La crisi economica scatena violente proteste in Est Europa
● La crisi economica internazionale, colpendo con forza l’Est Europa, vi ha fatto emergere le tensioni politiche e sociali che da tempo covavano,
o Est Europa dove, dopo alcuni anni di rapida crescita, in alcuni casi a due cifre, e l’emergere di una piccola borghesia, ora si prevede un brusco crollo dell’economia e delle illusioni che il capitalismo possa garantire miglioramenti economici e sociali.
o Collasso URSS e regimi stalinisti dell’Est (primi anni 1990), industrie locali chiuse o svendute ad investitori esteri; il loro sviluppo economico dipendeva dai flussi di capitali esteri;
o Per ridurre i loro costi, gruppi internazionali come VW, Renault, Nokia hanno delocalizzato nei paesi dell’Est Europa, appoggiati da una elite proveniente soprattutto dai vecchi quadri stalinisti, che hanno loro spazzato la strada da tutti gli ostacoli politici allo sfruttamento.
o I gruppi internazionali, che hanno prima intascato lauti profitti grazie ai bassi salari, stanno attuando tagli occupazionali.
o Le Banche occidentali stanno ritirano i loro investimenti; le elite dominanti, intascate enormi ricchezze tramite la privatizzazione di proprietà statali, fanno ora pagare la crisi alla popolazione, in accordo con UE e FMI.
o Venuti improvvisamente a mancare i capitali esteri per la crisi finanziaria, ne sono derivati enormi problemi per
● gli Stati est-europei sono stati finora salvati dal fallimento grazie al sostegno internazionale, dato che la bancarotta di uno di questi paesi avrebbe conseguenze drammatiche su tutta la regione, su bilanci statali, banche ed investitori.
● Tesi Wsws: Le difficoltà dei paesi est-europei rappresenterebbero un rischio per la stabilità politico-sociale dell’intera Europa, posizione condivisa da alcuni giornali borghesi:
o la tedesca Süddeutsche Zeitung: la grande crisi potrebbe spaventare mortalmente questi paesi, che da poco hanno scelto la democrazia. Stanno passando da un boom economico a una forte recessione senza una fase di transizione. Il 70% dei polacchi crede che il governo filo-europeo di centro-destra di Donald Tusk non sia in grado di controllare la situazione. La loro fiducia quasi mitica nel capitalismo occidentale è stata scossa nel profondo.
o Financial Times Deutschland (FTD): gli affari nell’Est Europa rappresentano oggi il maggior rischio per le banche occidentali, in particolare quelle di Austria, Italia, Francia, Svezia e Grecia, i cui impegni nell’area ammontano a circa $1500 MD;
o le sole banche austriache hanno crediti di €224MD in Est Europa, pari al 78% del PIL austriaco complessivo;
o per impegno finanziario nell’Est seguono nell’ordine Belgio (per 1/3 del suo PIL), Svezia (1/4) e Grecia (1/5);
o in particolare sono fortemente coinvolte anche l’italiana Unicredit, la tedesca HypoVereinsbank (con la filiale Bank of Austria), la francese Société Générale, la belga KBC.
o Per le banche austriache la perdita di anche solo il 10% del valore di questi crediti in Est Europa significherebbe una perdita pari a circa il 7% del Pil austriaco; se l’intera area est-europea cade in forte recessione tali perdite saranno 2-3 volte maggiori.
● Nove grandi banche hanno formato una lobby per premere su UE e BCE perché sostenga l’Est Europa, con il principale obiettivo di garantire i propri investimenti. Un ruolo rilevante in questa iniziativa l’ha avuto Austrian Raiffeisen International.
o FTD porta alcuni esempi di tali conseguenze: Griffin Eastern Europe Fund ha perso il 63% del suo valore in un anno; Julius Bär Black Sea Fund, perso l’80% dei suo capitale in 12 mesi;
o Nel 2008 l’Ungheria è stata salvata dall’iniezione di capitali del FMI;
o che quest’anno ha assicurato un credito alla Lettonia; $400 mn. promessi a Polonia ed Estonia.
