadarKrisztian_16_belivek.indd 406-407 26/06/2012. 28/06/2012. 19/07/2012. 24/07/2012. 27/07/2012. 10/08/2012. 30/08/2012. 04/10/2012. 8. 9. 10. 11. 12. 13. 14. 15. 2012. 10. 04. 24/05/2012. 16. 10/05/2012. AJB-4744/2012 AJB-6347/2012 AJB-2834/2012 AJB-2784/2012 AJB-2638/2012 AJB-2883/2012 AJB-2523/2012 AJB-4436/2012 AJB-2332/2012 AJB-4159/2012 AJB-2303/2012 None 7. In process es against truancy 6. Law enforcement measur /2012 AJB-3299/2012 AJB-6980 04/05/2012. None 5. In process AJB-2709/2012 Family allowances 27/04/2012. None 4. /2012 In process AJB-2834/2012 28/10/2012. AJB-1041 Detention of minors 30/03/2012. /2012 tor 3. 3. 24/05/2012. AJB-3298 of the CC AJB-1961/2012 2. 15/04/2012. Reaction of the legisla- 22/03/2012. Transformation of the Social Service System of the Disabled Vocational training Public education Insulin supply for people suffering from diabetes Rules of taxation Family protection Party and campaign financing Election of the Media Council Rights of minorities Government decree on student contract Free legal aid concerning the submission of constitutional complaint Transitory Provisions of the Basic Law Pensions granted before the age of retirement The right of the Government Control Office to challenge contracts at courts Act on higher education (student contract) Act on churches initiation Decision In process In process In process In process In process In process In process In process In process In process, enter into force suspended In process In process In process Annulment (due to formal causes) In process In process. Upon the enquiry of the CC, the ombudsman upheld the petition (27/09/2012.) Decision of the CC Subject 2. 1. File AJB-2302/2012 Date of Subject Table 1: Ex officio 13/03/2012. File None None None None None None None None None None None Amendment to the Media Act Amendment to the Act on Minorities Amendment to the Act on Higher Education None Amendment to the Basic Law Reaction of the legislator Petitions to the Constitutional Court 2012 1. Date of initiation Annexes Table 2: Upon submission 407 2013.01.18. 19:05 31/01/2012. 15/02/2012. 15/02/2012. 15/02/2012. 15/02/2012. 16/02/2012. 16/02/2012. 16/02/2012. 19/04/2012. 19/04/2012. 19/04/2012. 19/04/2012. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Date of initiation 408 KadarKrisztian_16_belivek.indd 408-409 AJB-2470/2012 AJB-2469/2012 AJB-2467/2012 AJB-2466/2012 AJB-1877/2012 AJB-2078/2012 AJB-1040/2012 AJB-1874/2012 AJB-1925/2012 AJB-1667/2012 AJB-700/2012 AJB-1878/2012 File In process In process In process In process Rejection In process Refusal (the local government withdrew its decree) In process In process Rejection In process In process Commissioner for Fundamental Rights Commissioner for Future Generations Commissioner for Future Generations Commissioner for Future Generations Commissioner for Fundamental Rights Commissioner for Fundamental Rights Commissioner for Fundamental Rights Commissioner for Fundamental Rights Commissioner for Data Protection Commissioner for Data Protection Commissioner for Data Protection Commissioner for Data Protection Rights of detainees Environment protection; noise and oscillation load Omission concerning the Act on strike Sanctioning improper use of public areas National Security Services Act on Civil Procedure System of criminal records Protection of classified data Misdemeanour; resisting police measures Dustbin scavenging Concession of an establishment Building rules of Dunakeszi Decision of the CC Commissioner Subject Table 3: Petitions initiated before 2012 and upheld later on None None None None None None None None Reaction of the legislator Table 4: Petitions rejected or refused Act on strike Date of initiation File Subject Date of rejection 1. 19/04/2012. AJB-2467/2012 System of criminal records 18/09/2012. 2. 15/02/2012. AJB-1874/2012 Omission concerning the 26/06/2012. 3. 16/02/2012. AJB-2078/2012 Date of 1. 13/03/2012. File AJB-2302/2012 Dustbin scavenging Date of initiation File Subject Date of decision Decision 1. 30/03/2012. AJB-2834/2012 Government decree 03/07/2012. Total annulment 2. 24/05/2012. AJB-4159/2012 27/06/2012. Suspension of Family protection initiation Subject Transitory 26/07/2012. Refusal (the local government withdrew its decree) Table 5: Petitions the CC declared to be well-founded on student contract the enter into force Table 6: Petition upheld Date of maintenance 27/09/2012. Reason of enquiry Provisions of the Legal background altered Basic Law 409 2013.01.18. 19:05 The European Futures at the Danube: Danube Strategy and the global competitiveness of the EU28 Attila Ágh Budapest Corvinus University Introduction: The Perspectives of Danube Strategy in the EU28 Both the Baltic Sea Regional Strategy (BRS) and the Danube Regional Strategy (DRS, or EUSDR in the longer version) have belonged to the basic megatrends in the institutional and policy transformations of the EU. In the last years they still have lost momentum, first of all in the new member states (NMS) concerned. The global crisis management has re-directed all institutional and policy reforms of the EU. The vital changes from economic governance to economic government have been accelerated and these efforts have marginalized some other important transformations. This paper presents three main arguments for the all European importance of the functional macro-regions (FMRs) as the new mega-strategies in the EU. It is in the hope of keeping these strategies high on the agenda even in the rainy days with a new initiative from the Upper Danube to relaunch the DRS. So, this message is in the spirit of the Baden-Württemberg Declaration that the “real objective” should be “strengthening the entire area to benefit not only itself but also the EU and Europe as a whole” (2010:3). Danube Strategy is the Europe’s Promise – quoting the title of Hill’s book from 2010 -, since with the success of the DRS the global competitiveness of EU is at stake. Thus, the European Futures will also be shaped at the Danube, and by the DRS all actors concerned have their opportunity and responsibility to build a better future at the Danube, for both the Danube Valley citizens and for all European citizens.1 As Europe’s Promise the FMRs represent first a change of paradigms in the European thinking as a summary of its structural transformation from the “governance turn” 410 KadarKrisztian_16_belivek.indd 410-411 411 2013.01.18. 19:05 through the “multilevel governance” (MLG) to the idea of creating the meso-level between the EU transnational level and the member states’ levels. It is equally important to bridge between the principles of more integrative convergence and more differentiated membership as a “more for more” strategy within the EU. Second, FMRs are a challenge in the new member states for more intensive integration “outside” – i.e. within the EU and in the EU’s neighbourhood - and more decentralization “inside” as overcoming the democratic, governance and sustainability deficits. At the same time the bottom-up approach of the FMRs may have a positive effect on all member states by enhancing their social capital and global competitiveness. Third, these mega-strategies offer the optimal way of solving the “carrot crisis”, i.e. the crisis in the EU’s pre-accession policy, since so far the Union has been unable to present an attractive programme for the West-Balkan (WB) states. The FMRs have the big advantage of containing an attractive package of economic prosperity, promotion of democracy, developing logistics and preserving the natural environment.2 No doubt, however that the EU has recently engaged first of all in rebuilding the European architecture on the top. Second, the NMS has been still fighting with the dismal effects of the global crisis due to their crisis mismanagement. And third, due to this cumulative effect the WB enlargement has been neglected in the EU. Therefore, in this paper the main focus is on the historical dynamism of the EU’s transformations with special regard to the increasing NMS crisis with its possible implications on the WB accession. In this framework the Hungarian opportunities and failures to take advantages from DRS in general, and from its central geographical position in particular will also be analyzed, given the Hungarian-Croatian-Serbian (HCS) potential for the synergy in DRS. Still, the main analytical profile of this paper is to discuss the DRS in the general perspectives of the EU’s recent profound transformation. In the EU political science these basic megatrends have come to the surface and the have served as a base for the new paradigm of integration: First, the EU institutional and policy developments have always been the main drivers in the changes of paradigms in the European political science, since the EU has constantly provoked new and new creative ideas, terms and approaches as conceptual innovations in political science. This process is at the same time the emancipation of the European political science from the US dominated political science. The paradigm-framing role of the EU 412 KadarKrisztian_16_belivek.indd 412-413 developments has become evident in the European Political Science in general, and in the multilevel governance (MLG) analysis in particular. This “megatrend” of conceptual innovations in the European political science is particularly clear in the case of the functional macro-regions as the BRS and the DRS.3 Second, the global megatrend is the emergence of the structured or institutionalized global world. The usual general statement has been so far that the global world is chaotic and at most it may have only some kind of “neo-feudal” structure with the differentiated realms of global security, economy, society and culture. Nowadays, however, the opposite process can be noticed as the institutionalization of the global world with the several layers of regionalization: (1) the continent size mega-regions, (2) the multi-country macro-regions, (3) the sub-national meso-regions and (4) the micro-regions within. The EU itself is the very first well institutionalized mega-region as “regionalism with a strategic design” with well arranged meso-regions and micro-regions within. The EU has also pioneered in the world-wide regionalization process by creating the emerging functional macro-regions as the “missing link” between mega-regions and meso-regions. The FMRs cannot be understood without the initiative of the EU for institutionalization-regionalization of the global world. It has appeared in the EU in a special way as the combined and parallel process of “globalization cum regionalization”, i.e. promoting the interregional contacts with the neighbouring states and supporting their internal regionalization, since the EU cannot play an important role in the global world without regionalizing-institutionalizing its own neighbourhood. Thus, the European Futures presuppose regional competitiveness at all the three levels: mega-, macro- and meso-regional levels (Annoni and Kozovska, 2011 and Annoni and Dijskra, 2012).4 Third, the EU internal megatrend is the “integrative balancing”. The EU integration is a relative homogenization process, which upgrades the weaker partners and facilitates their catching up process with the other member states, although this megatrend has been shaken to a great extent by the global crisis. At the same time, it keeps the principle of differentiated memberships and protects the socio-cultural diversity of member states. Differentiated integration and memberships is both opportunity and danger for the EU (see Tekin, 2012). It is an opportunity for development and adjustment as an innovative diversity for the further structural differentiation of the institutions and policies. Differentiated membership, however, is also an acute danger of fragmentation and peripherialization, if the sufficient level of the political-legal and socio-economic homog413 2013.01.18. 19:05 enization as the common denominator has not been kept or recreated. Therefore, the EU history has been a careful integrative balancing between homogenization and differentiation, which has been redefined in all new steps of enlargement. It was so in the case of the Eastern enlargement, and it will be so in the Croatian case, and also in the future West Balkan cases, although this EU transformation crisis is a big danger and opportunity for the application and modernization of integrative balancing.5 The DRS is a “multilevel” answer to the territorial challenge, since it has to be formulated first at the level of those concerned member states, second at the level of all river states as a giant development programme, third, at the EU level as a “meta-program” for all member states, including the common Rhine-Main-Danube waterways as a huge logistic programme. Finally, fourth, at the global level as a part of the EU programme for improving its global competitiveness by upgrading the internal cooperation in the Danube region and enabling it to dynamize external EU relations. The Danube Region has been the largest unused territorial potential of the EU and the real challenge is the mobilizing of this neglected – actually wasted - territorial capital by turning it into a powerful macroregional social capital. The extent to which territorial capital can be turned into social capital is the key issue not only for the (macro- and meso-) regional competitiveness in the global context, but also for the global competitiveness of the EU as a whole. For the EU the DRS brings about creating and connecting market corridors to four directions – to the North Western, South European, East European and Middle East markets – that will increase the global competitiveness of the EU a great deal. The main issue still is that “The Danube Region has changed dramatically. (...) The world’s most international river basin is now largely a European Union (EU) space.” (European Commission, 2010b:3). Moreover, “Macro-regional strategies are prime test case of what territorial cohesion means in practical terms.” (European Commission, 2010a:1). Consequently, the DRS is an organic part of the EU identity and it is also the test case of the innovative capacity of the EU as discussed below. Thus, neither the member states, nor the subnational meso-regions (NUTS2) but the functional macro-regions between the EU level and member state levels can offer a new, innovative organizing principle and conceptual framework for the EU2020, since in the renewed cohesion policy the new macro-regional strategies may be the breakthrough towards “the Europe of the Macro-Regions” as part of genuine European Futures. 414 KadarKrisztian_16_belivek.indd 414-415 I. The FMRs as powerful instruments of the EU development For a deeper analysis of the DRS it is necessary to give a complex definition for the functional macro-region (FMR). In the CoR formulation its three dimensions have been clearly distinguished: “Regarding a possible definition of an EU macro-regional strategy, most participants agreed that a) it has a geographical and territorial component, b) it presents a form of integrated and, occasionally, innovative policy making, and c) every strategy is unique in and by itself, but should nevertheless remain open to outside participants. The relevance of various stakeholders and citizens’ participation was also underlined in terms of better inclusion and transparency of such initiatives.” (CoR, 2009a:6). In the followup discussions the definition of macro-regions has been further developed: “The macro-regional strategy added value is the integrated approach, namely the multi-level and trans-national governance for an effective coordination of EU, national and regional instruments and financing flagship projects. The innovation concerns the building of a new governance for achieving more efficacy in facing common challenges and opportunities.” (Stocchiero, 2010b:3). Moreover, “The macro-regional strategy sets out to integrate different policies, programmes and funds. However, the cohesion policy represents the main framework of application because the objective is to sustain territorial cohesion in vast areas.” (Stocchiero, 2010b:7). The FMR has to contain a really bottom-up strategy to strike a proper balance between the well organized institutional governance and the high policy performance, or between legitimacy and efficacy. But it has to be done along the “functional” lines because the macro-regions are to be organized according to their common functions as coordinated policy areas. Altogether, the FMR is a “transnational subnational” functional organization, since at this level of macro-regions its parts are not necessarily countries, only their subnational units, and the borders have been defined by the common, joint functions of these constituent parts. All in all, the concept of territoriality and the organization principle of the FMR have changed the EU’s regional policy almost beyond recognition for a Future Europe.6 No doubt, the EU28 will be re-organized step by step into a system of the (partly overlapping) macro-regions, since this macro-regionalization-level between the mega-region and the meso-regions is still missing in the EU to a great extent. At the same time, the emergence of BRS has provoked a fierce debate and a warning has been issued that the 415 2013.01.18. 