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September 2002



Part 11. Eastern Europe

416) In Eastern Europe the promise of West German or US living standards remains a chimera. UNICEF's report on the region, A Decade of Transition, bears this out. There are nearly 18 million children in the region who are living on less than $2.15 a day, which is the World Bank yardstick for poverty. This children's agency has said that "poverty has risen since the countries left communism in 1989". The majority of the poor children - 16 million - live in former Soviet Union countries, and a further two million are in Central and Eastern Europe. In Moldova, Armenia, Kyrgyzstan and Tajikistan, the majority of children are poor. The authors of the report cling to the hope that the levels of child mortality would fall, but still comment: "However, millions continue to suffer from poverty, ill health and marginalisation".

417) If childhood is supposed to be 'the best years of your life' - which is certainly not true for the majority of the world's children - it certainly is not the case for huge sections of the region's children. Rises in adoption and institutionalisation go hand in hand. In Belarus, for instance, where the rate of adoption rose by 160 per cent between 1989 and 1999, the proportion of infants under three years old in children's homes rose by 170 per cent. Moreover, in Russia and the Ukraine, one child in seven was malnourished, while in Albania, Uzbekistan and Tajikistan, this figure rose to one in three.

418) Alongside this have been falling educational standards with less than half of the 15- to 18-year-olds attending school in Central Asia. Yet in 1991 two-thirds were attending school. This is capitalist 'progress' with a vengeance! So dismal are the prospects for the peoples of the region that the number of children - 108 million - has fallen by about 13 per cent since 1999 because of the drop in births.

419) Eastern Europe, in general, has suffered the same maladies as the countries of the former Soviet Union but not, perhaps, in such an extreme form as the latter. The restoration of capitalism has brought in its wake all the excrescences of the system: joblessness, increased drug addiction, homelessness, prostitution and attacks on women. There was an initial drop in production in the early 1990s. Towards the end of the decade, prompted primarily by foreign investment, some of the stronger economies appeared to have scored some successes economically. At the very least it appeared as though some successful industries and enterprises were beginning to arise from the ashes of the wreckage left in the wake of fast-track privatisation.

420) But such is the present parlous state of these economies that they are involved in an unseemly auction for the investment by foreign multinationals in their weak and ailing economies. An example of this was the playing-off of Poland against the Czech Republic, with the latter winning, when the car multinationals Toyota and Peugeot-Citroën decided to build a car plant in the region. The chosen site of Kolin in the Czech Republic is near low-unemployment Prague, but only 80 kilometres from the Polish border. The Poles made the ironic comment that the Czechs will probably need to import 'guest-workers' from Poland, where there is 18 per cent unemployment at the present time.


421) Poland's economy has slowed to a niggardly growth of 1 per cent. High interest rates and stagnating GDP have undermined the purchasing power of Poland's consumers, which are the most important in Eastern Europe with a population of 39 million, four times the size of Hungary or the Czech Republic. In the twelve years since the collapse of 'communism', and bolstered by twelve years of so-called 'liberal market reforms', it has been the main lure for foreign investors. However, this has not sparked a massive economic revival, and with it dramatically increased living standards for the majority of the Polish population.

422) The revolt of the Polish people against this resulted in the coming to power of the so-called 'left-of-centre' coalition government in October 2001. This government is led by the Democratic Left Alliance (SLD), which gained power by promising to fight against the blatant corruption, the elements of 'wild capitalism' pursued by the previous government. Pledged to carry through further privatisation of the 30 per cent of the economy remaining in state hands, the government is nevertheless resisting a speedy move in this direction. It has therefore earned the ire of the new Polish capitalists and their international backers. The intention, it seems, is to retain a significant state sector, state capitalism, of some basic utilities and industries, which marks a movement towards 'dirigiste' (interventionist) policies favoured by capitalist governments in the West, and particularly in Asia, in the pre-Keynesian period.

423) At the same time, they and their followers aim to grab influence, and therefore income, in many of the largest companies. They describe this ritual 'restocking' of company boards after elections in the Polish acronym TKM: 'our f...... turn'.

