On the Periphery: The uneven development of the European union and the effects of the economic crisis on central-eastern Europe

Global Society

Volumn 25, Issue 2, 2011, Pages 249-266

  Rae, Gavin ^a  

^a NONE

Author keywords

[No Author keywords available]

Indexed keywords

ECONOMIC INTEGRATION; ECONOMIC POLICY; EUROPEAN UNION; FINANCIAL CRISIS; GLOBAL ECONOMY; REGIONAL ECONOMY; SOCIOECONOMIC IMPACT;

CENTRAL EUROPE; EASTERN EUROPE;

EID: 79957505695     PISSN: 13600826     EISSN: 1469798X     Source Type: Journal    
DOI: 10.1080/13600826.2010.548057     Document Type: Article

References (61)

1. Throughout this paper the terms CEE and EU10 are used interchangeably and refer to the countries: Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia. WE and EU15 are used to describe those countries that made up the EU before 2004. For the purpose of analysis both Malta and Cyprus are omitted.
2. U. Beck and E. Grande, Cosmopolitan Europe (Cambridge: Polity Press, 2007).
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4. Andreas Bieler and Adam David Morton (eds.), Social Forces in the Making of the;New Europe;: the Restructuring of European Social Relations in the Global Political Economy (Basingstoke: Palgrave, 2001)
5. D. Bohle,;Neoliberal Hegemony, Transnational Capital and the Terms of EU's Eastwards Expansion;, Capital and Class, No. 85 (2006), pp. 57-86.
6. S. Shields,; Historicizing Transition: the Polish Political Economy in a Period of Global Structural Change-East Central Europe's passive revolution?;, International Politics, Vol. 43 No. 4, (2006), pp. 474-499.
7. Bieler, op. cit.
8. Bohle, op. cit.
9. Bohle and Greskovits,; Neoliberalism, Embedded Neoliberalism and Neocorporatism: Towards Transnational Capitalism in Central-Eastern Europe;, West European Politics, Vol. 30, No. 3 (2007), pp. 443-466.
10. Bohle and Greskovits, op. cit.
11. Passive Revolution is a concept derived from Gramsci who used it to describe a revolution not based upon established societal groups nor a specific hegemonic project. Rather it is one where a section of the national elites connected to the state ally with stronger social forces internationally to carry through a revolutionary change.
12. E. Dauphinee, Faith, Hope, Neoliberalism: Mapping Economies of Violence on the Margins of Europe;, Dialectical Anthropology, Vol. 27 (2003), pp. 189-203.
13. In many respects Gramsci's concept of hegemony was based upon an analysis of the differing relationships between the state and civil society in Eastern and Western Europe.
14. P. Anderson,;The Antinomies of Antonio Gramsci;, New Left Review, Vol. 100 (1976), pp. 17-43.
15. P. Gowan; Neo-Liberal Theory and Practice for Eastern Europe;, New Left Review, Vol. 213, No. 1 (1995), pp. 3-60.
16. M. Stokes; Eastern Europe's Strong Foreign Bank Presence: Potential for Contagion?;, Rge Monitor (2008), available:,http://tinyurl.com/yz346mu.
17. In the CEE economies, excluding the Baltic States, foreign owned banking assets are held by Austria (24.2%)
18. Belgium (8.9%); France (9.6%)
19. Germany (14%)
20. Italy (19.1)
21. Netherlands (4.8%)
22. Sweden (0.4%)
23. other (18.9%). The remaining foreign owned banking assets in the Baltic States are pos-sessed by Germany (24.4%)
24. France (7.2%) and Austria (1.9%)
25. World Bank; EU10 Regular Econ-omic Report;, (2009), available:,http://tinyurl.com/yao7mga.
26. For example, Gowan describes how during the early transition period the United States had sought to support CEE as an export economy and-by particularly promoting Poland- undermine the EU's Common Agricultural Policy (CAP). In response, WE promoted its own hegemony through ensuring that the new division of labour in CEE was governed by WE economic interests. As WE managed to secure its dominance in CEE, the matter of EU enlargement took on a greater importance.