o Osservatori vedono il rischio di una bancarotta statale per l’Ucraina, la cui divisa (hrywnja) ha perso il 30% negli scorsi tre mesi; nel tentativo di evitare la bancarotta, i buoni del Tesoro garantiscono un profitto del 27%. L’Ucraina avrebbe un debito estero di $105MD, contro un PIL annuale di circa $140MD; a dic. 2008, crollo di oltre il 26% della produzione industriale; il prezzo dell’acciaio, il maggior prodotto di esportazione del paese, -56% dall’estate 2008;
● I governi di Ungheria, Bulgaria e Romania hanno già annunciato misure di austerità per stabilizzare le finanze statali, tutti i partiti politici (dai socialisti ai riformisti della destra) concordano che il loro costo sia a carico della popolazione.
● Il 30% del reddito delle famiglie est-europee sarebbe legato al ripianamento del debito, % più alta in Ucraina, Romania, Ungheria e Slovenia; nei paesi dell’euro tale tasso è del 10%.
– Lettonia, scorsa settimana, circa manifestazione indetta dai partiti di opposizione e dai sindacati contro corruzione e incompetenza degli alti funzionari pubblici, circa 10mila i partecipanti; repressione poliziesca, con gas lacrimogeni, arresti e feriti. Proteste contro il pacchetto finanziario FMI legato a estese misure di austerità; previsione di -5% del PIL e di +10% della disoccupazione.
– Negli scorsi mesi la Banca centrale lettone ha speso 1/5 delle sue riserve in valuta estera per evitare il crollo, ed ha richiesto aiuti internazionali;
– a dicembre 2008 FMI, BERD e diversi paesi UE hanno concordato la concessione di un credito di oltre €7,5MD alla Lettonia. Nonostante ciò per quest’anno p previsto un forte crollo dell’economia, con l’aumento della disoccupazione dall’8% attuale al 12%.
– La Lettonia (come Lituania ed Estonia) ha un alto debito estero, per il 90% denominato in valuta estera.
– L’economia lettone (2,3 mn. di abitanti) è quella maggiormente colpita in Est Europa dalla crisi
o Causa l’acuirsi della crisi economica, dopo quello islandese caduto a gennaio a seguito di proteste di massa, si ora è dimesso anche il governo di centro-destra lettone (venerdì 20 febbraio), dopo la sfiducia espressa verso il primo ministro conservatore, Ivars Godmanis, dai due maggiori partiti della coalizione, il Partito del Popolo e l’Unione Verdi/Agricoltori.
o Il governo lettone era formato da una coalizione di sei partiti della destra, alcuni dei quali nazionalisti estremisti.
– Bulgaria, 2000 dimostranti contro la grande coalizione di governo, in occasione della crisi del gas; la Bulgaria dipende completamente dalle forniture russe, via Ucraina.
– Lituania, 20mila manifestanti contro la coalizione a quattro del governo conservatore di Kubilius, che ha ridotto del 12-15% la spesa per il PI e per la previdenza sociale, ha aumentato le imposte e ridotto i sussidi per farmaci e riscaldamento; intervento della polizia gas e proiettili di gomma.
– Polonia, ad inizio anno sembrava che la sua economia fosse in grado di affrontare la crisi da sola, ora gli esperti temono abbia presto delle difficoltà; la sua valuta, lo zotly, ha perso circa il 20% sull’euro da inizio anno, facendo perciò accrescere i suoi debiti e prestiti, che per il 25% circa sono in valuta estera. Varsavia cerca perciò di legare maggiormente lo zotly all’euro.
– Cekia, la corono ha perso circa il 16% sull’euro nell’ultimo semestre; enormi perdite per la sua industria, molto dipendente dall’auto come quella slovacca.