424) The disappointment with this and the failure to revitalise the economy has seen the government's approval rating plummet from 50 per cent after it took power to 36 per cent in early 2002. The pattern is similar to that in the neo-colonial world. A government comes to power with aroused expectations and quickly disappoints those who voted for it, with a corresponding slump in its popularity. In fact, the SLD-led government has seen a greater drop than that witnessed by its unpopular right-wing predecessor four years ago. It has introduced new taxes and spending cuts which have angered big sections of the population. The main achievement, according to Miller the prime minister, is that: "Poland will avoid the fate of Argentina". Even that is not completely assured as the government treads in the path of the so-called social democrats of Western Europe in removing allowances for having babies, scaling back early retirement and hacking away at mushrooming social entitlements. The cynical expectation that the government would inevitably tread this path is summed up by the chief economist of Bank Zachodni: "Every party promises more social spending before elections, but they have taken the first step in the right direction in the budget for the next year".

425) However, the complacency of the bourgeoisie is not well founded as even the editorial writers of the Financial Times, usually apostles for 'free enterprise' in Eastern Europe, concede: "The average Pole is angry with market orientated reform". This will become compounded if Poland eventually enters the EU. Poland is the largest of the twelve candidates negotiating membership of the European Union and is expected to join along with nine others in 2004. However, big difficulties lie ahead on negotiations on agriculture and regional aid, as well as issues of the budget. Eurosceptic parties gained nearly a fifth of seats in the last elections. Membership of the EU is still supported by about 60 per cent of the population but this could fall dramatically with a worsening of Poland's economic position as part of a general stagnation of the world economy.

426) Most of the bourgeoisie is looking on the SLD government as the 'last chance saloon'. One government spokesman said: "We have Solidarity out of government [since the September 2000 election]; we have most of the liberals out... If the same thing happens to the post-communists [SLD], who will be next?"

427) Poland is the biggest headache for the EU, accounting for a third of the population and two-fifths of the GDP of the candidates for EU entry. It has the largest steel industry, the biggest farm sector and the longest stretch of Baltic coastline. It is the biggest 'opportunity', reckon the EU bureaucrats, but also the biggest 'headache'. Agriculture is the main stumbling block, with the issue of future farmland sales to foreigners a key question.

428) Poland, along with other new entrants, will get considerably less during a 'ten-year transition period'. It has been recommended by the EU Commission that direct payments begin at 25 per cent of the level enjoyed by the 'veteran' EU members and be phased in over ten years. One of the factors in fuelling the opposition to the sale of land to 'foreigners' is the fear that pre-1945 owners of land, mostly German, could demand or buy back from the present occupants land which once belonged to them.

Czech Republic

429) This is an issue which also affects the Czech Republic and highlights the unseemly scramble which is taking place over privatised assets in Eastern Europe. In fact, all the ghosts of former national conflicts have been unleashed by the return to capitalism in Eastern Europe. A dispute over the role of ethnic Germans in Czechoslovakia more than a half-century ago was provoked in an interview given by the then Czech prime minister, Zeman. He said that those expelled from the Sudetenland after 1945 were "Hitler's fifth column - traitors", who could otherwise have qualified for the death penalty. Some 13 million Germans were driven from their homes in Eastern and Central Europe.

430) Between 2.5 to 3 million former Sudetenland Germans were expelled from what is now part of the Czech Republic at the end of the Second World War. This was a historical crime carried through by the Stalinists under the aegis of the Russian Red Army. Now the Czech prime minister seeks to reinforce the impression that all Sudetenland Germans were organically and intrinsically pro-Hitler. The truth is that the Communist Party, in the 1920s, enjoyed considerable support amongst the German population in the Sudetenland. This evaporated with the failure of the policies of Stalinism and the discriminatory measures against the ethnic Germans in pre-war Czechoslovakia. This drove many into the arms of the Nazis and the Sudetenland quislings who followed them, but significant sections remained opposed to the fascists.