19:05 macro-regional strategies “may give rise to a Europe with different speeds”. Hence the basic message from the Med regions is that “The political answer to the Community challenge should not be to stop the macro-regions that are working, but how to create the conditions for the catching up of weak trans-national areas. However, in order to avoid a meaningless competitive race to create macro-regional strategies in different EU areas, the EU should communicate clearer messages. The 3 NOs should be rigidly confirmed to discourage the proposals of macro-regions based on expectations to access new financing in the next programming period. (...) The setting up of a new budget line dedicated specifically to a macro-regional strategy is not a good solution. That is because it would create competition and preferences among different vast areas” (Stocchiero, 2010b:17). The dilemma is that although the “macro-region is a strategy that contributes to Europeanization”, still the worry can be raised “whether it creates new divisions and tensions“, and this danger is so acute that Stocchiero has used even the term of “potential hostilities” (Stocchiero, 2010a:3-4). Another worry has come from the general dissatisfaction with the cohesion policy; hence the macro-regional strategies have appeared as the main instruments of the EU deepening for the internal homogenization in the present acute crisis situation: “Cooperation fatigue couples with enlargement fatigue. In fact, another motivation for the launching of the macro-regional strategy is the European widening and stressful stretching to 27 Member States. The enlargement has increased deepening needs and particularly demands to spur more social and territorial cohesion. The political objective is to create a more united Europe, increasing social and economic convergence. With Europe enlarged to 27 Member States, the geographical, social and economical dimensions are wider and scattered; a risk of relative fragmentation versus concentration exists; tighter relationships are needed. A claim for a greater commitment towards EU deepening before the materialisation of new enlargement perspectives is demanded.” (Stocchiero, 2010b:8). The maturity test of the FMR efforts has to go beyond the mere geographical aspect, since both the governance aspect and the policy aspect have to be analyzed. Namely, the “EU macro-regional strategies seek to achieve coordination across three dimensions: horizontally (across sector policies), vertically (across different levels of governance from EU to regional and local), and geographically (across administrative boundaries).” (Dühr, 2011:42). Territorialization of policy universe is needed because of the transnational issues, which have the “effects across national and regional borders that cannot be addressed 416 KadarKrisztian_16_belivek.indd 416-417 adequately at the local, regional or national level alone”. These transnational issues of common concern benefit from rescaling, hence they “require transnational cooperation as individual countries alone will not be able to address the challenges successfully” (Dühr, 2011:8,41). The DRS differs in this respect very much from the INTERREG. Namely the INTERREG broad frameworks with intergovernmental nature of cooperation are based on direct EU funding, and therefore they “rarely result in projects of real significance for the macro-region (...) It is therefore important that policy priorities and actions are specific to the macro-region, and not merely replicate EU policy objectives.” (Dühr, 2011:40). No doubt that the cultural factors and education will also have a key role in DRS, above all in the subjective Europeanization and in the EU identity formation, but at the start of the implementation phase the cooperation in the “real economy” is more important and more urgent, since it generates the effective spillover from the economy to all other policy fields to promote social progress and to generate synergy (OECD, 2011a,b,c). The territorialization of transnational issues with specific strategies for macro-regional developments does not mean that the member states will be weakened, since the comprehensive system of multilevel governance presupposes also a rather strong and innovative role in the newly conceived “developmental states” of Nordic type. New Localism means that “globalism” does not ruin but strengthen “localism”, provided that the global openness produces better local-regional governance, more EU accommodation, and higher global competitiveness. New Localism demands the reinterpretation of Europeanization by reinventing the role of the member states both in the “production cooperation” and in the promotion of multiculturalism as the common cultural heritage. The main features of the “glocality”, the globalized locality have been discussed in the literature since the early nineties, but they have only come to the fore by the recent daring moves of macroregionalization like the BRS and DRS. The theoretical arguments of the productivist approach based on the human investment for social progress were also well-known already in the nineties, since they were already raised and practiced in the Nordic member states. Yet, these innovative ideas with the developmental state as a new state formation, performing the function of permanent adjustment to global changes through institutional reforms and human investments, have become of more theoretical and practical importance for the EU only after the global crisis as part of its exit strategy. Obviously, the FMRs have a very special relationship not only to the member states as developmental states, but more and more to the big cities and/or to the metropolitan areas. 417 2013.01.18. 19:05 In the case of DRS the Council of Danube Cities and Regions (CODCR) has played an eminent role since the Declaration of Danube Cities (Ulm, 4 July 1998) with its Head Office in Ulm and General Secretariat in Bucharest. CODCR has the mission statement that the cities and regions are pillars of democracy in Europe, which includes also the key principles of good governance and rule of law, and especially “the principle of regional balance”, being an organic part what I have called integrative balancing in this paper. Its recent meeting was in Bucharest on 28-29 June 2012 under the title Competitiveness and Innovation for Jobs and Economic Recovery in the Danube Region. The big agglomerations play an eminent role in the global world, so the macro-regional competitiveness depends very much also on the cooperation of the DRS metropolitan areas.7 Summarizing the governance and policy dimensions of the FMR maturity test, it is clear that the different terms of New Localism, the place-based approach and the territorialization of the EU policy universe have actually described the same principle of development policy with “territorial focus” that has been called by the OECD the “new paradigm of regional policy” (Barca Report, 2009: XI). The territorialization has become the main paradigm of development strategies, which presupposes a “comprehensive reform” of cohesion policy, since “there is a strong case (...) for the Union to allocate a large share of its budget to the provision of European public goods through a place-based development strategy”. Moreover, “In a place-based policy, public interventions rely on local knowledge (...) The goods and services concerned need to be tailored to places by eliciting and aggregating local preferences and knowledge by taking account of linkages with other places. This is where the territorial dimension of cohesion becomes particularly relevant.” (Barca Report, 2009: VII,XI). II. The DRS from the uploading phase to the implementation phase The first, uploading phase of DRS began with June 2010 European Council meeting. The uploading process of DRS in 2010-2011 took place without major conflicts following the acceptance of BRS in 2009. After the June 2011 EUCO decision the DRS entered its implementation or downloading phase, so by Summer 2012 it has reached its first year of existence. The organization of DRS is in fact an organic part of the reunification of Europe: “Following the accessions of 2004 and 2007, there is a need and an opportunity 418 KadarKrisztian_16_belivek.indd 418-419 to overcome the legacy of former divisions and for the potential of the Region as integral part of the European Union to be more fully realised. This EU Strategy for the Danube is also within the EU 2020 framework being adopted at the Spring European Council. In addition, it is in line with the adopted Lisbon Treaty which states that the EU shall promote economic, social and territorial cohesion, and solidarity among Member States. Macro-regional strategies are prime test case of what territorial cohesion means in practical terms.” (European Commission, 2010a:1).8 The main reason of this relatively “peaceful” process was the three “No-s” of the Commission, “no new regulation, no new legislation, and no new financing”. The report on the Budapest conference (25 February 2010) has also noted this - “No new money for Danube Strategy, leaders confirm” -, adding also that “concrete proposals were thin on the ground, with governments taking a broad brush approach to outlining the priorities of the initiative” (www.euractiv.com, 1 March 2010). Thus, in the uploading phase there was no serious redistribution conflict yet, since the DRS was, indeed, “thin”, so it could have a relatively smooth preparatory period. However, it turned out step by step that the three “No-s” in fact could be the three soft “Yes”, thus, the uploading of the DRS was a very productive as well as becoming a more and more conflicting period. Starting the series of the official meetings of national governments, Germany organized its conference on 1-2 February 2010 in Ulm and Hungary on 25-26 February 2010 in Budapest. It was followed by a common Vienna/Bratislava meeting of Austria and Slovakia (19-21 April 2010), then by the Ruse/Giurgiu meeting of Bulgaria and Romania (10-11 May 2010) and the Constanta closing conference of Romania (9-11 June 2010), altogether five official EU conferences took place – and one more on 8 November 2010 in Bucharest as part of preparation of the Commission’s DRS “Long Paper” (see http://ec.europa.eu/ regional_policy/archive/cooperation/danube/conference/ulm_en.htm). These conferences were organized by the European Commission and they all had a high level attendance by prime ministers and other leading politicians, so they legitimized the DRS on the part of the participating EU member states and by this they put it even legally on the right track. These official conferences have sent out the basic messages on the DRS. The Ulm Declaration (2010:2) has noted that “An EU strategy for the Danube region should treat the Danube as a common EU responsibility and draw up a common vision for the region’s development (…) make existing EU policies, programmes and projects more effective by utilizing the scope for the increased coherence and synergies in their implementation 419 2013.01.18. 19:05 and ensuring optimal use of the region’s territorial potential”. In the Declaration of the Budapest Danube Summit (25 February 2010) the government representatives of Austria, Bulgaria, Czech Republic, Germany, Hungary, Romania, Slovakia and Slovenia have welcomed the decision of the June 2009 European Council. The Declaration of Budapest has demonstrated the political will of the countries concerned that the Danube region is to be developed into a European region of security, stability and prosperity, since it has an outstanding significance for the Union’s territorial cohesion and it has felt a joint and shared responsibility for its sustainable development. Actually, at the end of the series of DRS conferences the Commissioner for Regional Policy has finally emphasized in Constanta: “We are experiencing a true Danube boom.” (European Commission, 2010d:1). At the same time, Commissioner Hahn has issued a warning that the concept of the Danube region should not be overstretched towards the Black Sea Region because it will lose its contours and its proper identity: “Some would like to see this Strategy extend to the waters and maritime issues of the Black Sea. I believe we should keep our focus on the Danube. (…) But we should not duplicate the work that is being done under the Black Sea Synergy, which already provides a multilateral framework for tackling the most pressing issues.” (European Commission, 2010d:3). This statement proves that the “Danube boom” generated also other claims that could have overburdened the original project and by involving the big outsiders as Russia and Turkey this extension could have jeopardized the entire project. Because of the “Danube boom”, i.e. the fashion of establishing macro-regions, many other actors were mobilized in 2010 in the hope of getting a more favourable position in the EU budget, although the “territorial cohesion” of the suggested macro-regions and the willingness of their potential participants were by far not satisfactory. The uploading process after the June 2010 EUCO meeting can be summarized in four important events: first, the publication of the Commission’s Programme, including an Action Plan (I call it “Long Paper”) in December 2010; second, the entry of the Hungarian Presidency on 1 January 2011 with its DRS priority; third, the decision of GAC on DRS in April 2011; and finally, the Conclusions of EUCO in June 2011. This formal decision of the EUCO finished the legal process of uploading the DRS as a concrete and detailed macro-regional project and at the same time it began its implementation process: “The European Council endorsed the EU Strategy for the Danube Region and called on all relevant actors to implement it without delay, as outlined in the Council’s conclusions of 13 April 2011; Member States are invited to continue work in cooperation with 420 KadarKrisztian_16_belivek.indd 420-421 the Commission on possible future macro-regional strategies, in particular as regards the Adriatic and Ionian region” (European Council, 2011:13). • The first and possibly the most important event in the uploading process was the publication of the Commission’s “Long Paper” on the European Union Strategy for the Danube Region on 8 December 2010 (European Commission, 2010b,c). The biggest problem with the Long Paper is that it provides a long list of policies, even underlining some key issues grouped in four pillars, but it does not identify any “prime mover”, and it does not offer a Road Map either where to start and how the synergies can be created in the truly integrated policies. As a result of the balancing between/among competing-conflicting policies and their organized interests, all policies have been presented on the long list as of quasi equal importance. There has been no serious effort to point out, how they influence each other positively or negatively. Although, for instance, the well known conflict between “transport” (shipping on the Danube with the deep canalization) and “environment” (keeping the clean water and natural water resources) has shown that a solution should be found between the conflicting priorities, the Long Paper still tries to avoid conflicts and remain neutral, but in this case there can be no real programme. It would have been necessary to focus on the socio-economic drivers of DRS, which could have provided a positive spillover on all other policies and could have created, indeed, integrated policies of all kinds and combinations in DRS based on the common socio-economic development leading to prosperity. Altogether, the Long Paper still offers a very optimistic perspective for the DRS: “The Strategy should make this a truly 21st century region, secure and confident, and one of the most attractive in Europe.” (European Commission, 2010b:3). • The most interesting and innovative part of the Long Paper is the “implementation and governance” section, where the governance in and by DRS has been characterized as a decentralized network governance. Actually, it has brought in a three-layered governance structure. First, the Commission, assisted by a High Level Group of all Member States, which monitors and supervises this dynamic and its loose governance structure, hence a thin layer of governance still exists on the EU level. Second, the policy cooperation in the different policy fields is to be done by Priority Area Coordinators (PACs), so the actors are to be connected in all key policies. Third, the whole project is directed and monitored basically by the National Contact Points in all countries concerned. This is obviously softening up the three “No-s” on regulation and institutionalization sides, since keeps only a minimal EU level regulation and 421 2013.01.18. 19:05 institutionalization, but encourages the macro-regional level institution-building. On 3 February 2011 Johannes Hahn announced the list of coordinator countries for the four pillars (A-D or I-IV) structured altogether in 11 (3+3+3+2) Priority Areas (PAs), usually 2-2 countries for all Areas (except for the first PA – as 1a and Ab with four coordinators) with 3-3 coordinator roles for all member states (European Commission DG-Regio, 2011a,b). This division of labour clearly reflects the idea of the decentralized network governance, which is a novelty, indeed, but this rather complicated and over-balanced system has to face a tough test of implementation.9 • The entry of the Hungarian Presidency on 1 January 2011 can be considered as the next big event in the uploading process, since this project was a high priority for Hungary that gave a strong push to the elaboration and acceptance of DRS (see Ágh, 2012b). During the Hungarian Presidency, on 13 April 2011 the General Affairs Council passed its “Conclusions” on DRS. Legally this can be considered as the most important EU document in the uploading process that was summarized and endorsed by the EUCO in June 2011. This document was prepared on the basis of the Long Paper and was consulted also with the Foreign Affairs Council. It could be the reason that the external connection appeared here clearly: “While stressing the primarily internal character of the strategy and the necessity to preserve the integrity of the EU decision making, ACKNOWLEDGES that the inclusion and participation of third countries is crucial if the desired objectives of the strategy are to be achieved”. The GAC Conclusions have emphasized that “the implementation of the EU Strategy for the Danube Region should be launched without delay” and its experiences should be summarized in the first Progress Report by the end of 2012. They have further softened the three “No-s” by indicating that the DRS had to be supported “by facilitating the coordination of existing EU funds” and “providing technical assistance” to the Priority Area Coordinators. Finally, the GAC document not only stresses the close cooperation between BRS and DRS but it opens up the door for the other macro-regional organizations, since it “INVITES the Member States in cooperation with the Commission to continue work on possible future macro-regional strategies.” (Council of the European Union, 2011a:2-4).10 The Conclusions of the June 2011 EUCO have also repeated from the 13 April 2011 GAC decision the formula that “Member States are invited to continue work in cooperation with Commission on possible future macro-regional strategies”, adding also that “in 422 KadarKrisztian_16_belivek.indd 422-423 particular as regards the Adriatic and Ionian region” (European Council, 2011:13). It indicates that some other macro-regionalization initiatives have also emerged and with the actual softening up of the three “No-s” the competitive game for resources has appeared around the DRS. The biggest push for the macro-regions has been in the Med area, but it is too vast to pool all the interests together for integrated policies and strategies. It has turned out that the Western and Eastern parts of the Med area have developed diverging trends in this respect. France and Spain have emphasized the external dimension in their Med policies, concentrating on Morocco, while Italy has stressed the “internal” macroregional development programmes and has tried to find partners in the Eastern Med area, above all in the West Balkans. France and Spain have wanted to maintain and enlarge the capacity of the Union for the Mediterranean that provides a general umbrella. Their effort was supported for a while by the “Arab Spring”, but the situation has been deteriorated very much by the increasing Arab-Israeli conflict over the Palestinian State. Nowadays, the situation has become more and more complicated also by the growing interventionism of Turkey, looking for a dominant role in the Eastern Mediterranean. Finally, the Med perspectives have worsened very recently by the chaotic and shaky financial situation in Greece and Italy. It is not by chance that the main worry of the Med macro-region designers has been the diverging-conflicting foreign policy interests of the states concerned. Therefore, it has been mentioned frequently that whereas for the BRS “the external dimension is rather marginal” despite the strong interdependency with Russia, it is opposite in the case of the Med region (Stocchiero, 2010a:9). Given the big interest and pressure from various sides, the CoR organized a series of meetings on the macro-regions in Brussels (see www.cor.europa.eu). First of all, on 13 April 2010 the Forum on Macro-Regions took place as the “first ever” conference on the topic and then a next one on 1 July 2010. There was especially big interest on the part of the Med Programme (MEDGOV), consisting of 13 countries from the Northern Mediterranean area. In the April 2010 conference some new actors also took part, e.g. the North Sea – English Channel as would be macro-region, and the CoR supported their claim to establish a new macro-region. There was an even larger attendance at the July 2010 conference that was organized in the building of the European Parliament. Altogether, there was a “macro-regional fever” felt in many parts of Europe, first of all in the Med region. It turned out that the potential macro-regions could be found everywhere in the EU. At the July 2010 conference some participants emphasized that the macro-regional trend was already underway, whereas some other participants issued warnings about “the macro-regional 423 2013.01.18. 