CEE Euro-election results

Scary elections in eastern Europe

Time to start fretting
Jun 11th 2009
From The Economist print edition


Boring centre-right parties did well—but so did quite a few nasties
INTEPRETERS in the European Parliament trying to translate the remarks of George “Gigi” Becali may struggle. Even in his native Romanian, his puzzling syntax and coarse slang make him a butt of satirists. The interpreters may also blench at what he says, especially about Jews, gays, Roma (Gypsies) and women. But they may be spared this for the time being because a court has banned the newly elected Mr Becali from leaving Romania pending a criminal trial for kidnapping.


Xenophobes and populists have been elected in old European Union members such as the Netherlands too. But their east European counterparts make the westerners seem tame. Mr Becali’s fellow victor on the Greater Romania list is Corneliu Vadim Tudor, a vituperative nationalist who was once court poet to Nicolae Ceausescu, the former Communist dictator.

Yet international co-operation among politicians who hate foreigners is inherently tricky. Hungary’s far-right Jobbik party, which won three seats, may join its Balkan counterparts (including two members of Bulgaria’s explicitly racist Ataka party) in Roma-bashing. But they will have little in common when it comes to minority rights for Hungarians in neighbouring countries such as Slovakia and Romania, where Magyar irredentism is a convenient bogeyman for local chauvinists.

There were shocks at the far-left end of the spectrum too. One winner in Latvia was Alfreds Rubiks, a hardline former Communist who was jailed for backing a Kremlin-inspired coup against Latvian independence in 1991. Most Latvians see him as a pariah. His victory highlights the ominous rise of Soviet nostalgia among the country’s increasingly alienated Russians. In Estonia, by contrast, ethnic Russian parties flopped. The soft-left Centre Party got their votes, and more besides. The most striking Estonian result was the election of Indrek Tarand, a popular ex-diplomat who ran as an independent to protest against rules stopping voters from choosing among candidates on party lists.

As in western Europe, the main stories in the east were thumping wins by centre-right parties. Poland’s ruling Civic Platform did strikingly well, with 25 seats to 15 for the main opposition, the more populist Law and Justice party. In the Czech Republic the centre-right Civic Democrats won nine of the 22 seats, against seven for the Social Democrats and four for the Communists. In Hungary the ruling Socialists (ex-communists) did very badly, with only four seats to 14 for the conservative Fidesz party. That augurs well for the right in next year’s general election.

The exception was Slovakia, where the ruling centre-left Smer (Direction) party led by the prime minister, Robert Fico, did well on a paltry 19.6 % turnout, the lowest in the EU. His party won five out of 13 seats, with the fragmented conservative opposition polling poorly, as did two nationalist fringe parties in the coalition government. Both had featured in a string of recent corruption scandals.

The real significance of the elections may lie less in the composition of the new European Parliament than in pointers to the future course of national politics. Mr Fico, for example, will need to find new allies after next year’s general election if his present coalition partners continue to flop. Poland’s Civic Platform is on track to win the presidency next year.

Scandal-strewn Bulgaria is holding a parliamentary election on July 5th. If the European contest is any guide, the vote should be lively but nasty. Mafia-linked parties did alarmingly well in the European poll, though they did not win any seats. Vote-buying was common, as were other lurches towards rule-bending and ballot-rigging. In what looks like a blatant attempt to penalise minor parties, the authorities tried (but failed) to raise the election threshold to 8%, the highest in Europe. Legal chicanery meant that an opposition coalition had great difficulty even registering. Sadly, EU officials monitoring Bulgaria’s shaky progress towards clean government will have plenty to put in their next report. It is bad enough when dodgy characters win votes, but even worse when they count them.

CEE Economics/Romania-Bulgaria

Eastern Europe’s woes

Stopping the rot
Nov 27th 2008
From The Economist print edition


East European economies crack, with Romania and Bulgaria the worst off

JUST another week’s news in eastern Europe: Latvia, after vehement denials, starts talks with the IMF; Bulgaria loses €220m ($286m) in promised payments from the European Union because of its failure to tackle corruption; and the European Bank for Reconstruction and Development cuts its growth forecast for the region by half. But the good news is that worries of a huge meltdown, from the Baltic to the Black Sea, now look overblown.

