3. Transformation as a Stability Problem for the Emerging Democracies

In East-Central Europe, thanks to the trust or passivity of the population, the reform elites were in a position after 1989 to implement a transition strategy that was very costly in the short-term. The ensuing change of governments to reform Communists in Poland and Hungary did not bring a change, but only a minor dilution of this strategy. In the Czech Republic, the transition strategy was characterised by low social costs from the beginning, but even there it cost the Klaus government its majority. The electoral success of the Czech Social Democrats is also the result of the electorate's fears about diminishing social security. Only in Slovakia did the transformation burdens take second place to the national question and the personality of Meciar. If the economic upturn since 1994 continues, growth expectations could keep the current governments stable, or the liberal reformers could be proven correct ex post facto and thus become an electable alternative.

If insecurity and distributional conflicts dominate despite economic growth or even if growth should slow, then the governments would come under strong pressure to intervene. To the extent that liberal or Social Democratic (reform Communist) alternatives are already exhausted, populist and or authoritarian/nationalist forces could gain. In this context, the opportunities of the governments to gain legitimacy through success are objectively limited. In particular foreign economic imperatives like debts, deficits and the maintenance of fragile competitive advantages pose clear constraints. This is particularly true of Hungary with its extremely high foreign debt, but it is true in declining order for Poland, Slovakia and the Czech Republic as well. International institutions like the EU, the IMF and the World Bank use political and diplomatic means to reinforce the markets' pressures to adjust.

An increasingly unequal distribution of income and growing limitations on social welfare polices, due to savings imperatives, combine to create particular legitimacy problems for the reform Communists' Social Democratic governments. They must try to bridge the ever-wider gap between their two main constituencies, the reform losers and the new-rich from the old Nomenklatura[19].

An expansion of social security and transfer systems for the affected groups (unemployed, the retired, etc.) and regions will inevitably run up against high debts and fiscal deficits. East-Central European countries are revising their social welfare systems, in part by dismantling them. Not only are the scope and level of the transfer incomes very modest, many programs for direct support (e.g. housing, health care) are undergoing reforms, price increases - and often crises. As such, the situation in East-Central Europe resembles that of Western Europe, where the social welfare state is also overburdened by the consequences of persistent mass unemployment and increasing impoverishment. In view of the welfare state's ongoing crisis in the West, the East-Central Europeans are increasingly turning to the model of minimum insurance for all combined with options for additional individual coverage.

Individualisation, materialism and declining social control in an atomised society leave poorly paid and poorly equipped police forces with only a limited ability to enforce state control. The erosion of personal security caused by increasing crime exacerbates the general loss of social security.

As a consequence, the transition's impact on East-Central European society will probably resemble a mixture of the wealthy Western nations' future, defined by overburdened social security systems, mass unemployment and a "two-thirds society" and the world's poorer countries' current situation defined by large informal sectors and cliental structures. This combination will confront a population that has neither the comfortable financial buffer of the rich countries nor the low expectations of the poorer countries. Instead, people in the East-Central European countries have the memory of a modest provision of the basic necessities in the Communist planned economies and the expectation of a rapid rise in living standards to equal those of the wealthy Western countries.

Whether and to what extent the consequent increase in opposition to the emerging system will be truly destabilising is dependent on the structure of the political and social cleavages in the East-Central European countries. If the cleavages intersect, then shifting political coalitions can form. If they are instead cumulative and reinforcing, because the same societal groups are always on one side of the cleavage, then society and politics could gradually polarise into antagonistic camps.