19:05 bubbles” and asked about what the EU added value of the suggested macro-regions could be. Nevertheless, it was clear that all participants had in mind the preparations for the next budgeting period between 2014 and 2020, and intended to prepare their claims for the start in 2014. The conference contributions showed conceptually two main features. On one side they pointed out the perceived problems and weaknesses of BRS and DRS, on the other side they indicated the moves and intentions to launch their own new macroregional initiatives of different kind. Actually, in 2010 no direct claims were formulated yet and no official announcements were made. “the whole European territory should not be covered with macro-regional strategies (...) the EU should not create artificial regions (...) In any case, the current enthusiasm for EU macro-regional strategies does not necessarily mean that this is a suitable instrument for all parts of Europe.” (Dühr, 2011:10,12,48). It is still an open question how many macroregions will be organized in the next years in the EU. Obviously, if a real common strategy could not be created in some wanted but only imagined macro-regions, then the competition for the EU resources may take other forms in the near future. In the long run, however, it can be expected that the EU will be re-organized at the level of macro-regions. However, Italy decided later to go ahead with the Adriatic and Ionian Initiative (AII) turning it into a macro-region. This organization was founded in 2000 and it has embraced eight countries (Albania, Bosnia-Herzegovina, Croatia, Greece, Italy, Montenegro, Serbia, and Slovenia). On 23 May 2011 a high level meeting of the foreign ministers concerned took place in Brussels to make this claim, with the participation of Maria Damanaki Commissioner for Maritime Affairs and Fisheries and co-organized by the CoR. The CoR President Mercedes Bresso said that the Adriatic and Ionian Macroregion should benefit from an EU strategy similar to those developed for the BRS and DRS. Accordingly, at this 13th meeting of the AII an official declaration was published (The Brussels Declaration of 23 May 2011) to promote the EU Strategy for the new macroregion. On her part, Mercedes Bresso made a promise that the CoR would issue an expert Opinion on this claim to facilitate the official process. Indeed, the 92nd Plenary Session of the CoR on 11-12 October 2011 endorsed the request of the AII to form the AdriaticIonian macro-region that could be the first step in the official process. In fact, “The proposal launched by Italy, Greece and Slovenia to build an Adriatic-Ionian macro-region rests in the enlargement process and it splits the Mediterranean area into three hypothetical macro-regional spaces: the Eastern Mediterranean, the Adriatic-Ionian, the Western Mediterranean.” (Stocchiero, 2010b:13). It is still an open issue, how this effort will develop and whether it can cumulate enough energy for establishing a real macro-region, which will be, by the way, overlapping to a great extent with the Danube macro-region in the West Balkan area.11 Finally, as indicated above the June 2011 EUCO decision closed the uploading process and it gave way for the implementation process as the second phase in the history of DRS. However, this second period of DRS has been a period of its marginalization due to the recurring crisis and the permanent crisis management process. Therefore, this downloading phase has been the “annus horribilis”, the year of horror with continued troubles for the EU because of the so many urgent and overwhelming issues in crisis management. The DRS has not been the only major project that has been marginalized, even more, the successful crisis management so far has also provoked the danger of a much wider Core-Periphery conflict. It has not yet been contemplated yet at the level of the EU main decision-making bodies that the macro-regional strategy could be one of the most appropriate ways to overcome this Core-Periphery conflict within the EU as well as to ease the other conflict between the EU and the “third countries” concerned. Certainly, the DRS began its implementation phase when the EU navigated stormy waters. Nevertheless, after its first year the DRS is still an open and promising, but uncertain and vulnerable project as a brave vision of integrative balancing in a huge area, both sectorally and regionally.12 Altogether, in 2010-2011 there was a macro-regional fever or enthusiasm in the EU, therefore, as Stefanie Dühr has underlined, the Commission has cautioned “against unreflected copying of the approach and the mere bundling together of existing and planned projects (...) new initiatives should be supported by a clear and common strategy”. Consequently, 424 KadarKrisztian_16_belivek.indd 424-425 III. Hungarian contributions: From initiative role to a Sleeping Project Hungary has been very active and initiative in DRS from the very beginning. In 2011, during the Hungarian EU Presidency it played an important role in promoting the final endorsement of DRS by the EU. Yet, after the years of “macro-regional fever” in 20102011, the current impression is that the DRS has become a Sleeping Project not only in Hungary, but in all NMS, and to a great extent in the EU as a whole. The presentation of the Hungarian case can discover the reasons for the declining interests in DRS by the 425 2013.01.18. 19:05 EU in general and in the NMS in particular. The decline of interests can be noticed at both the EU level and the member state level, while despite the protracted crisis, there have still been many important events in all member states concerned in the unfolding implementation phase. The contrast is quite clear between the decreasing high level activity and the increasing – but mostly fragmented – “policy-oriented” and/or “locallyoriented” activity. This contrast indicates the vital interests of meso- and micro-level actors in DRS and the missing interests of the NMS governments in the FMR-type of interregional and intraregional cooperation. The implementation phase, as a result, can be characterized by the lack of the strategic “metagovernance” of the NMS governance in the local-regional and policy cooperation in the midst of the robust basic-level activity in the DRS design.13 This paper has a special focus on the Hungarian situation, first of all, on the special weaknesses of the incumbent Hungarian government due to its over-centralization efforts and Eurosceptic profile (Ágh, 2012b,c) that may also be relevant for analyzing the NMS developments in general, including the interregional cooperation with the WB states. Actually, the Danube Strategy could be a fulfilment of the age-old Hungarian Dreams. The Danube has always been a vital part of the Hungarian national identity, since Hungary is centrally placed geographically between the Upper Danube and the Lower Danube. Thus, the Danube Valley has always been a decisive factor in the Hungarian history and culture, economy and logistics. Finally, it has been one the most characteristic motives of the Hungarian political efforts in the neighbourhood policy cooperation in the last two centuries with many ideas about the Danube Alliance. Also in the recent years Hungarians have been preoccupied with the development visions in the Danube Valley. The DRS project has been very popular with Hungarians from the very beginning and nowadays it belongs to the very few issues that have been given an all-party support in Hungary.14 Yet, after the golden years of uploading the DRS in the EU, in the present implementation stage the DRS is not high on the agenda any longer, since the government’s interests have drastically declined and the fatally weakened territorial organizations have been unable for a meaningful bottom-up activity. In fact, the DRS project has become a Sleeping Project in Hungary, and this is a characteristic story for the NMS countries in general suffering from the global crisis to a great extent because of their missing decentralization-regionalization. DRS has a large “body” in Hungary with an active and ambitious network society of policy and local-territorial actors based on the “civil energies”, but 426 KadarKrisztian_16_belivek.indd 426-427 it has no “head” with a governmental policy centre based on prudent strategic planning in a partnership spirit. The Danube Saga is increasingly full of paradoxes in Hungary and without solving these paradoxes Hungary cannot join the efforts for the European Futures at the Danube.15 Priority Paradox: The first and most important paradox may be called priority paradox. The DRS was the crucial part of the real Hungarian national priorities, nonetheless, it has recently been marginalized not only by the EU crisis management in general, but even more within the Hungarian national framework. Although DRS creates an organic unity of the EU internal cooperation and the further West Balkan enlargement, still the present government cannot integrate these two issues into a common interregional strategy, which would give the real heart of the DRS. In fact, the V4 efforts and meetings have always emphasized the unity of these two aspects, namely their readiness to participate in DRS as a EU project, which is at the same time the best way to promote the pre-accession process in the West Balkan countries (V4, 2011,2012). The only issue the Hungarian EU Presidency could focus on was the promotion of the Croatian membership and the Presidency was successful in this respect. No doubt that DRS appeared as an important item in the Hungarian Presidency programme in general, but without a deep and organic connection to the enlargement: “EU Strategy for the Danube Region: The Hungarian Presidency is unequivocally committed and will make every effort to have the EU Strategy for the Danube Region endorsed by the June European Council. The Danube Region Strategy is the second comprehensive macro-regional EU initiative. Its objective is territorial development and it is based on the experiences of the Baltic Sea Strategy. From the 14 countries participating in the Strategy, eight are Member States (Austria, Bulgaria, Czech Republic, Germany, Hungary, Romania, Slovakia and Slovenia), while the six third countries concerned are Bosnia and Herzegovina, Croatia, Moldova, Montenegro, Serbia and Ukraine. The Strategy is not only aimed at fostering good neighbourly relations in the region, but it should also consolidate the European integration process with the Western Balkan countries. It should bring the EU closer to its citizens and promote cooperation with third countries. The Action plan for the Danube Region Strategy defines 11 priority areas. The projects of these 11 priority areas represent a vital contribution to sustainable development in the region.” (Hungarian Ministry of Foreign Affairs, 2010:20, see also Council of the European Union, 2009). 427 2013.01.18. 19:05 The DRS as a priority returned rather emphatically in the Report on the achievement of the Hungarian Presidency: “The Strategy aims to boost economic growth, increase employment and create favourable living conditions in the Danube region through coordinated responses to cross-border challenges. The Council conclusions on the Strategy incorporate the political agreement on the objectives and tools that have also been endorsed by the European Council on 24 June 2011. The Hungarian Presidency has prepared the ground for the successful implementation of the strategy, the informal institutional background has been set up and practical implementation can be launched. Furthermore, the European Investment Bank is opening an office in Budapest (Budapest Danube contact point) tasked with promoting the implementation of the Strategy.” (Hungarian Ministry of Foreign Affairs, 2011:64).16 Interestingly enough, there is a sharp contrast, however, between the two Hungarian documents, since the DRS had been very important in the Programme, whereas in the Report it was somewhat downscaled. The reason is most probably twofold, on one side during the Presidency the Hungarian government realized the overwhelming role of the EU crisis management that marginalized almost all other issues, on the other side the DRS, as it was accepted by the EU with three “No-s”, might have meant a relative disappointment for the Hungarian authorities. However, there was a striking common feature in the two documents because no direct connection was mentioned between the DRS and the enlargement/widening process. The pre-accession process in the West Balkans and with the Eastern Partnership was also an important part of both documents, but its achievements were discussed separately in the Report (2011:25-27). Again, the reasons for this missing close connection between the two main parts of DRS mirror the template of most EU documents, which have usually not elaborated this organic connection either. Nevertheless, this organic interregional connection could have been seen much better and closer from Budapest than from Brussels. Thus, the main reason of pushing aside the DRS project has been “homemade”, since the new government with its two-third parliamentary majority has ruined the entire system of local-regional selfgovernments in the country. All in all, after the February 2010 Commission’s Danube conference in Budapest, organized by the former Bajnai government, there has been no high level DRS meeting in Hungary, since the incumbent government has lost its interest in the Danube Strategy. In order to avoid the serious conflicts with those governments and influential actors deeply interested in DRS, it has not organized any important international conference 428 KadarKrisztian_16_belivek.indd 428-429 in Hungary. The Hungarian government has not built the proper institutions, Danube Offices to govern the Danube issues either. So to say, the present Hungarian government has been “swimming” against the EU mainstream in Danube. Thus, finally, the priority paradox is that the main priority of the Hungarian government is to centralize the state power and to introduce measures to keep its power ad infinitum versus the noble priority of European integration through the strategic actions like the DRS.17 Policy Paradox: The second paradox as the policy paradox is that the DRS project has been downscaled in the domestic strategic programme, too, partly due to the overwhelming pressure of the domestic socio-economic crisis, partly to the incapacity of the over-centralized state. The incumbent government replaced the former New Hungary Plan (ÚMT) with the New Széchenyi Plan (ÚSZT) on 4 January 2011, but in this new strategic Programme there is no direct reference to the DRS. The New Széchenyi Plan is not structured along the DRS pillars, although some concrete and partial projects may have closer or looser - but certainly vague - connections to the DRS. It means that the New Széchenyi Plan has not elaborated any synergy between/among the various policy fields based on the organization principle of DRS. Above all, the Hungarian policy approach in DRS has still been divided policy-wise basically by the big tension between the “green” and “shipping” issues, or the ecological and logistical approaches. Moreover, there have also been some bilateral forms in the Hungary-Croatia and the Hungary-Serbia IPA Cross-border Co-operation Programme for 2007-2013, that could be enlarged by policy coherence to the national and international synergy, but these policy frameworks for the Hungarian-Croatian-Serbian trilateral macro-regional cooperation have not yet exploited for the DRS either. From the eleven DRS priority areas (PAs) Hungary has to coordinate three fields, the sustainable energy with Czech Republic, the water quality with Slovakia, and the environmental risks with Romania. In fact, Hungary has not yet taken the opportunities offered by the coordinating role in the three policy fields allocated to Hungary by the Commission. In the domestic respect, the strategy for policy coordination and coherence with multilateral synergies has not been elaborated. It is therefore not yet possible to outline the Hungarian DRS sectoral priorities either, it remains to be seen how they will be finalized.18 Institutional Paradox: The third paradox is the institutional paradox, since the DRS institutional coordination in Hungary has been split between the Ministry of Foreign Affairs (with the DRS government commissioner) and the National Development Agency (NFÜ, belonging to the Ministry of National Development, MND). Other ministries 429 2013.01.18. 19:05 (Ministry of National Economy, MNE and Ministry for Countryside Development, MCD) have also been involved but with no clearly outlined competences. There were two government decisions - 1149/2010 (VII.9) and 1150/2010 (VII.9) - on the appointment, role and competences of the DRS government commissioner. The Commissioner has been attached to the Ministry of Foreign Affairs but only with a relatively small staff that basically was established earlier for elaborating the Hungarian strategy and representing abroad at international negotiations and conferences. However, the real policy coordination of the supposedly DRS related projects has been done by the National Development Agency, or by the other ministries concerned, including the project management and the allocation of the resources and the EU transfers. Actually, when the uploading phase of the strategy-making was over, the central role of the Ministry of Foreign Affairs became outdated. In the implementation phase the place of any DRS government commissioner for an efficient coordination of the various policy fields would be more functional in the National Development Agency with a strong Secretariat as an effective Danube Office.19 Institutionally, even deeper, there has also been an acute conflict between the various territorial - local, regional and national – levels due to the ongoing “destructive” legislation on self-governments, or due to the quasi complete disempowerment of all territorial actors. First of all, the regionalization in Hungary has been turned back drastically by the incumbent government, since the regional development councils have been disbanded and all decisions have been taken at the national government level, so the MLG system actually does not work in Hungary. There were two NUTS2 regions with a special interest in DRS, the South Great Plain Region and the South Transdanubian Region, since these adjacent Hungarian regions could benefit most from the DRS in general and from the HCS interregional cooperation in particular. The South Great Plan NUTS2 region borders on the three HCS countries concerned, and thus it has a special opportunity to connect organically the NMS countries with the pre-accession WB states. Similarly, the South Transdanubian Region could serve as a gate and bridge to Croatia, and virtually also to the Italian based would-be macro-region as well. These opportunities have been lost, since the incumbent government has produced an over-centralization of state administration and it disempowered the local-regional self-governments both administratively and financially. Thus, neither the NUTS2 regions, nor the other local-territorial actors are capable of playing any significant role in promoting DRS in a bottom-up approach by effectively supporting and coordinating their civil organizations and NGOs.20 430 KadarKrisztian_16_belivek.indd 430-431 The only ongoing successful regionalization has been promoted by the Centrope organization initiated and supported by Austria and covering some parts of Austria, Hungary, Slovakia and Czech Republic with 6.5 million of population. This organization has built strong regional cooperation framework based on the European Regional Development Fund and it has issued regularly Regional Development Reports (Centrope, 2011a). Its Political Board meets twice a year to discuss strategic decisions (5 December 2011, Bratislava, 21 May 2012, Brno and 25 October 2012, Pamhagen, as Centrope Summit 04). In the latest meetings the Political Board has mobilized for the support of the DRS: “The more the EU Strategy for the Danube Region becomes a catalyst for the development and inflow of investment, the more important becomes a sound anchoring of Centrope in the Strategy’s implementation.” (Centrope, 2011b:5). Furthermore, it has called for the creation of an effective coordination mechanism by elaborating the RECOM (Regional Cooperation Management) on its part with seven projects. Finally, the Centrope Strategy 2013+ (see Centrope, 2012) has recently been elaborated, discussed and launched. It has turned out that the Centrope initiative with the RECOM network (see RECOM HUAT) has been a very successful model also for the HCS trilateral cooperation, i.e. it can be extended to Croatia and Serbia as well.21 Social Paradox: Fourth, the social paradox appears between the wide social mobilization of the various actors and the missing comprehensive, well coordinated central state action for the DRS in Hungary. The DRS project presupposes a bottom-up approach in general with the prominent role for the NUTS2 regions. These actors of territorial development have actually been liquidated by the government as the genuine socio-political actors, and the NUTS2 regions have only remained mere territorial-statistical units, indeed. Yet, many policy or sectoral actors have still been active, first of all in the fields of tourism, transport, environment protection and cultural-artistic events that could have been supported by the bigger or smaller settlements. Nevertheless, the main territorial actors – regions, counties, micro-regions and cities – are too weak for creating a meaningful network society in themselves. Thus, nowadays the most important dimension of the DRS-type social mobilization in Hungary is the small project-oriented activity of civil organizations and NGOs but without a serious government financial support or even coordination effort.22 As a matter of fact, the organization of international DRS-type networks began already some years ago in the most sensitive field of cooperation, in the tourism of the middle and south-eastern sectors of Danube Valley. DATOURWAY is a transnational strategy for 431 2013.01.18. 