– Ungheria, fuga di capitali degli investitori esteri negli scorsi mesi; alto livello di debito statale e privato soprattutto verso creditori esteri; il 60% circa di esso è in valuta estera; la sua valuta, il forint, ha perso oltre il 20% nel semestre scorso. Forte rischio che si prosciughi il credito per le sue banche, molto dipendenti da quelle europee occidentali.
– Romania, migliaia di lavoratori di Dacia, filiale di Renault, hanno manifestato a Pitesti a difesa del loro posto di lavoro; la direzione intende imporre una quarta interruzione della produzione per due settimane (dal 26 gennaio 2009), dopo quella di un mese appena terminata; all’esame il licenziamento di ¼ della forza lavoro (3-4mila su un totale di 13mila).
o nel 2008 a Pitesti ci sono stati scioperi salariali durati settimane.
– Già colpiti i fornitori di Dacia:
o Leoni, cavi, sta chiudendo il suo stabilimento di Pitesti, uno dei quattro che ha in Romania, con il licenziamento di 220 addetti.
Nokia, già licenziati circa 600 addetti, in vista altri licenziamenti.
– The international economic crisis has hit Eastern Europe with full force and brought long-simmering social and political tensions to the surface.
– Last week approximately 10,000 people protested in Latvia against the rampant corruption and incompetence of those in the highest public offices. The demonstration, which had been called by the opposition parties and trade unions, was followed by scenes of violence, with over 100 arrested.
– In the Bulgarian capital Sofia, approximately 2,000 demonstrated against the government. Anger with the grand coalition under Prime Minister Sergei Stanishev has been strengthened by the acute gas crisis; this Balkan state is entirely dependent on Russian supplies of gas via Ukraine. When supplies were cut off last week, Bulgarians suffered under the icy temperatures.
– Last Friday there were also violent protests in Lithuania. Protests also took place in five other Lithuanian cities, as well as the capital, with more than 20,000 taking part.
– In Lithuania anger was directed against the conservative government of Andrius Kubilius. His party, the Homeland Union-Lithuanian Christian Democrats, which governs in a four-party coalition, recently agreed measures to deal with the financial and economic crisis that are entirely at the expense of the general population. The government wants to cut expenditure in the public sector and on social security by 12 to 15 percent, at the same time raising taxes while cutting subsidies for medicine and heating.
Any end to this series of protests is not in sight, and observers are predicting similar protests for Estonia, where the government of Andrus Ansip is rapidly losing support, and also in Romania.
– Last week thousands of workers at the Renault subsidiary Dacia in the southern Romanian city of Pitesti demonstrated in defence of their jobs. The workers demanded that the continual production breaks be lifted and that their jobs be guaranteed. Last year, Pitesti had seen strikes for higher wages lasting for weeks. Meanwhile, Dacia management are planning a fourth production break from January 26 for two weeks, due to "dramatically falling" demand. Only on Monday Dacia terminated a one-month interruption of work.
– Management are considering sacking a quarter of the workforce due to the collapse of demand in January. This was confirmed in the press by Dacia general manager Francois Fourmont. If the "plan to deal with the consequences of the crisis" does not bear fruit by the spring, he said, some 3,000 to 4,000 of Dacia’s 13,000 workers will be dismissed.
– Dacia’s suppliers have already been hard hit.
o Cable manufacturer Leoni is closing its plant in Pitesti, one of its four factories in Romania, making about 220 workers there redundant. The management have justified this by saying that production exceeds demand.
o Workers at the Nokia factory, opened only last year in Klausenburg, are facing dismissals. According to trade union[e] sources, Nokia has already sacked about 600 workers.
– Anger here is also being directed ever more directly against the government in Bucharest. Shortly before the end of the year, the government trebled the "eco-tax" on imported used cars, with the aim of protecting the domestic automobile industry. But many drivers protested against the measure by mounting road blockades.
– The struggle between the population and the political elite will inevitably increase because of the mounting economic crisis. The governments in Hungary, Bulgaria and Romania have already announced they will implement further austerity measures to stabilize the state finances. All political parties, whether nominally calling themselves socialist or right-wing reformist, are agreed that the burden of the crisis must be placed upon the general population.
