Eastern Europe
Chris Edwards
1992
To
understand what is going on in Eastern Europe it is first necessary to say a
little bit about the interaction between the Western bloc and the Eastern bloc
in the aftermath of the 1989 events. The Cold War was the glue that held
together the Western capitalist edifice. Since 1989, just as the Eastern bloc
has fragmented, so the West has began to unravel and inter - imperialist
conflicts have started to come to the surface. The increasing divergence
between US military and political power on the international arena and its
growing internal economic weakness was not seen as a major source of global
instability a year ago at the time of the Gulf war. The decline of the global
role of the Soviet Union, the Gulf War victory and the continuing diplomatic
co-cooperativeness of Germany and Japan
seemed to underline the global hegemony of the United States. A sign of the
decreased ability of Germany to operate independently of the USA was evident
even at that point, however, in the form of the acquiescence of the US to
Germany's ambitions to negotiate its own aid deals with the Eastern bloc
without its overall supervision.
However,
the growing diplomatic assertiveness of Germany was indicated this year by its
early unilateral recognition of Croatia. This can only be seen as a warning to
the rest of the imperialist world that Germany intends to be the dominant power
in Eastern Europe as well as within the EC. All over Eastern Europe and the
former Soviet Union, small independent states such as Croatia are emerging. The
majority of them are unviable as politically and economically independent
nations. Alongside them on the other hand is the economic power of Germany. It
is clear that many of these countries will only become viable as client states
of Germany which is best situated to take advantage of this circumstance.
The recent
development of German irredentist diplomacy in relation to German minorities in
Poland, Czechoslovakia and the former Soviet Union may be seen as a cloak for
its imperialist manoeuvres. Rights for German minorities in these countries
have become an issue in a way that they were not before 1989. These communities
were relatively well integrated into the host countries and there were no major
conflicts with the majority population. These communities are now being
manipulated by the Bonn government to assert their ethnicity and demand special
rights in the areas where ethnic Germans are concentrated. This is despite the
fact that neither Poland nor Czechoslovakia have ever denied the German
minorities their rights. It is an artificial issue which the German government
is using to justify its interference in the countries it wishes to dominate.
There has
been a major shift in the trading patterns in Eastern Europe since 1989.
Subsidised trade in Eastern European currencies with the Soviet Union and
within the Eastern bloc has sharply declined along with COMECON and there has
been an increase in trade with the West in hard currencies. The result of this
is that Eastern Europe is becoming Latin Americanised. Exports of raw
materials, agricultural products and some low tech semi-manufactured products
to the West has increased while the export of over priced higher technology
industrial products to the former Soviet Union has declined. Eastern Europe
also has to pay for the previously subsidised energy and raw materials from the
former Soviet Union in hard currency. Shipments of former Soviet oil to Eastern
Europe have been cut in half since 1989. Eastern Europe is thus being turned
into a backward, de-industrialised, agro-export,, zone At the same time it
faces all the protectionist trade barriers in the imperialist countries that
the Third World has always experienced. As always, free trade is only for the
rich nations. Payment in hard currency is also increasing the Eastern European
trade deficits which will result in more IMF-dictated austerity or borrowing
with the consequent increase in entanglement with the debt trap.
The
collapse of Soviet power in the Eastern bloc and the crisis of the Stalinist
economies in Eastern Europe has given the West an unprecedented amount of
leverage which is greater than even that which the imperialist powers have been
able to exert over the Third World in
the post war period. While imperialist leverage was confined to the imposition
of its economic model through the agency of the IMF/World Bank, imperialists
have been able to do this, and also overtly impose their will on the political
institutional policy of the Eastern bloc, as well as a condition of diplomatic
recognition. This includes such things as what to do with their nuclear weapons
and even which laws to adopt. This has been so much so that the imperialists
have become emboldened enough to extend the political leverage they have
managed to impose upon Eastern in Europe to the Third World. An example of this
is the recently formulated "Good Government" policy expounded by
British Foreign Secretary Douglas Hurd--tying British Foreign aid with overtly
political as well as economic strings.
The
overthrow of Stalinist regimes in Eastern Europe has resulted in a variety
of regimes which can be categorised as
follows: in only one country can it be said that capitalism is being completely
restored--Germany where the West German bourgeoisie was in place to finance it.