19:05 the sustainable territorial development of the Danube area with special regard to tourism. The DATOURWAY program (2009-2012) has been focusing on tourism in its largest meaning combined with cultural exchange. It incorporates the preservation of natural habitats, presentation of cultural traditions and finally promoting economic growth and/ or recovery by tourism in the countries concerned. Suggested by the Hungarian settlements for the common tourist programmes along the Danube, the program started in spring 2009 in seven member states (Bulgaria, Croatia, Hungary, Italy, Romania, Serbia and Slovakia), with the support of the EU’s South East Europe Transnational Cooperation Programme. Its basic aim is to foster and coordinate the territorial development of Danube Valley settlements, and its leading organization was the VÁTI (the Hungarian Regional Development and Urbanization Nonprofit Co.) in Budapest (see DATOURWAY, 2011,2012).23 Social mobilization has also been promoted and facilitated by many other organizations connected with the DRS projects like Danube Partnership Network of the 75 riparian Hungarian settlements formed on 15 August 2010. The local actors prepared several Danube Development Corridor related projects at both national and transnational levels and this led to the formation of the Association of Hungarian Settlements’ and Regions’ Developers (AHSRD). Based on this network, there has been a Hungarian initiative, the DaNet - or DanubeNet - project to elaborate the sustainable development strategy in the Danube Valley as a bottom-up approach with the participation of the riparian settlements. DanubeNet is a network system for NGOs funded by the EACEA (Education, Audiovisual and Culture Executive Agency). It has four objectives: (1) to provide platform for NGOs in local, regional, national, transnational and trans-boundary level; (2) to create networks for professionals and stakeholders according to their interest to the DRS priority areas; (3) to lobby for the realization of the DRS action plans at local, regional, national and EU levels; and (4) to integrate and communicate the needs of the network into the DRS.24 The Danube scientific conferences and other related academic events have also been an important dimension of social mobilization, since they can serve also for the project elaboration purposes, but at the same time they are aimed at outlining the long term visions and strategies, and organizing transnational networks. Among others, there has been a Blue Ribbon project with a series of international and national conferences and editing two international books in English on DRS. Beyond the Blue Ribbon conferences there have been another series of bigger and smaller Hungarian and international scientific con432 KadarKrisztian_16_belivek.indd 432-433 ferences, some of them have been focusing on the particular policy issues in a sectoral approach like the logistics-shipping and ecological problems. Some others have dealt with the regional-local issues of the specific Hungarian territorial units, often with a profile of cross-border cooperation. Although these conferences have been very intensive actions along the lines of DRS followed by wide interests of the particular stakeholders, there has still been so far no meaningful public discourse at large in Hungary about the DRS with an effective state support and coordination.25 Political Paradox: Fifth, the political paradox is between the national consensus in the DRS and the lack of a real start of the implementation phase in Hungary. There is wide consent about the necessity and advantages of DRS but there has been so far no nationwide Action Plan, only improvisative crisis management in all policy fields, including the DRS project. Although the incumbent government could have used the DRS in this troubled period as an important and popular issue to mobilize the population and to restart the economic growth but the present political leadership has still neglected it. The National Development Agency has emphasized e.g. the importance of the Danube Development Plan in connectivity, i.e. in shipping on the Danube but it has considered this Plan only as the preparations for the period of 2014-2020, allegedly, due to the lack of resources. In fact, some resources are available in the EU funds but because of the permanent redesigns of the state budget several times within a year, the government has also been in deep trouble with the preparations of the DRS. Altogether, there have been several reasons in Hungary after the EU Presidency for downgrading the DRS by the incumbent government.26 No doubt that after the first year of the DRS implementation phase, and following a series of smaller conferences, the missing closing conference in Budapest has a symbolical meaning, namely it sends the message that Hungarian government has no clear and strong commitment to DRS. As it has been mentioned, the DaNet project has been very important to launching a series of Danube conferences on various topics in the countries concerned at its kick-off conference on 29-30 November 2011 in Budapest. These conferences were meant to mobilize the civil society organizations and drawing attention to the sustainability of development. According to its original program the final closing conference as a DanubeNet Congress was planned in Budapest in June 2012. However, instead of this closing meeting, the Hungarian side announced the plan to organize an “official” conference in September 2012, while some other smaller meetings have also 433 2013.01.18. 19:05 been indicated (see DanubeNet, 2011, www.terport.hu). In fact, the incumbent government’s neglect can mostly be demonstrated by the fact that this central international conference in Budapest has not taken place at all. Instead, it has been delegated to a much smaller “alibi event”, exclusively with the Hungarian participants in a smaller Danube city, Dunaújváros. The government was represented here only with some mid-level ministerial officials and the government’s “message” to the conference was to be read out. There have also been some quasi “official” events in Hungary in the DRS matters, while there have been references by the government to the Bucharest conference in September, the Brussels Open Days event in October and the Regensburg conference in November 2012 as closing events. However, it is clear that due to its economic and political misery the incumbent Hungarian government has been unable to provide a proper DRS perspective for the country and for the Danube partners.27 Although DRS is very important for the country and, accordingly, Hungary made a big effort during its EU Presidency to promote this mega-project, after two years in office the incumbent government has mismanaged the deep financial, economic and social crisis that downgraded the DRS in Hungary and also Hungary’s role in the international cooperation. The DRS project has not lately figured in the official discourse, since it has also disappeared from the government’s policies. It is true that the paradoxes described above are very country specific because Hungary during the present government has developed a very peculiar position to the DRS. Nonetheless, the government has still launched the usual success propaganda also about the DRS in and by Hungary.28 Yet, it is still very important to provide an overview of the potential role of Hungary within the Danube Strategy, by indicating the special areas of cooperation and the roles of different stakeholders. Above all, it is necessary to describe the overall development potentials of the trilateral interregional cooperation by identifying the Hungarian functions in the HCS. They are as follows: First, the bridge function of Budapest in the network of the Danube capitals and the active organization role of the two Hungarian regions, which have been most concerned in cross-border cooperation. Second, the institutional function of Hungary in organizing cooperation of the DRS within the EU in general and within the V4 in particular. Third, the policy coordination function of Hungary in DRS (PACs) in the three selected fields allocated to Hungary by the Commission, and also beyond. Fourth, the culture and tourism development function in the spirit of the sustainable development at the state level as well as at the NGO levels. 434 KadarKrisztian_16_belivek.indd 434-435 Thus, the Hungarian situation in general that has been described above in paradoxes can be summarized in a SWOT matrix as follows: (1) Strengths – Hungary is geographically centrally located between the Upper and the Lower Danube and has high interest in DRS for historical, economic and cultural reasons. (2) Weaknesses – the Hungarian territorialregional and civil actors were weak and they have been further weakened by the present government. (3) Opportunities – DRS is the unique opportunity for both the intraregional and interregional cooperation and for a meaningful domestic decentralization-regionalization. (4) Threats – Serious domestic disintegration and EU peripherialization may come in NMS due to the external and internal crises, and Hungary has mostly been concerned. Finally, it has to be made clear that economic growth would not start again without the domestic consolidation in the political, social and financial dimensions. There has been an increasing socio-economic and deepening political crisis everywhere in Europe, which has hit all NMS countries very seriously, particularly Hungary. However, the negative impact of global crisis has been deepened by the crisis mismanagement of the incumbent Hungarian government. This protracted crisis may delay the effective start of the Danube Strategy, but for sure, the DRS project is still a decisive part of the exit strategy for Hungary. No doubt that the DRS will stimulate both the domestic economic growth as well as the tripartite HCS macro-regional cooperation. Despite the present problems, and based on its former DRS activities and experiences, Hungary in the future can still be helpful in elaborating the framework for the interregional Danube cooperation, with special regard to the HCS cooperation, by initiating the proper transition management in the implementation phase. IV. DRS perspectives of overcoming the carrot crisis in the WB region The incoming accession of Croatia could have turned the EU attention to the WB region in general and to the ECE-WB interregional DRS cooperation in particular, but obviously this is not the case due to the prolonged EU crisis. The enlargement fatigue in the old member states has seriously been aggravated by the global crisis, while on the other side the new member states are still in their troublesome consolidation process, since they have also been shaken by the global socio-economic crisis to a great extent. In the last decade the EU has been less and less able to act as a “magnet” or the centre of gravity for the West Balkan countries by providing the proper attraction and mobilization in their 435 2013.01.18. 19:05 pre-accession process for implementing the conditionalities that I have termed it as “carrot crisis” (Ágh, 2010a). This situation can be basically changed by the DRS in the “more for more” spirit of the EU’s widening policy as a genuine “European perspective” both for the WB countries to reorganize their societies based on the EU values and for the EaP countries to support their more intensive Europeanization.29 The Commission’s Long Paper has made references to the “third countries” in the DRS design, it has still missed the opportunity of stressing the “Balkan connection”, i.e. the huge relevance of DRS in removing the “carrot crisis”, although in such a way those old member states that have suffered from the enlargement fatigue could have accepted the DRS easier. Due to this weak or missing connection to the WB enlargement, the tremendous potential of DRS has been neglected for the solution of this important and long time overdue problem of the EU. The HCS triangle – Hungary, Croatia and Serbia - as a special inter-regional connection between East-Central Europe and the Western Balkans can promote also the intra-regional cooperation within the Balkans. In general, the territorial challenge for this inter-regional cooperation is also a test case for the integrative balancing in the EU.30 The DRS as a development megaproject embodies the real territorial challenge for both the EU member states concerned and the “third states”, namely the WB potential members and the EaP neighbours. It could be a positive sum game, since this macro-regional synergy is advantageous for all participants above. The older member states can also benefit from the accelerated process of the pre-accession in the West Balkan region and from the intensive widening in the Eastern Partnership because both can generate the extension of the internal market as a common economic area with shared social progress. The ambitious implementation of DRS could have been an opportunity for a radical change with institutional reforms and policy innovations at both the EU and the macro-regional levels . Namely, after the successful uploading, the DRS project has still to face this teasing issue of its governance deficit. The early discussions in the Committee of Regions concluded with justification that “the newly implemented Baltic Sea strategy was benefiting from a long history of regional cooperation and the ‘strong organisational capital of approximately 50 local organisations’. Conversely, EU macro-regional strategies in the Balkans and the Mediterranean had to cope with a lack of state and civil society capacity, administrative cen436 KadarKrisztian_16_belivek.indd 436-437 tralisation and the personification of resources at the regional level. The legacy of different armed conflicts and recent instances of diplomatic confrontation in South-East Europe should also not be underestimated. Thus, (...) the implementation of macro-regional strategies should be well planned and given more time to develop. Greater attention should also be paid to various multilateral organisations beyond the EU, so that they could better coordinate and realise the goals of those strategies in certain cases.” (CoR, 2009a:7). No doubt that the BRS can rely on the high density of transnational institutions, therefore it cannot be a “model” to follow for the DRS, which can rely only on its much less developed common institutional structure along the Danube Valley. Obviously, the internal institutionalization-regulation of DRS faces the obstacle of the governance deficit still existing in the NMS, namely the lack of proper decentralization as well as the weak autonomous power of regional-local units in these states. Furthermore, as Commissioner Hahn has underlined (European Commission, 2010d:3), the catching up exercise appears for the new member states, not only in the economic field but also in overcoming their own special governance deficit, since they have relatively poor administrative capacity. This “governance building” process in NMS can be facilitated through the transfer of “best practices” from the old member states and by the better compliance with the EU regulations. Finally, the biggest governance problem of the DRS is also the weakness of the public administration in the pre-accession countries and in the EaP states.31 Therefore, the DRS is not so much relying on the existing and “fixed” MLG institutional structures, but much more on the contrary, it could provoke a genuine “governance turn” to erode the fossilized over-centralized structures and to introduce new decentralized structures instead, since this macro-region is not yet ready, but it is to be made. The governance issue will be much more complicated in the bigger and more heterogeneous Danube Region than in the Baltic Region. Danube Region consists basically of four – old, new, pre-accession and EaP - kinds of states, unlike the Baltic Region where the existing institutions are not only much more developed, but the Baltic Region itself is also more homogenised. Thus, the elaboration of the governance structure in DRS has to be more innovative in both ways, concerning both the “institutionalized rule structures” for the non-formalized institutions and the “modes of social coordination” for the competitive network governance. In such a way, it can also be instructive for the EU as a whole, how to overcome this governance deficit in the NMS and even more in the pre-accession states 437 2013.01.18. 