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August 2009

Eastern-Europe - Monthly political report

The month of August - despite the tangible expectations before the autumn political season - did not bring a veritable off-season in the region. In Moldova, the new governing coalition was formed, but there are still a lot of unanswered questions. The formation of the Albanian government is underway as well. The Czech parliamentary campaign continues, but the election was postponed by the Constitutional Court. In Lithuania, Romania and Montenegro political scandals were on the agenda. The post-Yugoslavian region as a whole is expecting a 'hot autumn', while Baltic States debate the newest anti-crisis measures. The new Bulgarian government started a 'witch-hunt' against Socialists. Russia, instead of solving its inner problems, again tries to gain strength abroad. This time, Dmitry Medvedev interfered in Ukrainian politics. Armenia and Turkey made a step towards a thaw in mutual relations.

The month of August brought the most interesting events to Moldova - after a repeated early election in July, the parliament held its first sitting. The centrist Democratic Party and three liberal opposition parties formed the coalition 'Alliance for European Integration'. However, the coalition will not have the necessary majority to elect a president, unless a part of the Communist Party's deputies supports Marian Lupu, the chairman of the Democratic Party, the likely candidate of the future government. The incumbent Vladimir Voronin himself announced his readiness to resign, although his party made a constitutional complaint against the election of the chairman of the Liberal Party, Mihai Ghimpu to the post of speaker. Only September will tell whether a new order is in perspective for Moldova: even the coalition parties give only 50% chance to the success of the presidential elections. The Albanian government is in formation as well, although the parliament will convene only in September after the June election. The coalition of the Socialist Movement for Integration (LSI) and the governing Democratic Party is contested even within the LSI. The party's chairman, however, is a firm supporter of the new government, which has already started to work on a plan of economic stabilisation as well as on quite surprising drafts, like the legalisation of gay marriage. The Socialist Party which lost the election will boycott the parliament (this does not come as a surprise in Albania), which is also a condition for the party's chairman Edi Rama to remain in his position. On the party's congress at the end of the month, the opponents of Rama declined on their candidacy. Another important party congress will be held soon, this time in Russia. The governing United Russia party will have to make serious amendments to its party programme because of the economic crisis. The congress will also be a preparation for the October local elections, which are contested by many in advance. The government, meanwhile, is more and more desperately trying to get a grip on the situation in the Northern Caucasus. In August, the injured President Yunus-Bek Yevkurov was reinstated as the head of state of Ingushetia, and started with replacements in the government. Besides the problems with public safety, the IMF disapproved of the Russian anti-crisis plan, although, according to official statistical data, the region has started to come out of the crisis. Some estimate that next year's budget deficit may be two-digit. The government is trying to interfere in corporate loaning through loan rates. Regarding foreign policy, Russia strengthened its positions: President Dmitry Medvedev openly and strongly interfered in the Ukrainian presidential campaign. After the parliament had overridden the veto of the President Victor Yushchenko, it became sure that Yushchenko's successor will be elected on 17 January. The Kremlin openly supports the opposition candidate Victor Yanukovich: the new Russian ambassador to Kiev cannot occupy his position unless Ukraine gives up its 'anti-Russian' policies. Yushchenko is trying to keep his version of constitutional amendments on the agenda by advocating a referendum on them. The parliament's autumn session started, but deputies carried on exactly where they left off before the summer break, the legislature being unable to work. The Prime Minister announced that the budget will be worked out together with the representatives of IMF, and that gas transit prices will be raised. The state of Bosnia and Herzegovina was also unable to function correctly. Although the cantons of the Federation adopted the anti-crisis plan of the government, the different pressure groups again reacted by calling for protests. The High Representative Valentin Inzko had to intervene in several occasions: first, by enacting an interim budget in Mostar, then issuing a law on the inventory of state properties, after politicians had been unable to do so. Ethnic tensions are becoming an ever-growing problem: the Croat Lidija Topic did not assume the post of chief negotiator with the EU, because Croat ministers are boycotting the Federation's government. The reason for this is an everyday policy debate. Ethnic tensions are growing again in Macedonia as well: the opposition Democratic Party of Albanians resented 'violation of minority rights' on the 8th anniversary of the Ohrid Agreement, and called for the broadening of these. Till then, the party will boycott the parliament. In the meantime, the legislature is adopting laws necessary in order to start accession talks with the EU. Out of the three important laws, there is only the law on public servants remaining, but another condition for starting EU-talks is the approval of Greece, which is questionable. Because of the fall in industrial production the government turned to the IMF and has approved a new austerity package. This time, state investments will be stopped. In the neighbouring Bulgaria the economic and political cleanup is underway as well. The IMF allowed the country to draw 474,5 SDR, while the government announced plans to save BGN 2,5 billion and to join the ERM2 phase this year. There will be no tax hikes, but salaries and social spending will be frozen. Meanwhile, there is an 'official witch-hunting' in political ranks: besides changing all the regional governors, the government calls to account anybody, who may have connection to the previous government (including ministers). A new office was created to handle EU-funds. The goal is to recuperate frozen funds.