This was an exceptional situation which did not exist elsewhere in Eastern
Europe. A second exception to the
pattern elsewhere is Yugoslavia where a civil war has erupted between rival
"reform" Stalinist governments, although this could very well not
been the exception in future if the situation in the former Soviet Union
deteriorate further.
The
greater part of the rest of Eastern Europe falls into two categories: some
regimes in the poorer south saw
initially the replacement of conservative Stalinist rule by governments of
"reform" communists (Romania, Bulgaria and Albania) which have
survived for a period of time, before finally giving way to anti-communist
regimes. The Romanian NSF sustained itself the longest by employing a grotesque
irredentist demagogy, but it too has now given way to a restorationist
government. Others in the north have seen the complete collapse of Stalinist
government and their replacement by
non- Stalinist, pro-bourgeois regimes (Poland, Czechoslovakia, Hungary).
Despite the fact that there has been a purge of Stalinists from leading
positions within the state apparatus of these latter three countries,
capitalism has not yet been restored, collectivised property largely remains
intact and they must still be characterised as deformed workers states.
The
absence of a substantial domestic bourgeoisie and the inability of Western
capitalism to invest on a significant scale has led to a privatisation
programme which is, as some of free-market economists have freely admitted,
less than successful. In Poland where the privatisation process was first begun
over two years ago only 0.27% of state-owned enterprises have been privatised.
Economic
advisers differ on the rate of capitalist restoration. Some Like Jeffrey Sachs
and the British magazine "The Economist" criticise the Polish
government for being too timid with their reforms. Jeffrey Sachs recently went
so far as to describe the privatisation process in Eastern Europe generally as
a "debacle".
Hungarian
economic adviser Janos Kornai argues, on the other hand, that capitalist
restoration should take place slowly and avoid jumping ahead of the organic
development of a national bourgeoisie. Mass privatisation cannot be undertaken
overnight because the continuing inefficiency of the state sector supposedly
prevents this from being possible. In Poland and Czechoslovakia, privatisation
has been attempted all at once. In Germany and Hungary it has been a more
gradualist. In Eastern Germany the institutions of market economics could be
introduced overnight with privatisation afterwards because these institutions
already existed in West Germany where there were also lots of well-trained,
market friendly bureaucrats and unquestioning acceptance of the institutions of
the capitalist economy. In the rest of Eastern Europe there were neither of
these. According to the "The Economist" the only way to create these institutions is through rapid and
wide-ranging initial privatisation.
Another
issue appears to be whether or not price liberalisation and commercialisation
of trade in goods should precede
changes in the forms of ownership of property. This is a exemplified by
Yeltsin's shift from support to the Shatalin plan - "market economy in
five hundred days" - to his present policy of freeing prices before
large-scale privatisation.
What these
ideologues of the free-market appear to be unable to comprehend is that the
state sector is inevitable as long as Eastern Europe remains a weak part of the
world economy. It may be possible to replace part of the sector, but it could
only be eliminated completely at the cost of enormous industrial collapse.
While this has been possible in Eastern Germany because of the ability of West
Germany to underwrite the social cost, it is not possible anywhere else. Such a
policy is bound to generate, in the
absence of a credible left-wing alternative, further growth of countervailing
nationalist populist/fascist trends based on an economic-nationalist defence of
indigenous industrial capacity.
Throughout
Eastern Europe Eastern Europe there is a squabble going on over who is going to
have the richest pickings from the privatisation bonanza--the would-be
capitalists from the nomenclature or the anti-communists of the new
restorationist parties. The centre of gravity has shifted so far to the right
that the main dispute between the mainstream political parties is not over
whether there should the privatisation, but over the extent to which
free-market economics should be allowed to determine economic policy and over
the proportion of foreign and domestic capital which is desirable.
Germany
.
The
capitalist reunification of Germany was a betrayal of the Eastern German
workers. In no way can this unification on a capitalist basis be regarded as a
progressive measure. The result of the unification, on a capitalist basis,
confirms absolutely this view. Trotsky's priorities were as follows and still
serve as a useful guide to our thinking in this connection:
"The
question of overthrowing the Soviet bureaucracy is for us subordinate to the
question of preserving state property in the means of production in the USSR;
that the question of preserving state property in the means of production in
the USSR is subordinate for us to the question of the world proletarian
revolution."
