Aug. 6 (Bloomberg) -- The European Union’s failure to resolve the euro crisis is hammering Greece, Italy and Spain. It’s also unraveling the weaker democracies of Eastern Europe.
The most recent example is Romania, where a bare-knuckle struggle for power is under way, leading to a still unresolved referendum to impeach President Traian Basescu. Basescu is a political bruiser, but the rival who is trying to remove him, Prime Minister Victor Ponta, has trampled the separation of powers and inflicted real damage on the country’s fragile institutions, for example, firing the ombudsman and seizing powers from the courts and parliament.
Ponta is taking a page from the playbook of neighboring Hungary’s populist leader, Prime Minister Viktor Orban, who tried to seize control of the central bank and other institutions. In Serbia, meanwhile, recent elections elevated a former senior member of the ultranationalist Serbian Radical Party to the presidency, and the onetime spokesman for former Serbian President Slobodan Milosevic to prime minister. This as Serbia is bidding to join the EU.
These politicians owe their rise to the financial crisis. It made their predecessors -- and Basescu -- deeply unpopular, because they racked up excessive debt, imposed harsh austerity measures or simply failed to roll back the tide of high unemployment and low growth.
Orban and Ponta have drawn the ire of the EU for changes that risk destroying years of effort to build democratic institutions in former communist states. The European Commission last month issued Ponta a list of 11 demands to correct the authoritarian drift. He says he’ll comply, even as he carries out what he calls a “democratic reset” in Romania. We’re skeptical.
As incumbent parties fall across Europe, this trend may be more dangerous for the countries in the east. Romania, Serbia and to a lesser degree Hungary are much poorer than their western counterparts and have younger and weaker democratic institutions. The European Commission laid out in a July progress report the gains that Romanian democracy has made since 2007, including more independent courts and the introduction of an ombudsman. These are the improvements now being rolled back.
Despite the commission’s best efforts to browbeat Ponta into line, uncertainty about the future of the single currency and commitment to the EU project as a whole is making the job harder, reducing Old Europe’s authority and gravitational pull. If countries that have highly developed infrastructure, hundreds of years of unbroken democratic tradition and the ability to put rockets into space can’t keep their fiscal houses in order and do what it takes to fix the euro, why should the leaders of Eastern Europe heed their advice?
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