19:05 .The institution-building in DRS can rely on the pioneering work and assistance of the old member states concerned. The DRS partners at the Upper Danube have both the opportunity and responsibility in this crucial situation to launch a new initiative for the revival of DRS, first of all in the socio-economic fields as promoting democracy through increasing prosperity. At the same time, they have to re-start the governance building programs by proposing models and establishing networks. The regional government of Baden-Württemberg established its “Danube Office” in 2002, and similar organizations can also be expected to emerge everywhere. Obviously, the actual and virtual tensions due to the huge asymmetry between the institutions of the old and new member states has also to be tackled. If this new initiative succeeds, then finally the DRS itself will have an effective common self-regulatory body as a new informal institution emerging from the Annual Meetings, like the 1st Annual Forum in Regensburg on 27-28 November 2012.32 In this institution-building process the FMR approach facilitates also the understanding and further elaboration of the various roles within DRS. Namely, the “gate”, “bridge”, and “engine” (driver) functions are very important devices for enhancing the macro-regional competitiveness. In this respect for Baden-Württemberg, Bavaria, and Austria provide the “gate” and “driver” functions opening up the DRS for the EU in the global world, while Bratislava and Budapest can offer the “bridge” function with Bucharest and Sofia as the “bridges under construction”. Finally, the emerging multiple networks with the hubs of Zagreb and Belgrade can embrace and mobilize the WB territories. The MLG system presupposes multiple functions with various inner and outer “policy borders” within the macro-region. Hence, in some cases the pre-accession states can also play step by step the “gate” role in special functions for the macro-region as a whole. The DRS matters in overcoming the governance deficit not only at the transnational macro-regionalization and the national or meso-regional levels, but even more so at the lower territorial levels of the transnational subnational. No doubt that MLG structure has also to be organized into an urban – or metropolitan - network in DRS like the Council of Danube Cities and Regions (CODCR), including the increasingly active role of the Balkan capitals. This upgrading of the Balkan capitals is the necessary part of the EU new territorial paradigm. After the long period of the uniformalization approach to regional development (one model fits for all) the new paradigm is that all regions in the EU have to try to optimalize their own specific territorial capital through a well designed plan or strategy, since the “different is beautiful” or “specificity matters” in the territorial developments. The Ulm 438 KadarKrisztian_16_belivek.indd 438-439 Declaration in February 2010 emphasized (2010:3) that the DRS had to be extended to the “third countries”. The Baden-Württemberg Declaration (2010:3) added in October 2010 that the main task of the DRS was the optimal use of territorial potential in this extended macro-region that I call “the territorialization of the EU policy universe”. Nowadays, in the new approach the emphasis is not on the generalities, i.e. on the common strategies and goals for the all EU (NUTS2) regions, but on the particularities, i.e. on the specific strategies of the given regions to optimalize their own territorial potential. In this “place-based” approach – using the new fashionable term from the Barca Report - the special and unique territorial capital has to be developed or converted into the specific territorial social capital, since this specificity is the real driver of regional development everywhere. The Danube macro-region as a transnational subnational entity also has to be taken in its own particularity of the geographical composition, i.e. connecting the Upper Danube and Lower Danube regions. Hence, also the DRS project has to use its special, “place based” territorial potential for the macro-regional development to enhance its competitiveness within the EU or even at global level through improving the EU competitiveness. The same applies to its local-regional units, which have to use also their own specific local-territorial potentials to enhance their competitiveness in this MLG structure. All in all, there have recently been several efforts to make a systematic overview of democratization in the so called “Central and East European countries” (CEEs). To make this vague term more concrete, the usual typologies distinguish between the “established” democracies in East-Central Europe and the “hybrid” democracies in Eastern Europe proper (see Linde, 2009). With special reference to the Bertelsmann Transformation Index (BTI) as a coherent framework, Joergen Moller and Svend-Erik Skaaning have prepared a theoretically informed typology, a systematic and encompassing overview of post-communist political regime forms: “First, the seven liberal democracies and polyarchies are all situated in East-Central Europe, when this region is constructed as including the Baltic countries. Second, five of seven electoral democracies are to be found in the Balkan Peninsula. Third, three out of six minimalist democracies inhabit the Western part of the former Soviet Union. Fourth, and finally, six out of seven autocracies are situated in the Caucasus or Central Asia.” (Moller and Skanning 2010:64). In my view, there has also been a big contrast even in the ECE or NMS countries between the procedural and performance Democratization. Namely, the EU institution transfer led to the “procedural Democratization” that has to be understood first of all in the institutional-administrative dimension, whereas later the EU policy transfer should have led 439 2013.01.18. 19:05 to the “performance Democratization” but it has hardly taken place so far as it has been discussed in the terms of governance deficit. Nowadays the main internal tension in the NMS appears between the procedural and the performance aspects of Democratization. Most people accept that at formal-legal level there is a democratic order in their country concerned but they think that it works with a very low performance (see e.g. Pew Foundation, 2009).33 Looking back after two decades to the NMS democratization the main problem is that the effective democratic states with high performance are still missing in NMS, but for them also a new start could be given by DRS. Moreover, most analyses have underlined that only a weak and fragile state - as a “mere” electoral democracy with only formal democratic structures - has emerged in the WB region so far. The political systems of these Balkan states, of course, are very complex and they need further, more nuanced and detailed analysis. In addition, the democratic institutionalization is much more comprehensive than its state-level organization, since it embraces also the territorial actors and the establishment of the dynamic civil society with a civic spirit. Altogether, the successful implementation of DRS presupposes the intensive study and the deep reform of both the NMS and the WB states. The WB region cannot stay in an endless candidacy, but in its present situation it is not yet ready for accession. The real question is how to cut this Gordian knot, and the solution is “more for more”, indeed, i.e. more EU assistance for more reforms.34 Conclusions: Europe’s Promise and Revival of Danube Strategy In mid-2011, largely overlapping with the beginning of the DRS implementation phase, there was a turning point in the EU from global crisis management to the transformation crisis. Transformation crisis means a new priority of focusing on the complete overhaul of the EU institutional architecture instead of small and partial corrections towards a more integrated Union as the title of Europe’s Promise (Hill, 2010) indicates. This overwhelming process was stretching first from the Euro Plus Pact in March 2011 to the Treaty on Stability, Coordination and Governance in March 2012. It produced some solution in the Compact for Growth and Jobs in June 2012 and it is expected to reach a point of departure for the new European architecture from the 1 January 2013. The former and the continued 440 KadarKrisztian_16_belivek.indd 440-441 crisis management has concentrated on the “South”, since the “East” has also been deeply impacted but not so seriously hit directly by the financial-sovereign crisis (Magone, 2011). This crisis management has prevented or deteriorated the implementation of many other EU projects, including that of DRS. The NMS region as a whole has had to fight both with the detrimental effects of crisis and within the EU for the renewed cohesion policy. It has tried to join forces in the debate about the planned cohesion policy for 2014-2020 in order to minimize to negative effects of its drastic reduction demanded by the net payer states. Europe’s Promise includes the perspectives of Cohesive Europe or the “Convergence Machine” after the global crisis that could give a new opportunity for the revival of the DRS as well.35 The Hungarian EU Presidency was followed in 2011 by the Polish Presidency that organized the support for the future cohesion policy. The most important development during the Polish Presidency (see 2011a,b, and PMRD, 2011) was that reacting to the Commission’s proposal for the budget of cohesion policy in the 2014-2020 period (European Commission DG-Regio, 2011c). On the margin of the GAC meeting on 15 November 2011 thirteen member states (ten NMS, plus Greece, Portugal and Spain, with four other states as observers) formed a group of the Friends of Cohesion. Along the lines of V4 cooperation the Czech Presidency in 2011-2012 was followed by the Polish V4 Presidency in 2012-2013. On 22 March 2012 the V4 Regional Ministers discussed the issue in Prague and protested against the efforts to curtail cohesion policy in MFF for the period between 2014 and 2020. In the closing event of the Czech V4 Presidency in Prague on 22 June 2012 the Prime Ministers concerned sent a joint letter to the heads of the EU institutions for the support of a strong cohesion policy. On 1 June 2012 the Friends of Cohesion Policy (already 15 member states) issued a declaration to maintain the previous level of cohesion policy in the period between 2013 and 2020 (see Friends of Cohesion Policy, 2012). Due to the heated debates in the European Council, the latest Conclusions have been silent on DRS after one year of workings, and devoted only few lines to cohesion policy (EUCO, 2012:11). At the same time the European Parliament on 23 October 2012 adopted a resolution on Multiannual Financial Framework that demanded keeping EU policy programs intact from the drastic reductions (European Parliament, 2012b).36 As the EU navigates stormy waters in 2012, the DRS may be one of the instruments to solve the dual problem of deepening and widening. It has been argued so in many analyses (see above all Stocchiero, 2010a,b) that because of the enlargement fatigue there 441 2013.01.18. 19:05 is an urgent need for more internal homogenization in the EU. The point is, however, that the DRS can be a win-win or positive sum game. The DRS has been conceived from its initial formulation as a networking “instrument” to overcome the dual limitations of deepening-widening. It is partly the solution of the “domestic” problems of the member states and partly the new approach to the enlargement in the WB region. The extension of spillover effects to the WB states does not decelerate, but it accelerates and the internal homogenization of the EU regions concerned. If the EU supports some pre-accession countries/regions/localities through these organic connections, then the problem of wasting resources or energies - that might have been spent allegedly within the EU more effectively – does not emerge, since the DRS just facilitates the optimalization of these resources both inside and outside the EU. The WB accession is still high on the agenda for peace-makers and investors, democracy-promoters and “culturalists”-environmentalists. It is not an obstacle to the EU internal development, since the DRS can promote both deepening and widening. So far the relationships of the WB states to the EU memberships can be characterized by the terms of the cognitive dissonance with too high expectations and too low reformism, which is, again, not surprising, since the same was the case with the NMS twenty years ago. It means that most people in the WB states accept contradictory statements at the same time about the EU membership, namely despite their reservations about the membership they consider the accession process as a very short and close one. Actually, in the process of turning the DRS from uploading-elaboration phase to downloading-implementation phase, the urgent issue is organizing the “transition management” for sustainable development, i.e. for the sustainability of both social progress and natural environment through the transnational advocacy networks. The transition management has to be supported by the governments concerned and completed by a great number of bottom-up transnational projects. Recommendations for transition management in the HCS triangle are as follows: (1) to organize the common HCS Council for transition management; (2) to formulate the common priorities within the larger set of DRS; (3) to upgrade the separated national projects into the common DRS project; (4) to launch a communication campaign on DRS. Hence, some kind of the European Citizens’ Initiative (ECI) should be launched for the implementation of the DRS. The macro-regions can be the best background for citizens to mobilize civic organizations for the common causes of their territorialized social agenda. The EU has to initiate a comprehensive communication campaign for generating the increasing awareness for the implementation 442 KadarKrisztian_16_belivek.indd 442-443 of the DRS, targeting also at the populations of the WB countries as it has been indicated in the GAC document on BRS (Council conclusions, 2011b:12).37 In the EU2020 general framework, the DRS project has a huge potential of territorial capital, since it is a magnificent, brave vision for the peoples as well as for the regions, countries, and governments concerned in the Danube Valley. No doubt, it will still be very difficult to elaborate the DRS further, and even more to implement it effectively. Thus, in this Strategy the EU will be facing a severe test case of its future-driven capacity. In fact, the DRS is nowadays only at the starting point in a big adventure. The new strategic design can be based on the revelation that it is only the complex social progress that could produce bigger economic growth and better economic performance (Martens, 2010), and it is not vice versa as allegedly economic growth leads to social progress automatically. Pushing for bigger economic growth, but preserving the present status quo – with all social factors unchanged – invites failure and stagnation in the entire Danube Valley, but first of all in the WB region. Instead of demanding abstract and over-generalized requirements (conditionalities) from above in a top-down process, the EU has to promote a genuine, multifaceted social progress from below in a bottom-up process that generates the Europeanization of the WB countries in several steps according to a DRS Roadmap.38 This Roadmap can confirm that the functional macro-regions are important innovations and they can also be breeding reactors for further innovations in both the institutional and policy dimensions. The Danube Strategy has proven so far to be really innovative, since it has offered a new version of regional governance as the common regulations/institutions for the regions of some member states with those of other neighbouring states. Thus, the DRS has the potential to solve many problems at the same time, since it is speeding up also the policy developments through their territorialization. It based on an approach tailored to the specific character of the given macro-region, and they have to move now from vision to action. DRS requires strong and effective MLG-type governance structures and further territorialization of transnational policy issues, since the macro-regional responses to the recent challenges cannot be static, they change all the time having their own dynamism.39 On the other side, the global crisis has demonstrated very forcefully that there has been a serious governance deficit in NMS that has also come to the surface in the DRS implementation process. The DRS project is still in its early implementation phase, and it will face many difficulties: “After all, macro-regional cooperation is complex and time 443 2013.01.18. 19:05 consuming” (Dühr, 2011:48). Indeed, “The building of a macro-region is not an easy process. It may take a long time to come true.” (Stocchiero, 2010b:5). Nevertheless, the trouble lays not so much in the difficulties of elaborating and implementing the macroregional strategies like the DRS, but much more in the protracted global crisis, which can jeopardize both the implementation of top-down strategies and the turn towards the bottom-up strategies. The post-crisis period has to be based on the new paradigm of social progress that demands more complexity management in the cohesion challenge and territorial challenge in the EU than ever before. It is a very important and promising message that the GAC meeting on 5 December 2011, even in an extremely critical situation emphasized the relevance of the enlargement strategy for the future of the EU27(28) (Council conclusions, 2011c). However, the Greek case has proven that if the internal homogenization has not been completed in the EU and the large governance deficit has still remained in a member state, then it may produce a deep crisis not only in the given member state because of necessity this crisis shocks also the other member states. Hungary welcomes Croatia in the EU, nonetheless this enlargement should remind Hungary and the other NMS that the Europeanization cannot be finished at the entry but it is a permanent, ongoing process. For the genuine implementation of the DRS, Hungary – with the other NMS – has to do a lot of “homework” in order to have a successful crisis management.40 After the first year of DRS, Johannes Hahn Commissioner for Regional Policy visited seven countries concerned between 28 June and 1 July 2012, along the Danube Valley starting in Austria, following in Slovakia and Hungary, Croatia, Serbia and Romania, and closing in Bulgaria (European Commission, 2012c and Danube Region Strategy, 2012). Hahn met government officials and monitored the developments of the DRS related projects, but he did not give any meaningful evaluation of the first year. Instead, it has been announced that the Annual Forum of DRS will be held in Regensburg on 27-28 November 2012 for the overview of the first year of the DRS implementation phase. In the uploading phase of DRS there was an asymmetry between the governments and territorial-civil actors with the dominance of a top-down approach creating the DRS framework in the EU. In the implementation phase the territorial-civil actors have entered the scene and have been activated, but an opposite asymmetry has come to the surface, since the governments have lost interest to a great extent in DRS due to the global-EU crisis and to the weaknesses of their government-governance structures. With many nice official declarations so far, after the first year of DRS so many key issues have still remained open.41 444 KadarKrisztian_16_belivek.indd 444-445 Actually, there has been some kind of the roller-coaster in DRS with ups and downs. Certainly, the DRS has failed to make a breakthrough in the first year of implementation phase. It has lost momentum of its dynamism from the uploading phase, but this Sleeping Project is by far not yet in abyss. Although within the EU the South is in “the eye of the storm”, and accordingly in the focus of the crisis management, the South German provinces and Austria can initiate the revival of DRS. Also in 2014 a new robust upswing can start in NMS as a new cycle of recovery, like in 1997 what was the beginning of the real catching up process. In our part of Europe the cooperation of the Upper Danube and Lower Danube is the best means to overcome the Core-Periphery Divide. It is closely connected with the future of cohesion policy and the Territorial Agenda, or the common implementation of economic, social and territorial cohesion that has been stipulated by the Lisbon Treaty. As the June 2012 resolution of the European Parliament has underlined, the EP “endorses the macro-regional approach to territorial cooperation policies (...); believes that macro-regional strategies opened a new chapter in European territorial cooperation by applying a bottom-up approach and spreading cooperation to more and more areas via better use of available resources; recommends that, in view of their clear European added value, macro-regional strategies should receive more attention in the framework of European territorial cooperation, to be reinforced as of 2013” (European Parliament, 2012b:6). In sum, in the late 2012 the perspectives of the DRS project for a relaunching exercise can be seen as follows: • The BRS is in a relatively homogenous area with the traditions more in cooperation and less in conflict, while the DRS is in a very heterogeneous area with the traditions more in conflict and less in cooperation. BRS can still be the icebreaker for the functional macro-regions and further lessons have to be drawn from its practice in cooperation mechanisms. Complexity management has a high priority in this multisectoral and multi-level project. Similarly, the transformation management is equally important for the implementation of DRS between/among the partner countries at the very different level of socio-economic development. Unlike in the Baltic Sea Region, there is a huge asymmetry in the Danube Region, since the two German provinces and Austria give more than seventy per cent of the GDP in the DRS, so the other twelve states concerned give less than thirty per cent of the total GDP.42 • There has been actually a dialogue of the deaf on civil society, or in some cases even “alibi conversations”, since the actors from different countries speak different “languages”. The term has been very much inflated, and this verbal inflation prevents 445 2013.01.18. 