Those who
argue that national self-determination should
be supported even if this means the restoration of capitalism, or who
argue that bourgeois democracy must be restored before advancing to socialism
("socialist stagism") show that they are incapable of distinguishing
between the baby and the bath water. They are incapable of defending the gains
of October. Our slogan remains: for an independent, socialist, united Germany.
Despite
the fact that the Eastern German productivity levels were the highest in
Eastern Europe, they were still low compared to the Western economies with
which they had to compete. The choice was either to make the necessary massive
investment to bring them up to a competitive standard or let them collapse. It
was unrealistic, however, to expect Western capitalism, in the middle of a deep
recession, to provide the investment necessary to create a viable industrial
base in Eastern Germany, which would then be a source of hostile competition to
its own industries.
The result
was inevitably that the industrial capacity of East Germany was decimated. Only
8 per cent of former East German industry was viable on a competitive
capitalist basis. By only spring of 1991
50 per cent of the GDP of the former East German provinces was made up
of transfers from the West, which were
not spent on investment but taken up with maintaining consumption levels. At
the same time industrial output halved during 1991 and it has been estimated
that 40 to 50 per cent of jobs have been lost in the Eastern Germany since
1989.
The
Truehandstalt, the government agency that has been charged with privatising
state industry in former East German LEA, has privatised more than 5,000
company's since unification, but it has
a only been able to find "guaranteed" employment for about a quarter
of the four million workers initially on its payroll. The ability of the West
to underwrite this process in the East
has enabled privatisation to be undertaken in a relatively gradual,
orderly fashion minimising as far as possible social cost. This is a luxury
which the rest of Eastern Europe has been unable to afford. Even so, over five
million jobs have disappeared since the beginning of 1991! A further half
million are expected to disappear in the current period. The German budget
deficit is expected to increase by over two-thirds by 1995 compared to 1989. At
a same time the German economy has lost 40 billion Deutchmarks because of the
cessation of interest and principal repayments by Moscow. This will involve a
loss of 30 billion Deutchmark to the Bonn government. It is clear that the
German economy cannot sustain social security payments with five million
unemployed forever at its current standards.
The recent
period has seen the growth of far right parties, racist and anti-gay attacks as
well as a strike wave by public and private sector workers which has forced to
climb down over pay limit by the Kohl administration. While the former
development serves as a warning that the fascist menace is a very real, the
latter development indicates that the working class remains strong and
combative and the socialist alternative must be built to defeat the extreme
right. The downturn in the capitalist economy means that the resources for
underpinning reunification are limited
and further massive attacks on workers can be expected.
The
attacks on abortion rights as a result of unification have intensified. Under
the West German regime abortion was illegal at any point during pregnancy and
women and doctors continue to be prosecuted. Within the GDR abortion was legal
and women were entitled to paid sick-leave even when having an abortion.
Contraceptive pills were made freely available to all women over the age of 16.
The status quo in relation to the GDR's abortion laws has been allowed to
continue for a period of two years after unification. However, since women have
been the first to lose their jobs in the post unification decimation of East
German industry, they have also lost the right to paid sick leave along with
the job. After the two years are up the laws will be brought into line with
those of West Germany. There have been several large demonstrations in Berlin,
Memmingen and Bonn demanding abortion on demand.
While the
GDR's laws on gay issues were far from satisfactory, they were in some senses
less oppressive than those in Western Germany. Homosexuality was decriminalised
in the GDR in 1968. West German law still criminalises certain aspects of
homosexuality and discriminates against lesbians and gays in the sense of
setting the age of consent for homosexuals at 18 years while for straights it
is set about 16 years.
Yugoslavia
This is
the other exception in the north-south European twin pattern of post-1989
developments. It will be dealt with in greater detail in a separate article.
Briefly, Yugoslavia pioneered the economic reforms which later were adopted as
part of the policy of "perestroika" in the Soviet
Union--self-management of factories co-ordinated by market mechanisms. This led
to a differentiation between the more
economically developed regions in the north--Croatia and Slovenia and the more
backward south. The north began to resent having to subsidise the south and
this fuelled separatist developments. The Stalinist bureaucracy fractured along
national lines leaving the Yugoslav army as the only remaining all-Yugoslav
institution holding the country together. This was subsequently purged of
non-Serbians and became the vehicle for the Serbian Stalinist Milosevic's
greater Serbian ambitions. It formed an alliance with the Croatian Serbian
militias which identified themselves with the war-time monarchist chetniks
rather than Tito's partisans. In Slovenia and Croatia anti-Communist,
separatist, republican administrations were elected. The presidential elections
were won by ex-Communist Tudjman and the reform Communist Kucan respectively. A
civil war ensued with the intervention of the UN forces currently taking place.
