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This site is no longer active. Please go to edwardlucas.com/blog instead Regards Edward
Friday, August 13, 2010
Thursday, June 17, 2010
Redesign pending
Sorry for the long gap in posting material on this blog. I have been busy launching an Economist blog called Eastern Approaches
This site has been redesigned and will be relaunched shortly at www.edwardlucas.com
Thursday, May 27, 2010
the rise of English (book review_
The rise and rise of English
Top dog
May 27th 2010
From The Economist print edition
Globish: How the English Language Became the World’s Language. By Robert McCrum. W.W. Norton; 310 pages; $26.95. Viking; £20. Buy from Amazon.com, Amazon.co.uk
ENGLISH is what matters. It has displaced rivals to become the language of diplomacy, of business, of science, of the internet and of world culture. Many more people speak Chinese—but even they, in vast numbers, are trying to learn English. So how did it happen, and why? Robert McCrum’s entertaining book tells the story of the triumph of English—and the way in which the language is now liberated from its original owners.
The author’s knack for finding nuggets enriches what might otherwise seem a rather panoramic take on world history from Tacitus to Twitter. Take the beginnings of bilingualism in India, for example, which has stoked the growth of the biggest English-speaking middle class in the new Anglosphere. That stems from a proposal by an English historian, Thomas Macaulay, in 1835, to train a new class of English speakers: “A class of persons, Indian in blood and colour, but English in taste, in opinion, in morals, and in intellect.” At a stroke, notes Mr McCrum, English became the “language of government, education and advancement, at once a symbol of imperial rule as well as of self-improvement”. India’s English-speaking middle class is now one of the engines of that country’s development and a big asset in the race to catch up with China.
Bit by bit, English displaced French from diplomacy and German from science. The reason for this was America’s rise and the lasting bonds created by the British empire. But the elastic, forgiving nature of the language itself was another. English allows plenty of sub-variants, from Singlish in Singapore to Estglish in Estonia: the main words are familiar, but plenty of new ones dot the lexicon, along with idiosyncratic grammar and syntax.
Mr McCrum hovers over this point, but does not nail it. English as spoken by non-natives is different. The nuanced, idiomatic English of Britons, North Americans, Antipodeans (and Indians) can be hard to understand. Listen to a Korean businessman negotiating with a Pole in English and you will hear the difference: the language is curt, emphatic, stripped-down. Yet within “Globish”, as Mr McCrum neatly names it, hierarchies are developing. Those who can make jokes (or flirt) in Globish score over those who can’t. Expressiveness counts, in personal and professional life.
The big shift is towards a universally useful written Globish. Spellchecking and translation software mean that anyone can communicate in comprehensible written English. That skill once required mastery of orthographical codes and subtle syntax acquired over years. The English of e-mail, Twitter and text messaging is becoming far more mutually comprehensible than spoken English, which is fractured by differences in pronunciation, politeness and emphasis. Mr McCrum aptly names the new lingo “a thoroughfare for all thoughts”. Perhaps he should have written that chapter in Globish, to show its strengths—and limitations.
Iceland
Life in Iceland
Nasty, brutish and short
May 27th 2010
From The Economist print edition
Wasteland With Words: A Social History of Iceland. By Sigurdur Gylfi Magnusson. Reaktion Books; 288 pages; $39.95 and £25. Buy from Amazon.com, Amazon.co.uk
FILTHY, damp, cold and exhausting, living in Iceland for most of the past millennium had one redeeming feature: that the long dark winter evenings gave people the chance to read a lot and tell stories. That combination of cultural depth and material backwardness is the central message of Sigurdur Gylfi Magnusson’s social history of one of Europe’s smallest and remotest countries.
Given its 300,000 population (about the size of New Orleans), Iceland produces a lot of news. Its volcanoes and banks have blown up with dreadful consequences for locals and outsiders alike. Alone in Europe, it husbands its fish stocks properly. It used to be horribly expensive to visit. Now its hauntingly barren landscape is a bargain holiday destination. This book, drawing on Icelanders’ astonishingly detailed diaries and letters in past centuries, gives the outsider a rare glimpse into the past lives of an extraordinary people.