19:05 the meaningful discussion at civil society level. The civil society organizations in the three constituent parts of DRS (Upper Danube, NMS and Lower Danube) are at the very different level of developments and/or institutionalization. There is a robust civil society in the Upper Danube, a weak one in NMS and very slowly emerging in the Lower Danube. Without specifying these differences and the actors of civil society (NGOs, non-profit organizations, voluntary organizations, sectoral and local interest organizations, etc), and identify their capacities and representativeness, it would be impossible to revive the dialogue among/between civil society actors along the Danube. Danube Strategy has developed so far just general weak policy networks with some policy communities mostly in the West in the policy fields concerned. Equally, there is only a weak issue network along the Danube among the various policy fields, instead of a strong iron triangle as a Danube riparian issue community. Stable expert networks are also needed with strong background institutions as bridges between the top-down and bottom-up approaches.43 • In the uploading phase there were naive expectations on the internal dynamism, sustainability and its bottom-up capacities of the project, but the downloading phase took place already in the deep crisis period of the NMS, hence its implementation has slowed down. There has been a decline or backsliding of democracy in the NMS, and Hungary has been the “frontrunner” in this negative game. The democracy, governance and sustainability deficit has been characterized in the introductory paper of this volume, leading to the missing or weak participatory democracy, horizontal partnership-structures and sustainable society/environment instead of policy planning with coherence and synergy. Therefore, new top-down initiative is needed from the German provinces and Austria, and also from the NMS governments giving more competences to the actors, and finally from the non-member state governments to launch strong national DRS-related projects. The relaunching process of the DRS has a good chance after the Regensburg Annual Forum with the Upper Danube initiative, although the NMS countries are still rather defensive, but with the Lower Danube in high expectations.44 • Altogether, relaunching the DRS in 2014 can be based on three factors, (1) the new European architecture will be settled in great outlines, at a higher level of integration that makes possible to turn to the lessening of Core-Periphery Divide, (2) in the new financial perspective and with the renewed cohesion policy there will be new perspectives for the DRS as well, and (3) the cumulated experiences from the former years could serve for both deep corrections and brave new ideas in the Upper-Lower 446 KadarKrisztian_16_belivek.indd 446-447 Danube cooperation, in the NMS democratization and in the revival of the EU enlargement policy. All in all, in 2014 there can be a new opening to the European Futures with new scenarios for the integrated Danube Region as a truly liveable and prosperous region.45 447 2013.01.18. 19:05 Annexes The Danube Region Economy Table 1: GDP of countries and regions at PPS in 2011, billion € 448 KadarKrisztian_16_belivek.indd 448-449 Table 2: GDP of countries and regions as % of the region’s aggregate GDP in 2011 449 2013.01.18. 19:05 Table 3: Per capita GDP in countries and regions in 2011 thousand €, in PPS Source: “Overview of recent economic performance in the Danube Region”, presentation by Rumen Dobrinsky Senior Research Associate, Vienna Institute for International Economic Studies under the title „Reflections on the State of the Danube Region”, 1st Annual Forum of the EU Strategy for Danube Region, Regensburg, 27-28 November 2012. 450 KadarKrisztian_16_belivek.indd 450-451 References Annoni, Paola and Kornelia Kozovska (2011) EU Regional Competitiveness Index 2010, European Commission, Joint Research Centre, EUR 24346, www.jrc.ec.europa.eu Annoni, Paola and L. Dijskra (2012) EU Regional Competitiveness Index 2011, European Commission, Joint Research Centre, http://ec.europa.eu/enterprise/policies/industrial-competitiveness/competitiveness-analysis/seminars/files/bbs_annoni_dijkstra_ slides_en.pdf Ágh, Attila (2010a) “Regionalisation as a driving force of EU widening: Recovering from the EU ‘carrot crisis’ in the ‘East’”, Europe-Asia Studies, Vol. 62, Issue 8, October 2010, pp. 1239-1266 Ágh, Attila (2010b) “The Renewal of the EU Democracy: From Multilevel Governance to Global Governance”, Journal of Comparative Politics, Vol. 3, No. 1, January 2010, pp. 4-20, http://www.jofcp.org/jcp/JCP-January-2010.pdf Ágh, Attila (2010c) “Danube Strategy as a challenge of globalized locality (glocality): The Europeanization of a Functional Macro-Region in the Danube Valley”, in Ágh, Kaiser and Koller, pp. 13-40 Ágh, Attila (2011a) “Regionalising the EU’s neighbourhood: Planning the Global Role for the Trio Presidency, in Fabry (ed.) pp. 243-249 Ágh, Attila (2011b) “The European Futures and Cohesive Europe: EU2020 Strategy and cohesion policy with flexible integration”, Journal of Comparative Politics, Issue 6, July 2011, pp. 49-66 Ágh, Attila (2011c) “Cohesion Policy and the Europe 2020 Strategy: Constructing the EU for the next decade”, in Ágh (ed.) 2011 Ágh, Attila (2011d) “Regional competitiveness of the EU in the global context: EU developments from regional policy to cohesion policy”, in Ágh (ed.) 2011 Ágh, Attila (2011e) “Danube Strategy and Europe 2020 Strategy: The organic link between the bottom-up and top-down EU projects”, in Ágh, Kaiser and Koller Ágh, Attila (2012a) “Global Governance and Integrative Balancing: EU Efforts to Respond to the Global Challenge”, Journal of Global Policy, Vol. 3, Issue 2, pp. 145153, May 2012, http://onlinelibrary.wiley.com/doi/10.1111/gpol.2012.3.issue-2/ issuetoc, first published online 22 May 2012 Ágh, Attila (2012b) “The Hungarian Rhapsodies: The Conflict of Adventurism and Professionalism in the European Union Presidency”, Journal of Common Market 451 2013.01.18. 19:05 Studies, The JCMS Annual Review of the European Union in 2011, (First published online: 10 April 2012, http://onlinelibrary.wiley.com/journal/10.1111/% 28ISSN%291468-5965/earlyview) Ágh, Attila (2012c) “The Socio-Economic Crisis and Social Polarization in Hungary: The Paradoxes of the European Integration Process”, in Schüler (ed.) pp.59-85 Ágh, Attila and Judit Kis-Varga (eds) (2009) The global crisis and the EU responses, Budapest: Together for Europe Research Centre, p. 353 Ágh, Attila and András Vértes (eds) (2010) From the Lisbon Strategy to the Europe 2020 Strategy: Think European for the Global Action, Budapest: Together for Europe Research Centre, p. 261 Ágh, Attila, Tamás Kaiser and Boglárka Koller (eds) (2010) Europeanization of the Danube Region: The Blue Ribbon Project, Budapest: Together for Europe Research Centre and King Sigismund College, p. 260 Ágh, Attila (ed.) (2011) European Union at the crossroads: The European perspectives after the global crisis, Budapest: Together for Europe Research Centre, p. 337 Ágh, Attila, Tamás Kaiser and Boglárka Koller (eds) (2011) The New Horizons for the Cohesion Policy in the European Union: The Challenge of the Danube Strategy Budapest: Together for Europe Research Centre, p. 229 Balfour, Rosa and Corina Stratulat (2011) The democratic transformation of the Balkans, European Policy Centre, EPC Issue Paper No. 66, http://www.epc.eu/ documents/uploads/pub_1363_the_democratic_transformation_of_the_balkans.pdf Bérczi, Anna (2011) Duna Stratégia I, ppt (presentation at the conference “New Széchenyi Plan, Danube Strategy and Sustainability, Budapest, 11 November 2011), http://zoldregiokhalozata.hu/know_others.php?regionid=6 Bertelsmann (ed.) (2012b) Transformation Index BTI 2012, Gütersloh: Verlag Bertelsmann Stiftung, p. 139 Blockmans, Steven (2012) A Nobel Peace Prize to revive the EU enlargement process, European Neighbourhood Watch, Issue 87, November 2012, http://www.ceps.eu/ system/files/simplenews/2011/05/NWatch87.pdf Bukovic, Hrvoje and Igor Vidacak (2010) “Enhancing the role of social economy in attaining the Lisbon Agenda objectives”, in Samardzija, pp. 185-215 Centrope (2011a) Regional Development Report 2010: Returning to Growth, http://www.centrope.com/repository/centrope/downloads/Regional%20 Development%20Report%202010%20Executive%20Summary.pdf 452 KadarKrisztian_16_belivek.indd 452-453 Centrope (2011b) Conclusions of the Centrope Political Board, Bratislava, 5 December 2011, http://www.centrope.com/en/centrope-project/political-conferences/tomasov-bratislava-2011 Centrope (2012) Centrope Strategy 2013+, http://www.centrope.com/repository/centrope/downloads_Hu/StrategyReport_hu.pdf Dhéret, Claire (2011) What next for EU Cohesion Policy? Going “beyond GDP” to deliver greater well-being, EPC Policy Brief, March 2011, http://www.epc.eu/pub_details.php?cat_id=3&pub_id=1243&year=2011 Dühr, Stefanie (2011) Baltic Sea, Danube and Macro-Regional Strategies: A Model for Transnational Cooperation for the EU?, Notre Europe, Studies and Research No. 86, http://www.notre-europe.eu/uploads/tx_publication/Etude86-Macro-regionalstrategies-en.pdf Dzihic, Vedran and Dieter Segert (2011) “Lessons from ‘Post-Yugoslav’ Democratization: Functional Problems of Stateness and the Limits of Democracy”, East European Politics and Society, 0888325411406436, first published online on May 3, 2011 as doi:10.1177/0888325411406436 , http:/online.sagepub.com, http://eep.sagepub.com/content/early/2011/04/30/0888325411406436. Eurochambres (2008) Regional Competitiveness Atlas 2008, http://www.eurochambres.be/DocShare/docs/1/EUROCHAMBRES/docs/DLS/Atlas_of_Regional_ Competitiveness-2008-00845-01.pdf Fabry, Elvire (ed.) (2011) Think Global – Act European, Vol. III, Paris: Notre Europe Institute, p. 383 Freyburg, T., Lavenex, S., Schimmelfennig, F., Skripka T. & Wetzel, A. (2009) “EU promotion of democratic governance in the neighbourhood”, Journal of European Public Policy, 16, 6 (Special Issue on European Union External Governance) Freyburg, T. & Richter, S. (2010) “National identity matters: the limited impact of the EU Political conditionality in the Western Balkans”, Journal of European Public Policy, 17, 2, pp. 263-281 Gallup Balkan Monitor (2010, 2011) http://www.balkan-monitor.eu/ and http://www. balkan-monitor.eu/files/BalkanMonitor-2010_Summary_of_Findings.pdf Gergely, Erzsébet (2011) Duna Stratégia I-II, ppt (presentation at the conference “New Széchenyi Plan, Danube Strategy and Sustainability, Budapest, 11 November 2011), http://zoldregiokhalozata.hu/know_others.php?regionid=6 Gänzle, Stefan and Kristine Kern (2011) Europe 2020 and Macro-Regional Europe: Coping with the Prospect of Differentiation in the EU, in Ágh (ed.) 2011 453 2013.01.18. 19:05 Gill, Indermit and Raiser Martin (2011) Golden Growth: Restoring the lustre of the European economic model, Washington: The World Bank, http://www.scribd.com/ doc/91164655/Golden-Growth Hardi, Tamás (2012) Duna-stratégia és területi fejlődés (Danube Strategy and territorial development), Budapest: Akadémiai Kiadó, p. 293 Heinelt, Hubert and Michele Knodt (eds) (2011) Policies within the EU Multi-Level System, Baden-Baden: Nomos, p. 410 Hill, Steven (2010) Europe’s Promise: Why the European Way is the Best Hope in an Insecure Age, University of California Press, p. 474 Hill, Steven (2012) Europe’s Earthquake, 12 October 2012, http://www.steven-hill.com/ europes-earthquake/ Human Development Report (2011) Sustainability and equity: A Better Future for All, United Nations, http://hdr.undp.org/en/reports/global/hdr2011/ Jacoby, Wade (2010) “Managing globalization by managing Central and Eastern Europe”, Journal of European Public Policy, Vol. 17, No. 3, April 2010, pp. 416-432 Jahn, Detlef and Kati Kuitto (2011) “Taking stock of policy performance in Central and Eastern Europe”, European Journal of Political Research, Vol. 50, No. 6, pp. 719-748 Kodric, Mojca (2011) The EU Strategy for the Danube Region: What Potential Contribution to Regional Stability and Cooperation, Bruges Regional Integration and Global Governance Papers, BRIGG Paper 4/2011, p. 32, http://www.cris.unu. edu/fileadmin/workingpapers/BRIGG_papers/BRIGG_4_2011.pdf Lavenex, S. and Schimmelfennig, F. (2009) “EU rules beyond EU borders: theorizing external governance in European politics”, Journal of European Public Policy, 16, 6 (Special Issue on European Union External Governance) Lavenex, S., Wichmann, N. & Lehmkuhl, D. (2009) “Modes of external governance: a cross-national and cross-sectoral comparison”, Journal of European Public Policy, 16, 6 (Special Issue on European Union External Governance) Linde, Jonas (2009) Into grey zone: The recent trend of “hybridization” of political regimes, QoG Working Paper Series 2009:7 (The QOG Institute, University of Gothenburg, Quality of Government) http://www.qog.pol.gu.se/working_papers/2009_7_ Linde.pdf Magone, José M. (2011) “Centre-Periphery conflict in the European Union? Europe 2020, the Southern European Model and the euro-crisis”, in Ágh (ed.) Martens, Hans (ed.) (2010) Europe 2020: delivering well-being for future Europeans, EPC Challenge Europe Issue 20, March 2010, www.epc.eu 454 KadarKrisztian_16_belivek.indd 454-455 Moeller, Joergen and Svend-Erik Skaaning (2010) „Post-communist regime types: Hierarchies across attributes and space”, Communist and Post-Communist Studies, Vol. 43, No 1, March 2010, pp.51-71 Noutcheva, Gergana (2012) European Foreign Policy and the Challenges of Balkan Accession, London and New York: Routledge, p. 247 OECD (2011a) Better Life Initiative: Compendium of OECD well-being indicators, http:// www.oecd.org/dataoecd/4/31/47917288.pdf OECD (2011b) Regional Competitiveness, http://www.oecd.org/document/37/0,3343, en_2649_34413_36878693_1_1_1_1,00.html OECD (2011c) Territorial Development http://www.oecd.org/about/0,3347, en_2649_34413_1_1_1_1_1,00.html Pálné Kovács, Ilona (2011) “The future of European cohesion policy: The paradoxes in domestic governance of CEE countries”, Ágh 2011 (ed.) Pew Foundation (2009) End of Communism Cheered but Now with More Reservations, http://pewglobal.org/2009/11/02/end-of-communism-cheered-but-now-withmore-reservations/ Piattoni, Simona (2010) The Theory of Multi-level Governance, Oxford and New York: Oxford University Press, p. 301 Samardzija, Visnja and Alan Dukes (eds) (2008) Communicating Integration Impact in Croatia and Ireland, Zagreb and Dublin: IMO Zagreb and IIEA Dublin, p. 266 Samardzija, Visnja and Hrovje Butkovic (eds) (2010) From the Lisbon Strategy to Europe 2020, Zagreb: IMO, p. 312 Samardzija, Visnja and Igor Vidacak (2010), “Lessons learned in implementing communication strategy – the EU and Croatian approach”, in Samardzija and Dukes, pp. 68-86 Schakel, Arjan H. (co-authored and co-edited with Liesbet Hooghe and Gary Marks) (2008) Regional Authority in 42 Democracies, 1950-2006: A Measure and Five Hypotheses, Double special issue Regional and Federal Studies, Vol. 18, Nos. 2-3, p. 302 Schüler, Sonja (2012) Politische Kultur in (Südost-) Europa, Munich: Verlag Otto Sagner, p. 188 Stocchiero, Andrea (2010a) Macro-Regions of Europe: Old Wine in a New Bottle?, CeSPI (Centro Studi di Politica Internazionale) Working Papers No. 65/2010, April 2010, http://www.cespi.it/WP/WP%2065-CeSPI%20Macroregioni%20europee%20_ eng_.pdf Stocchiero, Andrea (2010b) The geopolitical game of the European Union strategy for macro-regions: Where does the Mediterranean stand? CeSPI (Centro Studi di Politica 455 2013.01.18. 19:05 Internazionale) Working Papers No. 74/2010, July 2010, http://www.cespi.it/WP/ WP%2074%20Stocchiero%20macroregioni.pdf Taylor, Andrew, Andrew Geddes and Charles Lees (2013) The European Union and South East Europe: The dynamics of Europeanisation and multi-level governance, London and New York: Routledge, p. 253 Tekin, Funda (2012) Differentiated integration at Work, Baden-Baden: Nomos, p. 330 Tuka, Ágnes and István Tarrósy (eds) (2010) Borderless Europe: challenges and opportunities, Pécs: University of Pécs, p. 257 Van Langenhove, Luk et al. (eds) (2012) The EU as a Global-Regional Actor in Security and Peace, The EU-GRASP Final Integrative Report, http://www.eugrasp.eu/wpcontent/uploads/2012/01/Final-Integrative-Report.pdf Vasilache, Andreas, Reimund Seidelmann and José Luis de Sales Marques (eds) (2011) States, Regions and the Global System, Baden-Baden: Nomos, p. 369 Veres, Lajos (ed.) (2008) Danube-Area Cohesion, Dunaújváros: Hungarian Association of Spatial Development, p.302 Villaverde, José and Adolfo Mara (2011) Regional Disparities in the EU, SIEPS, 2011:4, www.sieps.se Youngs, Richard (2009) “Democracy promotion as external governance?”, Journal of European Public Policy, 16, 6 (Special Issue on European Union External Governance) Zerka, Pawel (2011) Towards a smart cohesion policy, http://demosservices.home.pl/www/ files/P_Zerka_Smart_Cohesion_July_2011_pdf.pdf Wulf, Johann-Jakob (2012) One year Danube Strategy – a prime test of territorial cohesion in the EU”, paper written for the Annual Conference of UACES, Passau, 2-5 September 2012 EU related documents AII, The Adriatic and Ionian Macro-Region (2012), http://www.aii-ps.org/index.php/ adriatic-ionian-macroregion Baden-Württemberg Declaration (2010) Closing Declaration of the 2010 Danube Conference, The Future of the Danube Area, 5-6 October 2010, Representation of the State Baden-Württemberg to the European Union, http://www.ulm.de/sixcms/ media.php/331/Closing_Declaration.pdf Barca Report (2009) An Agenda for a Reformed Cohesion Policy, 27 April 2009, European Commission Regional Policy – Inforegio, http://ec.europa.eu/regional_policy/ar456 KadarKrisztian_16_belivek.indd 456-457 chive/policy/future/barca_en.htm and http://ec.europa.eu/regional_policy/policy/ future/pdf/report_barca_v0306.pdf BRS, The Baltic Sea Region (2012), Programme for 2007-2013, http://eu.baltic.net/ Programme_document.98.html CeSPI (2010) Europe and its neighbourhood: towards macro-regions? Seminar in Brussels (1 July 2010), http://www.cespi.it/GOVMED/compte%20rendu-macroregions-en.pdf CoR, Committee of Regions (2009a) The Draft Opinion of the Committee of Regions: An EU strategy for the Danube area, 81st plenary session, 5-7 October 2009, RELEX-IV-025, www.cor.europa.eu CoR, Committee of Regions (2009b) Round-up the Sixth Atelier on “EU Macro-Regional Strategies and European Governance”, (Held on 26 November 2009), www.cor.europa. eu CoR, Committee of Regions (2009c) The European Grouping of Territorial Cooperation (EGTC): State of play and prospects, written by METIS for the CoR, Brussels, www. cor.europa.eu CoR, Committee of Regions (2009d) White Paper on Multilevel Governance, 17-18 June 2009, CONST-IV-020, http://web.cor.europa.eu/epp/Ourviews/Documents/ White%20Paper%20on%20MLG.pdf and, http://cor.europa.eu/en/activities/governance/Documents/CoR%27s%20White%20Paper%20on%20Multilevel%20 Governance/EN.pdf CoR, Committee of Regions (2010) Forum – Europe’s macro-regions: integration through territorial cooperation, Brussels, 13 April 2010, http://www.cor.europa. eu/pages/EventTemplate.aspx?view=folder&id=177a95fc-ce27-4d76-82ce457420963ce4&sm=177a95fc-ce27-4d76-82ce-457420963ce4 CoR, Committee of Regions (2011a) Opinion of the CoR on the Fifth Cohesion Report, 89th plenary session, 31 March and 1 April 2011, COTER-V-011, www.cor.europa.eu CoR, Committee of Regions (2011b) The Adriatic and Ionian Region, Speech by Mercedes Bresso, Brussels, 23 May 2011, President’s private office, GSPI, www.cor.europa.eu CoR, Committee of Regions (2011c) Scoreboard for monitoring MLG at the European Union level, December 2011, www.cor.europa.eu CoR, Committee of Regions (2012a) Opinion of the Committee of Regions: Building a European Culture of Multilevel Governance, CIVEX-V-020, 94th plenary session, 15-16 February 2012, www.cor.europa.eu CoR, Committee of Regions (2012b) Interregional group “Danube” in CoR, http://cor. europa.eu/en/activities/interregionalgroups/danube-group/Pages/index.aspx 457 2013.01.18. 