Poland
Poland has
pioneered the economic reform process. In January 1990, the government of
Mazowiecki freed prices, devalued the zloty by 90%, exposed the economy to the
full force of international trade and drastically cut state-spending under the
auspices of Mazowieckis's Finance Minister Balcerowitcz. Even with two million
out of work at the end of 1991, the West was not satisfied: "many Western
economists wondered whether Poland's recession had been a severe as it needed
to be. With so much a entrenched inefficiency,
a biggest shake out of Labour seemed necessary" complained the
editor of "The Economist".
In October
1991, Poland's first free multi-party elections resulted in no party
establishing a clear claim to form a government. Only 43 per cent of the
electorate turned out to vote. A coalition government was finally sworn in two
months later under the Prime Ministership of Jan Olszewski. The pace of the
reforms was slowed. The economy was stimulated with tax cuts, subsidies were
granted for state-owned industry. This has prompted two finance ministers,
Lutkowski and Olegchowski, to resign. The latter resigned because the Sjem
would not vote down a proposal to increase index-linked pensions and state
employees' salaries. This jeopardised an IMF loan because it took public
spending beyond the limit agreed during negotiations. There is a danger that
Walesa may seek wider, dictatorial powers to impose the IMF-dictated reforms.
In
response to this slowdown in the pace of reforms under Olszewski, "The
Economist" commented:
"For
all their boldness, Poland's reformers have done too little, not too
much--especially if the chance for radical change is ending. The crucial
failure was that privatisation has been so dispiritingly slow. Mr Mazowiecki
said his government would privatise half the state-owned sector by 1993 and, by
1995, create a structure of ownership similar to that of a West European
country. Two years and to a prime ministers later, little has been done."
The shock
therapy was met with strikes and much protest which split Solidarity into
hostile factions. The subsequent decline in Solidarity's legitimacy was
demonstrated during the elections in November 1990 when Mazowiecki was beaten
by an unknown émigré candidate. In the October 1991 elections, the government
got only 16 per cent of the vote.
The results
of this shock of therapy have been disastrous. Poland is confronted with a
massive fiscal deficit, and deepening
recession. The IMF has already withheld its quarterly tranche of the loan
because Poland overshot its budget deficit target last summer and it has so far
been unable to fulfil the conditions of the IMF-imposed stabilisation agreement
to write off 50% of its debt to creditor countries
Its plans
to attract Western capital are illusory as Western demands more and more
austerity. The series of strikes at the beginning of this year against
austerity indicated a significant potential for smashing the imperialists'
plans if a credible revolutionary Trotskyist party existed. The recent period
has seen the growth of the OPZZ union confederation at the expense of Solidarity which has suffered
from the association with the government. Solidarity has declined in membership
from 10 million in the early 1980s to 2 million now. OPZZ established under martial law as an
alternative to Solidarity has grown to nearly 3 million members. There has been
close co-operation between these two unions and the smaller Solidarity 80 union
at the local level in the recent unrest and they often c0-operate in joint
committees at factory level.
On the
other hand, the populist/fascist Confederation for an Independent Poland (KPN)
emerged with 46 seats in the 1991 elections. It voted along with the
post-Communist deputies against the
proposal to vote down the salary increases. It is entirely possible this
movement will grow on the basis of such
populist manoeuvres and as elsewhere in Europe it could become a menace
in the absence of a left-wing alternative.
Attacks on
abortion rights have been in evidence and the first women have been turned away
from hospital because of a new code of "ethics" adopted by Poland's
Medical Council which forbids doctors to perform abortions unless health is an
danger or there has been a case of rape. Doctors may also be barred from
practising medicine for life if they ignore the new ruling. The reintroduction
of religious teaching in schools also promotes the cause of anti-abortionism.