The story is not wholly pleasant. Even readers with strong stomachs will find them tested. The book opens with an account of a man who rips his own testicles off with a cord after a tantrum involving allegations of infidelity. The pressure-cooker of emotions induced by isolation (the road round the island was completed only in 1974) dispel any stereotypes of Nordic stolidity. The dank squalor of the turf-built hovels in which most Icelanders lived is described with disconcerting relish, along with the suppurating sores, stoically borne, that resulted. Clothes were boiled in urine occasionally, but were otherwise worn without washing.
Life lightened up in the 19th century when mechanisation allowed Icelanders to make some money from fish. In 1940 British and then American forces occupied the island to safeguard it from Nazi Germany. That broke the country’s isolation for ever. The author regards with distaste the pell-mell enthusiasm for globalisation, and casino capitalism that marked the last decade. He is particularly scathing about the bogus boom-year talk of the virtues of the Icelandic national character (innovative, resourceful, etc). Thrift and hard work, not showing off and speculation would have been more accurate, he says.
Books on Icelandic social history are rare. So it is a pity that this one has so many odd omissions. The author barely mentions the greatest tragedy in Icelandic history, the colossal volcanic eruption of 1783 which cut the island’s population by a fifth, to just 40,000 people. He writes a lot about childhood (and child labour) but rather little about sex (which helps while away those dark winter evenings). In particular, he says almost nothing about the country’s fascinating national cuisine. Iceland is a country where raw puffin hearts, pickled rams’ testicles and putrefying shark flesh are all regularly eaten. It may be that, as an Icelander himself, Mr Magnusson does not find such dishes particularly exotic. His readers, especially the unsqueamish ones, would be hungry to know more.
More jokes, please
Explosive humour
May 27th 2010, 13:03 by E.L. | LONDON
JOKES helped make communism collapse. “Anekdoty” as they were termed, helped dispel the climate of fear and highlighted the backwardness and stagnation that were the hallmark of central planning and the police state. The best ones were about people like Brezhnev; few found Stalin a good subject for humour.
But since then life has become trickier for jokesters. Mocking other countries can easily seem patronising and crude. The fictional Borat was hilarious for people who couldn’t find Kazakhstan on a map, rather less so for Kazakhs (and for the Romanian villagers gulled into taking part as extras). Poland’s then deputy foreign minister Radek Sikorski won kudos in 1999 by forcing CNN to apologise after Ted Turner told a silly joke implying that Polish sappers used their feet to detect mines.
Some old joke themes survive. The “hot Estonian guy”, famous for his dim wits and low libido is highly amusing for that country’s envious southern and eastern neighbours. Jews are still canny; pensioners, such as the stereotypical elderly Hungarians Kohn and Grün, are fearful of the future (and sometimes of the fast-changing past). Jokes about “new Russians” and their crudeness and extravagance are legion. But for the most part political correctness has taken its toll. Ethnic stereotypes, once a handy summary of the plusses and minusses of national character, are now seen as thinly disguised racism. Even the most side-splitting joke about, say, a scheming Romanian, a cowardly Czech and a gloomy Hungarian risks attracting a rebuke rather than a roar of approval.
This is not just an ex-communist phenomenon. A recent column which lightheartedly chopped Italy in half and suggested that the southern bits might be nicknamed “bordello” produced some anguished responses (as well as a much larger number of appreciative ones). So did an animated version published a couple of weeks later. the arrival of a TV crew from Rome, solemnly eager to interview the author of the “provocation”.
But a joke-less future would be a bleak one indeed. And good though the old jokes were, it is high time for some new ones. Promising themes might be the sleaze and cronyism of post-communist politics, the stitch-up of Europe between big countries at the expense of small ones, and the lamentably inadequate response of the continent’s political class to the economic crisis.
