ABSTRACT
Far-reaching democratization, economic liberalization, marketization, pri-
vatization, restructuring and reform of the legal system were carried out fairly successfully and expeditiously in East Central Europe during the 1990s, assist-
ing the emergence of relatively liberal and robust forms of market economy and representative government in most of the region. (the main misgivings concern Hungary – see below). Most of this region’s economies have greatly
benefited from their inclusion in the 2004 “eastward enlargement” of the EU and from their close proximity to (and increasingly deep integration into) the
strong and dynamic German and Austrian economies, many of whose successful exporting firms have found it expedient either to relocate or outsource/
subcontract much of their production from high-waged and strongly unionized Germany and Austria to relatively low-waged and weakly unionized but well
educated, trained and skilled East Central Europe. This helped the economies of the Czech Republic and especially Slovakia and Poland to grow rapidly from 2002 or 2003 to 2007 or 2008. It also shielded them somewhat from the full
blast of the major economic crises of 2008-09, centred in five excessively “financialized” Atlantic economies (USA, UK, Ireland, Spain, Iceland) which
also suffered burst “property bubbles”. Unfortunately, deep integration with Germany and Austria, which had
helped to reduce the negative impact of the Atlantic-centred financial/ economic crisis of 2008-09 on East Central Europe, exposed this region to the
full blast of the Eurozone crisis of 2010-13 and helped push the Czech Republic, Hungary and Slovenia into a second recession in 2012 (the first being in
2009). The region’s recovery could falter if the (still very shaky) Europe-wide economic recovery expected in 2014-15 were to be choked off by further financial crises and/or strict enforcement of the very rigid fiscal austerity
regime adopted by the Eurozone in 2010-11. The disappointing performance of post-communist Hungary (politically as
well as economically) and recent major economic setbacks in Slovenia have indicated that locational advantages, inclusion in the 2004 “eastward enlarge-
ment” of the EU, flying starts during the 1990s and “being East Central European” would not automatically guarantee that post-communist political
and economic transformation would be accomplished much more successfully in East Central Europe than in the much more troubled Balkan states. There are no culturally or locationally preordained outcomes. Circumstances and how
astutely governments or regimes play their hands have mattered more than the quality of the hands that those governments or regimes were dealt.
