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December 2009

Eastern-Europe - Monthly political report

Presidential elections started and ended December in Eastern Europe. Traian Basescu won in Romania by a hair's breadth, while in Croatia, following the results of the election at the end of the month, serious problems might arise within the governing right-wing. With the exception of Romania and Ukraine all countries have adopted their budgets, Ukraine will probably have to wait for weeks for this, because of the presidential campaign. However a new gas crisis was avoided. In Latvia and Lithuania, the fact that the parliament adopted the budget does not mean that the government has stabilized the situation. In many countries, it will be all the more difficult to make responsible decisions at the beginning of the year because 2010 will be a year of elections - for example in Bosnia, too. Montenegro moved closer to membership in the NATO and the EU, unlike Macedonia, for which in this area the month of December again has not brought positive elements. Serbia has submitted its application for membership. Municipal elections were held in Kosovo and in Azerbaijan. Bulgaria continued judicial reforms. In Russia scandalous incidents were at the heart of politics.

The first important event was the second round of the presidential elections in Romania, won by the incumbent Traian Basescu, somewhat contrary to expectations. The result of the election was unsuccessfully contested by the opposition Social Democratic Party. Basescu after his inauguration, tried to reconcile a coalition with the opposition National Liberal Party, but that ultimately failed, so the centre-right Liberal-Democratic party and the Democratic Union of Hungarians formed a new government, led again by Emil Boc. The PSD saw an exacerbation of its inner fights, that had not been negligible earlier either. The new government's first task was the formulation and the drafting of the budget. Although the budget has not been adopted by the end of the year, it is expected to be in early January. Pensions and wages will be frozen, and the mass dismissals may force the trade unions to protest. In December another presidential election took place: in Croatia, where a serious fight developed only for the second place - the candidate of the opposition Social Democrats, Ivo Josipovic smoothly won the first round. In the end, the other second round candidate turned out to be the Zagreb mayor Milan Bandic (formerly also member of the SDP, but now a right-wing populist candidate). The ruling Democratic Union will have no official, or unofficial candidate in the second round, which - together with the infighting between the Prime Minister and the party's 'Sanader branch' may cause serious upheaval. During the month the new labour law was adopted, and the parliament voted on a failed motion of censure against the Minister of Transport, Bozidar Kalmeta. The outgoing president Stjepan Mesić claimed former Prime Minister Ivo Sanader may have had connection with the disorders related to the sale of INA. The fight against corruption remained in the focus of Bulgarian politics too. The Penal Code was substantially amended by the parliament, while a law, which extends the powers of the Interior Ministry in wiretapping, generated serious debates. The government is set to improve the health legislation, as well as to launch the pension reform in early 2010. This month a major political event was the breakup of the group of the 'conservative scandals party' Order, Law and Justice after the MP Mario Tagarinski left the group under unclear circumstances. The party chairman Yane Yanev, therefore, will not support the government in the future. The opposition Socialist Party threatened with leaving the parliament's bodies because the government dismissed the former labour minister Emilia Maslarova from her position of chairman of a parliamentary committee. Unlike Bulgaria, in the Czech Republic the mitigation of the Penal Code takes effect in January, but a much more important matter is how much of the budget amendments drafted by the Social Democratic Party will be realised, this one being an election year. This almost led to the resignation of the Finance Minister Eduard Janota, after a significant increase in the deficit in December, therefore, it is likely that further budgetary restrictions are needed. The Prime Minister Jan Fischer also indicated that in the future, he would regularly consult with the two major parties. In December, Ondrej Liska was elected chairman of the Green Party - the party is therefore open to coalitions to both directions, but is unlikely to reach the parliamentary threshold this year. Problems with the budget also make it difficult for Ukraine to obtain the next part of the IMF loan. Indeed, the budget is not expected until after the presidential elections in January (although the law concerning the 2012 European Football Championship was again adopted by the parliament). In the country though, already almost everything is about the presidential campaign - beginning from the President's draft constitutional amendments to the mutual accusations of fraud. In this contrast, the fact that Ukraine avoided a new gas crisis seems to be a small achievement. From the part of Russia this is likely to be yet another sign showing that the country's leaders can negotiate with Yulia Timosenko. Moscow, meanwhile, continues to remain in 'modernization fever' although the new trade law that seriously limits market laws may hardly be defined as the wish of the civilian circles supporting Dmitry Medvedev. However - triggered by the death of the lawyer Sergei Magnitsky in captivity - the relevant sections of the Penal Code were amended, and the head of state ordered a major transformation of the Interior Ministry. The President's powers in the field of external policy were increased, now he himself may in some cases, deploy the military abroad. The disaster of the Lame Horse club in Perm left its mark on politics, triggering strict measures.