The most likely outcome is several years of low or no growth, with bigger hiccups in countries that have the shakiest financial systems and biggest imbalances. The outside world (ie, the IMF, the EU and the European Central Bank) is ready to help when necessary and—more usefully—even before problems hit markets. The ECB has opened a €10 billion credit line to Poland, which saw its currency, the zloty, fall sharply earlier this month. Hungary’s central bank was even able to cut its interest rates by half a point from the 11.5% rate that it set last month, as part of a $25 billion international bail-out. And foreign banks have stood by their subsidiaries in the ex-communist countries. It was their risky lending that inflated the property bubbles, now popped, and also financed huge current-account deficits in such places as Latvia and Bulgaria.

The biggest worries are now focused on Bulgaria and Romania, the poorest and worst-governed new members of the EU.

The Bulgarians have their hands tied by a currency board that pegs the lev rigidly to the euro. That rules out devaluation to restore competitiveness, which is a concern as exports sag. It also removes a potential buffer, because the central bank cannot adjust interest rates. A current-account deficit worth a quarter of GDP looks alarming.

At least Bulgaria’s fiscal position is strong. The state has little foreign debt and runs a budget surplus. That should allow it to increase public spending as the economy slows. It can also borrow abroad (though the authorities say they have no plans to approach the IMF). The loss of some EU money is embarrassing, but Bulgaria is still in line to get €11 billion in the years up to 2013. Oriens, a Hungarian-based merchant bank that specialises in the Balkan region, reckons that growth next year will be 2.3%: low but not awful.

Romania has a current-account deficit of only 14% of GDP; a floating currency that gives it more flexibility; and is less dependent on exports to the slowing euro area than Bulgaria. But it may have a harder landing. Oriens forecasts GDP growth of just 0.9% next year. Its banking system is less profitable than Bulgaria’s. Although it is mostly foreign-owned, it looks wobblier; inter-bank rates have nearly doubled this year to 15%. Foreign reserves are scantier and the IMF reckons that the currency, the leu, may be overvalued by 19%.

Thanks to populist spending in the run-up to this week’s parliamentary election, the budget deficit may reach 3.9% of GDP by the year-end. That is not a lot by some standards, but it may still cloud outsiders’ willingness to provide more cash. Whatever coalition the election produces, serious reform is a long way off. Bulgaria’s politics are also troubling. Politicians’ ties to organised crime remain scandalous; the main populist party seems to blame the country’s Turkish minority as the economy slumps. Meltdown may have been averted, but the eastern Balkans still face bleak times ahead.

Bulgaria/Romania corruption

Bulgaria, Romania and the EU

Balkan blushes
Jul 24th 2008 | SOFIA
From The Economist print edition


The European Union softens its criticisms of Bulgaria and Romania

BY THE polite standards of Brussels, it was quite tough. On July 23rd the European Commission issued critical reports on Bulgaria’s and Romania’s progress (or lack of it) in fighting corruption and spending European Union money. Yet after intense lobbying, the language was weaker than in the scalding drafts leaked earlier. And the commission dropped an explicit warning that Bulgaria was endangering its chances of joining the euro and the Schengen passport-free travel area.

Even so, the reports hit home, complaining of a “striking” absence of convincing results in Bulgaria’s anti-corruption fight, and of a “grave problem” over the “lack of accountability and transparency in public procurement” when spending EU funds. The commission announced severe sanctions, suspending aid worth as much as €486m ($770m). Without reform, the suspended sum will rise sharply by November.

