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Economic patriotism fuels populism and demagogy

Central and Eastern Europe has seen tremendous changes since the fall of the Berlin Wall, moving from state-sponsored socialism to market democracy and EU membership in less than 15 years - EurActiv spoke with a leading academic Dr. András Inotai, about the legacy of enlargement, political and social realities in the new member states, and future challenges.

Dr. András Inotai is Director General of the Institute for World Economics external in Budapest, advisor to the Hungarian government during EU accession negotiations, and a visiting professor at the College of Europe.

Let us begin by speaking about the recent summit, including the position taken by Poland during the negotiations.
I think that all in all it was a successful summit and a successful German Presidency. Most of the things the German Presidency was planning to do could be achieved. Of course, at the last minute, there was a lot of discussion about the future of the Constitution, and there were some problems, but at the last minute I think that a compromise was more or less achieved. Of course, it would have been better without this "intermezzo", but it happened.
It has been three years since the enlargement, but it has been over 15 years now since the Berlin Wall came down and the Soviet Union collapsed.

How do you see the transition more globally?
First of all concerning the enlargement, I do not think that it needs to be underlined or proven that enlargement was a success story, and I am definitely against any kind of enlargement fatigue. There is a fatigue in some countries, but it has nothing to do with the enlargement. There have been very few – if any – negative elements that have hindered or blocked the EU's everyday, pragmatic work - either in the institutions or in the decision-making process. If there were setbacks, the setbacks were not produced by the new member countries. The setbacks were produced by the negative referenda in France and in the Netherlands, the sluggish liberalisation of the internal market and growing global competition for which some European countries – and societies, I have to add – were not yet sufficiently prepared. In most cases, the new member countries remained silent, and only in some cases did they try to introduce themselves into the European Union's policy-making process as policy-shapers.
This is mainly due to historical reasons. That for many centuries, all these countries were unilateral policy-takers of different great powers, and then the societies were accustomed to this situation, and they tried to increase their room for maneuver without any strategy, just for pragmatic reasons as a way of withstanding the imposition of the interests of others. They never formulated their own interests. Now, as fully-fledged members of the European Union, they are not policy-takers any more, at least in a unilateral sense. They are policy-makers – and I should say policy-shapers – in a European Union of 27 countries. That is something that needs changing in the political culture of some countries.

And the Polish position at the summit reflects this political culture?
Yes, it does. That was actually a reference to the Polish behavior. On the other hand, I think that it is very important to emphasize that both the old and the new member countries facing the global challenges should reassess the sequencing or the priorities of so-called “national interests”. In the future, I think that when we look at the special interests of our countries, we have to look at them in the European framework, because in many cases, short-term so-called “national losses” are much lower and much less costly than long-term European interests.
The new member countries, including Poland, have a very special responsibility. We are not only responsible for the future of Europe - as is each of the 27 countries - but we are also responsible for the positive assessment of the new member countries. So if Poland is doing something that is disliked in other parts of Europe, it definitely and almost automatically has a negative impact on the assessment of the other countries as well. If Hungary does the same, it has the same implications for the other member countries. We are therefore also very much responsible for the future of Europe and enlargement, because if many countries – or a growing number of countries – feel that these new countries are not behaving as they should, then the question will arise of why should we get more new member countries with the same problems and same diverging behavior.

Was there any pressure on Poland from the other EU-10 member states to adopt a more conciliatory or cooperative approach? How was the Polish position perceived by other new member states?
It was certainly not supported in most member states, since in this concrete issue of the Polish vote proposal, the only country that was openly in favor – at least up to a certain point – was the Czech Republic. All the others were against, and all the others wanted to maintain firstly what is formulated in it, and then of course, what it contained and what has been commonly negotiated in the Constitution.
We would like to keep this, and I hope very much – maybe it is wishful thinking – that when we are talking about and making decisions on the future of Europe, political leaders take responsibility for Europe, and not only for their domestic population, or part of the domestic population. Unfortunately, the European Union consists of nation states, and nation states – the politicians in the nation states – have their own political camp, they have their political supporters, and they would like to adjust themselves to the requirements and expectations of this part of society. We also need to take much more responsibility at society level for Europe, but this is an educational issue as well, not only a political one.