Eastern Europe—"source of the fire-storm"
– Over the recent past, the economies in the former Eastern bloc countries have experienced a rapid growth, reaching double-digits in some places. Following the "high-altitude flight," however, instead of the "soft landing" experts had hoped for, an abrupt crash is predicted.
After the collapse of the Soviet Union[e] and the Stalinist regimes in Eastern Europe in the early 1990s, local industries were largely shut down or sold off at bargain basement prices to foreign investors.
– Transnational corporations such as Volkswagen, Renault and Nokia tried to reduce their costs by developing factories in the low-wage countries of Eastern Europe. They were supported by a corrupt, compliant elite that mainly stemmed from the old Stalinist cadres, which provided a crucial element to removing all political obstacles to exploitation.
– Economic success depended entirely on the supply of capital from abroad. The sudden drying up of these capital flows as a result of the international financial crisis caused massive problems for the Eastern Europe states. Only international support has enabled a complete collapse to be avoided, so far.
– Last year Hungary was saved from bankruptcy by a cash infusion from the IMF.
– And now Latvia has also been granted a credit package.
– Poland and Estonia, whose economies face imminent failure, have been assured a total of $400 million. The failure of any Eastern European state would inevitably have dramatic consequences for the entire region.
– The situation of Ukraine is particularly precarious. According to some observers, state bankruptcy threatens the country. "Market data points to a payments failure," Die Welt quotes strategist Tom Fallon at La Française des Placements in Paris. The country’s currency, the hrywnja, has lost 30 percent of its value in the past three months, recalling the collapse of the Asian currency markets during the Asian crisis of 1997.
– The country’s indebtedness is crushing. According to financial press agency Bloomberg, Ukraine has debts of $105 billion on the international credit markets, a massive amount for a country whose annual economic output is approximately $140 billion. In December industrial production fell by over 26 percent.
– The price of the country’s most important export product, steel, has fallen by 56 percent since the summer. At the stock market in Kiev, brokers are speculating on a huge shock. The main stock index has lost 85 percent in value in less than a year.
– Under the headline, "The Next Source of the Fire-storm is Eastern Europe," Financial Times Deutschland pointed to the consequences for Western Europe. If European Union[e] members such as Hungary or Estonia get into a predicament, FTD writes, this will also affect the state budgets, banks and investors in the other EU countries.
"A dramatic meltdown of wealth," reports FTD, and points to the example of the Griffin Eastern Europe Fund, which has lost 63 percent in value within one year.
– "The Julius Bär Black Sea Fund, which invests in stock markets around the Black Sea, has even managed to destroy 80 percent of investors’ capital in 12 months."
– According to the article, Eastern Europe business presently ranks among the greatest risks for Western banks. The banks’ commitment in these countries amounts to some $1,500 billion. Financial institutions from Austria, Italy, France, Sweden and Greece are particularly affected. Austrian banks alone have outstanding credits of €224 billion in Eastern Europe, corresponding to 78 percent of Austria’s entire economic output.
– Twenty years ago in eastern Europe, a broad wave of protests swept aside Stalinist regimes that at the start of 1989 had seemed firmly ensconced in power.
o In June, Solidarnosc won the parliamentary elections in Poland, and in October, Hungary adopted a bourgeois constitution. In November, the Berlin Wall was toppled along with the Stalinist regime in Bulgaria. The next government to fall was in Czechoslovakia, while in Romania, the Stalinist dictator Ceausescu was shot by a firing squad.
– The movements that unleashed these political earthquakes had a broad but diffuse social basis. They were motivated by the desire for more democracy and better living conditions, but lacked any clear idea of how to achieve these ends. The working class, which constituted the overwhelming majority of the population, lacked any independent perspective. Decades of political suppression by the ruling bureaucracy and the perversion of Marxism by Stalinism had severed the working class from the traditions of genuine socialism.