Bulgaria’s prime minister, Sergei Stanishev, welcomed the softened language of his country’s report and promised an “action plan”. Outsiders treat all promises of improvement, along with such flourishes as the appointment of a well-regarded ex-ambassador, Meglena Plugchieva, to oversee the use of EU funds, with justified scepticism. Despite much shuffling of departments and expensively publicised initiatives, and what on paper look like the right laws and procedures, the glaring fact remains that Bulgaria’s efforts have shown almost no results in terms of convicting fraudsters or corrupt officials.

Indeed, public figures sometimes seem not just weak but malevolent. For example, the EU’s anti-fraud agency, OLAF, has accused high-ranking officials of being a “political umbrella” for gangs who have stolen millions of euros meant for Bulgaria’s backward and dirt-poor countryside. “Influential forces” in politics and the bureaucracy, suggested OLAF’s leaked letter, are “not interested” in punishing those linked to two notorious crime bosses.

Worries about Bulgaria and Romania, especially over their ability to administer nearly €38 billion promised by the EU up to 2013, are hardly new. In January it emerged that the man in charge of Bulgaria’s roads, Veselin Georgiev, had granted contracts worth hundreds of millions of euros to a company owned by his brother. The commission froze €144m for farming and road improvements, and Mr Georgiev resigned. So did the interior minister, Rumen Petkov, after reports that a drug gang had obtained secret internal documents from his ministry, and that illegal booze producers had traded money for favours from a senior crime-fighter. Mr Petkov is in charge of fund-raising for the Socialist (ex-communist) party, which heads the governing coalition and also won the presidential election in 2006.

Crime, corruption and a weak judicial system are overlapping problems. Not one of dozens of gangland killings since 2001 has been solved. The kidnapping of the president of a leading football club and, later, his wife within the past two months has highlighted the authorities’ seeming helplessness over organised crime.

What scandalises ordinary Bulgarians is that their country, the poorest in the EU, is missing a vital chance to modernise. Public services are dire—shown by a crisis this month in Sofia’s rubbish collection, which has left the streets piled with rotting piles of garbage. So foreign criticism, which in some countries might arouse defensiveness, is in fact welcomed. The EU’s popularity has rocketed, whereas the government’s negative rating is now as high as 73%. The country has lost, by some estimates, a quarter of its population since the early 1990s, shrinking from 10.5m then to as low as 7.5m now. That is a huge vote of no confidence by the public.

Parliament is another story. The government looks set to survive a no-confidence vote next week. A general election is due next summer, when a new centre-right party, headed by the mayor of Sofia, Boyko Borisov, is expected to do well. He attracts praise for his dynamism, though fastidious Bulgarians flinch at his background as an ex-wrestler, bodyguard and police chief: emblematic in their eyes of the political milieu that the country needs to dump.

In Romania, by contrast, politicians are relieved after escaping sanctions in a softly worded commission report on their anti-corruption and legal reform efforts. This too was watered down from the draft, itself weaker than some seasoned Romania-watchers had hoped. The commission bemoaned the lack of practical results but welcomed a “move in the right direction”. In Bulgaria, sadly, outsiders find it hard to see any movement at all.

If you wanted to discredit the EU, squandering taxpayers’ money in its most corrupt new members, Romania and Bulgaria, would be one way to go about it. Yet though Brussels is disappointed and even angry about the two countries’ performance since joining the club in January 2007, Eurocrats are not sure what to do. Sharp criticism and tough sanctions might merely demoralise those who are trying to make things better, as well as undermining the membership hopes of other Balkan countries. Despite everything, few believe that any of the new members would be better off out than in.

Markov murder

Dead, not buried
Jun 26th 2008 | SOFIA
From The Economist print edition


New light on an old murder


WHEN Georgi Markov, a Bulgarian émigré broadcaster, was murdered in London in 1978, few could have suspected that Communist rule in his country would collapse a decade or so later. But Bulgaria’s democratic rulers proved unable to help solve one of Britain’s most spectacular political murders. Key files were inexplicably destroyed; two senior officials died mysteriously. Though the cause of death—a pellet laden with a fatal poison, ricin, supposedly poked in with an umbrella—had long been known, the trail to those who ordered the killing seemed to have gone cold.

