Thursday, December 17, 2009

europe view no 163

Europe view has now come out without a break for 163 weeks, for those who like statistics. That may make it the longest-running column dealing with CEE in the mainstream media, but it's Christmas so who's counting

Looking to the stars
Dec 17th 2009

A little seasonal wisdom for the east
THE reindeer are straining at the harness, the sledge is packed and snow is falling softly all over central and eastern Europe. So what should Santa bring the region?

A wishlist is easily drafted. A quick return to economic growth; a louder voice in the councils of international organisations such as the European Union (and better decisions by them); more attention from the American administration; a neighbourly Russia. But such a list belongs in the same category as childish scrawls in crayon, asking Father Christmas to bring a magic rabbit and an invisibility cloak.

In the real world, the best that the region can hope for is rather more limited. The top priority is to hope that western Europe—the main export market for the region—does not plunge into another, deeper recession. The financial tsunami of the past 12 months has receded, leaving the basic structure of economics and politics in the region covered in seaweed and shabby, but intact. No government has fallen to the temptations of economic autarky and political populism: those messages are preached on the sidelines by the likes of Hungary’s Jobbik, but the political mainstream remains untouched.

That is cause for relief—and also gratitude. Some politicians have put national interest above their own short-term popularity. Outsiders deserve thanks too, such as the European Bank for Reconstruction and Development and the European Commission, which together with the IMF and some national governments cobbled together deals that kept the western-owned banks in the region from pulling the plug on their stricken local subsidiaries. Santa should reward them, just as he delivers lumps of coal to those who have been less helpful.

Any presents from the new European Commission are likely to be ill-chosen and disappointing. But one big and practical offering would be a beefed-up EU presence in Crimea. An EU-sponsored higher education institution, cultural centre and visa office would be a powerful counterweight to Russia's “soft power” efforts and would signal EU commitment to Ukraine, even while the question of membership is on hold.

NATO may not send anything, barring some exercises in the Baltic next summer. It is transfixed by the needs of Afghanistan, devoting its spare moments to examining its own navel. The best that can be hoped for is that it does not weaken its collective security guarantee by discussing it to death.

What the region really needs—and only it can provide—is a new account of itself. The great story of the past 20 years needs a new chapter. Many ex-communist countries have joined what were once “western” clubs such as the EU and NATO. But “enlargement fatigue” means that the next lap of EU expansion is likely to be slow. And being in the club does not mean that you get taken seriously: almost every top job in the EU, NATO and other big outfits is held by westerners.

The virtuous circle of low labour costs, foreign investment and export-led growth is outdated too. The region has lost some of its competitiveness. And it should not aim to stay only as a low-cost provider of goods and services for the rich west.

The best way to be taken seriously is to have something new and interesting to say. The ex-communist countries need to show that their brainpower, creativity and innovation deserve a place at the top table. A big asset is that people in the region are used to radical change in a way that the old, tired countries of western Europe can hardly imagine.

Europe needs that dynamism, innovation and flexibility more than ever. Please Santa, bring sharp pencils for the Christmas thinkfest.

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