431) It is absolutely false to paint a whole 'nation' in this manner as organically fascist or 'traitors' to the Czech lands. This is done because of the fear that wealthy Germans will return to buy up their former property in what was Sudetenland. It was for this reason that Czech law prevents Germans from buying property in the country. This is in violation of the EU's precepts and therefore would be unacceptable if the Czech Republic joins the EU. Hence the whipping up of an anti-German nationalist fervour in the Czech Republic.

432) The Czech elections in June 2002 were a further indication of the widespread disillusionment throughout Eastern Europe with the effects of capitalist restoration. The two most significant facts coming out of the election were the very low turnout - just 58% participated, the lowest since 1989 - and the vote for the Communist Party (KSCM). The vote for the KSCM is not only the highest percentage it has achieved since 1989 but it actually increased its vote by 70,000, compared to a loss of around 300,000 votes for other parties.

433) The so-called 'Social Democrats' (CSSD) have emerged with the highest percentage of votes, although four less seats than previously, but their preferred partners in the coalition government (Coalitci) of Christian Democrats and Liberals won just 14.3% of the vote, with eight seats less than previously.

434) The main loser in this election, however, was the main bourgeois party, ODS, led by the arch-Thatcherite Vaclav Klaus who got just 25% of the vote. The latter, as prime minister in the mid-1990s, presided over a 'botched privatisation', with unprecedented corruption and an attempt to buy popularity through an unsustainable spending boom which ended in a financial crash. He is mistrusted by the bourgeoisie of Western Europe because of his demagogy and his brand of Euro-scepticism. Moreover, he is not trusted to handle controversial issues, like the post-war expulsion of ethnic Germans from Czechoslovakia.

435) The vote for the KSCM is extremely significant, combined with the rejection of the right-wing parties, and is an undoubted reflection of the swing towards the 'left' which is taking place. The KSCM does not stand for a clear programme of democratic socialism. Given its antecedence there is still a strong pro-Stalinist element amongst its membership and, moreover, an eagerness on the part of the leadership to share in the spoils of office in a bourgeois government. Their problem is that neither the social democrats nor the other bourgeois formations, it seems, are prepared at this stage to share power with them. Nevertheless, their support in this election, part of which is a large protest vote by Czech workers, is extremely significant.

436) Our comrades have kept alive the traditions of genuine Marxism in the Czech Republic in what has been a historically unprecedented and difficult situation. A new situation has now opened up which, when combined with the ferment which is developing in the rest of Eastern Europe and linked to the world crisis of capitalism as a whole, can present our organisation with big opportunities to advance in the next period.


437) But also in Hungary the dogs of nationalism were whipped up in 2001 by the former Hungarian prime minister, Orban. His government granted the 3.5 million ethnic Hungarians living in neighbouring countries special Hungarian government identity cards and benefits. On the anniversary of Hungarian statehood, Orban declared: ">From now on we shall implement the cross-border reunification of the Hungarian nation because the future knows no borders". This could be interpreted as meaning just that there would be an 'erosion of borders' which would allegedly come from membership of the EU. But it aggravated Hungary's neighbours, especially Romania, which has 1.6 million ethnic Hungarians within its borders.

438) There is a legitimate opposition within Hungary at the discrimination against Hungarians in neighbouring states. But Hungarian nationalists believe that the territories inhabited by the Hungarian minorities, which belonged to Hungary until the aftermath of the First World War, were wrongly removed from the 'motherland' and should return. The signing of the 1920 Trianon Treaty, which divided Hungary to the benefit of neighbouring states, notably Romania, was the occasion in 2001 for the nationalist drum to be banged.

439) Orban also saw this as a means of rallying the 'nation' behind his beleaguered government and warding off defeat in the April 2002 general election. He failed, with the misnamed Socialists gaining ground. They managed to cobble together a coalition. 'Investors' see the new government as more 'free-market orientated' than its predecessor, which is itself sufficient comment on just how 'socialist' are the socialists.

