Eastern Europe: Eurozone crisis threatens liberal reform

20 August 2012
The Guardian London

Not only is the eurozone crisis shaking the world to its financial foundations, it is also having unforseen political consequences in the former communist states, helping unpick progress made towards democracy in eastern Europe, argues lawyer Andrea Capussela.

How does the eurozone crisis look from eastern Europe? Not good, is the short answer. Hungarian laws and Romanian decrees have recently attracted the ire of Brussels. Many commentators have ascribed this to the political effects of the recession: faced with popular distrust, rising populism and acute political strife, those governments sought to entrench themselves in ways which Brussels judged illiberal or undemocratic.

But this interpretation neglects one important effect of the eurozone crisis: a change in the incentives under which these governments operate.

It is well known that the crisis directly threatens the survival of the EU, and that it can only be overcome by pooling more sovereignty into a form of political union. And it is clear that not all EU member states shall be part of such political union. The alternative is stark: either no EU or a two-tier EU. The core – the current eurozone, presumably – will remain open to the others, but moving from a union of 27 to one of 17+10 will alter its politics because the outliers will lose influence and status.

The problem is not confined to Hungary and Romania, therefore, and in fact a recent authoritative report by Freedom House finds that "stagnation and backsliding is evident in key governance indicators across the new EU member states and countries of the Balkans"; this phenomenon is observed even in the EU's own quasi protectorate, Kosovo, which stubbornly remains a "semi-consolidated authoritarian regime". For these countries the alternative is either second-tier membership or no EU at all.

The Hungarian and the Romanian cases differ – Romania's actions are reversible, and it responded positively to the EU – but the charge is the same: Brussels complains that these governments are dismantling or threatening the rule of law and the constitutional checks and balances that they adopted before entering the EU. Which has alarmed many commentators, because the transition to liberal democracy was thought to be irreversible once the eastern countries had acceded to the EU.

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