GLOBAL PERSPECTIVES | KOMMUNIKATION GLOBAL - 01 | 2009

"The economies of the region had not only
different growth rates but also different
engines of growth. Domestic consumption,
investments and exports were the three
usual factors for economic growth."
– Dr. Andras Inotai
WINDOW ON EUROPE
IPS: State intervention and ownership is likely to grow everywhere in the world; what will happen in countries
such as Poland, the Czech Republic and Slovakia where free market ideology has played an important
role?
AI: The current crisis and state interventions in the United States and Western Europe constitute a very bad
message to those countries that in the last 20 years were trained and influenced by neo-liberal ideas. CEE
was a very good student of this neo-liberal ideology, and now we see that this ideology may have created
the crisis.
I would be a bit careful with this assessment, but we did criminally ignore the lack of regulation of global
financial markets. State regulation, not direct intervention, is necessary. If this regulation is done at the EU
rather than the national level this will be good because it will deepen European integration, but at the
moment there is a danger that everyone does something at the national level.
IPS: The Slovak government recently warned companies not to lay off employees, adopting a tougher language
towards businesses in a country where car manufacturing is crucial. Is this signalling a new relation
between businesses and politics in the region?
AI: Yes. This can easily lead to the strengthening of national economic policies at the expense of European
economic policies and European integration, but it can also create nationalist ideology. When living standards
are going down, people will be more impatient and they will be quick to blame someone; not their
own governments but Brussels, the Americans -- to some extent this is justified because the crisis started
there -- international financial circles, the New York-Tel Aviv axis, Russia and Germany, or their
neighbours. You will always find an enemy.
IPS: There are fears in Hungary and Ukraine, where national currencies risked collapse, that the substantial
IMF loans provided may have dangerous conditions attached.
AI: We don't know the exact conditions. The main requirement is that the process of cutting budget deficits
should not be brought to a halt. The best is if we don't use these loans at all, they are an umbrella, a message
to investors that the government will fulfil its tasks. It only makes sense to use this loan to pay back
credits with higher interest rates than that of the IMF's money.
IPS: But citizens from CEE do not trust the political class, and tend to see it as corrupt. Are there reasons
to worry about where this money will end up?
AI: There has been a clear counter-selection concerning the political elite. If they lose their position as a
politician most of them cannot do anything, either they don't have a diploma or it is outdated, and that's
why we have so many 'survival politicians', playing the most immoral games to maintain their positions.
IPS: The region has also been known for its Atlanticism. Will the crisis have geopolitical implications?
AI: There are geopolitical implications, but not as a result of the crisis. The crisis is to some extent a consequence
of the already advancing shift in global geography. China and Asia in general have become the
growth centre of the global economy, the Transatlantic region is no longer the centre of future growth.
IPS: For those countries that did not look only westwards, there may be a possibility to export to emerging
economies.
AI: Much will depend on their capacity to reorient exports to countries with markets that are still growing.
China, the Balkans, the Arab countries, India, the Far East and Russia could become new targets of CEE exports.
Poland and Hungary have been very successful in exports to Russia, and Hungary was the leading regional
exporter to China, whereas the Czech Republic and Slovakia rely very much on EU markets, and I don't
know to what extent they will be flexible to go to other markets as well. IPS | GLOBAL PERSPECTIVES �
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