national populism and slovak – hungarian relations in - MEK

Zsolt GálNational Populism and Slovak – Hungarian Relations in Slovakia 2006 – 2009. Forum Minority Research Institute Šamorín – Somorja, 2009(Venezuela, 1974–1978); the former three administrations particularly strongly fit the definitionin terms of political goals pursued and economic tools applied (Kaufman –Stellings 1991, p. 16).6 The Bulgarian government was unable to implement a decisive and drastic austerity packageand the consequences were catastrophic: hyperinflation, the national currency’s fall,the banking system’s collapse, a significant GDP decline, mass protests, eventual fall ofthe cabinet and holding early elections. As a direct result of the banking system’s breakdown,17 banks (approximately one third of the country’s banking system) folded; in1996, nine out of ten state-run banks that controlled 80% of the country’s financialreserves posted negative capital reserves and half of all private banks declared technicalbankruptcy. People stood in long lines before exchange offices in order to exchange theBulgarian currency into any foreign currency. With respect to American dollar, theBulgarian currency depreciated by 589.3% in 1996 and by 264.5% in 1997. Due to thecurrency crisis, political instability, financing budgetary deficits by printing uncoveredmoney and strong inflation expectations, the year-on-year inflation rate exceeded 2000%in March 1997. The average annual inflation rate reached 310.8% at the end of 1996 and578.5% in 1997. The gross domestic product dropped by 10.9% in 1996 and by further6.9% in 1997. The currency’s breakdown, the banking system’s collapse and hyperinflationstrongly devalued the population’s savings. In early January 1997, mass rallies andstrikes engulfed the country, forcing the government in February 1997 to agree to callearly parliamentary elections for April 1997. In elections that followed, the ruling socialistparty suffered a crushing defeat (Bulgaria: the Dual Challenge of Transition andRecession, 2001; Tomšík, 1999, pp. 28–32).7 While ‘soft’ populists threaten only parties of the incumbent administration (i.e. they wantto replace them at helm), ‘hard’ populists pose a threat to very foundations of a democraticconstitutional system (e.g. minority rights or independent institutions) and strive tocriminalize their political opponents. In Central Europe, typical representatives of the formerare Fidesz from Hungary or -SD from Slovakia; typical representatives of the latterinclude the HZDS and SNS from Slovakia or various parties in Poland such as the Leagueof Polish Families and Self-Defence but also the Law and Justice (Smilov – Krastev, 2008,p. 9).8 Csaba admits that in the globalized economy of the 21st century, these countries may havelost the leverage to inhibit unsound growth in consumption and credit in a significant waybut still criticizes them for failing to use at least those means they do have on their disposal.Due to free movement of capital as well as the fact that financial sector is mostlyin the hands of large supranational corporations and that banks may also extend loans inforeign currencies, the room for national governments and central banks to influence economicdevelopment through monetary policy continues to shrink. On the other hand, thesecountries failed or were very reluctant to apply available means on the revenue side ofthe state budget (i.e. taxation) as well as available though limited regulatory mechanismsto prevent economy from overheating (Csaba, 2008, p. 594).9 British economist John Maynard Keynes (1883–1946) was convinced that in the time ofeconomic crisis (i.e. insufficient aggregate demand that is accompanied by unused workforceand free production capacities), the government should stimulate economic growththrough increasing public expenditures even if it amounts to ballooning debt; however,Keynes was also aware that the state budget should be balanced in the long term asdeficits produced in the time of crisis should be made up for by surpluses produced inthe time of boom. In other words, Keynes and Keynesians recommend resorting to fiscalstimuli in order to help economy overcome recession and restore economic growth but218