Under these conditions, a minority took the initiative to restore capitalism. The Stalinist bureaucrats sided with them, proclaimed the "failure of socialism" and secured their privileges by appropriating large sections of the nationalised productive forces as their own private property. The majority of the population paid a high price. Social life throughout eastern Europe is characterised by unemployment, mass poverty, the decay of infrastructure and health and education systems, and gross social inequality.
– Now, 20 years after the overthrow of the Stalinist regimes, there are indications of a fresh wave of protests. In recent days, sharp clashes occurred in Latvia, Lithuania and Bulgaria.
On January 13, 10,000 gathered in the Latvian capital of Riga to protest against the flagrant incompetence and corruption of the government. Demonstrators threw snowballs and, according to the police, a few Molotov cocktails. The police responded with tear gas, made 126 arrests and injured 28 demonstrators.
A few days later, similar scenes took place in neighbouring Lithuania. After a trade union[e] demonstration in the capital city of Vilnius, protesters tossed snowballs, eggs, bottles and stones at the country’s parliament. The police responded with tear gas and rubber bullets.
The European Union[e] fears a chain reaction. The Financial Times wrote: "In Brussels there is growing concern that the public protests could spread across the entire region where many governments depend on narrow majorities or are based on shaky coalitions."
– These concerns are entirely warranted. The international financial and economic crisis has massive implications for eastern Europe. It is shattering not only its national economies, but also the ideological conceptions bound up with the restoration of capitalism in these countries.
– Relative high rates of economic growth, foreign investment, entry into the European Union[e] and the social rise of a middle class layer encouraged hopes that the economic and social situation would improve after an initial period of economic difficulties.
– Now these illusions are being shattered. The international economic crisis has brutally exposed the parasitic and semi-criminal character of east European capitalism. The result of 20 years of capitalist "reconstruction" is a mountain of debts and the looming bankruptcy of entire states.
– International concerns that made handsome profits by exploiting cheap labour in eastern Europe are implementing mass redundancies as demand for their goods shrinks.
– Western European banks that made high returns in eastern Europe are withdrawing their investments. And the ruling elites, who became fabulously rich through the privatisation of state assets, are now making the people pay for the crisis.
– They are doing so in close collaboration with the EU and the International Monetary Fund (IMF). The protests in Latvia were a direct reaction to an IMF financial package that was tied to extensive austerity measures. It is expected that the Latvian economy will shrink in the coming year by at least 5 percent with a 10 percent increase in unemployment.
– Twenty years of capitalist restoration have left nothing of lasting value or capable of withstanding the crisis. Western European concerns and banks have systematically ransacked eastern Europe, and the native elites, acting as intermediary, have raked in their own share of the booty. Now finance capital is being withdrawn, leaving not only states, but many ordinary citizens as well, with a mountain of debt.
– According to a report in the Austrian newspaper Kurier, 30 percent of the income of east European households is tied up with debt repayment. This percentage is even higher in Ukraine, Romania, Hungary and Slovenia. In the euro zone countries, the equivalent percentage stands at 10 percent.
– National budgets are also massively indebted. The worst situation is in Ukraine, a country of 46 million. The country confronts bankruptcy and is only able to acquire new loans at horrendous rates of interests. Ukrainian government bonds are yielding a profit of 27 percent, and the currency is in free fall: the Hrywnja has lost 30 percent of its value in the last three months. Industrial production collapsed by 27 percent in the month of December.
In the meantime, western European banks are worried that they could be caught in the turbulence. Analysts currently regard eastern Europe as one of the biggest risks for investors. Austrian financial institutions are particularly exposed. They have loaned €224 billion to eastern European countries—the equivalent of 78 percent of Austrian GNP.
– But other European banks, including the Italian Unicredit, the German HypoVereinsbank (through its subsidiary Bank Austria), the French Société Générale and the Belgian KBC, are also heavily involved in the region.
– Nine major banks have formed a lobby aimed at pressuring the European Union[e] and the European Central Bank into supporting eastern Europe. In particular, these banks are seeking guarantees for their own investments. The peoples of eastern Europe will not see a cent of possible EU money. Instead, they will be forced to pay the bill for the bailout of Western banks through cuts in their living and social standards.
