Issue 235 of SOCIALIST REVIEW Published November 1999 Copyright Socialist Review

Is the price right?

  • Hungary, Poland and the Czech Republic claim they are ready and waiting to join the EU. But there will be a price to pay.
  • According to Newsweek, Hungary will have to spend $12 billion on the development of roads and railways
  • The Czech Republic will need more than $3.4 billion just for water purification
  • Poland will have to find $3 billion just for the reduction of sulphur emissions
  • Just as in 1989, western Europe is offering financial assistance. But it never appeared then, and the working class had to pay

  • Eastern Europe


    Has the market delivered for the people of eastern Europe ten years after the collapse of the Berlin Wall? We look at the reality today, and talk to socialists about life there. Compiled by Beccy Reese, Judith Orr and Gareth Dale

    Scenes of thousands of people on the streets of East European cities flashed across television screens at the end of 1989. On 9 November the Berlin Wall, symbol of the postwar division of Europe, fell because of pressure from below.

    The events in Germany were by no means isolated. The East German ruling class had been shaken by the comparatively peaceful, but nonetheless dramatic reforms that had led to free elections in Poland and Hungary earlier that year. The regime was under massive pressure, including from Gorbachev in Russia, to undergo drastic changes. The mass demonstrations that arose, coupled with the mass emigrations to the West across newly opened borders, cracked the regime.

    Throughout 1988 and 1989 thousands of people in Czechoslovakia signed petitions against the regime, but only after the fall of the wall did a mass movement gather momentum. By the end of November 3 million workers had taken part in a two hour general strike and 500,000 demonstrated in Prague's Wenceslas Square.

    Just seven weeks after the wall came down, the political order which had dominated the region for over 40 years was at an end. No wonder there were such scenes of joy. The regimes were not based on workers' control of society but on exploitation and denial of human emancipation. But what replaced them has been a tremendous disappointment. The leaders of the 1989 revolutions believed that parliamentary democracy modelled on the West would be all that was necessary. The state of these countries today shows what the 'free market' has delivered. According to the Economist, the economies of Hungary and Poland are now 'booming'. During 1998 these countries saw growth rates of around 5 percent (twice that of Britain). Poland, Hungary and the Czech Republic all have low inflation and falling interest rates. The east European countries are attracting attention from the west, with Hungary seeing more than $17 billion of foreign investment last year. Now, with Hungary, Poland and the Czech Republic, former Warsaw Pact countries, accepted into Nato, it seems that after ten years 'free market' capitalism has reversed the fortunes of eastern Europe.

    But the supposed 'economic miracle' in Poland has come at a price. In 1990. there was a policy of 'shock therapy'. The newly elected government argued that things would have to get worse before they got better. The policy hinged on privatising the majority of state owned enterprises. This meant holding wages down, slashing welfare benefits, and mass unemployment. By 1991 unemployment had reached 12 percent. To many in Poland today, as unemployment climbs again to 11 percent, it feels as though these days are returning. As one Solidarity official working in Wujek mine put it, 'The early 1990s were the shock therapy years. A lot of people had to bear the brunt of the reforms. Now we are undergoing another round of shock therapy and people feel like they didn't really have the time to enjoy economic growth.' Today Poland's prime minister, Jerzy Buzek, argues in favour of more privatisation. One of the areas to face privatisation most recently was the health service. The health minister claimed that old people were taking up space in hospitals so part of the 'reform' is to move them out into care centres and free up the resources. Bankruptcy has become an issue as hospitals search for extra funds, and anger among nurses over poor pay and lack of resources has caused popular strikes and protests. There is a growing dissatisfaction with the Polish government and over three quarters of the population cite unemployment as the most pressing issue over which the government must take action. The dissatisfaction is also matched in the Czech Republic, where 76 percent of the population are 'disgusted' by politicians. Worsening economic conditions there mean an average wage is $350 a month and unemployment is around 10 percent.