External problems will exacerbate these internal problems:

• While no East-Central European country is threatened by military conflict with a neighbour, and while there are no explicit territorial conflicts, these four countries do border on other relatively unstable countries in Europe (Belarus, Ukraine). Hungary is particularly concerned about the situation of the Hungarian minorities in neighbouring countries, above all in Slovakia. The shared desire of these countries to join NATO is a clear sign of their security concerns, above all vis-a-vis Russia.
• Economic (and thus social) development in these transition countries is increasingly dependent on foreign economic factors, particularly on trade with the western industrialised countries, on foreign investment and credits, on exchange rate developments and - to a lesser degree - on the possibility of migration to high-wage areas. Aiming to secure these opportunities in the long-term, East-Central European countries are seeking membership in the EU.
• At the same time, public opinion holds foreign economic influences responsible for many of the transition costs. As such, many extremist groups are calling for limits on and/or discrimination against foreign economic activities ("against a national sell-out"). The majority demands greater consideration of indigenous values and traditions and less focus on copying the West European model.

While greater foreign dependence exacerbates feelings of insecurity, integration into western international organisations, particularly EU and NATO membership, could also serve as an anchor that would facilitate democracy, free-markets and a general Western orientation. Extremist groups in East-Central Europe reject accession, as it will solidify dependence. Reform-oriented forces want a rapid accession in order to stabilise the transition.

By and large, since 1993 (after the deep recession) developments in East-Central Europe in the areas of foreign policy, foreign economic relations, politics, society and the economy have all had a positive and reinforcing effect on one another. Successes in certain sectors compensate for the few deficits in others; they also serve as a safety valve for problems (e.g. change of government as a safety valve for dissatisfaction arising from economic problems). But the political choices within the democratic spectrum could be exhausted by disappointment first with the Liberals and then with the Social Democrats.

How quickly the currently prevalent virtuous circles might deteriorate into vicious circles is shown most clearly in the borderline case of Slovakia, which recurrently threatens to take a turn for the worse. It allows to sketch a scenario of de-democratisation: a strong government leader in East-Central Europe could attempt to weaken his domestic opponents through shrewd use of his power and by gradually hollowing out democracy. This danger is implicit in presidential systems, as they tend to personalise and polarise politics. Fragmentation within the president's camp can be the result (e.g. among the Polish right in 1994 or within the Slovakian HZDS at the end of Meciar's first governing period), which could move the president to reach for more authoritarian measures, in order to compensate for the weakening of his own base. An authoritarian politician can generate support by drawing on the wide-spread hope in East-Central Europe that a strong-man can solve problems better than a parliament and elections (in the Czech Republic, 16 percent have this hope; in Slovakia, 24 percent; in Hungary, 18 percent; in Poland, 35 percent)[20].

Criticism from abroad deepens the conflict at home, as a national "rallying-around-the-flag" takes place among the loyalists while the opposition is excluded for "dirtying the nest." Economic troubles then worsen as foreign investors and trading partners become wary, who the government then blames for the crisis. A vicious circle of economic and social problems and attempted authoritarian solutions sets into motion, which further isolates the country.

A specific variant of this scenario would begin with the electoral victory of a party or movement that not only had an authoritarian leader personality but also a corresponding program. Background and cause of such a party's success could be the alignment of political cleavages such that economic, social, regional and cultural fissures deepen into a division of society. The victorious party would then probably organise the large group of reform losers, most likely by invoking its market-hostile and national-xenophobic values and opinions.

Such groupings exist in East-Central Europe; up to now, they have hardly won more than 10 percent of the vote - frequently much less. Their programs combine extreme left and right wing elements of fear of foreign powers and support for a strong state. Examples of such possible groups around which a movement could crystallise were or could be, in Poland the "Party X" led by Stan Tyminski; in the Czech Republic, the nationalist Assembly for the Republic under Miroslav Sladek; in Slovakia, the Slovak National Party under Jan Slota and the Association of Slovak Workers under Jan Luptak (both currently in the government coalition); in Hungary, Istvan Csurka's MIEP ("Truth and Life") or Imre Poszgay's National Democratic Association. Additionally, there are orthodox Communist groups and parties, above all in the Czech Republic and - much weaker - in Hungary.

Such an electoral victory is currently improbable, but it could be a possible reaction of the electorate to a worsening crisis coinciding with disappointment in regard to a previously elected reform Communist government. In countries with relatively low voter turnout like Hungary and Poland, the populist-national-authoritarian voter potential is hard to gauge.