– Western European bankers also fear that the gains of capitalist restoration have been lost. "Many of us have fought fifty years in order to free these countries from Communism and now that we have a free market system in the region we cannot leave them on their own," was the comment by Herbert Stepic, head of the Austrian Raiffeisen International to the Financial Times. His bank played the leading role in assembling the lobby of nine banks.
The working class in eastern Europe must draw the lessons from 1989. At that time, the advocates of capitalist restoration were able to prevail because workers lacked their own independent programme. The result is the current catastrophic situation.
– At the time, the International Committee of the Fourth International issued strong warnings about the dangers of capitalist restoration. "The working class has not overthrown [the heads of the GDR] Honecker, Mielke, Krenz and the entire Stalinist Mafia in order to hand over the levers of production to Daimler, Thyssen and Deutsche Bank, the same capitalist interests which organised two World Wars and set up concentration camps for the workers." wrote the Bund Sozialistischer Arbeiter (today the German Socialist Equality Party) in a programmatic statement of February 1990.
We opposed the infamous lie that declared that Stalinism was the inevitable consequence of socialism: "The history of Stalinism is the history of the greatest crimes committed against the working class—all in the name of socialism…. The collapse of the regimes in Eastern Europe has refuted not only Stalinists but also all anti-communists: what has failed is not socialism but Stalinism."
– We called for the defence of nationalised property and for its organisation under the democratic control of the working class. "The production facilities which were erected with great sacrifice by the working class cannot be left to the whims of the capitalists. State property must be cleansed from the control of the parasitic Stalinist caste and placed at the disposal of the working class…. Workers councils must assume control over the economy and democratically reorganise the planned economy from top to bottom in order to meet the demands of producers and consumers."
Finally, we emphasised that these aims could only be achieved through the unified action of the international working class: "Capitalist restoration in Eastern Europe will have drastic consequences for the working class in Western Europe, allowing the capitalists to utilise cheap layers of qualified workers in the east to massively increase the exploitation of workers in the west…. The current situation poses more urgently than ever the task of uniting workers across all borders in a combined struggle for the overthrow of capitalism and Stalinism."
This perspective is of utmost importance today. The unification of the European and international working class in the struggle for a socialist programme is the only progressive alternative that can prevent Europe from once again being plunged into war and barbarism as was the case in both 1914 and 1939.
Published by the International Committee of the Fourth International (ICFI)
Latvian government resigns as crisis deepens in Eastern Europe
– Latvia’s centre-right government resigned last Friday, against the background of a worsening economic crisis. This is now the second European government to collapse as a result of the international financial crisis, following the government of Iceland, which resigned in January after mass protests had filled the streets of Reykjavik.
– The Latvian government’s resignation was preceded by the two largest coalition members, the People’s Party and the Green/Farmers Union[e], withdrawing their support for conservative Prime Minister Ivars Godmanis. The government had consisted of a fragile coalition of six right-wing, business-friendly and, in part, extremely nationalist parties.
The massive protests in recent weeks had led to tensions in the government. Thousands of demonstrators took to the streets in protest at the austerity measures, demanding the government’s resignation and the calling of new elections. The largest demonstrations since independence saw approximately 10,000 participants protesting in mid-January in front of the parliament building in Riga, with violent clashes between demonstrators and the police.
Of all the Eastern European states, Latvia’s economy has been hit the hardest by the economic crisis. While the country had recorded double-digit economic growth in previous years as a result of massive foreign investments, Latvia now faces an abrupt decline. The country’s 2.3 million inhabitants face the worst recession of all the 27 European Union[e] member states. In order to balance an enormous budget deficit, the Godmanis government had agreed on tax increases and austerity measures, which led to the protests.
– In order to avoid the threatening collapse, in the past months the Latvian central bank has spent a fifth of its foreign exchange reserves and has requested international aid in order to support the economy. In December, the European Union[e] Commission, the International Monetary Fund, the World Bank, the European Bank for Reconstruction and Development (EBRD) and several EU member states agreed to provide Latvia with a stabilization credit worth over €7.5 billion.