In Latvia, the conflicts within the government are increasingly visible, after the adoption of the budget. The People's Party openly questions the tax hikes introduced by the government and the necessity of the IMF-loan. The debate is clearly a part of the early campaign before this year's elections, and stems from the political return of the party's chairman, Andris Skele. The People's Party has pledged to withdraw the tax increases. A new source of tensions may emerge in connection with the appointment of the new director of the Privatisation Agency, but the minister of economy, Artis Kampars cannot be sure of his position either. In Lithuania, even though the government managed to adopt the budget and the social constraints (which were then also signed by the President), it is clear that the government's positive image is maintained only by the President, Dalia Grybauskaite - the Prime Minister, Andrius Kubilius is more unpopular than ever. What is more, the Prime Minister has not managed to secure a stable parliamentary majority yet, and the opposition keeps on 'seducing' deputies from the Social Liberal and the United Lithuania groups. In January, also social tensions may escalate. However, the opposition is unable to come up with a realistic alternative to the government. The situation is similar in Montenegro, where the opposition still cannot agree either on a common boycott of elections or on cooperation, even after the controversial Mojkovac local election. One thing though, that was criticised by all the opposition parties was that the government prepared and submitted the questionnaire of the European Commission almost secretly, without asking either the parties or the parliament about it. In December, Montenegro was given the NATO Membership Action Plan as well. The budget, together with austerity measures, was adopted, and negotiations were held on next year's minimum wage. The law on deputies, however, could not be amended before the yearend. The Prime Minister Milo Djukanovic ended long standing rumours when he announced that he would step down before the end of the parliamentary term. Bosnia and Herzegovina, on the contrary, failed to get the MAP from NATO, which is fully understandable, given that the country's politics continue to be chaotic, and the situation is likely to get even worse in 2010, because of the autumn elections. Milorad Dodik, the Prime Minister of Republika Srpska (RS) announced that the entity would hold a referendum on the decisions of the High Representative Valentin Inzko - which may lead to an independence referendum as well. Dodik is on thin ice, as the international community is becoming more and more impatient with his government. In December, nevertheless, positive things also happened in the country: the budgets of the entities were adopted, Mostar elected its mayor after Inzko's steps, and the law on the conflicts of interest was also adopted, however it received considerable criticism because of its leniency. Macedonia seems to be stuck on its road to EU membership as well, as in December the EU Council failed to agree on starting the membership talks with the country. This may also lead to a crisis in the government, should the junior governing ethnic Albanian Democratic Union for Integration decide not to support the government's failures. The country would otherwise be ready for negotiations, except for the ongoing name dispute with Greece. The opposition has been criticising the government for this and for the budget adopted in December, containing 'non productive' investments, like construction projects. In December, Serbia submitted its application for membership to the EU, after the report of Serge Brammertz, Chief Prosecutor of the ICTY turned out to be positive, and the Netherlands agreed to unfreeze the interim trade agreement. The fact however, that Serbia still has not managed to catch the Hague fugitive Ratko Mladic, which triggered the resignation of Rasim Ljajic, the chairman of the National Council overseeing the cooperation with the Tribunal, embitters the joy. The President Boris Tadic announced that the beginning of the year 2010 may see a serious reshuffle of the government, but he did not go into details. The parliamentary relations have also changed slightly, as the Hungarian deputies ceased to support the government because of conflicts around the budget. An important feature of the budget is the massive layoffs. The government of Kosovo may face a significant reshuffle too, after the second round of the municipal elections (which are not entirely over yet, given that in some municipalities the vote will have to be repeated in January). The Prime Minister Hashim Thaci may try to remedy the inner conflicts of the governing grand coalition by the reshuffle. Meanwhile, the investment strategy of the government was approved and the hearings in the case of Kosovo's independence ended in Hague. Azerbaijan also held municipal elections, which were hallmarked by a very low turnout. The governing New Azerbaijan Party won by no surprise, as the opposition did not even run in most of the municipalities. Representatives of the Azerbaijani government continue to be optimistic although the Karabakh conflict was not solved in 2009 either. The President Ilham Aliyev and some government officials threatened Armenia with an armed conflict again.