19:05 Council of Danube Cities and Regions (2012) Danube Days and other events, http://www. codcr.com/danubedays2012/other-events-5.php Council of Ministers (2007) Territorial Agenda of the European Union: Towards a More Competitive and Sustainable Europe of Diverse Regions, Agreed on the occasion of the Informal Ministerial Meeting on Urban Development and Territorial Cohesion in Leipzig on 24/25 May 2007, www.bmvbs.de Council of Ministers (2011a) Council Conclusions on the Fifth Report on economic, social and territorial cohesion, 3068th General Affairs Council meeting, Brussels, 21 February 2011, 6738/11, http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/EN/genaff/119400.pdf Council of Ministers (2011b) Territorial Agenda of the European Union 2020: Towards an Inclusive, Smart and Sustainable Europe of Diverse Regions, agreed at the Informal Ministerial Meeting of Ministers responsible for Spatial Planning and Territorial Development on 19th May 2011, Gödöllő, Hungary, http://www.eu2011.hu/files/bveu/ documents/TA2020.pdf Council of the European Union (2009) The future Spanish, Belgian and Hungarian Presidencies: Draft 18 month programme of the Council, Brussels, 27 November 2009, 16771/09, POLGEN 219, http://www.aedh.eu/November-27th-2009-Council-of-the.html Council of the European Union (2011a) Council conclusions on the European Union Strategy for the Danube Region, 3083rd General Affairs Council meeting, Brussels, 13 April 2011, http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/EN/genaff/121511. pdf Council of the European Union (2011b) Council conclusions on the review of the European Union Strategy for the Baltic Sea Region, 3125th General Affairs Council meeting, Brussels, 15 November 2011 (pp. 8-13), http://www.consilium.europa.eu/uedocs/cms_data/docs/ pressdata/EN/genaff/126082.pdf Council of the European Union (2011c) Council conclusions on enlargement and stabilisation and association process, 3132nd GAC meeting, Brussels, 5 December 2011, http://www. consilium.europa.eu/uedocs/cms_data/docs/pressdata/EN/genaff/126577.pdf Danube Alliance Magazine (2012) Special Issue for Danube Forum on 7 November2012, p. 145 Danube Program Office (2010) Danube Guide and Danube Main Street Guide, by Péter Gauder, Head of Studio Metropolitana Budapest, www.studmet.hu Danube Region Strategy (2012) Commissioner Hahn visits the Danube Region, http:// www.danube-region.eu/item/308058 458 KadarKrisztian_16_belivek.indd 458-459 Danube Region Strategy Newsletter (2012), Spring Issue, http://www.danube-region.eu/ item/298219 Danube Region Strategy, Serbia (2012) http://www.dunavskastrategija.rs/en/ DaNet, DanubeNet (2011) Opening conference in Budapest (November 2011), http:// groupspaces.com/DanubenetforNGO/pages/danet-memos DaNet (2012) DaNet conferences, http://groupspaces.com/danubenetforngo Danube Civil Society Forum (2012a) Key documents of DCSF, http://www.danubestrategy. eu/danube-civil-society-forum/key-documents/ Danube Civil Society Forum (2012b) Danube Strategy non-papers 2008-2009, including the Austrian, Bavarian, German and Hungarian (etc) documents, http://www.danubestrategy.eu/papers/papers/ DATOURWAY (2011, 2012) Description and Documents, www.datourway.eu, www.vati. hu, www.terport.hu, www.tfte.hu European Commission (2010a) EU Strategy for the Danube Region, Brussels, 2 February 2010, Scoping Paper for public consultation, REGIO/E1/EN/NV/OB D, http://ec.europa. eu/regional_policy/archive/consultation/danube/doc/scoping_danube_strategy.pdf European Commission (2010b) European Union Strategy for Danube Region, Brussels, 8.12.2010, COM(2010) 715 final, http://ec.europa.eu/regional_policy/cooperate/ danube/index_en.cfm European Commission (2010c) European Union Strategy for Danube Region, Brussels, 8.12.2010, Action Plan, SEC(2010) 1489 final (SEC(2010) 1490, 1491 final), http:// ec.europa.eu/regional_policy/cooperate/danube/index_en.cfm European Commission (2010d), Johannes Hahn Commissioner for Regional Policy, The Danube Strategy Conference in Constanta, Opening Speech on 9 June 2010, http://europa.eu/rapid/pressReleasesAction.do?reference=SPEECH/10/297&format=HTML &aged=0&language=EN&guiLanguage=en European Commission (2011) A new response to a changing Neighbourhood, Brussels, 25/05/2011, COM(2011) 303, http://ec.europa.eu/world/enp/pdf/com_11_303_ en.pdf European Commission DG-Regio (2011a) EU Strategy for the Danube Region http:// ec.europa.eu/regional_policy/cooperation/danube/index_en.htm European Commission DG-Regio (2011b) European Commissioner Hahn announces priority area coordinators for EU Strategy for Danube Region, 3 February 2011, IP/11/124, http://europa.eu/rapid/pressReleasesAction.do?reference=IP/11/124&format=HTML &aged=0&language=EN&guiLanguage=en 459 2013.01.18. 19:05 European Commission DG-Regio (2011c) Cohesion policy 2014-2020, Inventing in growth and job, October 2011, http://ec.europa.eu/regional_policy/sources/docoffic/official/regulation/pdf/2014/proposals/regulation2014_leaflet_en.pdf European Commission (2012a) European Union Strategy for the Baltic Sea Region, Action Plan, Brussels, SEC(2009) 712/2, http://www.esparama.lt/es_parama_pletra/failai/fm/failai/BJRS_failai/03-27_action_plan2012_en.pdf European Commission (2012b) The European Union Strategy for the Baltic Sea Region, Brussels, 23.3.2012, COM(2012) 128 final, http://eur-lex.europa.eu/LexUriServ/ LexUriServ.do?uri=COM:2012:0128:FIN:EN:PDF European Commission (2012c) http://ec.europa.eu/commission_2010-2014/hahn/index_en.cfm?DisplayId=1 European Commission (2012d) Information tools produced by Directorate General for Regional and Urban Policy, October 2012, p. 23 EUCO, European Council (2011) European Council 24 June 2011, Conclusions, EUCO 23/11 EUCO, European Council (2012) Conclusions, EUCO 205/12, Brussels, 14 December 2012, http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ ec/134353.pdf EUSDR Newsletter (2012) Spring 2012 Issue, http://www.danube-region.eu/pages/ newsletter EUSDR Report (2012a) PA 1a, June 2012, http://www.danube-navigation.eu/ EUSDR Report (2012b) PA 1b, June 2012, http://dunaregiostrategia.kormany.hu/download/f/50/50000/REPORT%20EUSDR%20PA1b%20 Implementation_29-6-2012.pdf EUSDR Report (2012c) PA 2, June 2012, http://www.google.hu/url?sa=t&rct=j&q=& esrc=s&source=web&cd=16&ved=0CE4QFjAFOAo&url=http%3A%2F%2Fw ww.euroskop.cz%2Fgallery%2F64%2F19388-eusdr_seminar.pptx&ei=n0qSUIL ZF5LT4QTVk4CQBQ&usg=AFQjCNHCmOzs5oq9l1ZGz7JbPytupblAyw&ca d=rja EUSDR Report (2012d) PA 3, June 2012, http://dunaregiostrategia.kormany.hu/ download/a/50/50000/PA%203%20Report%20June%202012.pdf EUSDR Report (2012e) PA 4, June 2012, http://dunaregiostrategia.kormany.hu/ download/b/50/50000/PA%204%20Report%20June%202012.pdf EUSDR Report (2012f ) PA 5, June 2012, http://dunaregiostrategia.kormany.hu/ download/c/50/50000/PA%205%20Report%20June%202012.pdf 460 KadarKrisztian_16_belivek.indd 460-461 EUSDR Report (2012g) PA 6, June 2012, https://docs.google.com/viewer?a=v&q=cac he:78XT3HvbNqsJ:dunaregiostrategia.kormany.hu/download/0/60/50000/EUSD R%2520PA6%2520report%2520final%252001072012.doc+&hl=hu&gl=hu&pi d=bl&srcid=ADGEESi-daNLqHpKlW_6DXVvyTLrbJTWxmed1K9rxKLmIdJp oq2OEZRpeFEORIk0ZRn2k0RLzuCUsXuee0ibkTE7rQv8tvLm0zb_PP_VXMCF2Gmv9gxXq703Djv6a3_yZaeKu3X46Wd&sig=AHIEtbQF4OFvuowXgifD pB_v1S0wcCor1Q EUSDR Report (2012i) PA 7, June 2012, http://dunaregiostrategia.kormany.hu/ download/d/50/50000/PA%207%20Report%20June%202012.pdf EUSDR Report (2012j) PA 8, June 2012, http://dunaregiostrategia.kormany.hu/download/1/60/50000/EUSDRreport-June2012-PA8-final.pdf EUSDR Report (2012k) PA 9, June 2012, http://www.erisee.org/sites/default/files/ EUSDR%20PA9%20Report%20June%202012.pdf EUSDR Report (2012l) PA 10, June 2012, http://dunaregiostrategia.kormany.hu/ download/e/50/50000/PA%2010%20Report%20June%202012.pdf EUSDR Report (2012m) PA 11, June 2012, http://dunaregiostrategia.kormany.hu/ download/3/60/50000/PA%2011%20Report%20June%202011.pdf European Parliament (2010) Resolution on a European Strategy for the Danube Region, 21 January 2010, www.europarl.europa.eu/sides European Parliament (2012a) Plenary sitting, Report on the evolution of the EU macro-regional strategies, 27.6.2012, Committee on Regional Development, A7-0219, http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP// NONSGML+REPORT+A7-2012-0219+0+DOC+PDF+V0//EN European Parliament (2012b) Resolution on MFF, 23 October 2012, http://www. europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P7-TA-20120360+0+DOC+XML+V0//EN Friends of Cohesion Policy (2012) Joint Statement on EU 2014-2020 MFF, Bucharest, 1 June 2012, http://civiltrustbuilding.eu/ctb/cohesion-policy-friends-group-adoptsjoint-statement-on-eu-2014-2020-multiannual-financial-framework/ Füle, Stefan (2011) Press statement of the European Commissioner on 3/11/2011 about the Commission’s Enlargement Package, http://europa.eu/rapid/pressReleasesAction.do?reference=SPEECH/11/723&format=HTML&aged=0&language=EN&g uiLanguage=en Hahn, Johannes (2012) At the heart of Europe, Government, Issue 4, November 20 2012, pp. 44-47 461 2013.01.18. 19:05 Hungarian Ministry of Foreign Affairs (2010) The Programme of the Hungarian Presidency of the Council of the European Union, 1 January – 30 June 2011: Strong Europe, http://www.eu2011.hu/files/bveu/documents/HU_PRES_STRONG_EUROPE_ EN_3.pdf, see also in shorter version: http://www.eu2011.hu/priorities-hungarianpresidency, Hungarian Ministry of Foreign Affairs (2011) Six Months in the Service of a Stronger Europe: Overview of the Hungarian Presidency of the Council of the European Union, January-June 2011, http://www.eu2011.hu/files/bveu/documents/HUPRES_ EREDMENYEK_EN.pdf Hungarian Ministry of Foreign Affairs (2012) Danube Strategy Government Commissioner’s Office, http://dunaregiostrategia.kormany.hu/hirek Hungarian non-paper on Danube Strategy (2009) Preparation of the EU strategy for the Danube region - Contribution by Hungary, 15 December 2009, http://www.danubestrategy.eu/uploads/media/Hungarian_nonpaper_english.pdf METIS-Vienna (2012) 1st Danube Financing Dialogue, 22-23 March 2012, http:// groupspaces.com/CapacityandCooperation/item/223882 Panorama - inforegio (2012a) Cohesion Policy 2014-2020: Investing in Europe’s Regions, No. 40, Winter 2011/2012 Panorama - inforegio (2012b) Targeting results: Fine tuning cohesion policy, No. 41, Spring 2012 Panorama - inforegio (2012c) Partnership in cohesion policy: Reinforcing implementation of this key principle, No. 42, Summer 2012 Panorama - inforegio (2012d) Investing in regions: Using financial instruments to leverage support for regional policy, No. 43, Autumn 2012 PMRD, Polish Ministry for Regional Development (2011) The Territorial Dimension of the European Social Fund: A Local Approach for Local Jobs? http://www.mrr.gov.pl/rozwoj_regionalny/Prezydencja/Kalendarz/Documents/The_Territorial_Dimension_ of_the_ESF_issue_paper.pdf Polish Presidency (2011a) Conclusions on the territorial dimension of EU policies and the future Cohesion Policy, 24-25 November 2011, http://www.aebr.eu/files/filemanager_files/news/Presidencies/PRES_PL_Conclusions__final.pdf Polish Presidency (2011b) Roadmap towards promoting and enhancing an integrated, territorial approach, 24-25 November 2011, http://www.aebr.eu/files/filemanager_files/news/Presidencies/PRES_PL_Roadmap_final.pdf 462 KadarKrisztian_16_belivek.indd 462-463 Regensburg conference (2012) Reflection paper, 27-28 November 2012, http:// ec.europa.eu/regional_policy/conferences/danube_forum2012/doc/draft_reflection_paper_v3.pdf Térport (2012) List of DRS programs and events, http://www.terport.hu/kategoria/ duna-strategia-0 Ulm Declaration (2010) German Policy Paper on an EU Strategy for the Danube Region, Ulm, 1/2 February 2010, http://www.danubestrategy.eu/uploads/media/ EUSDR_German_Position_Paper.pdf Vienna conference (2012) Start me up, 24-25 September, 2012, http://www.danubestrategy.at/ V4 (2011) Joint Statement of the Visegrad Group and Slovenia on the Western Balkans (Prague, November 4, 2011), http://www.msz.gov.pl/files/docs/ komunikaty/20111104PRAGA/Prague%20-%20Joint%20Statement.pdf V4 (2012) V4 premiers call for long-term solutions to EU troubles, http://www.visegradgroup.eu/news/v4-premiers-call-for Zöld-Nagy, Viktória (2012) Az ETT alapítás hazai gyakorlata és tapasztalatai (The practice and experiences of EGTC in Hungary), 24 September 2012, Deputy State Secretary for the Development of Territorial Administration, http://www.google. hu/url?sa=t&rct=j&q=&esrc=s&source=web&cd=15&ved=0CDcQFjAEOAo& url=http%3A%2F%2Fegtc.kormany.hu%2Fdownload%2Fa%2Fde%2F40000 %2F3%2520-%2520Zold%2520Nagy%2520Viktoria.ppt&ei Notes 1 This paper has been written in the framework of the OTKA (Hungarian National Research Fund) project “Competitiveness of the Hungarian regions in the EU” (ID: 77659). The earlier and shorter version of this paper was prepared for the Annual Conference of UACES in Passau, 2-5 September 2012. See “The Perspectives of Danube Strategy in the EU28: The challenges for the ECE-WB interregional cooperation”, http://events.uaces.org/documents/papers/1201/agh.pdf. This short introduction summarizes the conceptual framework of my recent papers on regionalization (Ágh, 2010a,b, 2011,a,b,c,d, 2012). It has a strong continuity with the efforts of my former papers on Danube Strategy (Ágh, 2010c, 2011e). 463 2013.01.18. 19:05 2 In this paper I have dealt only marginally with some very important theoretical problems of the changing paradigms, like cohesion, competitiveness and Core-Periphery relations that have been discussed in my former papers and the latest edited volumes (Ágh, 2009, 2011), since I have focused here on the FMRs. I have also tried to cut drastically the references to the literature, so e.g. I mention on BRS only Gänzle and Kern (2011), European Commission (2012a,b) and BRS (2012); and on MLG Heinelt and Knodt (2011) and Piattoni (2010). 7 The latest big event took place at 6th European Conference of the Danube Cities and Regions, “Start me up” 10th Vienna Dialogue Forum, 24-25 September 2020 (Vienna City Hall) (http://www.danubestrategy.at/) and Council of Danube Cities and Regions (2012). In general for the DRS information flow see http://www.danube-region.eu/. The Danube Civil Society Forum was established in Eisenstadt on 30 June – 1 July 2011 based on the activists of the countries concerned, see Danube Civil Society Forum (2012a,b). 3 The crisis-related new problems and worries have to be discussed as well, like Cohesive Europe, Core-Periphery tensions, Two-Speed or Multi-Speed Europe, the fight around the cohesion policy in the next financial perspective (see and Council of Ministers, 2011a and Dhéret, 2011) since the NMS have been worst hit in the EU by the global crisis (see also Jacoby, 2010, Jahn and Kuitto, 2011) that has to be taken into consideration in discussing the near future of the DRS. 8 4 The most powerful presentations of this idea are the volumes of Think Global – Act European by the Notre Europe Institute in Paris (see Fabry, 2011, and Ágh, 2011a and 2012a). On new regionalism as a global theory see Van Langenhove (2012). 5 The terms in this paper follow the official terminology of the EU, e.g. Croatia has been regularly mentioned as part of the West Balkans (WB). In my view, Croatia is part of East-Central Europe (ECE), although its accession has a big impact on the WB region as well. Given their locations and intermediary role, Hungary, Croatia and Serbia are the core for the ECE-WB interregional cooperation in the Danube macro-region. Therefore, their special role in the DRS as the HCS triangle cooperation deserves special attention for the perspectives of this giant project as a whole, see later. On the prehistory of the uploading process see the Ulm Declaration and the Closing Declaration. Baden-Württemberg established a Danube Network in Brussels and initiated a series of Danube conferences between 2006 and 2008. This was continued by the Commission’s government level Danube conferences in 2010 in Ulm, Budapest, Vienna/Bratislava, Ruse/Giurgiu and Constanta. There were a series of Danube conferences in the uploading phase like on 29 June 2009 in Linz for regional leaders, on 15 January 2010 in Vienna (Europaforum), on 20 January Bucharest conference on Danube Strategy, 1 March 2010 in Regensburg (Bavarian Stakeholder Conference) and on 18 March 2010 in Budapest (Expert Conference in King Sigismund College). On 13 April 2010 there was a meeting in Brussels about the macro-regions (Europe’s macro-regions: Integration through territorial cooperation, Forum at the Committee of Regions, www.cor.europa.eu/macroregions). The international group Danube with 23 CoR members was organized in January 2009. It has concentrated on common Danube identity, creating synergies between MLG levels and facilitating exchange of views, ideas and practices (CoR, 2012b). In the series of high level meetings see the Informal Meetings of the Foreign Ministers (Bucharest, 7 November 2011 and 22 October 2012, http://www.codcr.com/danubedays2012/other-events-5.php). 9 Actually, the PACs are only the layer that has been really active (see EUSDR Report, 2012a-m), the other two layers seem to be inactive. The general PAC structure is: Pillar I. - Connecting the Danube Region (PACs 1-3); Pillar II. – Protecting the Environment in the Danube Region (PACs 4-6); Pillar III. – Building Prosperity in the Danube Region (PACs 7-9) and Pillar IV. – Strengthening the Danube Region (PACs 10-11). 6 See the summary of territorialization concept in an EU expert document (Polish Ministry for Regional Development, 2011). The other related issues of regional competitiveness, clusters and EGTC have been discussed in the papers of Annoni and Kozovska (2011), Eurochambres (2008), Schakel (2008), Villaverde and Mara (2011). There has also been a large literature on the external interregional dimension of the EU, see Freyburg et al., 2009, Freyburg et al., 2010, Lavenex et al., 2009, Lavenex et al., 2010, Vasilache et al. 2011 and Youngs, 2009. 