Europe View nr 168 -- Europe's borderlands

Europe.view 

The centre cannot hold
Jan 21st 2010
From Economist.com


The borderlands of Europe should not be left behind

PLENTY of places have a claim to be Europe’s geographical centre. French geographers calculated in 1989 that it lies on a hill near Purnuškės in Lithuania. Belarusian cartographers think it is near the town that Russians call Vitebsk (Vitsyebsk in Belarusian). In 1887 in the then Austro-Hungarian empire, geographers erected a monument at Dilove, in what is now the Ukrainian province of Transcarpathia, marking what they reckoned was Europe’s real mid-point.

None of these claims can be definitive; finding Europe’s middle depends on what you count as its edge—the Azores? Iceland? The Ural mountains? The methodology of some claims is unclear. The more exotic ones bear as little relation to geography as the Loch Ness Monster does to aquatic biology. In other words, their purpose is to attract tourists. But at least for the Ukrainians visiting Dilove to be photographed by the monument, this is as far west as they can get.


“Where Europe Ends”, a powerful new film by Alina Mungiu Pippidi, a Romanian scholar and activist, shows the effect of the European Union’s expansion in dividing Europe. The combination of physical decay and human dislocation is poignant. The footage of disintegrating churches, ruined public buildings, shabby homes and bumpy roads leaves the viewer in no doubt of both the region’s rich heritage and its dirt-poor present.

Many of the people interviewed in the film have first-hand experience of the atrocities of the past century. Their grasp of the geopolitics is sometimes hazy, but their memories of shootings and deportations are sharp. Lines on the map drawn by outsiders have divided families and farms, bumping them around like shuttlecocks between different countries and political systems. The creation of a solid eastern frontier to the EU hardly matches the horrific consequences of the Molotov-Ribbentrop pact, but the victims are the same people.

People left behind by history are often those who find coping with the present day most difficult. Humble farmworkers in rural areas find it hard enough getting Ukrainian or Moldovan officials even to issue a travel document. Getting a visa to cross the border is even harder. The film shows the humiliating crowded queues outside EU member states’ consulates and the dismal life of illegal labour and squalid living that awaits those who make it across.

The film is partly paid for by the EU. It should be compulsory viewing for anyone who works in a consulate or visa office dealing with people from what one might call “left-behind” Europe. Some of the local staff there seem to have been hand-picked for their rudeness. Corruption is still troublingly prevalent. The system for visa applicants often appears to have been designed to deter, rather than enable, travel to the west. It may be unrealistic to expect a big liberalisation of visas in the short term. But it is hard to see any arguments against being polite, honest and efficient.

Enlargement has brought huge benefits for those on the inside, while putting the harshest costs on outsiders, particularly those least able to bear it, such as the citizens of Moldova, Europe’s poorest and most neglected country.

The mantra of EU and NATO expansion has been “Europe whole and free”. That may have now outstripped the willingness of voters in the luckier and richer parts of Europe to pay the taxes and accept the dislocation of further expansion.

But opportunities are opening up in Belarus (wriggling away from Russia), Moldova (with its reformist, pro-European, pro-American government) and even post-election Ukraine, assuming that the political paralysis of recent years ends. Treating the centre of Europe as a hopeless and irrelevant borderland cannot be right.

Moldova latest from Economist website

Protests in Moldova

Moldova burning

Apr 8th 2009
From Economist.com

Violent protests erupt against the government of Moldova

THE poorest country in Europe is used to being neglected by the rest of the world. But protests against vote rigging in elections held on Sunday April 5th brought Moldova some attention this week. In the past few days youthful demonstrators, who were organised via Twitter and other social-networking sites, stormed parliament and the presidential offices in the capital city, Chisinau. Some threw rocks, broke windows and started fires. As the police belatedly tried to restore order, scores were injured and one person died. Nearly 200 people had been arrested by Wednesday. Amid allegations of foreign mischief-making, Moldova expelled the Romanian ambassador.