    After German unification, Chancellor Kohl's CDU swept the board in the 1990 elections, gaining 41.8 percent of the vote. As it became clearer that unification did not bring a better future, the support for Kohl began to drop, first to the SPD, but recently to the more left wing PDS. In the 1998 general election the PDS gained 19 percent of the vote in the former East Germany, and in the recent elections in the eastern state of Thuringia the SPD slumped to third position behind the PDS. Shortly after unification it appeared that things could only improve. East Germany recorded growth rates ahead of those in the west. Since 1997 that has been reversed. Across Germany unemployment is high, at 11 percent, but this masks that fact that in many parts of former East Germany one in five people are out of work.

    Working class people suffered cuts and austerity following the 1989 revolutions. Whether they pay this time will depend on whether the growing anger can be directed away from parliamentary elections and towards a movement that challenges not only the ruling class's political hold on society, but also their economic hold.

    'We were seized by the feeling of being able to achieve everything'
    Gabi Engelhardt

    Removing another brick in the wall. Protests and the mass movement brought down the most hated symbol of the Cold War

    Ten years on they are trying to steal the revolution from the East German working class. The whole process is portrayed as the work of some great men. But it was the working class of East Germany who made the revolution and who overthrew the government.

    We were afraid that the East German government would use troops to suppress any opposition. Half of a meeting in a church in solidarity with the students were Stasi [secret police] agents. However, a feeling arose that things had to change. People started wearing white strips around their arms or attached to the aerials of their car, indicating they wanted to leave the country.

    But most of us wanted to stay. We started to secretly debate the manifesto of what became the United Left, the Neues Forum and others. The climax was the 40th anniversary of the GDR, the East German state, in October 1989. In Chemnitz, artists and people from the opposition had secretly organised a meeting and demonstration. About 1,000 people marched to the city centre, where troops attacked the demo. We were treated like heroes who had dared to challenge the system. People knew instinctively that something had already changed.

    Later that month Honecker resigned. Every Monday there was a demonstration, and the different opposition parties were born. Never before had we been able to take our ideas to the streets. The whole citizens' movement had to rely on the working class in order to put their ideas across. More and more people came to the Monday demonstrations. After the demos there were normally meetings, still inside churches. This arena was also the place to discuss the call for a general strike later in December. Workers who for the previous 40 years had been denied the right to strike discussing a general strike in public! Unfortunately, the decision was taken against a general strike, because the strike call was, amongst other things, for the withdrawal of the ruling party from the factories and also for reunification, and this was not in the interest of the oppositional groups.

    I clearly remember 'socialists' from the United Left who were irritated about people coming home from visits to West Germany with all their hope for a better standard of living. They didn't want to work for the rest of their lives for much lower wages than in West Germany. They didn't want to stay in the GDR. The gap between the social interests of the workers and the interests of the intellectuals became bigger and bigger, and by January and February 1990 nobody was interested in socialist ideas any more, however socialist-from-below these ideas might have been.

    In the first few months after the revolution everything seemed to have changed. We were seized by the feeling of being able to achieve everything. People became more confident. Ordinary people spoke at demonstrations and meetings. We won the right to travel, freedom of opinion and me the right to strike. After years of fear of the Stasi (in 1983 my flat was bugged, as I found out later from the Stasi files), after I failed to get a job several times because I abstained from the elections, after state officials threatened to take my children away if I did not 'behave properly', I felt really relieved.

    But things were soon to change. West German companies bought eastern companies. The workers here were told to make sacrifices in order to be competitive, which they did. There was always unemployment in East Germany, but it was hidden. Now unemployment was to become normal, and so was homelessness. In 1989 people had so much hope for their future. Today people feel betrayed. When East Germans voted for unification, they voted for a better living standard, more freedom, democratic rights. But the ruling classes, east and west, were interested only in their own survival.

    My father always wanted to establish his own company. He was not allowed to do so during the GDR. He fulfilled his dream in 1990. But today he has to work on building sites again. He is now 60 years old, and ill. Capitalism has destroyed him.