How do you see the future developing, in terms of a new class of leaders coming into power in Poland, Hungary, the Czech Republic – let us say a younger, more dynamic generation?
There is certainly less enthusiasm for European integration than there used to be before membership - this is quite clear. However, I must tell you that most of the experiences gathered in these three years of membership are absolutely positive. This is the same with the old member countries as well, but human beings generally forget about the positive issues. Better to say that they consider the positive issues as something self-evident – from trade to capital flows, from the four freedoms to the many other achievements that have been reached in the process of integration. They are always concentrating on the negative or potentially negative issues. I am sure that most of the new member countries are still more pro-European, than some of the old member countries. The younger generation is definitely pro-European, but there is a danger – or better to say that there are two dangers:
One danger is the very irresponsible “mental contamination” carried out by some politicians in all of the new member countries as well as in the old ones too. This mental contamination is much more costly than environmental contamination. Environmental contamination can be eliminated. It is a question of technology – we do have this technology – and it is a question of financial resources. But mental contamination sometimes needs a generation to be eliminated or reduced. That is the first danger.
The second danger is that if some of the old member countries – maybe even founding countries – act against Europe, for instance through economic patriotism, and the role of the state in blocking normal capital flows or ownership exchanges, then it forms a school in the new member countries. And then it is a very good argument for populist and demagogic politicians who say: “Look, we have been opened up, we have liberalized everything, we have privatized everything, we have a lot of foreign ownership, and if we want to go to another country that made a lot of investments in our country it is impossible.”
So I think that in global development terms this is extremely dangerous, because Europe as such had been accustomed to a kind of feeling – and not only a feeling, the fact – of supremacy over the centuries. It was self-evident that European capital was invested everywhere in the world, but once Chinese and Indian capital wants to come to Europe – and it will do – then immediately we say “That is impossible, they are aliens.” The world does not work like that. Globalization means two-way streets everywhere, and Europe has to get accustomed to it. Benefits are a two-way street, not a one-way street. Here I think Europe still has a learning process ahead of it.

So, some of the challenges faced in the East are obviously the same as some of those faced in the West?
These are challenges for the whole of the continent, but mainly for the most-developed countries and larger countries in European integration. What is deplorable is that this kind of protectionism is on the rise not only against non-European countries, but even within the European Union, which is definitely violating the principle of the four freedoms.

France and Germany made this position clear at the summit as well, with the competition clause that was deleted.
Concerning the Constitution – whether European integration is based on free competition or not – it is a remarkable step back.

You spoke of “mental contamination”. Could you give us an idea, of what kind of ingredients make up this mental contamination? Is it looking back towards the Communist era for past glories? Is it based on nationalism?
First, it is of course the promise – which can never be fulfilled – of bringing back the nice old Communist times where the state was responsible for everything, and people could behave as irresponsibly as they wanted because “father state” was always there and of course expected to solve all the problems. Of course, father state does not have any pennies. It can only solve a problem at the cost of the taxpayer's money, so it is a question of how the taxpayer's money will be re-distributed.
Second, after 17 years of turbulence and transformation – of big changes, most of them positive, I have to add, even if people do not experience it in that way or do not perceive it in that way – a large part of society would like to have a more peaceful time. Peaceful in terms of guaranteed employment, a guaranteed wage, guaranteed living standards or increasing living standards, but unfortunately, the world – not Europe – the world is not going that way.
Worldwide competition or competitiveness is a daily challenge to all countries, not only the Central and Eastern European ones. Then of course there is the unprocessed past. What the Germans did – I mean the West Germans' Geschichtsbewältigung – has not been done in any of the new member countries. In Hungary, for example, we have more or less elaborated or processed the past up to the First World War, but not for the last 90 years. Nationalism is of course one other mental contamination, just because the past has not been elaborated.

There has not really been time. It was suppressed under communism, and then…
It seemed that it was elaborated, but it was practically swept under the carpet after the Second World War in the communist era, in the framework of international communist solidarity. What is however interesting is that it is astonishing that the vast majority of those who are ready to get linked to such ideas and movements are the young people. Young people who have absolutely no personal experience of the past, and who in most cases have no clear idea of how the past was. They do not learn what they should learn in school – why it (nationalism) leads to war. This kind of perception – Weltanschauung – cannot be acquired through the internet. It needs a much higher level of literacy and not computer literacy, but real literacy: traditional, practical literacy - which unfortunately most people do not feel to need any more. It may have, and it will have, long-lasting consequences for all the countries of Europe. And then of course the last point in this mental contamination is sometimes the individual, unrestricted, and highly irresponsible ambition of some so-called politicians – I would almost say a psychiatric disease. It is very difficult to get rid of this behavior. Of course, the politician is always interested in seizing, keeping, or maintaining power, or getting to power – coming into power. That is understandable. However, I think that there are some written and unwritten rules, at least in democracies, which should be observed at all times. That is unfortunately less and less the case in some new member countries.

But overall you are positive about the future?
Absolutely. I am sure that enlargement was a success story. I am sure that the new member countries will catch up quicker than was the case with some Mediterranean countries. I am sure that they still have a huge potential in human capital, which is the most important element of growth. But there are of course also risks looming on the horizon, and we have to be very much aware of these risks in order to develop that kind of politics and those kinds of measures at the European level, not only the national one, which could keep these negative tendencies under control at least. I do not think that the negative tendencies can be truly eliminated, but they can be kept under control, hopefully in all 27 countries plus the Western Balkans, which is the next big challenge for the future of Europe. (