In Lithuania a serious personal change is to be expected as well. The speaker of the parliament Arunas Valinskas, after having torn apart his party, was accused of having good relations with a criminal group in Kaunas. Valinskas denied the accusations, but he is almost sure to be ousted in September. The speaker was also accused of the falsification of signatures before the May presidential elections. The President, Dalia Grybauskaite signed the majority of anti-crisis measures, but vetoed the 10% reduction of maternity payments. Next year, the government wants to reduce the number of public servants as well, by 20%. The relations with Russia have become tenser, with Moscow continuing the trade-war with Lithuania after Belarus.

The Belarusian government announced thorough reforms in the field of human rights in order to participate in the Eastern Partnership. An important step of this could be the abolition of the capital punishment. Besides all this, however, Belarus made concessions to Russia as well in the field of the Collective Security Treaty Organisation, and Dmitry Medvedev met Aleksandr Lukashenka in Sochi. The IMF, meanwhile, assessed the country's anti-crisis programme, declaring that the country needs $3 billion in loans. The Latvian government negotiated with the Monetary Fund as well. In the end, the governing coalition agreed on widening the tax base, but presumably this will not be enough. A further tax hike, however, is disapproved by the junior governing People's Party, several ministers of which came into conflict with Prime Minister Valdis Dombrovskis, thus the party may pose a serious threat to the government. The Prime Minister, by the way, is trying to bring the political right together in a coalition. His party, New Era has been joined by the Civic Union and the Society for Different Politics. The coalition is not stable in the neighbouring Estonia either, although the situation is not critical. The sudden hike in VAT rates, contested by the chancellor of law triggered a debate, followed by a third, debated austerity package, besides the general policy of retrenchment, prescribed by the ministry of finance. There is a conflict regarding the appointment of the Estonian EU-commissioner as well: the Reform Party prefers the incumbent Siim Kallas, while the junior governing Homeland- and Res Publica Union wants an unaffiliated commissioner. In Romania, on the contrary, there is still a permanent crisis in the coalition. In August, for example, the two coalition parties quarrelled over the method of cutting the public sphere's expenses by 20%, and there is also a conflict on which laws should the government assume responsibility for, and on the two different versions of the educational reform, preferred by the ministry and the president respectively. There are also ongoing protests: judges against the unitary salary law, and students against the educational reform. The coalition, however, stays, because neither of the parties is interested in breaking it up. All this is accompanied by various scandals: besides the investigation on the minister for tourism, Elena Udrea (which may cause serious damage to the political right), the President Traian Basescu found himself in a conflict of interests because of his brother.

The Montenegrin governing coalition was shaken by an inconvenient scandal too. The mayor of the capital, Miomir Mugosa, also a member of the governing Democratic Party of Socialists hit a journalist, and, as a consequence, the opposition drafted a vote of no confidence against him. The junior governing Social Democrats had been pondering for a long time before, unofficially, they opted for standing out for Mugosa. Deputies, in the meantime, were working on the reform of local authorities and the minority part of the electoral system. The autumn may be marred by a wave of strikes: teachers may cease working because of their demands for higher wages. In Croatia, the government is expecting a hot autumn as well. More than twenty organisations announced protests against the government for September only. The popularity of the government hit rock bottom, in spite of steps achieved in the Slovenian border dispute, as a result the cabinet suggested prolonging the mandate of President Stjepan Mesic, thus avoiding a crushing defeat at the presidential election next year. The senior governing Democratic Union is divided on the question of candidates anyway, but it is almost sure that neither the hardliner Andrija Hebrang, nor the moderate Nadan Vidosevic will be able to win. Preparations for the presidential election are visible in Poland too, although here parties have more than a year to get ready. The Prime Minister, Donald Tusk, is already paying attention not to support overwhelmingly liberal draft laws, because the popularity of his party is decreasing. The main issue of the month was next year's budget. The government affirmed several times that no tax hikes will be included in the budget, the cabinet wants to raise incomes by speeding up privatisation instead. The government would also give a clashing response to unions protesting against the selling of companies by tightening rules affecting trade unions. The speech of the Russian Prime Minister Vladimir Putin, in which he admitted the partial responsibility of the Soviet Union in the outbreak of the Second World War, caused a considerable uproar and division.