    Shortly after the toppling of the old regime it was relatively easy to present yourself as a socialist, because many people wished for an improved socialism. Later, in December 1989, when the working class had no more desire for socialist experiments', it was relatively hard to use the word socialism, because people always made the connection with the old GDR. Today it is easier once more because people, disappointed in the market, are searching for alternatives. This time there's the feeling that anything (except the GDR system) must be better than the market, and this opens people to the ideas of socialism from below. But there's a reservedness towards organisations and parties--people don't want a repeat of the feeling of having lived for or fought for the wrong cause.

    A whole generation of youth is becoming politicised. Around 3,500 young people demonstrated on 22 September in Chemnitz for training places. That's where the future lies. The working class still exists, the point is to revive the combative tradition. Back in 1989 the head of the Stasi was terrified of another 17 June (the 1953 uprising). The workers are learning that they can't rely on politicians.

    'I emerged from the police station with a feeling of power'
    Barbara Fuchs

    In 1989 I was settled in East Germany. It felt depressing, my friends and I didn't have any hopes in change. We watched as discontented people left the country, and the rest of us just hung around. Most of the people around me in the SED (the Communist Party) were quite critical of the party and there was increasing argument and discussion. But in the provincial apparatus it was mafia like, corrupt and degenerate. Anyone with a slightly alternative opinion would be marginalised and stamped on. I fought against those structures but found myself ground down and so came to Berlin in early 1989. This was still the time when Gorbachev dominated all our thinking. Many of us had illusions that East Germany would be able to go the same way as the Soviet Union, towards a reformed socialism.

    I went to the main square in East Berlin on 8 October 1989. On the one hand there was a fashion show, and on the other massed ranks of the police arresting people. I took some photos and was arrested, they took my film and brought me to a police station full of arrested people. The amazing thing is that I had no fear. It was a fantastic experience because suddenly solidarity was created amongst us arrested people. We all began to hum together, or to sing, or wink at each other, despite the police brutality. The whole experience politicised me and I emerged from the police station that night with a feeling of power, and then rapidly the whole thing began to explode.

    The next day news got out about the brutality in the police cells. At meetings reports were given of the events of the previous day. It was decided that we should have a big demonstration the following month, on 4 November. The contrast between the October and the November demonstrations was massive. It was as if everyone had woken up from a deep sleep. Suddenly all our creativity and imagination was unleashed. Suddenly discussion just exploded among all the artists and other people in theatre that I worked with. The artists' association started weekly discussions and meetings and opposition leaflets were handed around. The meetings were crammed full, there was lots of debate and argument. We talked about what sort of society we wanted, what sort of morals a future society should develop, we put on exhibitions in the centre of Berlin. It was amazing to see former dissidents being allowed to speak and to see their work distributed, and every week there were the huge demos.

    But after the winter of 1989-90, the debates began to dwindle and people's material problems began to dominate. It was wonderful when the wall came down and we could travel. But a new kind of fear started to rise in early 1990--the fear of losing your job. I was hit myself, I got a job in West Germany but was made redundant quite quickly and was forced to accept government funded training jobs.

    Today there's an lot of discontent, especially in the east, but also a lot of resignation. A lot of people vote PDS just as a kind of protest at the conditions. Some people have managed to adjust to the market, but others aren't doing well at all and reject it out of principle.

    'The new free market is not like heaven. It's like hell'
    Philip Ilkowski

    Many people had really very big expectations of the new Solidarity government. During 1989 there was not a huge level of class struggle. The great majority of people supported Solidarity, but in elections, not in the streets. In 1980 there were millions of workers striking, demonstrating and creating something new, and in 1989 they looked to elections to make things better. After one year there was nothing.

    People said, 'We want to live like people in Germany or Britain.' The government said, 'At first you will have to live worse but after two or three years you will live much, much better.' The new free market economy is not like heaven. It is rather like hell.

