The Eurozone Crisis and EU’s “Sins of Illiberalism”

The EU is identified as a soft and normative power with a capacity to transform politically the countries which aspire to become its member states. The enlargement of Central and East European countries was considered the pinnacle of the EU’s transformative power; a process of EU induced political change of the post-communist states through the accession process, political conditionality and socialisation with democratic Europe.

In 2004, eight countries from Central and Eastern Europe, having gone through a profound process of pre-accession transformation, were deemed ready for membership of the EU from, among others, a liberal democratic point of view. Hungary was among the frontrunners of this accession process, a country which managed its europeanisation more successfully than many other countries of the post-communist East. So why is Orban’s Hungary the most prominent case of illiberal EU member state with an admiration even for some of Putin’s tactics?

Today, Hungary is considered the most dramatic democratic backsliding of the eastern enlargement group. What makes is more worrying is that the second most popular party is after Fidesz is the more undemocratic and far right Jobbik. In some respects, Hungarian politics are unique in the EU and such developments have to do with domestic peculiarities, including wrongdoings by the country’s political elites and a background of severe economic crisis and financial vulnerability. However, Hungary’s current political illiberalism is also a reflection of the EU’s own state of play, where euroscepticism is on the rise and far right parties in many countries of Western and Eastern Europe are contaminating the liberal discourse of the mainstream political parties. We observe in most countries of Europe a rise of nationalism, a decline of trust vis a vis EU institutions, a growing aversion towards immigration, and even in some circles a dislike towards the free movement of people within the EU itself.

While some signs of euroscepticism and enlargement fatigue were evident even before the eurozone crisis which erupted in 2009, the latter contributed to the weakening of the European project from an economic and political point of view including the increase of illiberal voices. Hungary was the first country in Europe to experience the impact of the global financial crisis in 2008 with a serious drop of its GDP, a rise of protest politics, euroscepticism, a prominent far right and the mutation of the initially liberal Fidesz to an illiberal party in power. At the heart of the eurozone crisis lies Greece, a country whose democracy was drastically affected, through the collapse of its dominant two party system (New Democracy-PASOK) and with subsequent ground-breaking political ramifications and the rise of new political parties including the far right Golden Dawn.

My argument in this paper is that the rise of illiberalism in Europe is largely due to the eurozone crisis, the EU’s inwardness and its diminishing transformative capacity. I argue that not only is the EU’s normative influence declining, it also deals ineffectively with the various national expressions of illiberalism in three geographic spheres: its own democratic member states; the aspiring member states; its neighbourhood in the south and the east. The EU’s political influence hurts at a global level and its democratic model is struggling with competing narratives coming from other global players like Russia or China.

Due to the dominance of the economic crisis, the EU has committed “two sins of illiberalism”: first, illiberalism by omission in that the eurozone crisis has dominated the agenda and brought to a secondary position matters of a more political and democratic nature; and second, illiberalism by commission whereby the EU with its own actions has exacerbated democratic deficits through the creation of EU asymmetries among states and growing inequalities in the weaker periphery; through the strict imposition of austerity policy and a higher degree of external intervention into sovereign fiscal domains, the EU has led to the rise of reactionary political formations and strong Eurosceptic voices.

Europe’s declining normative influence

What distinguishes the EU from other competing powers in the multipolar world is a “soft”, democratic narrative, a primacy of liberal values and norms, vis a vis the more strategic and hard (military) power of other global players, such as Russia. The EU is challenged by varying degrees of illiberalism and undemocratic practices in three regions: inside the EU by populist backsliding; in the candidate countries by stalled democratic progress; in its neighbourhood by alternative discourses of political power. These three spheres could be personified in the politics of Orban-Erdogan-Putin.

Inside the EU: Populist politics

Inside the Union, Hungary’s Fidesz is a prominent case of an EU government which defies some of the basic premises of the EU liberal approach in the fields of media, immigration or capital punishment, and espousing even a more explicit anti-European rhetoric in its ideology. Beyond Hungary, EU democracy is threatened by a number of far right populist parties in many west European countries, parties which are using a clear populist discourse, with overt or covert racist tones and an ultra-nationalistic and anti-European language. The European Parliament elections of 2014 confirmed a turn towards more eurosceptic, populist political tendencies with the dramatic rise of anti-European and far right parties in some of the strongest north European economies (Austria, Denmark, France, Britain).

The impact of the eurozone crisis and the struggle to save the European economy from disintegration put democratic politics to the test. Market pre-eminence, focus on banking union, fiscal consolidation and severe austerity have affected liberal politics, labour rights and parliamentary practices. Greece is the epitome of this impact on the country’s politics; in Greece, the economic crisis has challenged the fundamental premises of the political and social foundations which were laid after the end of the military junta in 1974 and in the subsequent decades; a democracy which was considered to be a success story and a model (together with Portugal and Spain) for the Central and East European countries; today in Greece, mainstream politics have been delegitimised, middle class is dislocated, social relations have decayed and many democratic practices are often abused in the parliament, in the media, in the trade unions, in the country’s self-determination and self-definition.

With this in mind, one can see some tentative similarities between Greece and Hungary, two cases where democratic politics have been affected by the economic crisis and where past political elites have been discredited. Both countries went through deep economic crisis, Hungary the first EU country to be hit severely by the financial crisis in 2008, and Greece the first EU country to be hit severely by the sovereign debt crisis in 2009. Both experienced dramatic drops in their respective GDPs, protest politics and the rise of far right parties; in fact, Jobbik and Golden Dawn are displaying some incredible similarities in their ideological discourses and political styles.

