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A good society is unlikely to flourish in central-eastern Europe unless
the EU partnership shifts away from an agenda that mainly benefits multinational
companies.
There’s no doubt
that ‘Building the Good Society’ could represent a fresh start
for pan-European social democracy. The concept of a ‘good society’
has been rendered a cliché in many countries, and is heavily overused
by politicians. Yet the idea that society has its own requirements and priorities,
independent of principal economic actors, has far-reaching and radical implications
in 2009.
The document refers to the need to maintain public utilities as socially
provided goods. However, it doesn’t talk of the systematic way in
which these have been privatised. Particularly in the states of central-eastern
Europe, the process has aimed to create what the late Professor Peter Gowan
referred to as a ‘passive support hinterland for West European multinationals’.
This application of neoliberal economic policy to the EU accession states
has had ruinous social and political consequences. It has given weight to
the cynical Russian proverb from the 1990s, that ‘everything the Communists
said about Communism was a lie, but everything they said about capitalism
turned out to be the truth’.
In 1989 the PHARE programme of technical ‘assistance’ began,
initially aimed at Poland and Hungary, and then at other countries in the
region. The countries became recipients of European money aimed at supporting
the transition process. How this money was routed and distributed became
a crucial question. The answer, simply, is that no one organisation knows.
There was no co-ordination of how the money should be spent, and different
institutions were responsible for administering different parts of the fund.
What is clear, however, is that billions of euros were directed towards
consultancies based in western Europe. These consultancies acted as a ‘Trojan
Horse’ for the interests of Western multinationals. A pattern was
established. Consultants would advise foreign private investors to invest
into certain, cheap, plant. The consultancy would then recommend to the
EU that money should be invested into the same facility. The investors,
whether corporate or private, would profit massively. Programmes to improve
infrastructure also relied on these consultancies to identify and design
projects. The consultancies, by design, would ensure that certain clients
in multinational companies would win the related contracts. The question
of what represented the public interest was usually ignored.
These companies and consultancies required opacity. Therefore it became
necessary to establish and maintain a network of political contacts, and
reward the most helpful politicians with various forms of patronage. This
ensured that debates about how to conduct a transition economy were rendered
obsolete. The administration of these funds corrupted the young democracies
of the region. Suddenly, the electorate mattered less, and society mattered
less. Politics became a business, to be conducted in the twilight.
In the late 1990s, multinational investors descended to buy swathes of stock.
The assets they bought were usually in companies which had maintained a
massive market share by virtue of their previous existence as state monopolies.
Captive markets, a de-unionising workforce, and a relatively undemanding
consumer base, meant that profit margins were healthy. Large amounts of
money and work were being invested into a thin layer of ‘boutique
capitalism.’
Even in the ‘good times’ this led to severe regional imbalances.
In the industrial areas of Hungary, unemployment hit nearly 50 per cent.
There was no trickle-down of wealth. Tax-avoidance and casualisation erode
the fiscal basis for any ‘good society’.
So far, the depression has resulted in three of these ‘peripheral’
EU states approaching perilously close to bankruptcy. For a social-democratic
programme to be credible, we need to have a vision of what an enlarged Europe
should look like. Partnership with new EU countries must be genuine, and
resources provided that will enable these countries to claim a degree of
economic sufficiency, whilst acknowledging our interdependency. Social ownership
must be high on the agenda.
If anyone has any remaining doubts about the status of the accession states,
they should check the website of the London-based European Bank of Reconstruction
and Development. In addition to helping to ‘privatise’ the Hungarian
railway system, the EBRD promises to ‘support the involvement of the
private sector in the provision of public services’. That is the bankers’
agenda for Europe. It’s nothing to do with efficiency, or saving money.
It’s about dangling cash, and raking a profit.
Carl Rowlands is on the steering committee of the Central
European branch of Labour International and is a PES Activist. He works
as a technical service engineer by day, and also writes articles and short
stories on various topics. He lives in Budapest with his wife and son.
To read more articles,
and make a comment, go to
http://www.goodsociety.social-europe.eu
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