Now Scotland Yard officers have again been visiting Bulgaria, interviewing former secret-police officers and examining documents that they sought in vain in the early 1990s. At a time when Bulgaria’s reputation in the European Union has been dented by the seeming impunity enjoyed by its gangsters and their corrupt pals in officialdom, its willingness to co-operate with the British investigation will be an important test of good faith. “It will show to what extent former spies still control the country,” says Hristo Hristov, a Bulgarian journalist who follows the Markov case closely.

Bulgaria’s co-operation contrasts sharply with Russia’s intransigence over the murder of Alexander Litvinenko, a British citizen and vociferous critic of the Kremlin, who was poisoned in London in November 2006 by a rare radioactive element, polonium. British officials are convinced that Russia’s security service, the FSB, was involved in the murder. The prime suspect, Andrei Lugovoi, is now a celebrated Russian parliamentarian.

The Bulgarian authorities could obstruct the Markov investigation until after September 11th, the 30th anniversary of the murder, when the statute of limitations kicks in. But racing against time to find clues in heavily weeded archives in Sofia is unnecessary if the whole story is available elsewhere. Whether or not the Soviet KGB ordered Markov’s murder, their close Bulgarian allies would certainly have shared details of such a risky operation. Bulgaria asked Russia to declassify its Markov files in 1991 but did not pursue it. If the new man in the Kremlin, Dmitry Medvedev, truly wants to thaw his country’s icy relations with Britain, he could do worse than pass on whatever the closely-guarded archives of the old KGB contain on the Markov murder.

(in cooperation with the excellent Economist stringer Irina Novakova)

Bulgaria

Bulgaria
Dirty politics
Apr 17th 2008
From The Economist print edition
One resignation is not enough to clean up Bulgaria

RUMEN PETKOV admits that as the then Bulgarian interior minister he met the country's top gangsters in 2006. He claims it was in a good cause: to ask them to stop shooting each other in the crucial weeks ahead of the country's accession to the European Union.

Bulgaria's woes with crime and corruption needed more than a temporary ceasefire. Gangland shootings, never resolved, have resumed: last week gunmen killed Bulgaria's best-known author of books on the mafia, Georgy Stoyev, and the manager of an energy firm with a controversial history.

Under pressure from the European Union, Mr Petkov resigned this week after a leaked intelligence report said a drug gang had received top-secret internal documents from officials in his ministry, while illegal booze producers gave money to a senior crime-fighter in return for information and the destruction of incriminating evidence. EU officials have long worried that anything they shared with Bulgarian counterparts would be leaked to gangsters. Eurocrats say they objected to Mr Petkov's bullying attitude; an EU source says he enjoyed “rubbing our nose into the fact that Bulgaria is now a member state”. That is not a unanimous view. The European Commission's vice-president, Franco Frattini, went skiing with Mr Petkov last year and has praised him. But the EU has already suspended some programmes because of corruption. In July, it will assess Bulgaria's overall progress and may suspend the validity of its court decisions elsewhere in the EU.

It was a parliamentary investigation that made Mr Petkov's position impossible. But the real story is Bulgaria's political weakness. The ruling ex-communists are split between a supposedly modernising faction lead by the prime minister, Sergey Stanishev, and the old guard around Mr Petkov. A coalition party that represents the Turkish ethnic minority controls the agriculture and environment ministries, the main conduits for EU money. It has been heavily criticised for land deals, arbitrary treatment of mining licences and vote-buying.

Mr Stanishev was recently forced to bring back into government a deputy environment minister from this party, fired last year for alleged corruption (and then cleared). While out of office he caused surprise by acquiring two newspapers (from his savings, he said). The economy minister, Rumen Ovcharov, another old guard ex-communist, resigned last year under a cloud, but protested his innocence. Criticism from Brussels and elsewhere about Bulgaria's murk has continued. One more resignation is unlikely to make a difference.