The church's influence has been evident too in the closure of 60 per cent of
Poland's day care centres, making it difficult for women to work outside the
family. Women have also been the first to be fired in the wave of redundancies
which have hit Poland. There has been a strong response by women, however,
including public debates in the media and large demonstrations in Warsaw
and other cities. New feminist organisations have sprung up in response to
these attacks.
The growth
of Catholic fundamentalist bigotry in Poland has ensured that lesbian and gay
issues remain more than ever suppressed, denied and hidden from public view.
The demands of lesbian and gays, which were unheeded under Stalinism, received
even less attention in a society where intolerant religious bigotry is once
again being taught in state schools.
Czechoslovakia
As in the
case of Poland, Czechoslovakia has undertaken a severe shock therapy programme.
This has led to the growth of strong nationalist trends among the oppressed
Slovaks with some quasi-fascist elements. In the aftermath of the 1990
elections, the extreme right wing of Civic Forum, led by a Thatcherite former
Pinochet adviser Krauss, became the hegemonic in the government. At the
beginning of 1991 the shock therapy was launched. It affected the relatively
economically backward Slovakia particularly hard as its economy had been linked
closely with the economy of the Soviet Union and had already been hard hit by
the decline in this source of trade. Wholesale closure of factories occurred as
a result of the shock therapy. Unemployment increased by 10 per cent by the end
of 1991. This gave a massive impetus to the development of Slovak separatist
trends in the form of a split from the Slovak wing of Civic Forum led by a
former Slovak Prime Minister. This movement expresses, in the absence of a
credible left alternative, an economic nationalist and quasi-fascist/populist
reaction to the free market decimation of Slovak industry.
Former
Czech premier Dubcek, who has recently re-entered Party politics and become
President of the Slovak Social Democrats, a hitherto small party which is
picking up some popular support, also advocates state intervention to soften
the effects of market reforms. Unlike Slovak nationalist leader, Meciar,
however, Dubcek advocates the maintenance of the Czechoslovakian Federation and
in this sense is an ally of Havel.
Hungary
The
Hungarian political scene is dominated also by a free market trend on the one
hand, the Free Democrats, and the rather more economic nationalist Democratic
Forum on the other. The latter party which won the April 1998 elections has
presided over a far more gradualist privatisation programme than in Poland or
Czechoslovakia and this party has made clear its intention that foreign capital
will not have too great a share of Hungarian industry. It is suspicious of the
Free Democrats' commitment to full economic liberalism. Democratic Forum has
anti-Semitic tendencies which were evident during the 1990 elections. Hungary
has a history since the early Sixties under the Kadar regime off attempts to
relax the command economy through decentralisation and market mechanisms and a
kind of a "glasnost" which pre-dated the Russian version. A layer of
petty capitalists developed which undermined the unity of the bureaucracy until
it finally collapsed in 1989.
Hungary
has its own irredentist designs on the
ethnic Hungarians in Slovakia, Yugoslavia and Romania and supplied weapons to
Croatia in the civil war with Serbia with the clear aim of destabilising the
Yugoslav state and eventually gaining control of the Hungarian region.
In July
last year the main trade union confederation MSZOSZ forced the Antall
government to back down over price increases and there were marches by health
workers against the IMF-inspired spending cuts in March of this year. The
MSZOSZ is under attack from Government legislation which is seeking to promote
the smaller Federation of Workers Councils (dominated by the ruling Democratic
Forum) and the Western financed League of Independent Trades Unions which is
supported by the Free Democrats.
Romania
The
overthrow of the Ceausescu regime in December 1989 led to the installation of a
Aviv reform economists regime, the National Salvation Front which won of the
elections in May 1990. The Front introduced market reforms, but retained
certain economic nationalist features: the reforms were gradualist, much
industry and agriculture remained in state hands. An attempt by rightest
elements to topple the NSF regime was smashed by miners who rallied in its
support. A year later, however, they arrived back in Bucharest to protest
against the IMF dictated austerity being inflicted on them.
The Prime
Minister Roman said who was identified with the reform process was sacrificed
to appease them. Iliescu survive but his authority was undermined. His response
was to bolster his position by pandering to Romanian irredentist ambitions
declaring that Romania should take over Moldavia which contains a Romanian
majority of the population. This in turn lead the Russian, Ukrainian and Turkic
minorities to take over Eastern Moldavia and
form their own republic of
Transnistria. However, the subsequent success of Roman at the NDF
congress has led to an openly restorationist government being formed.
