The former Secretary of Defense Donald Rumsfeld is commonly given credit for coining the term “New Europe” a decade ago, in reference to the post-communist countries of Central and Eastern Europe. At the time, these countries were counted amongst the most staunchly pro-American members of NATO—and also among the boldest economic reformers on the continent, cutting their taxes and privatizing social security systems.
Today, the situation could not be more different. With the likely exception of the Greek Prime Minister Alexis Tsipras, Prime Minister of Slovakia Robert Fico and President of the Czech Republic Milos Zeman are the only leaders of NATO countries who will be in Moscow tomorrow to commemorate the end of the Second World War. Honoring the fallen soldiers is a worthy gesture, but the context is iffy—not just because these leaders are joining a slew of despots including Kazakhstan’s Nursultan Nazarbayev and Venezuela’s Nicolas Maduro—but also because of Russia’s ongoing aggression in Ukraine.
Fico’s and Zeman’s teams are trying spin the story by making sure that the leaders will not participate in the military parade on the Red Square (although they are scheduled to appear at the reception hosted by Vladimir Putin in the Kremlin). This move will do little to assuage fears that they are forming cozy ties with the Russian regime.
Beside Messrs. Fico and Zeman, Prime Minister Viktor Orban of Hungary is widely seen as Putin’s closest ally in Europe. Last year, Orban reached a €12-billion nuclear energy deal with Russia’s state-run Rosatom (a deal later overturned by the EU’s nuclear energy agency). Orban tried to make the details of this agreement classified for the next thirty years.
With some exceptions, the reform zeal is gone as well, replaced by complacency and pervasive corruption. Corruption levels in Slovakia, Hungary, and the Czech Republic—as measured by the World Bank’s Worldwide Governance Indicators, for example—are at higher levels now than in any year since the accession of these countries into the EU.
According to a 2013 Eurobarometer survey on corruption, 33 percent of Slovaks personally know someone who takes or has taken bribes, compared to only 12 percent across the European Union. Worse yet, 39 percent of Hungarians (and 29 percent of Slovaks) consider it acceptable to give money in order to “get something from the public administration”—as opposed to just 7 percent in Finland.
Rampant corruption erodes trust in the new political institutions and fuels discontent. New research by economists Simeon Djankov and Jan Zilinsky of the Peterson Institute suggests that, even when we account for the differences in wealth, the denizens of post-communist countries are markedly less satisfied with their lives than their peers elsewhere. Furthermore, corruption explains a large fraction of that divergence.
Corruption has also given Russia leverage in the region. In recent years, the influx of Russian funds into Latvia, for example, has raised fears of money laundering and Russian infiltration. It was reported that the 2009 electoral campaign of Nils Usakovs—the current Mayor of Riga and the leader of the pro-Russian political party, Harmony—was funded by Russian foreign intelligence.
Brussels deserves some of the blame. Billions of euros of “structural funds” from the EU often ended in pockets of local oligarchs, encouraging corrupt practices. According to Transparency International, the “normal” profit rate in Hungary is between 10 and 15 percent for small procurement projects—and likely much higher for the large, overpriced infrastructure projects funded by the EU.
A lack of American leadership in the region played an even more significant role. U.S. funding to civil society organization and the U.S. government-funded Radio Free Europe/Radio Liberty once played important roles in promoting sound policies and government accountability. Since American policymakers have shifted their attention elsewhere, the region’s underfunded media and civil society organizations have struggled to keep an eye on politicians—and to contain the Kremlin’s propaganda.
In 2008, the administration of President Obama also decided to “reset” the U.S.-Russia relationship and scrap the plan to build a missile defense shield in Central Europe. Central Europeans reciprocated America’s lack of interest by growing lukewarm toward the alliance, with defense spending dwindling way below 2 percent of GDP, an aspirational goal set by NATO.
Instead of reinvigorating NATO and the EU, “New Europe” risks becoming a liability. The situation is not hopeless, but in order to prevent the region from degenerating into an assortment of corrupt and dysfunctional countries used as Putin’s fifth column, the West needs to recognize quickly that something has gone terribly wrong in this part of the world.