To avoid offence, every country should concentrate on developing self-deprecating jokes (just as rabbis tell the best Jewish jokes). Estonia has (as in so many things) paved the way here, with two sharply amusing videos, one lampooning that country’s tendency to ignorant self-centredness, a second one its timidity and negativism. Self-deprecating humour is the ultimate sign of emotional and political maturity, just as a rabid prickliness is typically a sign of unresolved complexes about superiority, inferiority, and lack of attention from the outside world.
The sanction for those countries that don’t produce enough self-critical jokes is a simple one: they will be ignored. That is an even worse punishment than being mocked. An Estonian businessman of your columnist’s acquaintance was recently posted to Vilnius to sort out his company's troubled subsidiary there. He forced through radical management changes involving minute-taking, attendance at meetings and punctuality. In return, he sat through a week of back-slapping anecdotes about Estonians's social, sexual and other short-comings. Eventually his hosts tired of the fun and asked him for some Estonian jokes about Lithuanians. “We don’t have any. Our jokes are about the Finns”, he responded coolly.
Readers are welcome to post jokes in the comments section below and to recommend the ones they like best. A future column will pick some winners. Political correctness will not be applied, so ethnic stereotypes, historical grudges and other forms of grotesque unfairness will (within reason) be tolerated.
Slovakia Hungary
(a quick blog posting from today)
Pandora's passports
May 27th 2010, 13:50 by E.L. | LONDON
IN SOME parts of the world, having two or even three passports is nothing unusual. Plenty of people in Ireland (north and south) have both British and Irish passports; a sprinkling have American ones too. Even countries that frown on dual citizenship rarely make much of a fuss about it (not least because it is so hard to police). That lesson seems to be lost on Slovak and Hungarian politicians, who are cooking up an almighty row about the Hungarian new dual citizenship law which will give all ethnic Hungarians outside the country the near-automatic right to a Hungarian passport. The new law, passed by parliament on May 26th, removes the requirement for permanent residency in Hungary; in future, applications will simply need to show they speak Hungarian and have some Hungarian ethnic roots (such as a Hungarian grandparent).
For Hungarians, that salves a wound that has been open since 1920, when the Treaty of Trianon dismembered old Hungary, leaving more than three out of ten Hungarians stranded in other countries such as newly independent Yugoslavia and Czechoslovakia and a much bigger Romania. Giving passports to these Hungarians, who now number around 2m, appeases the radical right in Hungary and also signals to other countries that the Magyar minorities have a protector. That does not matter much in places such as Serbia, Slovenia or Austria, where Magyars live happily alongside their fellow-citizens. But it is potentially explosive in Slovakia, where some in the Slav majority are twitchy about what they see as the uppitiness of the ethnic Hungarian minority, who number about 10% of the population. Slovakia has annoyed Hungary, and alarmed some outsiders, with a poorly-drafted language law that in some cases penalises the use of the Hungarian language.
So Slovakia has protested, appealed to outsiders, and now says it will strip dual passport-holders of their Slovak citizenship. In theory, the fact that both countries belong to the European Union should mean that passports are largely irrelevant. Hungarian passport-holders have the right to work and live in Slovakia just like any other EU citizen. But these sort of ethnic-historical squabbles are just the sort of thing that EU enlargement was meant to settle. It is troubling to see them bubbling up. When Slovakia's new government takes office at the end of June, outsiders will be hoping to see some serious diplomacy between Bratislava and Budapest.
It is also odd to see ethnicity taking such precedence over more modern forms of political identity. The term "ethnic Hungarian" is convenient journalistic shorthand but a poor basis for legislation. There are people who speak excellent Hungarian but have no Hungarian ancestry, and others with pure Magyar blood (nasty term) who happen not to speak the language. It would take a new Nuremberg Law to determine exactly what level of Hungarian ancestry counts as sufficient.
Hungary would be on stronger ground if chose political-historical rather than an ethnic base for the law. For example, it could say that anyone whose ancestors were citizens of the old Hungarian Kingdom had the right to apply for a passport from the modern republic. (Estonia and Latvia took that approach when they regained independence in 1991, giving passports automatically to all citizens of the pre-war republics, regardless of ethnicity, while asking Soviet-era migrants to apply). If Hungary did the same, it is a fair bet that few non-Magyars would bother to take up the offer.