The upcoming municipal election continued to be a central issue in Georgia as well, after the parliament adopted reforms to the election code, only partly approved by the opposition. The opposition parties are divided on the issue whether to hold primaries in the capital before the mayoral election. Having only one candidate however would certainly have a positive effect for the opposition's performance. The relations with Russia further deteriorated, when in Kutaisi, during the construction of the new Parliament building, a Soviet monument was demolished (which also claimed the lives of 2 people), and when the airline connection could not be reinstalled between the two countries. On the other hand, South Ossetia still refuses to release two Georgian hostages. In December, the government changed too: in addition to the introduction of two new ministries, the education minister was replaced. A significant reshuffle took place in Belarus, where the new ministers all have a stricter stance on their portfolios than their predecessors, even though this does not really matter in such a strong presidential system. Belarus sealed a gas agreement with Russia, but failed to agree on oil supplies, which caused delay in oil transports in the first days of the year. At the beginning of the year, the Russian-Kazakh-Belarusian Customs Union entered into force. Several negotiations of the functioning of the Union were held in December. Belarus will receive the next instalment of the IMF-loan. Armenia also received credit, after the government had adopted the budget together with next year's anti-corruption program. The latter will be started by the officials' declaring their properties. Next year will see the beginning of student loans and business rules are also being modified, which may turn out disadvantageous for small- and medium-sized enterprises. In January, the constitutional court will pass its sentence on the Armenian-Turkish protocols, which the opposition Revolutionary Federation is still protesting against. In December, the opposition National Congress split twice, which meant also that for the first time since its establishment, members left the alliance, probably because of a softer stance of the alliance on the government. The opposition was split in Moldova as well, where, after another failed attempt to elect the country's president, Vladimir Turcan, a prominent member of the opposition Communist Party left the party's group together with three other members. Later he might be willing to cooperate with the government. The congress of the ruling Liberal Democratic Party decided that the party would identify itself as a conservative party in the future. The junior governing Our Moldova Alliance was filled with inside struggles, after the party's chairman, Serafim Urechean was re-elected under controversial circumstances. The government meanwhile passed a decision allowing people with double citizenships to have jobs in the public sphere. In Albania the split of the opposition is exactly what may save the parliament's work, provided that a number of Socialist deputies will - as they had promised - return to the parliament in January. The dispute of the government and the opposition was characterised by protests and ridiculous events in December as well: a hotel, under construction, belonging to the family of a Socialist deputy was destroyed in the capital, while the Socialist Party initiated a 'check on the mental capacities' of the Prime Minister Sali Berisha at the constitutional court. Reforms, however, continue to be adopted. During the month a package against organised crime was discussed by the parliament, it adopted a border agreement with Greece, and the governing Democratic Party held its congress.

The Polish parliament may also discuss important reforms as well, as the Prime Minister Donald Tusk caused a considerable uproar with his plans to amend the constitution. According to the original proposal, Poland should change to a parliamentary system, significantly curbing the powers of the president. Later, due to the resistance, the proposals were fine-tuned. A reform of public finances is also expected to be introduced in January, while the senior governing Civic Platform is more and more divided between the Prime Minister and his former deputy, Grzegorz Schetyna. The environment minister Maciej Nowicki resigned because of his disagreements with the Prime Minister. This and the composition of the so-called 'gambling committee' were the main topics in December. The government was able to agree with the US on the deployment of Patriot missiles, but it couldn't agree with Russia on gas imports. The neighbouring Slovakia may see a reshuffle in the new year as well, reducing the number of ministries. During the last month of 2009, the report concerning the scandalous sale of emission quotas to the Interblue group was compiled and approved, as well as the measures to apply the law on the state language, this latter ignoring diplomatic agreements. The Prime Minister fired the complete management of the Slovak Land Fund because of a disputed contract of land sales. Another corruption case was the main topic in Slovenia, where the Patria case from the previous term was raised again and - combined with other cases - led to the dismissal of the environment minister (formerly defence minister) Karl Erjavec, causing tensions within the government, in the middle of the pension and the health care reforms. In December, the Prime Minister Borut Pahor tried to reconcile the conflicts by consulting with parties. The meeting was not attended by the minister of economy, Matej Lahovnik, who expressed criticism towards the disagreements within the government. The leader of the opposition, Janez Jansa, however, does not seem to be able to take advantage of the situation: only a small part of the Slovenian society agree that Jansa was right when calling for a series of protests against the government in 2010 because of a disputed decoration of a former state security officer. A leader of the Estonian opposition, the chairman of the Social Democratic Party, Jüri Pihl also made a silly move virtually accusing the Prime Minister and two other ministers with treason at the state security service. Pihl later had to apologise to the ministers. The governing majority in the parliament adopted the budget and the new payment system for officials with the help of the Green deputies. However, a serious debate is going on about the budget of Tallinn, stuffed with loans which in turn may threaten the planned introduction of the euro. The Centre Party made further gestures of courtesy towards the Russian minority at its congress, in which ethnic Russians were elected to the party's presidium.

In January, the new president of Croatia will be elected, and Ukrainians will also vote for a new head of state. Romania and perhaps Ukraine are expected to adopt their budgets. A crisis may threaten the Latvian government, while in Lithuania social protests may make the government's work difficult. It turns out whether the Moldovan and the Albanian opposition will continue to split, and whether this will affect the work of the parliaments. In Poland, the government will draft reform proposals.

10 January - The second round of the presidential election in Croatia.
17 January - The first round of the presidential election in Ukraine.