    The majority of people still think that the former Stalinist regime was socialism. So when you talk to people about a socialist alternative, they say, 'We had it before and it wasn't very good.' For us it is very important to say that we are against this system now and the system before because it was capitalist, only transformed. We can talk more openly about socialism and sell our papers on demonstrations. But there is a very impoverished trade union movement. It is very strange because you have two main big trade unions--Solidarity and OPZZ, the former Communist state-organised union. On the small scale when there is a strike in a factory you can have OPZZ and Solidarity striking together. But when trade union leaders are organising big demonstrations it is quite impossible to bring these two unions together. The union leaders are very concerned with elections and making alliances. It's like the trade union bureaucracy everywhere, but it is more complicated because of the legacy of Stalinism.

    When you ask people, 'Do you want to go back to the former regime?', a large majority say no. Today we are not afraid of the secret police, Parliamentary elections are better than no elections. But economically it is much the same.

    Andy Zebrowski adds:
    There was a book out recently that tried to estimate what the old nomenklatura--that's the people in the top jobs--are doing now. There were 360,000 people in the nomenklatura at the beginning of 1989. One quarter of them set up their own private firms or have very high positions in privatised companies. Between 15 and 20 percent have the top jobs in state companies. Fifteen percent got special, very high pensions and about 25 percent have professional jobs--you might call them yuppies but they are older. Only a few isolated individuals have done badly out of the change. If you look at the rest of society--there are 55 percent living below the social minimum, a massive growth of poverty since ten years ago, there's 12 percent unemployment at the moment and it's rising.

    The current Polish government is the most unpopular government in ten years. In a recent opinion Poll 71 percent said that the government was working badly at the moment, and nobody--0 percent--said that it was working very well. The finance minister is cutting taxes for the rich and pushing ahead with more market reforms.

    This scene, in Prague's Wenceslas Square 1989, showed the strength of the opposition to the old regine which collapsed under the weight of popular protest

    'People understood that the market favours only a few'
    Zdenek Prasil
    Czech Republic

    The speed of the collapse of the old regime took most people by surprise. I participated in a strike committee at our school and the most common feeling was to democratise the old regime but keep its social composition. The most widespread feeling was euphoria on the one hand and confusion and naivety on the other.

    Due to the inheritance of Stalinism, the left lost the ideological battle for the future of the revolution. After that the proclaimed goal became the restoration of classical capitalism. The alliance of former middle and lower Stalinist bureaucrats was formed fast to support this--they understood very well that privatisation meant they could get what they controlled before.

    Today the feeling of most people is mixed. On the one hand they do not regret that the former Stalinist control of society is gone. On the other they see that what they have got now is in some aspects worse than what they had. Living standards for about 80 percent of people are the same or lower than in 1989, 10 percent are unemployed, and some forecasts say that it could be as high as 20 percent in two years. Most people already understand that the market economy favours only a few. But worse is that even those disillusioned do not see any alternative.

    The ruling class is now split in two parts--the 'crony' part, which got its property directly through stealing state property and an 'independant' part, which is able to build firms without direct help from the state. Both groups consist mainly of former Stalinist bureaucrats. The first group fears joining the EU because it means strong competition and pressure for bankruptcy of uncompetitive firms together. The other group wants to get rid of the subsidies (as well as any state welfare) so they do not have to pay taxes. They are pro-EU, ready to incorporate themselves into multinationals as their local agents or subcontractors.

    The split in the ruling class is so deep it prevents the formation of a stable right wing government This is one reason why a minority social democratic government has held office for more than a year. The other reason is the fear of both groups of the working class. The class struggle is intensifying. In many firms no wages have been paid for several months. There have been several rather militant demonstrations, but an overall sense of class solidarity among workers is still only developing. Trade unions are formally free, but many of them are purely bureaucratic structures with hardly any workplace presence. Step by step, and very unevenly, seeds of grassroots activity are developing in the unions. This has its favourable side--the union bureaucracy is not able to control the outbursts of anger of workers, and any larger confrontation can easily get out of its hands. On the other hand, it also limits organised forms of struggle. The hearing for socialist ideas is growing, but the radical left is splintered. Recently some groups have organised several common actions--for example against the Nato bombing of Yugoslavia or in support of striking teachers. Let's hope these may be signs of a brighter future.