Friday, May 21, 2010
Europe view no 184
Europe.view
An unfinished revolution
Public life in the ex-communist world is again run by a well-connected elite. But things may be starting to change
May 19th 2010 | From The Economist online
The Europe.view column will henceforth appear as a weekly posting at Eastern Approaches, The Economist's central and eastern Europe blog.
IN THE communist era, the countries of eastern and central Europe were run by tightly knit clans. Connections, particularly those of your parents, mattered more than ability. The same kind of people held the top jobs in the ruling party, in government, in media and in commerce and industry. One of the most potent fuels for the revolutions of 1989 was public discontent with this closed system and the unfairness and incompetence that went along with it.
It worked for a time. In the 1990s, social mobility, in both directions, was huge. Some of the former elite ended up washing dishes or selling insurance. People from the fringes of society (unemployed playwrights and electricians) rose to giddy heights. Capitalism opened huge possibilities for the flexible and ambitious. And if you didn’t like it, you could always leave: millions of people tasted the difference with work and study abroad.
They won that fight
But the new era proved brief. Instead of the old monopoly, a new cartel now holds sway. It is not so blatant. The communist parties' statutory grip on power is gone, as are the grim, grey men of the secret police. But from the Baltic to the Black sea, public life has again started looking like a game for insiders. The same people, with backgrounds in the same elite universities, with wealthy and well-connected parents, dominate politics, the media and top jobs in officialdom. Social mobility is slowing in many parts of the developed world, particularly Britain and America. But it is tantalising to see it fade in “new Europe”, which once seemed so open and dynamic.
The problem is most acute in politics. Generous subsidies for established parties rig the system against outsiders and newcomers. Electoral rules have the same effect—candidates for election face onerous registration requirements, for example. When voices are muffled, so are choices. Emigration, and in extreme cases even depopulation, is the unwelcome result.
But change does seem to be afoot. Running as an independent, Indrek Tarand, a popular former official, won a surprise victory in Estonia’s elections to the European parliament last year. In Hungary, the green-tinged anti-corruption movement Lehet Más a Politika (Politics can be different) won an unexpected 7.5% of the vote in the recent parliamentary elections. Less pleasingly, in the same election the far-right anti-establishment Jobbik party won nearly 17%, helped by protest votes as well as its traditional racist base.
The trend is visible elsewhere in central Europe. As the print edition reports this week, new parties and protest movements are making inroads into the clubby politics of the Czech Republic and Slovakia. Some, such as the Slovak Sloboda a Solidarita (Freedom and Solidarity), make heavy use of the internet. In the Czech Republic, a movement called Change the Politicians uses smartly made video clips of cultural hotshots such as Aňa Geislerová, Aneta Langerová, Marta Kubišová and Jiří Stránský denouncing corruption and calling for change.
But complaining is easy, as is casting a protest vote. The newcomers will certainly put the old guard under greater scrutiny, dent cultures of impunity and give heart to others who want to change the system. But that is not enough. What the ex-communist countries need is a big new impetus, to complete the changes in officialdom and public services promised but not fully achieved after the collapse of communism. Accession to the European Union and NATO gave that process a boost, but it has proved only temporary. In some respects, the countries of the region are regressing. To restore momentum the new outsiders must show that they can win power and use it—and at the same time not fall into the mire that has engulfed their predecessors.
Thursday, May 20, 2010
Important announcement
I have also been made International Editor, starting in September. However I will continue to write on the east European region for the print edition of the Economist, as well as running a new blog called Eastern Approaches.
I am delighted to receive material from outsiders. It need be no more than a short email and a link to something interesting, such as a news item, a pamphlet, or another blog. My aim is to post something new every day. I am also interested in books which I can feature in the "Book of the Week" slot. My email is edwardlucas(at)economist.com
My column Europe View will now move to this blog as a regular weekly posting. It has had 183 outings in its current form, and (and another 100-odd in its humbler preincarnation as Wi(l)der Europe in European Voice).