The immediate issue is the election result, in which the ruling Communists won a majority in the single-chamber parliament. The election was declared fair by outside monitors, who assessed what happened on the day, but the composition of electoral registers looks dodgy, as does the overwhelming support that the Communists enjoyed from the main media.

The protesters are loosely tied to established opposition parties. They are cross about the election and even more annoyed by the outgoing president, Vladimir Voronin. Mr Voronin has stated that, although he would step down in accordance with the constitution’s term limit, he would stay in politics as a “Moldovan Deng Xiaoping”. That seemed to suggest no change from the economic and strategic failures of the past two decades, which have seen Moldova’s 4m population languish in a geopolitical limbo between Russia and the European Union. Most Moldovans favour Europe but the political elite, mainly Soviet-trained and Russian-speaking, has found it hard to break old ties and habits.

Mr Voronin has wobbled in both directions. Of late he has seemed to favour ties with Moscow, chiefly because a deal with the Kremlin seems to offer the only hope of solving the frozen conflict with the self-declared state of Transdniestria. This densely populated and industrialised sliver of land on the eastern bank of the Dniester river has maintained an unrecognised independence since a brief civil war that finished with Russian intervention in 1992. Western attempts to resolve that debilitating impasse have got nowhere, whereas Russia has kept up a stream of initiatives.

With decent leadership and goodwill on all sides, it would be possible to have friendly relations with both Russia and the EU. But Moldova’s leaders have ended up with the worst of both worlds, ignored by the EU and bamboozled by Russia.

The most divisive question is relations with Romania. The Moldovan Soviet republic, which gained independence in 1991, was carved out of pre-war Romania in 1940, as a consequence of the Hitler-Stalin pact; Transdniestria, always in Russian hands, was bolted on. Nico Popescu, of the European Council of Foreign Relations, says that demands for closer ties with Romania have strengthened in recent years, as that country’s EU membership has contrasted ever more sharply with Moldova’s status as a “semi-failed state”. As well as EU flags, some protesters this week carried Romanian ones.

That has infuriated the Moldovan authorities. They find it much easier to fight the bogeyman of Romanian revanchism and chauvinism than defend their own dismal record in office. Andrei Popov, of the Foreign Policy Association, a Moldova-based think-tank, believes that the authorities may even be exaggerating the pro-Romanian element in the protests in order to discredit the opposition’s wider political demands.

There is little evidence that Romania has made a big effort to undermine Moldova. Romanian politicians, notably the president, Traian Basescu, have made grandiloquent and tactless statements. The mutual detestation between him and Mr Voronin is legendary. One practical Romanian policy has proved controversial: allowing Moldovans with roots in the pre-war Romanian state to apply for passports.

The political upheavals cry out for attention from the EU, which has failed to get to grips with Moldova’s ills. As with Ukraine’s orange revolution five years ago, it may take a heavyweight outsider to get talks going between entrenched but discredited authorities and an enthusiastic but incoherent opposition. If Europe cannot solve Moldova’s problems, it is hard to see much future for the trumpeted “Eastern Partnership” which is meant to reinvigorate EU policies towards the six ex-Soviet countries on its eastern borders.

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.

Europe View no 93: more on Morar

Europe.view

Corruption for and against
Aug 7th 2008
From Economist.com


Why Daniel Morar deserves the West’s support

CORRUPTION in Romania is a hot topic as the government decides whether to renew the mandate of the prosecutor-general, Daniel Morar. His supporters see him as a valiant scourge of high-level corruption; his opponents think he is an incompetent stooge pursuing political vendettas. These are the five common—but flawed—arguments against him.

First: the West is no better and its criticisms are hypocritical. Certainly since the collapse of communism the ethical underpinnings of the western system have steadily crumbled. The Europe of Gerhard Schröder and Silvio Berlusconi has little authority to condemn anybody.

