Global News Journal
Beyond the World news headlines
Business as usual as governments crumble in E.Europe
The Czech opposition toppled Prime Minister Mirek Topolanek’s minority cabinet on Tuesday in a no-confidence vote. Three days earlier, Hungary’s prime minister said he would resign to let someone else pull that country out of its economic mire. Although serious, the developments were far from surprising if complaints about the economic crisis by anti-government parties and disgruntled voters were anything to go by.
But don’t blame it all on the economic crisis. Even with unemployment on the rise and housing prices tanking, wobbly governments in this region are nothing new and political mayhem is still far off.
In fact, only a handful of governments have ever won re-election in central and eastern Europe since the fall of communism, and none twice. A mid-term collapse is much more common. Now opposition parties ever on the lookout for opportunity — Topolanek’s no confidence vote on Tuesday was his fifth — have the deteriorating economy on their side. But that might also be a poison pill, particularly in countries like Hungary or the Baltics, where whoever holds sway will have to enact deep spending cuts to level out their imbalanced economies — spending cuts that won’t be popular among the voting public.
And who says those ousted from power actually step aside? Take the energetic Latvians. The country of 2.3 million has run through 14 governments since it quit the Soviet Union in 1991 in a revolving-door style of politics in which the same parties continue to cycle in and out of power. Its new prime minister is Valdis Dombrovskis, a former finance minister, who formed a six-party coalition including the four parties of the government that collapsed in February due to the economic crisis. One of his first actions was to approach the International Monetary Fund and the EU to let his cabinet spend more than originally agreed when Riga took a 7.5 billion euro rescue package last year, a move that has been received coolly by the Fund.
Location still counts in central and eastern Europe
Poles and Czechs, their economies still relatively robust despite global recession, are up in arms about what they see as international investors’ tendency to tar them with the same brush as their more troubled neighbours such as Hungary, Ukraine and Latvia.
But if history is any guide, investors are unlikely to be impressed, at least in the shorter term.
