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HotNews.ro interview

Joan Hoey, EIU analyst: " It is difficult to imagine a chastened Mr Basescu"

de     HotNews.ro
Miercuri, 25 aprilie 2007, 0:00

Joan Hoey

Joan Hoey, senior-editor at the Economist Intelligence Unit, explained for Hotnews.ro the reasons why almost all the Central and Eastern Europe states went through deep political crisis after their accession to the European Union.

Hoey believes that Basescu's gesture - not to resign after impeachment - may be explained by signals that he wouldn't be able to run for president without the referendum result. The analyst also believes that, if re-instated, Basescu will not change his voice nor remain "chastened" as "it is simply not in his character".


Hotnews.ro: In what measure would suspended President Basescu’s change of mind on resignation cost him politically considering the coming referendum on his suspension?

Joan Hoey: I'm not sure that Mr Basescu's change of mind will cost him politically, as some commentators have suggested. He can argue that his hand was forced by the threat of parliament taking further action to prevent him from standing again in a presidential election, although his opponents have denied that this would have been the case.

The impeachment affair is unlikely to have dented his popularity among those who had supported him prior to the impeachment vote in parliament. He must still be the odds on favourite to "win" the referendum, given that he is the most popular politician in the country by a large margin.

Given the relatively low turnouts at parliamentary and presidential elections and the probably absence of 2m registered voters working abroad, as well as the president's popularity, it would be difficult to secure a majority of the electorate to impeach Mr Basescu.

Indeed the more or less continuous political bickering of recent years is likely to have turned the electorate off voting in even greater numbers than in the past. Thus the referendum to impeach Mr Basescu is expected to fail.

Hotnews.ro: Can one talk about the a possibility that the current crisis continue until the 2008 elections or beyond?

Joan Hoey: It is certainly possible to imagine that the referendum will not resolve the ongoing competition between opposing political camps in Romania. It could well be that Mr Basescu will be back in office after May 19th. Despite what's happened, it is difficult to imagine a chastened Mr Basescu; it is simply not in his character.

He can therefore be expected to continue his assault on Mr Tariceanu's government with the aim of helping his own party to become the dominant party in Romanian politics after the parliamentary elections scheduled for 2008.

However, it is still difficult to imagine that the Democrats (even with the Liberal Democratic Party) could win a parliamentary majority and form a government on their own (and it is by no means certain that the Hungarians would be happy to join such a government given the disappointments of recent years).

In that sense Romania appears destined for more of the same, with unstable minority governments or warring coalitions struggling to achieve policy coherence and to implement reform.

Hotnews.ro: Is Romania’s ongoing political crisis a unique case within the EU? Are there any precedents in EU member countries? If yes, how did they find a solution?

Joan Hoey: Romania's political crisis is by no means unique. It is part of a common pattern in central and eastern Europe. Political problems have affected the EU's east European new member states. Poland's government is seen as eccentric—preoccupied with cultural and national issues—and incompetent; Slovakia's as populist and anti-reformist.

Political polarisation in Hungary has reached stability-threatening proportions. Hungary's government looks weak and there are doubts over whether it can cope with serious macroeconomic problems. In 2006 the country witnessed the worst disorder since 1989.

Protests, some of which turned violent, were sparked by revelations that the prime minister, Ferenc Gyurcsany, had admitted to lying systematically to the electorate in order to win the parliamentary election in April 2006, but consequently refused to resign—which can in itself be seen as a manifestation of a malfunctioning democracy.

The Czech Republic struggled for months to form a stable government following its deadlocked parliamentary election in June 2006. Estonia, Latvia and Slovenia all have cautious or fragile coalitions. On the face of it, central Europe appears to have stabilised somewhat since the political turbulence of last year.

However, governments across the region remain weak, with underlying problems with political systems coming into the open following EU accession.

A common explanation for the emergence now of political difficulties across central Europe is that the EU accession process had previously held together these countries' fractious party political systems, as mainstream parties united behind the reforms that were needed to gain EU membership.

But once accession was achieved, and politics reverted to "natural" antagonistic patterns, the underlying fragility of east-central European political systems was exposed.

