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21 February 2013

Reuters: Bulgarian crisis ill omen for struggling emerging Europe


The violent protests that forced Bulgaria's cabinet from power underscore the lose-lose situation facing the European Union's newest members, as they struggle to stop economic downturn and stem growing public anger.

Ruling parties which stick with strict austerity programmes to win investor trust risk being bounced from power by voters fed up with cost-cutting and tax hikes. Governments which loosen the fiscal screws or try unconventional ways to rebuild support before elections may alienate investors and invite more pain down the road. Whichever path they take, ordinary Bulgarians, Slovenes, Czechs and Hungarians, all of whom get the chance to vote this year or next, face rising unemployment and stagnating wages.

Many of the 100 million-odd people who joined the European Union in the last decade hoping for western-style living standards are losing hope. Austerity is at least partly to blame. Under pressure from Brussels to reign in budget deficits, governments have cut costs and raised taxes, exacerbating a slowdown caused by a drop in demand for their exports in the debt-choked eurozone.

In the Czech Republic, anger over austerity has lifted the Communists - little reformed since they ruled Czechoslovakia in the Soviet era - to second place in some opinion polls, giving them as much support as Necas's ruling Civic Democrats and their partners TOP 09, combined ahead of an election next year. In Hungary, a fragmented opposition poses little threat to Prime Minister Viktor Orban, but a full 40 per cent of the electorate is undecided ahead of a 2014 vote. And in Bulgaria, there is a risk that an early election as soon as April will produce a stalemate like those that have clogged up reforms in neighbours Greece and Romania.

Full article



© Reuters


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