Page 46 - bne magazine February 2022_20220208

46 I OUTLOOK 2022 bne February 2022
CENTRAL EUROPE AND THE BALTIC STATES
Central Europe faces a critical year in 2022, with a key election in Hungary in April in which Prime Minister Viktor Orban, the region’s high-profile strongman, is seeking a fourth consecutive term, while rumbling politi- cal instability in Poland and Slovakia could lead to early elections. This could be a make-or-break year for the region's radical right-wing political forces, which will have an impact right across the EU and the Balkans.
These potential political changes come as the region, especially the Baltic states, faces a much more danger- ous geopolitical environment, as neighbouring Russia menaces Ukraine and tightens its grip on Belarus.
Central European states – which already have some
of the highest deaths per capita from coronavirus (COVID-19) in the EU – are also bracing for the sweeping eastwards of the Omicron version, at a time when businesses are already struggling to recover, government budgets are under huge strain, and people are increasingly ignoring restrictions or even marching against them.
Political instability and social unrest could also be worsened by rises in inflation, energy prices and interest rates. These will hurt living standards – which have stag- nated since the global financial crisis – and slow down Central Europe’s already protracted convergence with Western European levels.
International politics
The radical right-wing governments in Budapest and Warsaw remain locked in conflict with Brussels over a range of issues sparked by their attempts to consolidate their rule – notably by limiting judicial independence
– and pursue populist culture wars against sexual minorities that violate EU values. Orban’s Hungary is also in the dock for rampant corruption and its failure to prosecute it.
The European Commission finally seems to have found
a credible weapon to fight the populist contagion by threatening to hold up financial flows if the rule of law is breached and EU money put at risk. Unless the Commis- sion cravenly backs down, it is difficult to see a solution to this impasse until there is political change in both countries, something that still unfortunately appears uncertain.
Warsaw and Budapest have also become more isolated in the EU following the electoral defeat of populist governments in Slovakia in 2020 and in Czechia at
the October 2021 general election, as well as the
replacement of German Chancellor Angela Merkel
by a centre-left coalition. The Visegrad Group of the
four Central European countries, which Orban has weaponised in his battles against the EU, looks likely to become increasingly moribund now, though the V4 might still occasionally unite to fight Brussels’ policy on climate change or on migration, if there is another wave.
Hungary faces becoming more and more isolated and irrelevant in the EU, not least over foreign policy, where it continues to pursue closer relations with Beijing and Moscow at a time when, following the German election, the bloc is more and more united on the threat both countries pose.
Domestic politics
Radical right-wing parties have been a malignant cancer in Central Europe since Orban returned to power in
2010 determined to build a semi-authoritarian regime to entrench his rule. He was joined by Jaroslaw Kaczynski’s Law and Justice Party (PiS), which closely followed
his lead after it won the 2015 Polish election. Both governments have formed a united front to oppose the EU’s values, and have tried to encourage similar political forces in neighbouring countries, the Balkans and across the EU.
Radical right-wing populism continues to be fuelled by social disparities created by the transformation from communism, the cultural shock from accession to
the EU and its values, as well as phantom fears about migration and other topics spread by misinformation. But this year both radical right-wing governments face their toughest challenges yet as Orban confronts
a united opposition and the ruling Polish coalition continues to crumble.
Both governments have struggled to cope with the COVID-19 pandemic, partly because they have been reluctant to impose tough restrictions, which would have been unpopular with their often elderly and rural voters, many of whom have refused to be vaccinated because of distrust of the state as well as online misinformation.
In Poland the vaccination rate is around 57%, the worst in Central Europe after Slovakia, whose take-up is
just 48%. Hungary’s vaccination record is better – at 63%, roughly the same as the Czech Republic – but
the country has the second-worst death rate in the EU after Bulgaria. In the Baltic states, vaccination rates are higher still – with Lithuania and Latvia achieving almost 69% – but their current infection rates are among the worst in the region.
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