But the worst features of old Europe should hardly be a model for anyone. Italy’s economy is in a terrible mess; Germany has been nobbled by Russia. And Romania, as a much poorer country, cannot afford bad government. It has a once-in-a-lifetime chance to catch up the lost decades of communist rule and that depends largely on billions of euros from the taxpayers of the richer part of the continent. Corruption endangers that.

The second argument is that Mr Morar has made no difference. Corruption is just as bad as it always was. Again, there is a grain of truth in that. Bribery in schools, clinics and the like is endemic. But to be fair, dealing with that is not Mr Morar’s job: his prosecutors are supposed to go after high-level corruption, not day-to-day sleaze. His lack of results is notable, but hardly his fault: courts hand down derisorily lenient sentences and parliament preserves the immunity of his top targets. Even if Mr Morar is just scratching the surface of the problem and if some or even many of his prosecutors are incompetent, it is hard to argue that things would be better if nothing was happening at all.

Third: the real story is a battle of political clans, one of which is using the “anti-corruption issue” to attack the other. This has a large element of truth, in that the political grouping headed by President Traian Basescu has indeed used the corruption issue to bash its opponents.

And the president’s deplorable way with advisers, plus unexplained parts of his communist-era personal history, when he had a plum job abroad, certainly give his critics some serious ammunition. But that does not mean that anti-corruption fight is a sham. Politics in a free society often involves parties pushing good causes for opportunistic reasons. At the very least the past couple of years have seen an end to the climate of impunity that long characterised Romanian politics.

Fourth: the corruption issue is exaggerated. Most Romanians don’t pay bribes and the non-corrupt bit of the economy is what matters. Certainly growth has boomed and foreign investment has been flooding in. Yet those same foreign investors lament the damage corruption does. In particular, corruption in the education system devalues the “currency” issued by schools and universities—they will eventually become meaningless. And it is hard, if not impossible, for public administration to produce a modern infrastructure in a system plagued by corruption. Without that, growth will be throttled.

Five: this isn’t about morals. Corruption is just a symptom of bad government. True. It would be insane to start an anti-corruption drive by locking up all the doctors and teachers who take under-the-desk payments. But that is no excuse for leaving things as they are. Better salaries in the public sector are a necessary condition for ending corruption. So is more transparency. But it is also essential to punish flagrant wrongdoers, particularly at the top. Without that, no anti-corruption drive will have any credibility.

Daniel Morar

Romania

Mr Too Clean?

Jul 31st 2008 | BUCHAREST
From The Economist print edition

An anti-corruption crusader faces the sack

FIGHTING corruption in a country that tolerates it is a lonely job, and Daniel Morar may not have his for much longer. Intensely disliked by most of Romania’s politicians and vilified in the media, he reaches the end of his term as head of the Romania’s anti-corruption agency on August 12th. A government announcement on his future—and likely replacement—is expected imminently.

If so, Romania’s hottest political issue will become an international one. A European Commission report on July 23rd criticised Romania’s lacklustre effort against wrongdoing, but did not impose sanctions as it did against Bulgaria. It praised Mr Morar’s agency, and a spokesman says his status is a “test case” of Romania’s readiness to curb high-level corruption after joining the EU in 2007.

The Romanian parliament, however, does not share this admiration. It uses its veto to prevent Mr Morar’s hottest cases from going to court. And of the 109 cases that were prosecuted in 2007, only 25 resulted in prison sentences, mostly for the minimum three years, or (with mitigating circumstances) even less.

Critics say that Mr Morar is pursuing political vendettas on behalf of his backers, chiefly Romania’s president, Traian Basescu, whose supporters are the main opposition Democratic Party in parliament. Mr Morar’s agency has indeed chiefly gone after politicians from other parties; but it has prosecuted some important figures in Mr Basescu’s camp too.

Mr Morar’s difficulties are a symptom of something else: a culture in which corruption does not equate with disgrace. Transparency International ranks Romania as the most corrupt EU country. Bribery is endemic, typically to secure medical treatment or teachers’ favours.