27. World Bank; Growth, Poverty, and Inequality. Eastern Europe and the Former Soviet Union;, (2005), available:,http://tinyurl.com/779o2. (accessed 12 July 2006).
28. H. Hofbauer; Crisis in Eastern Europe: Economic Background, Social Outcome;, Paper pre- sented at the conference ;Actual Crisis in Central and Eastern Europe;, organised by Transform, Prague, 13-14 June 2009, (2009), available:,http://tinyurl.com/mvh8jg.
29. This estimate was based upon an assumption that their economies would grow on average by 5% and that the EU would increase by around 2%, see World Bank; Progress towards the Unification of Europe; (Washington, D.C.: The World Bank, 2000).
30. A. Bieler; The Struggle over EU Enlargement: a Historical Materialist Analysis of European Integration;, Journal of European Public Policy, Vol. 9, No. 4 (2002), pp. 575-597.
31. A. Moravcsik and A. Milada; National Interests, State Power and EU Enlargement;, East European Politics and Societies, Vol. 17, No. 1 (2003), pp. 42-57.
32. P. Copeland; IPE and European Integration: Applying Karl Polanyi's 'the Great Transform- ation'; (2008). Paper presented at the annual meeting of the ISA's 49th Annual Convention; Bridging Multiple Divides;, San Francisco, CA, 26 March, available:,http://www.allacademic.com/meta/p252968_index.html.
33. Estonia was urged to de-liberalise its trade policy before joining the EU and the Visegrad countries were criticised for their liberal tax policies, Bohle and Greskovits, op. cit.
34. Eurostat; GDP per Capita-Annual Data;, Eurostat (2010). GDP per capita is measured here as purchasing power standards with the EU encompassing all of the EU27 states.
35. World Bank; Trade Dynamics and Patterns in the EU10; (2008), available:,http://tinyurl.com/ye4dazu.
36. European Commission; The Economics of Enlargement; (2009), available:,http://tinyurl. com/ycl97au.
37. World Bank; EU10 Regular Economic Report April 2010; (April 2010),:,http://tinyurl.com/y4kozeu.
38. Eurostat (2010), op. cit
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40. World Bank; EU10 Regular Economic Report;, op. cit. These are: Hungary 65.7%, Poland 32.6%, Bulgaria 66.9%, Estonia 85.3%, Latvia 89.3%, Lithuania 70.5%, and Romania 55.5%. The countries where the share of loans in foreign currencies is below 50% are Slovenia 9.6%, the Czech Republic 13.6% and Slovakia 23.6% and Poland 32.6%
41. J. Drahokoupil and M. Myant, Transition Economies: Political Economy in Russia, Eastern Europe, and Central Asia (Hobcken, NJ: Wiley-Blackwell, 2010).
42. Slovenia stands out as a country in CEE that took the most distinct transition path. Before 1989 Slovenia had a level of industrialisation above other regions in Yugoslavia and its GDP per capita was far above the Yugoslavian average. Partly due to the pressure of trade unions the no shock- therapy programme of mass privatisation was carried out and there was only a very partial opening up to foreign capital,
43. J. Mencinger; Slovenia: Alternative Economic Policies in Action;, Der Öffentliche Sektor-Forschungs-Berichte, Vol. 3, No. 4 (2003), pp. 58-63
44. C. Samary; The Social Stakes of the Great Capitalist Transformation in the East;, Debatte, Vol. 17, No. 1 (2009), pp. 5-39.
45. World Bank; EU10 Regular Economic Report April 2010;, op. cit.
46. Eurostat (2010), op. cit
47. ;European car sales jump 16 per cent in December;, M&C News (15 January 2010), available:,http://tinyurl.com/23h2c2s.
48. This came on the back of Hungary reducing its budget deficit from 10% to 3% during the previous 3 years. Hungary is actually an exceptional case within the CEE due to the fact that its debt was built up largely in the public rather than the private sector.
