The Economic Successes and Sources of Discontent in East Central Europe

Abstract

By some measures, the European Union’s Eastern enlargement, and the attendant securitization of East Central Europe through membership in the North Atlantic Treaty Organization, have brought significant economic and welfare benefits to the former Soviet satellites or republics that have joined these organizations. All of their economies are considerably larger than in 1989. Foreign investment has helped fuel significant growth in the region, and financial linkages between East and West had a stabilizing influence during and after the US financial crisis of 2008-09. But economic success in absolute terms has not prevented a sense of disappointment from settling over the region, nor has it forestalled an illiberal backlash in a number of countries, which has had economic, political, and in some cases ethno-populist dimensions. This article examines some of the main economic trajectories around growth, consumption, investment, and finance. It explains why, despite numerous positive measures, both economic and political liberalism are under intensifying scrutiny. Growing inequality within countries, as well as continuing inequality – including power disparities between East and West Europe – have fueled discontent with the terms on which many East Central European states have integrated into the EU.