At an off-the-record seminar organised by a German think-tank recently, judges said punishing corruption severely would be hypocritical and harsh. The Romanian language has no precise word for “accountability”.

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.

Romania corruption scoop

This was largely the work of the excellent Economist stringer in Romania, Valentina Pop


Corruption in Romania

In denial

Jul 3rd 2008 | BRUSSELS AND BUCHAREST
From The Economist print edition

The European Union conceals Romania’s backsliding on corruption

HOW bad is corruption in Romania? Somebody well-placed to answer is Willem de Pauw, a Belgian prosecutor who is a veteran European Union adviser on the matter. Last November he wrote a report that concludes: “instead of progress in the fight against high-level corruption, Romania is regressing on all fronts…if the Romanian anti-corruption effort keeps evaporating at the present pace, in an estimated six months’ time Romania will be back where it was in 2003.”

This report has not been published (it is now available here). The European Commission’s report in February was a lot softer. “In its first year…Romania has continued to make efforts to remedy weaknesses that would otherwise prevent an effective application of EU laws, policies and programmes. However, in key areas such as the fight against high-level corruption, convincing results have not yet been demonstrated.”

That falls far short of admitting that Romania’s authorities are wilfully failing to co-operate. Some of Mr de Pauw’s most striking examples did not appear in the official report either, or were buried in footnotes. Mr de Pauw confirms his authorship but refers inquiries about it to the commission. Officials say he was consulted on the issue. Their February report, they add, was a “factual update”, not an assessment of Romania’s progress. That will come in a fuller report later this month.

It would be encouraging if this included some of Mr de Pauw’s points. One hot example is the cases that courts have sent back to prosecutors since Romania’s constitutional court struck down an anti-sleaze law. Mr de Pauw’s report said that “basically all” high-level corruption trials had been rebuffed by courts, which it was “statistically impossible to attribute [to] the coincidental occurrence of procedural mistakes in individual cases. Other factors than legal-procedural considerations have clearly played a major role.” He added that “the Romanian judiciary and/or legal system appears…unable to function properly when it comes to applying the rule of law against high-level corruption. Indeed, more than five years after the start of Romania’s anti-corruption drive, the public is still waiting for one single case of high-level corruption to reach a verdict.”

Events also support Mr de Pauw’s warning that Romania could soon regress to the level of 2003. Take the case of Adrian Nastase, a former prime minister charged with several counts of corruption and bribery. He has now been exonerated by the parliamentary committee on legal affairs. A lobby group, the Initiative for a Clean Justice, complains that “we are witnessing the transformation of parliamentarians into judges and of the judicial committee into an extraordinary court.” A full parliamentary vote on the committee’s recommendation has been postponed until after the EU’s July report. But Mr Nastase and his supporters are already considering a presidential bid in 2009.

In retrospect, the EU relied too much on individual politicians to back Romania’s anti-corruption drive, notably Monica Macovei, a much-admired justice minister. She was fired soon after Romania joined the EU in January 2007. Membership made the political elites feel they were off the hook. Mr de Pauw offers a bleak verdict. “Many of the measures that were presented, before accession, to be instrumental in the fight against corruption, have been deliberately blunted by parliament or the government immediately after accession…all major pending trials concerning high-level corruption, started just before accession and only after many years of hesitation, have now been aborted and are, most probably, definitely abandoned for all practical purposes.” He also cites the weakening of the role of the National Integrity Agency, meant to limit politicians’ conflicts of interests and verify their assets, and also amendments to the penal code before parliament that will “fatally affect” the investigation of corruption.

All this, he says, shows “the intense resistance of practically the whole political class of Romania against the anti-corruption effort”. Mid-level Eurocrats, as well as some foreign diplomats in Bucharest, agree. The problem is that countries such as France pushed to get Romania into the EU early for their own reasons, whether financial or geopolitical. And the political pressure may now be to cover up, not expose, the problem. If the EU’s July report on Romania is as anodyne as the previous one, suspicions will only grow.