49. The Romanian Prime Minister claimed that if these measures were not imposed then Romania would have to negotiate a new loan from international financial institutions after its current $20bn loan expired in 2011.
50. The impetus to bring down the budget deficit is driven by external and internal causes. As part of the requirements of Poland entering the euro zone the European Commission has given the Polish gov-ernment until 2011 to bring down its budget deficit to less than 3% of GDP and has advised that it cuts it by 2% in 2010. Also written into the Polish constitution is the clause that if public debt crosses 60% of GDP then the next year's budget must be balanced. It is possible that Poland's public debt will cross 60% in 2011, which would mean the government having to introduce stringent public spending cuts and/or tax rises.
51. S. Gill; Globalisation, Market Civilisation and Disciplinary Neo-Liberalism;, Millenium, Vol. 24, No. 3 (1995), pp. 399-423.
52. Gazeta Wyborcza; Szesc lat w Unii na plusie; [Six Positive Years in the EU], 30 April 2010, available:,http://tinyurl.com/6azh65m.
53. Rzeczpospolita; Unia Pomoglo nam Przezyc Kryzys;, 30 April 2010.
54. The EU parliamentary group The European Conservatives and Reformists was founded in June 2009 by the British Conservative Party, Czech Civic Democratic Party, Polish Law and Order Party, Hungar-ian Democratic Forum, Latvian For Fatherland and Freedom, representatives of the Polish minority in Lithuania and other two small parties form Belgium and the Netherlands. With the exception of the UK, Polish and Czech parties other member parties do not play a significant role in their countries. The British Conservative party has particularly been criticised domestically for entering this alliance. Attention has focused on the political biography of PiS MEP Michał Kamin ́ski, leader of the parliamen-tary group and former adviser to President Kaczyn ́ski. Critics have argued that he has a history of anti- Semitism, membership of far-right parties and homophobia. Likewise the Latvian Fatherland and Freedom party has been vilified for supporting and attending parades organised by Waffen-SS veterans in Latvia. Right-wing conservatism in CEE is closely tied to historical events reaching back to or before World War Two. Their reopening and reinterpretation by the conservative right often conflicts with the accepted political consensus in Western Europe.
55. S. Holubec and G. Rae; A Conservative Convergence? The Differences and Similarities of the Conservative Right in the Czech Republic and Poland;, Contemporary Politics, 1469-3631, Vol. 16, No. 2 (2010), pp. 189-207.
56. This has caused a dispute with the Italian trade unions as it is being accompanied by Fiat attempting to raise its productivity in Italy through making shifts more flexible, restricting strikes and limiting benefits such as sick days.
57. The Times; British Jobs and British Workers;, 31 January 2009, available:,http://tinyurl.com/ ctna51.
58. It is also false to see the cohesion programmes as not encouraging innovation themselves inside the EU. One third of the Cohesion funds are devoted to the development of energy saving/renewal technologies and protection of the environment; nearly another third towards supporting innovation and business and a final third towards infrastructure
59. Gazeta Prawna; Huebner krytycznie o pro-pozycji strategii gospodarczej europa 2020; [Huebner Critical of Strategic Economic Proposal Europe 2002], 3 March 2010, available: http://tinyurl.com/5vch4tz.
60. This has been criticised by the Polish PM Donald Tusk: ;The creation of separate institutions is not acceptableandweshouldworkwithintheframeworkoftheLisbonTreaty.Thismeansau nitedEurope;
61. http://www.euractiv.pl/eurowybory/artykul/barroso-i-tusk-za-jednoci-unii -europejskiej-i-przeciw-ograniczaniu-nowych-zasad-zarzdzania-gospodarcze go-do-strefy-euro-001900.