Both Hungary and Greece are small states in the periphery of the EU facing serious immigration challenges. They are cultivating ties with Russia, even willing to turn blind eye to the excesses of the Putin regime or its aggression in neighbouring Ukraine. Both are currently challenging the EU’s foreign policy through the use of the geopolitical card of Russia as a counterweight to the EU. The find themselves isolated in the EU arena without allies as a result of their governments’ internal and external choices and both governments are tuning into a neo-nationalist agenda overstating external dangers to the nation state. What is interesting is that these similarities come from two different ideological directions, a conservative government in Hungary and a left-wing government in Greece, but this is an indication on how ideologies have been muddled in the new European environment.

European democracy is going through a national sovereignty crisis as a result of the member state power asymmetry, expressed vividly by the economic and political rise of the north of Europe with Germany at the pedestal, the tightening of external control over internal finances and the marginalisation of some of the weaker economies. Greece is a case in point with its decrease of national authority over internal political, economic and social affairs: loss of fiscal control, increasing debt obligations, pressures from austerity politics; at the same time, laws have to be passed in parliaments through emergency procedures and party politics become divided and polarised into fighting opposing camps. Some of these trends are also visible in other peripheral, weaker economies that had to adopt bailout programmes and saw their incumbent elites delegitimized and punished in national elections.

EU candidate countries: Stalled democratic progress

EU liberal democracy is not simply challenged from within but increasingly from political practices in EU candidate countries and aspiring member states. While enlargement fatigue among many old EU member states was a phenomenon which occurred right after the eastern enlargement, the eurozone crisis gave a big blow to the transformative power of enlargement as the most effective instrument of political change in prospective member states. The emphasis on economic eurozone priorities, the self-absorption of the EU and the nationalistic turn of member states affected the enlargement strategy which became a second order policy within the EU’s and the European Commission’s agenda.

Two examples stand out as democratic backtrackers during the last few years: Turkey and Macedonia, having achieved significant democratic successes in the initial years of their engagement with the EU’s enlargement strategy, they gradually modified their political priorities towards more illiberal and authoritarian directions, distancing themselves from the EU democratic and liberal model. One common feature in both states is the longevity of their respective leaderships, who have remained in power for so long that they feel possessive of the state, indisputable in party politics, controllers of the media and builders of their own majorities as their legitimating pillars. Time and time again, Turkey and Macedonia have been accused of losing touch with democratic procedures, amid claims for corruption scandals and rising personal power. In both cases strong leaderships manipulate institutions and constitutional politics aiming at preserving their strong hold on political power. Macedonia under Grueski and Turkey under Erdogan have chosen to follow an independent course of action vis a vis the European Union and to opt out from the scrutiny and monitoring of the European Commission.

That the EU’s influence is waning over candidate countries is proven by the current state of stalled negotiations, the deadlocks in the accession process and the distancing between the two parties; Turkey has a big number of frozen chapters in its accession talks with the EU; Macedonia has not been able to start accession talks not only on the grounds of its unsolved constitutional name of the country and Greece’s veto, but increasingly over undemocratic practices.

Elsewhere, the waning influence of the enlargement strategy and the declining normative influence of the EU is observed in Bosnia, a country slipping more and more into ethnic party politics, amid the most complicated and impossible to reach decisions governance structure in the European continent. Bosnia is stuck in its association process with the EU, as a result of political resistance and lack of political will to implement some basic democratic changes and political conditions requested by the EU. But what is more impressive is the inability of the EU which has spent so much money, time and energy on this small post-conflict state, to make any difference or to have some positive political impact. On the contrary, the largely problematic states of the Western Balkans, producers and exporters of conflicts and instability in Europe during the 1990s, since the start of the Eurozone crisis they have themselves become consumers and importers of crisis from Europe.

EU’s neighbourhood: Alternative discourses of security politics

Further beyond in the neighbourhood, the EU is facing a combination of security and undemocratic challenges. On the one hand, in the Maghreb and Mashrek countries following the failed Arab spring politics, EU democracy promotion and political conditionality have become weak instruments of pressure and change. At its more extreme, the ISIS advance and growing Islamic fundamentalism pose not just an external threat to Europe’s stability but an internal threat through infiltration to Muslim communities in Europe. On the eastern side of the neighbourhood, the EU is facing a big challenge and competition with Putin’s Russia. More and more, the EU is competing in cold war terms with Russia’s regional and global influence, faced with an alternative ruling style of a authoritarian competitive system under an iron fist of the leader.

The challenges to European democracy from the eastern and the southern neighbourhood are not new and have been around in one form or another, since the dramatic 1989 revolutions and the victory of pluralist democracy at a global scale. But during the 1990s and the 2000s, the EU was able to project its democratic influence in its relationships with third states, through the promotion of democracy and the adoption of a strict political conditionality as prerequisites for the creation of external partnerships. Its Eastern partnership and its Euro-Mediterranean policies are gradually becoming obsolete frameworks that are in urgent need of redefinition.

Overall, we are witnessing the EU’s declining normative influence in three levels: inner circle of membership, middle circle of prospective members and outer circle of neighbourhood, and is expressed in the primacy of hard core economics, the weaker promotion of democracy, the inefficient political conditionality and the gradual realisation that illiberalism is becoming a threatening part of several national competitive politics. Within this climate, it is understandable how illiberal politics of the trio “Orban-Erdogan-Putin” are not just allowed to develop but also in a position to challenge the normative European project.


Othon Anastasakis
Illiberal Democracies