A proposal to raise taxes caused turmoil in Slovenia too. Finance minister France Krizanic wished to impose further tax rates on people with higher incomes, but this was announced so suddenly and the idea received such a strong opposition from the part of junior governing parties that it was quickly abandoned. The Prime Minister Borut Pahor would raise the VAT instead. The parliament - together with the budget amendments - will soon debate the law on courts and the health care reform. Meanwhile, the Croatian border dispute may be settled soon. The solution, according to preliminary information, would be a condominium imposed upon the disputed territory. At the same time, the Czech government is preparing the draft budget for 2010 as well. The government of Jan Fischer, in office until the early election, suggested raising the VAT, but it is questionable whether the parliament will be able to adopt the budget in time, as the Constitutional Court's recent decision may postpone the vote by even a month. The campaign, nevertheless, is underway. The Social Democratic Party came up with a strong left-wing programme, containing progressive tax system and pension hikes, while the new conservative TOP09 (with popularity around 10%) advocates a smaller state. Shadowy cases surrounding the leader of the political right, Mirek Topolánek are also part of the campaign, ranging from pictures of him negotiating with suspicious businessmen to an attack against him a week later.

Also in Kosovo, an election (the November local election) was the main issue in August. The Central Election Committee decided twice - in spite of objections of the opposition - not to install cameras into voting places. Many were protesting against the EULEX mission: ethnic Serbs disapproved the instalment of customs on the border, and the government protested against a policing agreement sealed between EULEX and Serbia without the Kosovo authorities. The government started large-scale projects, such as the highway Vernice-Merdare, but on the North riots are an everyday phenomenon. The situation is similar in the Presevo Valley of Southern Serbia, where ethnic Albanians are in minority. The Serbian government, however, had more important things to deal with. The adoption of the new law on information was a close call, and it could only postpone the threat of the crisis in the government (with the help of the opposition Liberal Democrats). An undisputable success is that the government managed to agree with the IMF on avoiding tax hikes. The government will economize money on the reform of the administration, although the details are still not sure. According to the plans, the number of ministries will be reduced by either 5 or 10, but this is a delicate topic for the junior governing parties, especially for the Socialists, who abstained from voting for the law on information. In Slovakia as well, a controversial law was the main topic. The law on the state language triggered protests from both of the Hungarian parties, and a diplomatic quarrel from the respective governments. The government also had to contain the growing number of extremist protests, and tackle the problems with some ministers. Viliam Tursky is the second minister of environment from the National Party this year to be dismissed, what is more, the Prime Minister Robert Fico announced that he would take away the party's right to nominate the minister. The minister of agriculture, Stanislav Becík was recalled by his own party, the Movement for a Democratic Slovakia, because of his having gotten too close to the Prime Minister. The opposition was divided on the state language act, but expressed a somewhat common opinion on the corruption cases.

The Armenian opposition also failed to build up a common front. The differences are apparently too great in the question of Karabakh and the Turkish relations. The two matters, closely intertwined became tense again, as the Armenian government issued a declaration (together with Turkey) on opening the common borders. This however does not contain any of the conditions expected by nationalists in the question of Karabakh or the Armenian genocide. The income of the budget lag behind the expectations, but the ministry of economy is now expecting 'only' 12% recession. Various loans were absorbed to finance the state investments. The thaw in the Turkish-Armenian relations caused uproar in Azerbaijan as well. The foreign ministry warned that should the peace talks remain without success for a long time, the government may use military force to regain the occupied territories. Nevertheless, the Azerbaijani government may hope for the best, which is marked by the parliament's approval of the plan to deactivate landmines. Meanwhile, parties are preparing for the December local elections, the governing New Azerbaijan Party is campaigning in the countryside, but the opposition will be able to set up candidates in the majority of local authorities as well. In Georgia, local elections will be held earlier than stipulated by law, and some by-elections will be postponed until then. The detente is marked by the willingness of one of the opposition leaders, Irakli Alasania to negotiate with the government and the president, although there were no talks on effective power-sharing. After quitting from CIS, a new minister for economy, Zurab Pololikashvili was appointed, as well as a new defence minister, the hardliner Bacho Akhalaia. The election of the new ombudsman, Giorgi Tughushi was supported by the government.

In September the new Moldavian and Albanian governments will be formed, and the new President of Moldova elected. The Czech electoral campaign will near its end, and deputies will decide the exact date of early elections. Russia will prepare for the local elections on 11 October. It will be decided whether Bulgaria will get back the frozen EU-funds. The speaker of the Lithuanian parliament will be ousted. The countries of the former Yugoslavia will face a tough autumn.

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