There are a number of possible reasons for this fragility. Most important, although democratic forms are in place in the region, the substance of democracy—including a political culture based on trust and healthy levels of political participation—is often absent.

This is manifested in low levels of political participation beyond voting (and even turnout at elections is low in some countries), and very low levels of public confidence in state institutions.

According to a Eurobarometer survey in 2006, public satisfaction with the performance of democracy was below 50% in all of the east-central European states except the Czech Republic and Slovenia, and was on average 17 percentage points lower in the new member states than in the EU15.

A key underlying factor is the existence of a large stratum of discontented voters, who feel that they have lost out during the transition.

Much of eastern Europe illustrates the difference between formal and substantive democracy. The new EU members have levels of political freedoms and civil liberties that are pretty much equal to those in the developed EU15, but they lag significantly in political participation and political culture—a reflection of widespread anomie and weaknesses of democratic development.

That is the main reason why, according to a new index of political democracy developed by the Economist Intelligence Unit, only two countries from the region—the Czech Republic and Slovenia—are in what is characterised as the "full democracy" category (in The Economist's The World in 2007).

Another problem in the region is that party politics often remains fragmented, for reasons that include the shallow roots of many parties and low voter identification with parties. The result is a tendency for fragile coalition governments.

Finally, transition from communism often left deep, unresolved divisions between members of the former regimes and their opponents, especially in Poland and Hungary, which experienced negotiated transitions that left considerable room for former communists to continue to exercise influence, but also in Romania.

Hotnews.ro: Is the crisis in Romania strictly political? Is there a risk of economic regression?

Joan Hoey: A disconnect between well-performing economies and troublesome politics characterises much of the region and not just Romania.

Partly as a result of the political weaknesses discussed above, and partly because of a general "reform fatigue" following the intensive efforts required to prepare for EU membership, the momentum for reform across the region has slackened following EU accession.

Nevertheless, at present the short-term economic prospects for east-central Europe remain good. Rising disposable incomes and large public investment projects funded by the EU, as well as strong inflows of foreign direct investment (FDI), are boosting growth. Import demand in the euro zone has picked up and exporters are also proving adept at penetrating new markets.

However, a valuable opportunity is being missed to enact much-needed reforms—to stave off impending demographic pressures on state finances and ensure future competitiveness by reforming healthcare, education and social support systems—at a favourable stage of the economic cycle, which will have economic costs in the longer term.

It is also possible that the region, which had appeared such a dynamic contrast to western Europe in the run-up to accession, will become gripped by the same policy short-termism and stagnation that bedevils the old EU members—and will do so, moreover, before economic catch-up is complete. Further reform progress would then be prompted only by crisis, as in Hungary at present.

It might even be argued that a vicious circle could develop, as, if faced by economic downturn, post-transition political systems—still unsupported by sufficient political participation and a strong democratic culture and traditions—could come under further strain.

It would be dangerous to assume, therefore, that "reform fatigue" is just a passing phase, and that these countries can continue their previously impressive economic progress without addressing the underlying problems of their political systems, including strengthening governance and promoting political participation.


The Economist Intelligence Unit's baseline forecast is that the disjuncture between weak politics and robust economic performance is likely to persist for a while. However, it cannot be assumed that this disconnect can continue indefinitely.

In many countries there are important decisions and policy initiatives that need to be taken—such as preparing economies for euro adoption, reforming the health, pension and tax systems, and other reforms to lay the basis for sustainable growth.

There are thus appreciable risks for the long term of a vicious economic-political circle in which the negative politics start to impinge on the economy.

Hotnews.ro: How can the European Commission impose its policies in a member country facing such a political crisis?

Joan Hoey: As discussed above, it is much more difficult for the Commission to use its leverage to pusg through reforms once candidate countries become member states—even if there is a monitoring regime in place as in Bulgaria and Romania, and even under the threat of safeguard clauses being activated.

With EU membership secured, the removal of the accession "policy anchor" led may to policy slippages and reform statis in most of the eight east European countries that joined the EU in 2004. Romania is unlikely to buck this trend.




















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