440) Unsurprisingly, the Socialists put forward proposals before the election for increases in social benefits and public-sector wages while promising tax cuts. They promised that many of these would be introduced in the first 100 days of the government's period of power. On the contrary, it is likely a diet of counter-reforms, as with other governments in Eastern Europe, will be served up to the Hungarian people.

The Balkans

441) Accumulated social bitterness, together with unresolved ethnic and national questions, is a feature of the situation in Eastern Europe. After the experience of the Balkans, with hundreds of thousands of people killed and many more maimed, imperialism is now concerned to maintain the status quo in the region. This is reflected, for instance, in the abandonment, albeit temporarily, of immediate independence for Montenegro. After heavy EU pressure, including blatant threats to cut aid, the republic will remain within a 'federation' with Serbia and will take turns to occupy a single seat at the UN. The state will not be recognised internationally as an independent entity.

442) So precarious is the situation in the Balkans, and to some extent in Eastern Europe, that the alteration in the status of one of the remaining states threatens to unravel the 'settlement' imposed on Bosnia. Specifically, imperialism fears that Montenegrin independence would provoke a similar move in Kosova/Kosovo. This is despite the fact that in Serbia it seems a breakaway by Montenegro would not now meet with significant opposition.

Disillusion with capitalism

443) In the past twelve years, the process of bourgeois restoration appeared to be unstoppable to the mass of the population, and particularly to the working class. However, as we have seen, it has produced a bitter harvest for the populations of the region, which is destined to grow worse on the basis of a new recession or slump in world capitalism. To some extent the working class has not yet recovered from the stunning blows meted out to it in the course of this period. However, the original enthusiasm with which bourgeois restoration was received has now evaporated amongst the majority of the population in the region.

444) There is now profound disillusionment with capitalism and even with 'democracy'. The same tendency as elsewhere to disengage from the political process is evident. There is also, on a basic level, a nostalgia for the 'certainties' which existed in the planned economies of the Stalinist states: the existence of a safety net in welfare and housing. The more thinking sections of the youth and working class are searching for an explanation of the calamity that has beset their societies and for a socialist and Marxist programme capable of showing a way forward.


445) September 11, as we have seen, has clearly opened up a new phase for the world and for capitalism. Despite the boasts of Bush and his junior partners, such as Blair, this does not mean a successful, triumphalist period for imperialism. The 'victories' which have been gained are shot through with contradictions. Certainly the US colossus bestrides the world like at no other time in history. But at the same time it has built into its foundations all the explosive material of world capitalism.

446) The working class has been partially weakened, largely in the ideological sphere, but it has not been seriously defeated or cowered. The anticapitalist movement, which the spokespersons of world capitalism consigned to history after 11 September, has arisen with a new vigour. This is because the deficiencies of the world bourgeoisie and its system have not been corrected but have deepened in the past year. The momentous general strike in Spain in June 2002 - deliberately played down by bourgeois commentators - and the massive demonstrations which accompanied this signify the re-emergence of the working class, as also did the previous general strikes in Greece, in Italy and in Portugal as well, and the political convulsions in France around the elections and emergence of the threat from the far right.

447) There is a big contradiction, still, between the mighty potential power of the working class shown in these movements and the political conclusions, which in general have lagged behind the objective situation. These are the themes which we will explore further in the document submitted to the Congress on Europe. However, it is clear that it will take further events, new and sometimes bitter experiences, before the working class significantly advances politically. But advance they will, because the crisis of world capitalism is preparing the conditions for this.

448) In the changed mood which will inevitably develop the CWI, which has stood the test of the last decade both theoretically and organisationally like no other international organisation, will have the chance to make considerable advances. We appeal to the working class, to young people, to women, to the oppressed ethnic and national minorities, to examine our ideas, to contrast the clarity of our analysis and the relevance of our programme with other shades of opinion within the world labour movement. This would lead them to draw the conclusion that they should join our International and its different national sections. Standing under the banner of the CWI at the moment are some of the most devoted and informed fighters for the working class. Join them and lay the basis for mass parties of working class people and a mass International, which is the indispensable weapon for working people themselves to create a new socialist world.