But these measures could not halt the rapid decline. This year, experts are forecasting a further drastic breakdown in Latvia’s economic performance and a rise in unemployment to 12 percent from the present official rate of 8 percent.
– Like the two other Baltic states of Lithuania and Estonia, Latvia is saddled with enormous deficits, with a high portion of these debts (up to 90 percent) being denominated in foreign currencies. The coupling of Latavia’s national currency, the lat, to the euro is already being discussed in this regard. This would only result in a further massive devaluation of the lat.
– In turn, this would increase the burden on companies and individuals, whose debts are denominated in foreign currency, at the same time raising the price of imported goods.
The situation in Latvia is symptomatic of economic conditions throughout Eastern Europe.
– At the beginning of the year, Poland’s economy was regarded as being sturdy enough to weather the crisis without needing assistance. Experts now fear the country will soon be in difficulty. Approximately 25 percent of the country’s debts and loans are denominated in foreign currencies. The steep fall in the value of the zloty, which has lost approximately 20 percent in value against the euro since the beginning of the year, means that the value of these foreign debts continues to rise. The country’s TIG 20 share index sank at the beginning of the month to a five-year low. Warsaw is now seeking to couple the zloty more closely to the euro to slow this decline.
– In the Czech Republic, the koruna lost approximately 16 percent over the last six months in relation to the euro. Industry, which is largely dependent on auto manufacturing, as in neighbouring Slovakia, is experiencing historically unprecedented losses.
– Next to the Baltic states, Hungary is also among the hardest to be hit by the crisis. In the last few months the country has seen a veritable flight of capital as foreign investors have withdrawn their money. Moreover, the country is burdened with a high level of state and private sector debt to mainly foreign creditors, with approximately 60 percent being denominated in foreign currencies.
– Last year, Hungary had to approach the IMF for assistance; with the EU also providing aid. Measured against the euro, the Hungarian forint has lost over a fifth of its value in the past six months. There is a great danger that banks, which strongly depend on their Western European parent companies, will face a drying up of credit.
– The collapse of the Latvian government is being met with great concern in political and media circles. It has become all too clear that all the states of Eastern Europe are facing substantial difficulties and that this can also pose a danger to the political and social stability of Europe as a whole. A recent editorial in Germany’s Süddeutsche Zeitung articulates these fears.
"The great crisis," the paper writes, "could mortally scar these countries, which have only recently embraced democracy. They are plunging from boom into a deep recession without any gradual transition." Now that the bankruptcy of the capitalist system is becoming plain for all to see, fear is growing that the general population could become politically radicalised.
– The editorial cites Poland as an example: "The population is deeply disconcerted, 70 percent of Poles now believe that the pro-EU centre-right government of Donald Tusk is not in control of the situation." The "almost mythical confidence" in Western capitalism has been shaken to its core. The editorial notes with concern that "scepticism towards the free market" is growing steadily.
Western Europe is also increasingly feeling the consequences of the crisis. This has become particularly clear in the case of Austria.
– The banks in this alpine republic have net assets in Eastern Europe of approximately $277 billion. Austria’s financial commitment in Eastern Europe amounts to approximately 70 percent of the country’s gross domestic product. This is followed by Belgium, Sweden and Greece, who have each assigned credits in this region valued at a third, a quarter and a fifth of their GDPs respectively.
– A loss of just 10 percent in the value of these credits in Eastern European would deliver a blow to the Austrian banks equivalent to approximately 7 percent of the country’s GDP. If Eastern Europe falls into a continuing and deep recession, the losses could become twice or three times higher.
In view of the dramatic situation, nothing is being excluded in Austria. Following reports of the possible bankruptcies of a number of East European states, the News magazine Profil pointed out that West European states were also under threat. It headlined its recent editorial: "Does State Bankruptcy Threaten Austria?"