Page 47 - bne magazine February 2022_20220208

bne February 2022 OUTLOOK 2022 I 47
With their voters frustrated by the continuing COVID-19 restrictions and the soaring cost of living, both radical right-wing governments have tried to divert attention by reviving fears over migration. This has had diminishing success – the influx of several thousand refugees
from Belarus to Poland last year seems to have done little to boost PiS support. Now both governments are turning more to cultural issues such as abortion and homosexuality to whip up support, which is bringing them once again into conflict with EU values.
Opposing them, civic organisations have led huge pro- tests and opposition parties have forged wide coalitions, usually led by centre-right parties (with the region’s left- wing parties out of power and marginalised).
The Slovak opposition mobilised to oust left-wing populist Robert Fico in 2020, and the Czech opposition joined in two coalitions of the centre-right and the centre to defeat ‘technocratic populist’ Andre Babis
at the 2021 election. Poland’s opposition parties may
“Civic organisations have led huge protests and opposition parties have forged wide coalitions, usually led by centre- right parties.”
form centre-right and left-wing coalitions ahead of the general election there in 2023. Meanwhile in Hungary, after three election defeats the opposition has finally united and will fight April’s election under one list and one candidate for premier, the liberal conservative Peter Marki-Zay.
Orban is currently ahead in the opinion polls ahead of the April 3 general election, which will be fought on a very crooked playing field, with a gerrymandered electoral system, as well as a great imbalance of campaign fund- ing and media coverage. If Orban wins a fourth consecu- tive term, this will likely embolden him to become even more obstructive towards the EU; if he is defeated, this would mark a dramatic political shift in the region back to liberal democratic values.
Poland could also have an exciting political year if Kac- zynski’s PiS calls – or is forced to call – early elections as its coalition crumbles. At the moment it too is ahead in the opinion polls, but in both countries the political mood could change as the cost of living crisis worsens and the pandemic drags into a third year.
Nevertheless, populism – whether of the right, centre or left – remains a powerful force in the region, and it could even mount a return in some countries that have already shaken it off.
The Slovak coalition is also looking fragile as the split between the two right-wing populist parties and their centre-right partners widens, though it is expected to try to stagger on as long as it can, given the lead in the opinion polls for the two rival left-wing opposition parties of onetime allies Robert Fico and Peter Pellegrini. Unless the government can somehow
pin corruption on top figures in the preceding Smer government in which both premiers served, its chances of staying the distance and retaining power at the next election look slim.
In Czechia all eyes will be on the candidates for the January 2023 presidential election, with a real risk that Andrej Babis, the agro-chemical billionaire and former premier, will triumph. He may be given a helping hand if the new centre-right government goes too fast in cutting the budget deficit. This could also enable Babis’ “techno- cratic populist” ANO party to return to power at the first attempt at the next general election.
In Latvia, the October general election is anticipated to increase political fragmentation, with a raft of new populist parties jostling to enter the Saeima. Populism is also on the rise in neighbouring Lithuania as well as Estonia, where the far-right EKRE party is riding high over migration fears.
Macro-economic environment
Over the past two years Central European governments have been helping businesses and employees cope with the economic impact of the pandemic; now, as their economies begin to recover fast, they are starting to be concerned about the rise in budget deficits and public debt and are considering tightening their belts, even though the pandemic is still far from over.
On top of this challenge, businesses and households are coming under new pressure from rising inflation, energy prices and interest rates, which are crimping margins and hurting living standards. Budapest and Warsaw are now imposing price caps on energy and other staples, but these moves will only have a short- term effect. Inflation is expected to hit 10% in Poland in February.
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