I will continue to post my main articles from The Economist and other outlets on this blog, which is about to have a snazzy redesign.
Monday, May 17, 2010
Estonia after the Euro
Thursday, May 13, 2010
Battle of Britain book review
Britain and the second world war
Boys in blue
May 13th 2010
From The Economist print edition
The Battle of Britain: Five Months That Changed History, May-October 1940. By James Holland. Bantam Press; 677 pages; £25. Buy from Amazon.co.uk
EVERY country’s version of the second world war is selective. For Russians, it starts with Hitler’s unprovoked attack in 1941 and highlights the colossal battles in the east. For Americans, it starts with Pearl Harbour and features the Normandy beaches and Guadalcanal. Germans may privately start the story rather earlier, with the humiliation at Versailles which brought economic collapse and fuelled Hitler’s rise to power.
Each version is true up to a point. And each seems a bit odd to outsiders. James Holland’s comprehensive and readable history of the battle of Britain exemplifies the particular British blend of amnesia and nostalgia that the war arouses.
Yet in any terms, this is a tremendous story. In September 1939, Britain was fighting a phoney war alongside a seemingly powerful ally, France. Less than a year later, the country’s survival depended on whether a fragile array of a few hundred fighter planes, flown by exhausted young men, could prevent Hitler’s Luftwaffe from gaining the air superiority necessary for “Operation Sealion”: the first invasion of England since 1066.
The happy combination of youthful gallantry triumphing against overwhelming odds with brainy boffins giving the vital technological edge (through radar, and the brilliantly designed Spitfires and Hurricanes), as well as inspirational leaders using flawless tactics and matchless rhetoric, is irresistible. The author has an encyclopedic knowledge of his subject, weaving together reminiscences from both sides, statistics and technical details into the broader picture.
He describes the collapse in France and the near-miraculous rescue in mid-1940 of nearly 340,000 British and French soldiers from the beaches of Dunkirk. He also tells the story of the carnage of poorly protected merchant shipping in the early months of the war which threatened to strangle Britain’s supply lines. He ends with Hitler’s fateful decision to postpone Sealion in September of the same year. The Luftwaffe had lost too many planes and pilots to the RAF’s fighters, while Bomber Command had punctured Germany’s myth of invincibility. It was, as Winston Churchill said, not the beginning of the end but the end of the beginning.
Published to mark the 70th anniversary of the battle of Britain, this book should sell well. But it will leave many readers unsatisfied. One problem is its glibness. Hitler can rightly be criticised for his many disastrous mistakes. But to write of the Nazi leader’s “almost complete lack of military understanding” is wrong: his problem was too much (self-taught) military knowledge, not too little. Similarly, to call the German general Gerd von Rundstedt a “pigheaded fool” is lazy language that would be out of place in a schoolboy essay, let alone in something that purports to be the work of a professional historian. Throughout the book, the language is unsettlingly colloquial and anachronistic. Confusingly, Mr Holland calls the pilots by their first names, though they refer to each other in diaries and memoirs by their surnames.
A bigger problem is that the author’s enthusiasm for his subject is not matched by his grip of history. He peddles the Anglocentric myth that Britain was “alone” in the summer of 1940 (insultingly forgetting Greece, Poland and the entire British empire). Too many characters appear, with annoyingly similar potted biographies. Their tinnily-told stories swamp the rather skimpy treatment of the underlying war-winning narrative, such as the innovative tactics of a brilliant New Zealander, Keith Park, and the way that Max Aitken revolutionised aircraft production. Heroism is indeed captivating. But it was more than heroism that kept Britain out of Nazi captivity.
new rachman novel
New fiction
Inky fingers
May 13th 2010
From The Economist print edition
The Imperfectionists. By Tom Rachman. Dial Press; 272 pages; $25. Quercus; £16.99. Buy from Amazon.com, Amazon.co.uk
FOR younger readers, stories about newspapers in their heyday may have a whiff of industrial archaeology, akin to tales about whaling or steam trains. Tom Rachman’s first novel is set in Rome, on a once-mighty American-owned international newspaper, surely quite unlike the (Paris-based) International Herald Tribune, where he used to work. The book links together 11 characters, each sharply drawn in a separate chapter. Read singly, each would be a good short story. Together they make an excellent novel.
