13 - Reassessing the neo-liberal development model in Central and Eastern Europe

Summary

From the point of view of many participants and observers, the breakthrough of 1989 was nothing else but the historical victory of liberalism over socialism.

(Szacki 1995 [1994]: 3–4)

The standard stabilization principles apply here: fiscal deficits must be eliminated, money creation controlled.

(Blanchard et al. 1993: xii)

Developments outside Slovakia have been exceptionally turbulent since 2008, which makes the need to provide certainty for our citizens ever more pressing. The Government…will guarantee sound and sustainable economic growth…which is not based predominantly on cheap labour, uncertainty in industrial relations, impaired health and safety at work, agency work, speculation and fraud.

(Government of the Slovak Republic 2012)

Introduction

Central and Eastern European countries were global leaders in the adoption of neo-liberal ideas and policies during the 1990s and 2000s. After being ruled for decades by communist political regimes that rejected free-market economics, Central and Eastern European countries were among the least liberal societies in the world in 1989. The following two decades witnessed a dramatic catch-up with and popularization of Western liberal norms. Estonia, for instance, which was part of the Soviet Union for almost fifty years, transformed into one of the most liberal economies in the world and a Eurozone member in the twenty years between 1991 and 2011. Its economic liberalism now exceeds that of most Western European countries. Other countries moved at their own pace, in their own way, and with greater or lesser trouble, but nearly all Central and Eastern European countries adopted neo-liberal ideas and policies at a dramatic rate for the better part of two decades.