464 KadarKrisztian_16_belivek.indd 464-465 10 The European Parliament has dealt with the DRS several times, first on 21 January 2010, supporting its elaboration (EP, 2010). Based on the Long Paper, the European Parliament discussed and endorsed the DRS on 15-16 February 2011. EP returned 465 2013.01.18. 19:05 Danube Strategy, 2009). The all-party parliamentary committee for the preparation of the Hungarian EU presidency issued a Declaration on 17 February 2010 on the support of the DRS. and it was its high priority, the real flagship project for the Hungarian EU presidency in 2011. In the mid-2000s the Hungarian Academy of Sciences conducted strategic research programmes at the request of the Prime Minister’s Office. One of these research directions was the Complex Danube Research led by the former president of the Academy, Ferenc Glatz, and this research embraced the Balkan studies as well (see Strategic Research – Research Reports 2007, HAS, pp. 235-302). In the same HAS framework at the request of the Prime Minister’s Office there was a research programme led by Attila Ágh to prepare the Hungarian priorities for the EU Team Presidency, which included the DRS and cooperated with the research teams on DRS (Council of the European Union, 2009). Both research directions were abandoned by the incumbent government in 2010. to the issue of macro-regional strategies on 27 June 2012 (European Parliament, 2012a). This resolution contains in its introductory part a reference to all EU documents on macro-regions. EP has also supported the maintenance of the EU policies at least at the present level, including cohesion policy that concerns also the DRS (European Parliament, 2012b). It is necessary to note here also that the regulation of the international rivers is a very important issue, see the special volume of the International Studies Quarterly, Vol. 55, pp. 805-883 on How to Govern International Rivers. 11 12 13 14 See CoR, 2009b,2010,2011a,b; CesPI, 2010; AII, 2012 and www.eu4seas.eu website. The Centro Studi di Politica Internazionale (CeSPI) was the most active institution in the Med area (see www.cespi/it/GOVMED). As Andrea Stocchiero has noted, the Italian government plans to launch the Adriatic and Ionian macro-regional strategy in 2014, during the Italian and Greek presidencies. Croatia proposes its territory for the link between the two macro-regions (Stocchiero, 2010b:15). The AII regional cooperation organized a meeting in Trieste on 12-13 June 2012. AII website (2012) indicates the steps of preparation, and expects the final approval by the EU in 2013 for the period of 2014-2020. At the time of writing there has been no further news (see http://www.aii-ps.org/index.php/adriatic-ionian-macroregion). Both the West Balkan pre-accession and the EaP process have been marginalized in the EU under the permanent pressure of the eurozone crisis. On 29-30 September 2011 there was an EaP Summit in Warsaw, which actually turned out to be a non-event. The V4 states have tried to turn against this mainstream, see V4, 2011,2012. On 25 June 2011 the Austrian, Hungarian and Slovak Ministers of Foreign Affairs had a common press conference and they emphasized the big importance of the DRS for the EastCentral European cooperation (www.terport.hu). I try to document in this subchapter the mushrooming, but mostly fragmented regionallocal, low-level and specific policy-oriented activities and events, first of all in Hungary and in the Hungary-related cases because this sector is so rich that a full overview cannot be given (see recently, Hardi, 2012). No doubt that Hungary has a vested interest in the success of the DRS. The former governments already had a strong commitment to DRS (Hungarian non-paper on 466 KadarKrisztian_16_belivek.indd 466-467 15 During the Hungarian EU presidency the Hungarian government was very active in the DRS matters, so were the other NMS governments. The latest event was the creation of the Territorial Agenda 2020 issued in May 2011 during the Hungarian presidency (see the related EU documents of the Council of Ministers, 2007 and 2011a,b) when the Hungarian government was active internationally. The TA2020 is also very important for the DRS, but it is basically against all over-centralizing efforts of the Hungarian government at home that reached its peak with the new Constitution in April 2011. 16 The Vice-President of the EIB announced at a press conference in Budapest on 15 June 2012 that from the 1 July 2012 onwards the Budapest Danube Contact Point would work to support the DRS related projects http://dunaregiostrategia.kormany.hu/hirek. 17 In 2011, after the Hungarian EU presidency for some time the international conferences continued at governmental level. For instance on 7 November 2011 there was a Bucharest conference on Macro-regions at the Ministers’ level with the Hungarian participant Enikő Győri, State Secretary for EU Affairs. However, after the EU Presidency the interest in DRS of the Hungarian government level has faded away. 18 In fact, the official, intergovernmental cooperation in several PACs has begun in the implementation phase. However, no state-level decision has been made so far in Hungary between/among the conflicting policy areas as energy, environment, shipping-connectivity etc, see later the DaNet and DATOURWAY programs and PAC Reports. For 467 2013.01.18. 19:05 a Danube International Conference in Budapest for the EFAP (European Forum for Architectural Policies). the shipping policy, at the 76th meeting of Danube Commission on 2-3 June 2012 in Budapest the amendment of the Founding Treaty (Belgrade, 18 August 1948) was discussed in order to modernize the legal regulations on the Danube. 19 After Etelka Pataki Barsiné, from 1 January 2012 Balázs Medgyesy, the head of green section of Fidesz has been a new government commissioner for the DRS in the Ministry of Foreign Affairs (Hungarian Ministry of Foreign Affairs (2012) Danube Strategy Government Commissioner’s Office, http://dunaregiostrategia.kormany.hu/hirek. There are three super-ministries in the Hungarian government with largely overlapping and confusing competences. Obviously, this chaotic situation of policy coordination has impacted seriously on the current marginalization of the DRS in Hungary. Finally, the government has created an over-centralized decision-making body on the EU transfers with four members, consisting of Prime Minister, the minister of Prime Ministry, and the Ministers of MND and MNE, which is a clear case of the crisis of crisis management in an overcentralized government. In the sittings of this “super-body” so far there has been no word about the DRS, or at least no official announcement has come out from the meetings. 20 The two Hungarian macro-regions concerned were also organizing international conferences in their regional capitals. See Macro-region at the crossroads of North-South and East-West on the Danube Region (Szeged, 21-22 June 2010), the Borderless Europe conference in Pécs (on 11-12 October 2010, see Tuka and Taróssy, 2010). I have dealt with the “destruction” of the decentralized Hungarian public administration by the incumbent government at length in a recent paper (Bumpy Road of the Hungarian Administrative Elite to Social Status, forthcoming in the International Review of Administrative Sciences). 21 As to the challenges for the DRS implementation in Hungary with the role of civil society it is enough to mention that the interest in the Danube cooperation emerged in Hungary in the mid-2000s. On 4-5 July 2007 already a big international conference was organized in Dunaújváros by the Hungarian Association of Spatial Development (HASD, see Veres, 2008). This first Danube-Area Cohesion conference was followed on 1-2 July 2009 by a second conference. The HASD has been very active, since it has managed two subsequent international development projects along the Danube as the Donauregionen and later the Donauregionen+ (20092012) under the leadership of Lajos Veres. In addition, on 4-7 May 2011 there was 468 KadarKrisztian_16_belivek.indd 468-469 22 Since 2007 the ECTC-type organizations (CoR, 2009c) have been expanded in Hungary and these territorial actors can give a good base for launching regional cooperation later, since in most cases they are even trilateral organizations, see the EGCT maps with organizations and PA preferences (Zöldi-Nagy, 2012). 23 There have been many base-level events and conferences in Hungary mostly with international extensions (see recently, Térport, 2012). On 6 October 2011 there was also an international conference in Sárvár (South-West Hungary) on the cross-border cooperation with the participation of the Austrian, Croatian and Slovak officials as a preparation for the network-building conference series. In fact, it has been a serious blow also to DRS that the state agency VÁTI with a strong coordinating role has been dissolved by the incumbent government for publicly unknown reasons. 24 The DanubeNET or DaNET conference series after the Budapest starting meeting covered also e.g. Lendava (12 January 2012), Osijek (19 January 2012), Brno (3-4 April 2012), Maribor (17 May 2012), Zagreb (18 May 2012). This series was supposed to come to an end in Budapest on 28-30 June 2012. Actually, 29 June is the Danube day that was celebrated in many countries concerned, but there was no Budapest closing conference at that time, and not at all. At present, the DaNET or the AHSRD led by István Szilvássy is the closest pro-government “civil” organization (see its news on http:// mttsz.lapunk.hu). Balázs Medgyesy government commissioner and István Szilvássy DaNET coordinator met Johannes Hahn in Budapest in his June 2012 visit. 25 In Hungary, before and after the series of international governmental conferences the Blue Ribbon project has organized some national and international conferences on 4 December 2009, 20 January 2010, 18 March 2010 and 10 November 2011. It has edited so far two books on DRS (see Ágh, Kaiser and Koller, 2010, 2011). It is also necessary to mention the important role of the Andrássy German speaking university (Budapest) in the DRS research and its coordination. 26 METIS-Vienna has prepared an overview of the financial opportunities in DRS for the Commission and it has also organized some meetings (see METIS-Vienna, 2012). 469 2013.01.18. 19:05 The funding possibilities for the HCS cooperation are basically connected with the two IPA projects, and with some other specific projects of transnational and/or interregional crossborder cooperation. Thus, they suppose strengthening cooperation of project preparation between Hungary, Croatia and Serbia through the DRS implementation. Altogether, with the four neighbouring countries – including Slovakia and Romania – Hungary has a fund of € 1.3 million for the 2007-2013 period. 27 28 29 The new Dunaújváros conference (Danube-Area Cohesion Third Conference) on 5-6 September 2012 was announced as a government supported event. Dunaújváros has a College that has been very active in the DRS matters, but obviously it is none of the big Hungarian universities, and this conference cannot be taken as a replacement for the central government international DRS conference either. For other events see for instance the conference on 11 November 2011 in Budapest to summarizing the tasks for the implementation of DRS by giving Hungarian status quo reports (see first of all Bérczi, 2011 and Gergely, 2011). The official website of DRS for the government is http://dunaregiostrategia.kormany.hu/ (in Hungarian). It contains also the basic documents of the incumbent government on DRS, namely the Foreign Minister János Martonyi Declaration on DRS (in English) (http://dunaregiostrategia.kormany.hu/download/8/a9/10000/ REG1_Panoramaxx_p_8-11_Martonyi_v0.pdf ), the position paper of this government about the Hungarian contributions to the DRS (http://dunaregiostrategia. kormany.hu/download/7/a9/10000/DRS_magyar_hozzajarulas_III_2010jun21. pdf ), and the press release on the DRS (http://dunaregiostrategia.kormany.hu/ download/5/a9/10000/Duna_Regio_Strategia_sajtoanyag_0.pdf ) from the period of the Hungarian EU presidency (both in Hungarian). The new materials on this government website (http://dunaregiostrategia.kormany.hu/) are short and meaningless. Actually the only an important news was at the press conference after the Dunaújváros meeting on 6 September 2012, when the government commissioner Balázs Medgyesy declared the DRS “a success story” but without presenting any relevant data and arguments (see also his press conference in http://inforadio.hu/hir/ belfold/hir-516980). In both Croatia and Serbia there have been high expectations on DRS. On 15 November 2011 there was a Belgrade conference on DRS for Serbia, and on 15 December 2011 for 470 KadarKrisztian_16_belivek.indd 470-471 Croatia, to be followed by some more or less “official” conferences. On 29 June 2012 a DRS implementation conference took place in Belgrade, see Danube Region Strategy, Serbia, 2012. 30 See the Hungary, Croatia and Serbia country assessments in the Bertelsmann Transformation Index (BTI 2012, Table) for 128 countries, as the Status index of political and economic transformation (SI) and the Management index - Political leadership toward democracy (MI): Hungary: rankings SI 17 and 11 – MI 48, Croatia: rankings SI 16 and 14 – MI 22, Serbia: rankings SI 23 and 31 – MI 31. In the Human Development Report (2011:16) their ranking is: Hungary (38), Croatia (46) and Serbia (59). 31 Wider relevance of DRS for the WB region depends on the continuation of enlargement (see European Commission, 2011 and Füle, 2011). The ECE Foreign Ministers in a letter to the EU on 8 December 2011, before the EUCO summit on 9 December 2011, supported giving the candidate status to Serbia as they had also supported the Croatia’s EU accession process. The V4 leaders have expressed several times their support for the WB enlargement. In the prolonged global crisis the accession conditionalities have been reconsidered, see Blockmans, 2012 and Hill, 2012. 32 The institutional system of DRS has slowly taken shape. On 30-31 January 2012 there was the second meeting of National Contact Points (NPCs) and Priority Area Coordinators (PACs) in Bucharest. In addition, the official intergovernmental cooperation in several PAs has begun, e.g. on 31 May 2012 there was a Hungarian-Czech meeting in the energy PA, etc, etc. On this topic see Wulf, 2012, since this is a new direction of the DRS research, which deserves increasing attention. 33 The old member states in the nineties realized the big governance deficit in future the NMS. In order to promote performance democracies, beyond the OECD and World Bank general instructions, in the nineties there were special Sigma and Puma public administration programmes launched for modernising the NMS governments. The WB countries would need similar extensive projects within DRS. 34 For a comprehensive analysis of the Balkan democratizations see Youngs, 2009, Gallup Balkan Monitor (2010-2011), Balfour and Stratulat, 2011, Dzihic and Segert, 2011, Noutcheva (2012) and Taylor et al (2013). Some authors argue that there is a “lack of 471 2013.01.18. 19:05 analysis on the post-Yugoslav regions” with its “defective democracies” in general, although there is a reference to the “limited civil society tradition” and “considerably low level of mutual trust among its overall population” (Bukovic and Vidacak, 2010:207). On the regionalization in the Balkans, see Pálné, 2011. 35 36 37 38 41 In fact, the evaluation of the first year of the DRS implementation has been given by Walter Defaa, the newly appointed Director-General for Regional Policy. In a very optimistic mood he has summarized the institution-building in DRS, but he has noted that “The two existing Strategies – especially the Danube Strategy – are relatively new, and their results have not been fully tested yet. A report on the added value for the Danube work is being prepared for early 2013.” (Danube Region Strategy Newsletter, Spring Issue, 2012:2). 42 Rumen Dobrinsky has presented the basic socio-economic data on the Danube Region at the Regensburg conference in 41 slides, see out of them Table 1-3. in the Annex. 43 After the Regensburg big conference there was a two-day workshop on 29-30 November 2012 in Stuttgart to launch a new research project on DRS with the support a BadenWürttemberg Foundation. Among other efforts, it proves that there is an intensive interest in Danube Strategy research in academic circles. The analysis of the actors profiles may be an important research topic in DRS. 44 The First Annual Forum of the EU Strategy for the Danube Region took place on 27-28 November 2012 in Regensburg with the speeches of Johannes Hahn and Angela Merkel with about 600 participants from the 14 countries concerned under the title of How can the Danube Region help to build a more Competitive Europe? For sure, this event has been a turning point in the DRS history and in its institutionalization within the EU. See the Panorama Nos 40-43 (2012), Information tools (2012) and Danube Alliance Magazine (2012). As Angela Merkel has noted in her speech, commenting the Nobel Peace Prize given to the EU: The big rivers like the Danube do not separate but connect the countries and contribute to the Peace between/among them. 45 At the time of writing the cohesion budget has not yet been decided. On the European Futures the latest development is the Road Map in the EUCO Conclusions in December 2012. I mention here only Blockmans (2012) indicating the EU membership has been permanently redefined. So the DRS is going to be redefined as the Conclusions indicate (EUCO, 2012: 11). The Report on effective multilaterialism (Van Langenhove, 2012) has also underlined that the EU can only play a meaningful role as a Global-Regional Actor, if it maintains its internal coherence as Cohesive Europe. Although cohesion policy and EU2020 Strategy have been closely connected with the DRS, there is no space in this paper to analyze the debates around the cohesion policy for 2014-2020. The views of the Friends of Cohesion have been best summarized in Zerka (2011) through combining cohesion and competitiveness (and innovation) as a “smart” cohesion policy. The Golden Growth perspective (Gill and Martin, 2011) has outlined the further and better workings of the “European Convergence Machine”. The September 2012 Vienna conference had the title of Communication and Mobilisation for the Danube Region Strategy, rightly so. See also the importance of Communicating Europe (Samardzija and Dukes, 2008; and Samardzija and Vidacak, 2010, in Samardzija and Butkovic), since communication campaign would be vital for the success in the DRS case. Mojca Kodric has emphasized that the functional macro-regions have contributed to the regional security and stability to a great extent. She has elaborated indicators for them as (1) equal partnership and joint ownership, (2) inclusion of stakeholders, (3) sufficient resources and institutional capacity and (4) common interests/commitments and level of commitment (2011: 15-27). 39 Again, it has to be emphasized that without the strong and wide architecture of MLG there can be no DRS. On the implementation of MLG see the latest documents with critical analysis, CoR, Committee of Regions, 2011c, 2012a.­ ­40 On 15 November 2011 GAC published its Conclusions on the review of BRS, indicating that the major review of the macro-regions will be in mid-2013, at the time of the Croatian entry (Council conclusions, 2011b:8-9). 472 KadarKrisztian_16_belivek.indd 472-473 473 2013.01.18. 19:05 474 KadarKrisztian_16_belivek.indd 474-475 2013.01.18. 19:05 printed by Pannon-Kultúra Kft. KadarKrisztian_16_belivek.indd 476 2013.01.18. 19:05