The opening picture is of the paper’s elderly Paris correspondent, whose skills as a hack have deserted him after a lifetime of dissolution. The last is of the drippy scion of the once-formidable founding family, who fails even to announce the paper’s closure properly. In between comes an agonisingly incompetent new freelance correspondent in Cairo, a memorably ferocious pedant who guards the paper’s prose and accuracy, and the paper’s most loyal reader, an Italian nobildonna who, Miss Havisham-like, prefers ancient editions of the paper to the up-to-date issues.
Most of the characters have interestingly unhappy love lives, with neat twists to their betrayals and disappointments. Though bleakly portrayed, they still attract the reader’s sympathy, not least for their precarious, ill-paid jobs and filthy working conditions (the office carpets not cleaned since 1977, according to the paper’s lore). One longs for them to leave and get proper jobs.
Novels about journalism by journalists tend to be strong on score-settling and colour, but rarely survive the feuds they describe. Mr Rachman’s escapes that category. Though it lacks the transcendent absurdity of Evelyn Waugh’s “Scoop” (1938), it could sit well on a bookshelf next to Michael Frayn’s “Towards the End of the Morning” (1967), which so vividly captured the feel of the old newspaper industry in the 1960s, on the brink of its television-led transformation into the power and prestige of the “media”.
This novel describes the final echoes of the newspaper story: dedication and ambition fighting a losing battle against backbiting and cheeseparing, and ending in a largely unlamented closure. Readers will look forward to Mr Rachman’s next novel. They may hope he picks a more cheerful theme.
Estonia and the Euro
(from the Economist print edition)
The Baltic states
Euro not bust
May 13th 2010
From The Economist print edition
Estonia gets a green light to join the euro. Other Baltic states will benefit too
SURPRISES are Estonia’s stock in trade. Its return to the world map in 1991 after a 51-year absence startled outsiders. So did what came next: a fast-growing economy, based on flat taxes, free trade and a currency board. In 2004 it confounded pessimists’ expectations by joining the European Union and NATO. Now it is set to pull off another coup, gaining green lights from the European Commission and the European Central Bank in its bid to adopt the euro on January 1st 2011.
Many thought that highly unlikely. Only two years ago a property bubble in the country popped, rocking the banking system and sending GDP plunging by 14.1% in 2009. Doom-mongers said devaluation was inevitable. But they were wrong. Flexible wages and prices have helped the economy stabilise: unit labour costs fell by 7.5% in the final quarter of 2009. Exports were up by a sixth in the first quarter of 2010 and the central bank forecasts growth this year of 1% (although that depends on the pace of recovery in Sweden and other export markets).
Thanks to a fiscal tightening of a stonking 7.5% of GDP, Estonia easily meets the euro zone’s public-finance rules. Its gross debt in 2009 was only 7.2% of GDP (compared with 115% in Italy), and the government deficit is 1.7% (Greece’s is 13.6%). The concern is sustainability: will future governments be so thrifty? Inflation is low: in the past 12 months the average figure was negative, at -0.7% well below the euro zone’s 1% target. But the ECB report calls for “continued vigilance”, as well as efforts to raise productivity and competitiveness.
The real problem for Estonia is political, not economic. Some euro-zone members (France is often mentioned) think that allowing an obscure and volatile ex-communist economy to join a currency union that already has too many dodgy members should not be a priority. If Estonia is really so solid, why not wait a year to be sure?
Yet that would send a perverse message. Estonia is almost the only country in the whole EU that actually meets the common currency’s rules. All those that use the euro have gaily breached the deficit and debt limits. The grit shown by Estonian politicians and the public in shrinking spending, raising taxes and cutting wages has been exemplary. Punishing Estonia, which obeyed the rules, while bailing out Greece, which has breached them flagrantly, would do little for the euro’s credibility with governments and investors alike.
