Central Europe Fractured

Scenario 2

1 October 2018

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The sovereigntist and illiberal trend that is so strong in Central Europe fails to gain traction across the continent. While this trend remains confined to the region, it produces an array of political regimes from an effectively authoritarian and nationalist variety in Hungary to a mixture of democratic paternalism and patriotism elsewhere. Meanwhile the EU, led by a core of older members, overcomes the bloc’s protracted malaise and enforces democratic and rule of law standards. Central European states must choose their place within, or outside, the European project. The four states opt for four very different futures, spelling the end of Central Europe as a coherent political region.

Led by a reinvigorated Franco-German tandem, the EU gradually finds a way out of the crises that have nearly wrecked the bloc over refugees and migration, the eurozone, and domestic and regional security. With EU stabilisation and even progress becoming increasingly obvious from 2020 onwards, the Europe-wide political pendulum starts to swing again.

However, nationalist impulses remain comparably stronger in Central Europe given a confluence of two factors. Many citizens remain regretful of the sweeping transformation they had to endure after 1989, and they harbour grievances over having been colonised by Western capital, culture and politics. An imbalanced political landscape provides nationalist and populist forces with a competitive advantage, not least after having been in government and cemented their political, business and media control over many years.

This specific political culture continues to set apart Central Europe from the remainder of the EU. This contrast will become more frequent and harsh, whether in the forms of a multi-speed integration or EU sanctions over illiberal regresses. Rather than finding a regional answer, each country of Central Europe is likely to produce its own solution.

Poland is the earliest to seek such an answer. Its parliamentary and presidential elections in 2019-20 centres around the EU vs. Poland dichotomy, through which the nationalist Law and Justice (PiS) government tries to defend its power amid a strongly pro-European society. PiS wins the election but fails to defend its absolute majority, forcing it to govern in coalition with a moderate and pro-EU ally. The subsequent presidential election propels into office a clearly pro-European and politically independent head of state, who further limits PiS’ leeway.

This domestic opening meets with a new EU approach that leaves behind past disputes and appreciates the critical position that Poland holds for the cohesion, economy and security of Europe.

In an effort to bolster the more moderate political leadership in Warsaw, Brussels agrees to a substantial package of benefits.

Poland is guaranteed to remain a large net recipient of EU funds under the bloc’s next multiannual budget as well as a new European Security Initiative, which includes major investments in Poland as the key state on the EU’s Eastern flank. Poland’s political role will be upgraded, portraying and treating the country as a crucial member of core Europe despite its non-adoption of the euro.

In contrast, Hungary – Poland’s erstwhile illiberal peer – finds itself in increasing political isolation. Abroad, Prime Minister Viktor Orbán has to bury his ambitions to become the Europe-wide leader of a sovereigntist and illiberal revolution.

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His Fidesz is finally ejected from the European Peoples’ Party, and his once-thriving relations with national conservatives across Europe wither. At home, his political grip over the country is becoming tenuous. Economic stagnation sets in, resulting in part from the drastically reduced EU transfers which were a response to Orbán’s neo-authoritarian rule. The far right, which Orbán set out to contain, raises its head ever more aggressively. The regime’s only lifeline both politically and economically are alliances with China and Russia that are growing closer by the day.

In this situation, Orbán decides to tie his survival to a referendum on Hungary’s EU membership, which is held to coincide with the 2022 parliamentary elections. A massive government-funded anti-EU campaign precedes the referendum, pro-European voices are greatly disadvantaged in the run-up to the poll and Hungarian voters abroad are systematically excluded from the ballot. As a result, a slight majority supports Hungary’s exit from the bloc. As a lesson from the United Kingdom’s no-deal disaster a few years earlier, Budapest determines that its best option is a Deep and Comprehensive Free Trade Agreement along the lines of those concluded with Eastern Partnership countries. By 2025, Hungary leaves the EU after being a member for a little less than a quarter century.

The other Central European state where a referendum on EU membership is a real possibility is Czechia.

The country’s populace has long been lukewarm about EU membership, with support levels far below those of its neighbours. Euroscepticism gains stronger political representation than ever before, with the country’s leadership and two fringe parliamentary groups openly questioning Czech membership in the EU. Public sentiment and political pressures lead, after a period of protracted government instability, to a referendum being called and taking place in 2020.

A heated campaign effectively pits aggressive identity politics against the strong economic benefits that Czechia enjoys from EU membership. When the final tally shows a narrow victory for the Czexit camp, the country’s famed pragmatism gains the upper hand. A compromise is agreed that has Czechia leaving the EU but staying in the single market. Modelled on Switzerland, this arrangement satisfies both nationalist Czexiteers and market-oriented Czemainers, and is least disruptive toward the remainder of the EU that fully surrounds Czechia.

Slovakia, finally, remains at the core of European integration. Although it continues to see political assaults on liberal democracy, the rule of law and EU membership, Slovak resilience to these temptations exceeds that of its Central European neighbours.

Slovakia also benefits from the political uncertainty over the EU membership of Czechia and Hungary, providing for a more stable, and thus more favourable, location for private investment and EU funds. Politically and economically, the smallest among the Central European states has the clearest perspective.

These divergent paths, by 2025, tear Central Europe apart. Alliances diverge again between European and non-European powers, and bilateral disputes are bound to return. Economic growth is contrasted with stagnation, occurring just across the border. In short, the region sinks back into some of its old ills, though hopefully not the worst.

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