The Populist Effects of COVID-19

How Some in CEE Feel Left Behind

11 January 2021

Visegrad Insight

Europe has had to contend with the effects of a sustained barrage of crises for over a decade.

Starting with the fallout from the financial crisis of 2008, followed shortly after by the Greek insolvency issues and accompanied social unrest, then the waves of migration stemming from dire economic environments in some African and Asian countries as well as refugees fleeing the violence of the Syrian civil war and other related military engagements to the COVID-19 pandemic.

This says nothing of the sustained attack from populist parties making large strides with the electorate by giving disharmonious solutions to the societal problems facing European countries today as well as the Eurosceptic forces intent on dividing the union which did result in the loss of one established member.

All in all, it is rather remarkable that the EU has been able to survive, more or less intact.

Opportunities not lost 

The Greek crisis did lead to a reformulation of the financial instruments of the EU, and today they are far more integrated than they were, placing them in a better position to fend off many of the challenges mentioned above.

Moreover, it has proven the EU to be a more stable economic concept which is attractive to investors from aboard.

Even in those recent cases where borders had to be temporarily re-established to curb the communication of the COVID-19 virus, there was never any question that they would once again be dropped after the number of new infections fell; this was not a de facto position for many 15 years ago.

Taking this into consideration, the pandemic has been seen as yet another test, but one that we are, in general, coming out of from a more positive outlook of the Union.

The next budget has been agreed upon, albeit with some temporary disagreements from Poland and Hungary – and for those living in those countries perhaps the pandemic has felt like it has strained relations with their fellow members – but the EU has been able to address the issues while not abandoning their principles.

Communities far afield

Over the past several years, diasporas from Central European states have been established across the region as well as in Berlin, Paris, London and Brussels. Perhaps this is not surprising for the Poles, who always have had a large expat community, but for the Hungarians, Slovaks and Slovenes, this new globalised world has become a reality with tangible effects.

There has been a convergence of standard of living and GDP, so when these populations return home even for visits, the changes are less dramatic, and a feeling of unity can blossom.

Financial stability and future outlook

Debt due to borrowing and lower economic output has changed the financial situation of the EU, as it has for all nations of the world, though it should be mentioned that not all EU countries are in the same position as this depends on whether their new liabilities are from domestically-denominated or foreign-denominated debt.

For countries like Czechia, Hungary and Poland, they need to be careful not to indebt themselves in foreign currency, but transparency in what you have borrowed is essential to reassure foreign direct investors.

Regardless of the country-specific scenarios, for the first time, there will be European institution indebtedness, new mechanisms to distribute EU funds as well as the next Multi-annual Financial Framework in general.

Some in Central and Eastern Europe might be – or at least feel like they are being –  left behind by those enacting change at the European level, especially if they are in danger of losing out on funds.

This could lead to Eurosceptic forces gaining ground in some local or national elections, but on the whole, the COVID-19 pandemic has shown Europeans that they will fare better together than apart.

 

This is a summary of a discussion with Zoltán Pogátsa (Associate Professor, University of Sopron) and Joanna Tyrowicz (Professor, University of Warsaw) at the New Europe 100 Forum 2.0 on 10-11 December 2020, edited by Galan Dall, Editor-at-Large of Visegrad Insight. Find out more about the New Europe 100 network here. For updates, follow us on Facebook, Twitter and LinkedIn.

The interview is part of a project supported by the International Visegrad Fund.

 

 

 

 

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