Bulgaria
In
Bulgaria a pattern developed similar to that of Romania. The Stalinist Zhivkov
regime had a history since the mid-80s of repression of the Turkish minority
which led to hundreds of thousands returning to Turkey in 1989. Shortly
afterwards Zhivkov was replaced by a regime of "reform" communists
who declared themselves to be social Democrats changing the name of the party
to the Bulgarian Socialist Party. At the same time anti- Communists organised
themselves as the Union of Democratic Forces (UDF).
The BSP
won the elections in the June 1998. The resulting BSP government was not formed
for three months and ruled for only two months amid much instability under the
premiership of Lukhanov. This undertook a gradualist economic austerity
programme in the familiar economic nationalist mould. In December 1998 a
coalition government of the BSP and the UDF was formed with Popov as Prime
Minister. A much more severe austerity programme was introduced, the results of
which led to the collapse of the fragile coalition. The new elections led in
November 1991 to a narrow victory for the UDF with the Turkish MRF party
holding the balance of power. After the downfall off Zhivkov many Turks
returned to Bulgaria. Repression eased somewhat under the BSP government, but
it was still a feature of BSP politics so that the MRF preferred to support the
UDF in the November 1991 elections.
Albania
Albania
also followed the Romanian model. The Stalinist Party of Labour won the first
multi-party elections in March 1991. This was followed by anti-Communist
rioting in Shkoder and a general strike called by the opposition anti-communist
Democratic Party (DP). After winning the presidential election the PLA leader
Ramiz Alia appointed a new PLA Government under the premiership of Fatos Nano
which announced moves towards a free market economy. This government lasted for
only a month in a climate of strikes and anti-Communist protest. In June 1991,
the PLA changed its name to the
Socialist Party of Albania, criticised
Hoxha and expelled old guard leaders. It committed itself to
privatisation and rapid conversion to a free-market. It was accused by the
opposition, however, of obstructing the radical measures it believed to be
necessary to achieve this. The SP would appear also to fit into the general
economic nationalist pattern with a more gradualist and limited approach to
economic reform. A coalition government with opposition parties under Ylli
Buffi took office, calling itself the "government of national
stability". In August anti-Communist demonstrations resumed attacking Socialist Party control of the media.
Economic reforms were also resumed and a privatisation agency was created. The
currency was linked to the ECU. In the context of continuing strikes and
protests Buffi resigned as Prime Minister and opposition parties pulled out of
the government. A new government under Vilson Ahmeti administered the country
until the new elections in March when the anti-Communist DP was elected.
To
conclude, how should these achievements be viewed? There have been some
attempts to portray them as in some way the initial stages of the political
revolution. This is a misleading and therefore disarming view of these events.
It is often linked, as we have noted,
to a confusion of bourgeois and proletarian democracy, and the view that it is
necessary for bourgeois democracy to be restored before proceeding towards
socialism--a kind of "socialist stagism". National
self-determination, according to this
view, is to be supported even if it means the restoration of capitalism. We
have already dealt with this point above.
The
situation bequeathed by the collapse of Stalinism is one in which communism is
largely discredited in the eyes of the East European workers. The Right has had
the initiative in the first instance and, therefore, the overthrow of the
Stalinist regimes has led not immediately to political revolution, but on the
contrary, in the direction of capitalist restoration. The view that it is
necessary to support restorationist
movements cloaking themselves in the garb of national self-determination, and
the representation of such restorationist movements as the "political
revolution", demonstrates total confusion.
However,
the beginnings of a shift backwards in the direction of political revolution
can be discerned in the resistance to austerity imposed by the restorationists.
Here is the opportunity which might be seized by Trotskyists. The tasks before
Trotskyists in Eastern Europe, therefore,
are to point the way forwards and lead the resistance to the attacks on
the working class and the oppressed: the struggle against the freeing of prices
and massive deindustrialisation, the attack on abortion rights, racist attacks
and the rise of anti-gay bigotry in a growing climate of intolerance. It is
necessary to counter pose to these attacks the perspective of uniting the
common interests of the working class and the oppressed from the Rhur to the
Urals (and beyond) as part of the struggle to build a Socialist United States
of Europe.