    'I went on an illegal demonstration for democracy, free speech and freedom of the press'
    Zolten Bassa

    Miners from the Istvan coal mine vote on the contents of a letter to be sent to the Hungarian prime minister which expressed anger that their demand had not been met, January 1989

    1989 was a very interesting year in politics. There were many demonstrations for free speech and democracy. In Hungary I wouldn't say there was a revolution--it was rather a series of demonstrations, and many changes were forced from below, but the actual measures were taken from above because the leaders of the Stalinist regime wanted to keep their economic power. In Hungary the demonstrations really started the year before. I remember going to a demonstration in March 1988, where there were 10,000 people, it was not publicised. It was an illegal demonstration for democracy, free speech and freedom of the press.

    There was quite a big miners' strike in 1988, and the opposition had split in the mid-1980s but had become a liberal and right wing opposition. They didn't really have contact with the miners, and also the miners didn't really go for political demands. So there was a separation between economic and political demands.

    Most people had serious illusions about bourgeois democracy, including me. The West seemed very prosperous and free. For Hungarians, Austria or Germany were a kind of paradise--they have two cars, big houses, shopping all the time. That pushed people to believe it really was a fantastic thing to have a bourgeois democracy and it meant that we would be rich.

    In March 1990 there were the elections. Six months later there was a taxi blockade. The government made a very serious mistake. In mid-October it denied that it would put up the price of petrol. A day later it put up the price by 50 percent. The taxi drivers blockaded the bridges, the main streets and the highways. The country was virtually stopped for three days. This was the most serious thing that happened--it was closer to a revolution than any day in 1989. Other cars and buses also blockaded the streets--90 percent of the population supported them. But the trade unions, bosses and government started to negotiate and achieved an agreement on the Sunday evening.

    Most opinion polls in the mid-1990s showed that there was serious disillusionment with the whole change. Unemployment was 20 percent, and 70 percent lived below the official poverty line. The polls also showed increasing nostalgia for the former state capitalist system.

    Most people have lost out. There was poverty before 1989--but it was a hidden kind of poverty. There were smaller wage differentials and income differences. Things are getting worse in economic terms. Political rights are far better than ten years ago. The problem is really that if you are not active you do not practise political rights and it makes you believe that they are not important. Then you don't see the connection between the relative freedom we have and the class struggle. We now have some tools in our hands. In 1988 we were beaten up by the police. People could lose their job and everything in the 1980s because of opposition activities. This is a problem of memory about 1989. There was pressure from below and the people hated that system politically and now they are a little bit confused because the so called 'new' system didn't give too much to them.

    Most people still think that the state capitalist system was socialism. Part of the intelligentsia and some more advanced workers can see the differences between the socialist aims and the really bad practice which was a denial of socialism. The problem is that they don't go beyond analysis and criticism, and they don't accept revolutionary ideas.

    I am optimistic. In 1995 there was a serious austerity package introduced by the so called socialist liberal government. There were demonstrations again. The trade unions were quite passive in fighting back. After a couple of demonstrations nothing happened, and now this year is better in terms of class struggle. There was a miners' demonstration in March and the first health strike in July. But the solidarity is not going out onto the streets. The anti-war movement, around Nato's attacks in the Balkans, was relatively good. All of a sudden a movement was born which organised a 4,000 strong demonstration in about five days.

    This is intensifying now that there is a right wing government, which has been in office since last July. People are less confused about what the government is about--family values and cutting single mothers' benefit. There is serious disillusionment. I can see a rising discontent, and the Balkan War, which the majority of the people in Hungary were against, was a big milestone.

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