Estonia has two more hurdles to jump before it can scotch the scoffers: an EU committee meeting at the end of May, followed by a finance ministers’ summit in early June. Few think that France and other doubters will actually block Estonia’s bid; persuasion and horse-trading will probably bring agreement. Then the decision will be irrevocable. That will give heart to Latvia and Lithuania, which hope to join the euro later in the decade. Like Estonia, their currencies are pegged to the euro, so they bear the pain of a rigid monetary regime, but also miss out on the lower borrowing costs and higher investment that membership of the currency can bring.
The next task is to stoke growth and cut unemployment (now over 15%). After that, the aim should be to reach Nordic-quality public services and an economy based on brainpower by 2018, when Estonia celebrates its 100th birthday and also holds the presidency of the EU.
Europe view: Greece viewed from the region
Europe.view
Default, and other dogmas
May 13th 2010
From Economist.com
The experience of ex-communist countries in the 1990s undermines many of the claims now made about Greece
FOR anyone from the ex-communist world with a medium-term memory, the frantic efforts under way to save Greece (and the other wobbly southern members of the euro zone) are rather puzzling.
For a start, what is so bad about default and restructuring? In the 1990s Russia restructured $32 billion worth of Soviet debt into PRINs and IANs (both are now stored in the Museum of Financial Archaeology and may be viewed on application to the curator). In 1998 it defaulted on those debt instruments. People said Russia’s financial credibility would never recover. One banker said he would rather eat nuclear waste than invest in Russia again. But within a couple of years, Russia was flavour of the month.
It was the same story with Poland, which restructured its debt after 1989. Thanks to heavy politicking from America, the freely elected authorities were allowed to swap sovereign debt incurred by the communist regime into less onerous “Brady bonds” (stored in the same museum, also viewable on application). Hungary, which did not have the same backing from America, has had to pay its debt in full. That depressed its growth rate in the 1990s and meant lower government spending and higher taxes. Hungary should have benefited from this sacrifice by gaining a better credit rating. It didn’t. Funny things, markets.
The moral is that investors’ memories are short. If Greece were to restructure its debt, it would not take long for greed to trump fear and for capital to start flowing again.
A second piece of dogma undermined by the experiences of the ex-communist countries is that leaving a common currency area is all but impossible. The Czech and Slovak korunas separated without even a ripple of disturbance. The Yugoslav dinar disappeared in a puff of hyperinflation, but the currencies that succeeded it did pretty well almost from the word go. The death-agonies of the Soviet rouble were painful, but now the Russian currency is one of the most solid in the region. Dig out the drachma from the museum and it may float better than anyone expects.
But perhaps trumping these feelings of confusion is a kind of envy. Greece is benefiting from the kind of support of which the ex-communist half of Europe could have only dreamed in the 1990s. Imagine for a moment that Greece was an EU candidate country, rather than a full member of both the union and of the euro zone. To judge by the way Turkey has been treated in recent years, Brussels would be demanding not only a leaner public sector but a different political system: for example, secularisation of church-state relations, greater minority rights or a climbdown on issues such as the names the country calls its neighbours.
The big difference, of course, is that in 1981, when it joined the then EEC, Greece was just one small country emerging from authoritarian rule (and from a military regime that had been partly supported by the West). In 1989, the sentiment was different. The west Europeans felt intimidated by the ill-dressed needy hordes in the east and preferred to slow things down rather than speed them up. That led to a long process of negotiations with phoney benchmarks for reform and adoption of EU standards. That was a great business for bureaucrats and consultants. But at the end the decisions on which countries to admit were almost entirely political. Funny thing, politics.
The lesson of Greece is that faced with a big, urgent issue, Europe can get its act together. What will it take for Ukraine or Turkey, both of which arguably deserve EU membership just as much as Greece does, to gain the same kind of attention?
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