An Awkward Celebration in the Heart of Europe

There was not much jubilation at the events commemorating 25 years since the fall of communism in Central and Eastern Europe. During his speech at an official gathering of Central European heads of states in Prague, the President of the Czech Republic, Milos Zeman, was booed by the crowd and pelted with eggs and tomatoes.

In neighbouring Slovakia, meanwhile, the anniversary of Czechoslovakia’s Velvet Revolution was marked by the surprising resignation of Pavol Paska, the speaker of parliament, following a scandal over corrupt public procurement of medical equipment, implicating him and his family. On Monday, a crowd of some five thousand people gathered in Bratislava to protest against rampant corruption and the growing ties between big business and government. On the same day, over 10 thousand Hungarians protested in Central Budapest against corruption, at an event dubbed ‘Public Outrage Day’.

There can be no question about the enormous economic, social, and human progress that countries of the region have made since 1989. However, there is a gap between the exuberance epitomized by the recent Foreign Affairs article by Harvard economist Andrei Shleifer and UCLA political scientist Daniel Treisman, who write about what they see as “normal countries,” and the growing dissatisfaction of many of the citizens of these countries, illustrated by this weeks protests — as well as by the growth of fringe, anti-system, populists of different ideological stripes.

The widely shared feeling of dissatisfaction in the heart of Europe cannot be dismissed simply as a product of people’s unrealistic expectations of the change that the fall of communism would create.

Among the successful countries of Central Europe, this backsliding has been the most pronounced in Hungary. Its Prime Minister, Viktor Orban, cited Turkey and Russia as examples of illiberal democracies that worth following and emulating. Though disturbing, Mr Orban’s rhetoric pales in comparison with his actual policies, which have aimed consistently at suppressing the civil society and extending the power of the state.

Corruption is a problem, both for Hungary and its neighbours. On most indicators of institutional quality and corruption, a significant gap persists between post-communist countries and the more successful European economies- and it might even be widening. Slovakia, for example, ranked 57th on the 2004 edition of Transparency International’s Corruption Perception Index. By 2013, it moved down to 61st place. The Czech Republic, in turn, fell from 51st to 57th place.

This goes hand in hand with the growing political power of the wealthy. In Slovakia, the investment group Penta, known for its presence in health care sectors in Slovakia, Czech Republic, and Poland, created an uproar for acquiring a share of the country’s leading newspaper, SME. The purchase triggered the resignation of most of the editorial staff over fears that the acquisition would end the outlet’s long tradition of investigative journalism, independent of political pressures.

This event had a precedent in the neighbouring Czech Republic when entrepreneur Andrej Babis bought, in the summer 2013, the publishing house MAFRA, which runs the country’s leading broadsheet newspapers, Lidove Noviny and Mlada Fronta Dnes. Shortly thereafter, Mr Babis — the second wealthiest Czech according to the Forbes ranking — entered politics and became the country’s finance minister. Mr Babis’ holding company, the Agrofert Group, comprises more than 200 firms, active in chemistry industry, agriculture, food processing, renewable energy, forestry, timber harvesting and woodworking. Agrofert is the largest Czech and Slovak agriculture and food group and the largest private employer in the Czech Republic, with some 27,000 employees.

Only last month, Petr Kellner, who ranks as the wealthiest Czech on the Forbes ranking, offered to fly the Czech President Milos Zeman from a state visit to China on his private jet. Notwithstanding the awkwardness of the situation and the eyebrows this was going to make, Mr Zeman was happy to oblige.
The Central European malaise also has a geopolitical component. Unlike leaders in Poland or in the Baltic countries, politicians in Slovakia, Hungary, and the Czech Republic have adopted a much more accommodative attitude towards Russia. The Prime Minister of Slovakia, Robert Fico, counts among the most vocal critics of EU’s sanctions against the regime in the Kremlin. Mr Zeman is a regular at conferences organised on the island of Rhodos by Vladimir Yakunin, the chairman of Russia’s State Railways. And Mr Orban’s government in Hungary recently struck a deal with Gazprom over the construction of a new natural gas pipeline, South Stream, disregarding thus the EU’s official position on the project.

The widely shared feeling of dissatisfaction in the heart of Europe cannot be dismissed simply as a product of people’s unrealistic expectations of the change that the fall of communism would create. It is also a reflection of some real backsliding in countries that were once seen as unequivocal reform successes. This year’s protests might mark a turning point, ending the period of voters’ tacit tolerance of corruption, cronyism, and government arrogance as necessary, if unpleasant, features of life after communism.

Dalibor Rohac is a Policy analyst at the Center for Global Liberty and Prosperity, Cato Institute