The transition toward democracy and market economies in Eastern and Central Europe started in 1990 and the outcome of these 25 years have disappointed the vast majority of the population in these countries. The result is that now they are vulnerable to a populist or nationalist turn and if such forces appear as we have seen in Hungary and Poland, the countries inevitably fall prey to them.

It would be worth looking back a bit at how we got here. Most of these countries have carried out economic reforms that by and large ticked all the boxes on the list of Western experts, whether IMF or EU or others: shock therapy, privatisation, structural reforms, reduction of the size of the state etc. While not everything was perfect, a comprehensive neo-liberal economic agenda was fully implemented in all of these countries, with high costs to the population in terms of unemployment, de-industrialisation, cuts in the welfare system and so on. Macro-economic indicators were and are still quite good, not just in Poland but in the Baltics, Romania, Czech Republic, too. Growth was high before 2008 and it has resumed in quite a few of these countries. But despite all the effort, all the reforms, all the pain endured by the population, the actual benefits are very limited (and restricted to a small and often corrupt elite).

The expectations at the beginning of the reform process were that if all the reforms are done and all the pain is endured, living standards will be similar, in time, to those in Western Europe. One could argue that these expectations were unrealistic (although nobody bothered to point this out at the time), but also overly optimistic. Eastern Europe couldn’t compete with China as a base for high volume manufacturing, there were no other alternatives to develop the economies and then the crisis hit them in 2008. Credit, consumption, real estate bubbles and remittances from migrants helped create an illusion of prosperity, but it didn’t last. Poland is heavily anchored to the German economy, which partially explains its success. But even there, the living standards and the earnings are way below the Western average. Emigration has impacted very severely on the social fabric of these countries and is also generating a painful brain drain, although one could see a positive impact in the money sent back home and the reduction in unemployment.

The realisation came that it is likely that these countries will never catch up with the West, so all the effort was in vain and this is as good as it gets. This disappointment is quite painful and is often articulated as a betrayal by the West (the countries in the East have suffered for centuries as buffer zone between the West and Russians/Soviets or the Ottomans, they have been abandoned to Stalin at the end of WWII, their entire economies have been bought up by the West so now everybody has to work for pennies etc.) and the EU is embodying this Western betrayal. Political and social reforms were carried out in order to achieve EU membership and now some of the changes that were introduced are seen as negative and damaging (especially ethnic minority or LGBT rights). This disappointment can be easily harnessed by populists and we now see the consequences. One should add that there are populists and nationalists in other countries: Robert Fico in Slovakia or Milos Zeman in Czech Republic (preceded by Vaclav Klaus).

All these countries have very fragile democracies which can be easily dismantled. One cause for this fragility is that these countries have never dealt with the darker periods of their past, especially the inter-war period and WWII. All the soul-searching that took place after 1990 was focused on the Communist period and the issue of collaborators with the regime and the Soviets. The pre-communist regimes were viewed without any criticism and with rose-tinted nostalgia, often undergoing a rehabilitation. This was particularly bad in Hungary and its permanent return towards the past for anchoring its identity. Looking back at the Horthy or Pilsudski regimes as reference points for the present was damaging as these regimes were authoritarian, nationalistic, clerical and paternalistic. Hungary also revived its discourse of victimhood in relation to the loss of its provinces after WWI and damaged its relationships with its neighbours due to a nostalgic revisionism. Anti-Semitism was another problematic issue in both Poland and Hungary in the interwar period, not to mention their role in the Holocaust. Sadly, there is a revival of anti-Semitism in both countries on a scale that is rather worrying.

Orban has set up a semi-authoritarian regime with a managed democracy comparable to Putin’s Russia. This has emboldened the extreme far right and legitimised fascistic elements/aspects in politics. Hungary is not a democracy anymore and it shouldn’t be in the EU. Poland is just starting out on what seems to be a similar direction. The EU is powerless in offering any effective resistance, for a variety of reasons.

Globalisation is at fault here in as much as it is in the rest of the EU or in other parts of the developed world as the economic model based on free trade doesn’t compensate for the negative impacts on certain parts of the population. The difference is that in Eastern Europe the proportion of the population that was left behind is higher than in the West, which explain the power grab by Orban and Kaczynski.

Sadly, as we don’t really have an effective solution (yet) to the problems generated by globalisation, things are not likely to change or improve. It will be interesting to see how much worse things are going to get in Poland and Hungary, and whether other countries will go the same way. And whether at some point the EU (or NATO?) will have to do something and what that might be.