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April 2009

Eastern-Europe - Monthly political report

In April, the world economic crisis continued to be the main issue in the region. Austerity measures have become even harder to implement in the Baltic States, while Macedonia and Albania were considering a loan. Albania also applied for membership in the EU. At the beginning of the month Eastern Europe was shaken by riots in Moldova, but it seems that the tension has already calmed down. The second round of the Slovakian and the Macedonian election was a much easier case. Sochi saw a mayoral election taking place. Croatia and Slovenia made steps to resolve their conflict, and also the Turkish and the Armenian government signed a historical agreement. The Georgian opposition has been protesting for almost over a month now, and there has been discontent among unions in Croatia as well. In Bosnia a corruption scandal made the task of the government, preparing to introduce austerity measures, even more difficult. In the Czech Republic the new government is about to line up.

The month began with the Moldovan riots. After the parliamentary elections on the 5th April, where the governing Communists won an absolute majority in the parliament, the opposition began to protest. The participants of the riots called themselves the heirs of the Orange Revolution. They set the presidential palace and the building of the parliament on fire. There have been casualties as well. Because of the events, relations with Romania worsened significantly. The opposition was allowed to check voter lists, but by the time they did this, the constitutional court had already declared the results valid. The Communists will have a majority of 60 deputies in the parliament, thus they will be short of one deputy when electing the successor of the President Vladimir Voronin. Unaffected by the riots, the talks about Transnistria continued. The two other elections of early April were much more peaceful. In Slovakia, the incumbent Ivan Gasparovic was elected for a second term, while his main rival, Iveta Radicová had to resign from her mandate as a deputy after breaching the code of conduct. The minister of construction Marián Janúsek also had to resign after giving unlawful advantage to several companies linked with the junior governing National Party. His successor, Igor Stefanov, who had been close to Janúsek, was ordered by Prime Minister Robert Fico to annul the contracts. While the justice minister Stefan Harabin drafted his plans for the reconstruction of the judiciary, the Party of the Hungarian Coalition was on the verge of splitting, with three deputies and hundreds of members having left the party, criticizing the leadership of the chairman Pál Csáky. Macedonia also elected its new president during the month: in line with expectations, Georgi Ivanov won the vote, and his main supporter, the senior governing party scored a sweeping victory at the local elections as well. However, the low turnout almost thwarted the vote, and with the majority of ethnic Albanians staying home, the junior governing Democratic Union of Integration lost a good part of its positions. The party is also disappointed with the progress of the Greek-Macedonian talks: if the name-issue is not settled by this autumn, the party will leave the government. After the election, the incumbent Branko Crvenkovski will return as the leader of the opposition, and the main right-wing rival of the Prime Minister, Ljubco Georgievski is also about to return to the political scene. Macedonia is still hesitating whether it should apply for a loan from IMF, but the budget has already been cut by 9% in April. Albania is in the same situation with asking for a loan. The country, after having applied for membership in the EU is preparing for the June elections. The two main parties, after lengthy debates, agreed that the new IDs will be distributed quicker and cheaper, but it is still questionable whether every Albanian citizen will be able to vote. As for the economy, the tax on profits has been limited in 10%, but the Prime Minister Sali Berisha announced wage and pension hikes for before the elections. Bulgaria - similarly to Albania - changed its electoral system before the parliamentary election scheduled for the 5th July. The threshold, doubled for coalitions is clearly disadvantageous for the 'Blue Coalition' of smaller right-wing parties, what is more, the court has denied the registration of the new leadership of Űnion of Democratic Forces', the leader of the coalition. According to the government, the country will be able to maintain the surplus of the budget, and after having been unwilling at first, the government included reducing social sphere contributions among its election promises. The main issue concerning the leading party of the opposition, GERB, was the unresolved litter management of Sofia.

Politicians tried to alter the party system in Russia too: here, of course, only 'cosmetic' changes took place: the number of people required to found a party was lowered, parties in general gained more access to media and a minimal representation was guaranteed for small parties. The mayoral election in Sochi, however, was far from being democratic: the incumbent Anatoly Pahomov won by a landslide, while his main rival, Boris Nemtsov was intimidated in several ways. Meanwhile, an amended budget, based on an oil price of 41$ was adopted with a deficit forecast of 7,4%, but there is still an ongoing debate about the increase of social expenditures. At the same time, Armenia was preparing for an election as well: Yerevan will hold its first-ever local elections on the 31st May. The Heritage party announced its support for the leader of the opposition, Levon Ter-Petrosyan. An even more important event was however the signing of a roadmap agreement by the Armenian and Turkish governments about the opening of the borders, although Karabakh has not been mentioned. This was disapproved of by the party of the diaspora, the junior governing Revolutionary Federation, which left the government in protest. The party’s ministers have not been replaced yet. The thaw in the Armenian-Turkish relations annoyed Azerbaijan the most: the country saw several protests against the roadmap agreement, with some politicians speaking even about a betrayal. The prospective opening of borders will be quite disadvantageous for Azerbaijan from the aspect of the Baku-Tbilisi-Kars railway. Meanwhile, the government was negotiating with the EU about a possible solution for the Nabucco pipeline, although Azerbaijan had already made an offer to Gazprom as well. A plan for regional development by 2013 was adopted; this would strengthen the non-hydrocarbon sector.

Another conflict continued in April, but came closer to being resolved: Croatia and Slovenia agreed with the proposal of Olli Rehn about the setting up of a team of international arbitrators to make suggestions on their border conflict. No concrete answers have been given so far from the part of the two governments, but the process was evaluated positively, so there is a chance that Croatia’s accession may continue soon. Croatia also scheduled local elections for the 17th May, with the opposition Social Democrats criticizing mainly the government’s crisis plan. It is also true that unions have not reached an agreement with the government yet, and announced protests for the week before the election. In Zagreb the opposition People’s Party announced that it would not support the Social-Democrat mayor, Milan Bandic, and problems arose between the governing Democratic Union and its coalition partners as well. In Slovenia the coalition was also shaken, after the social-liberal Zares accused the Prime Minister Borut Pahor with cooperating with business tycoons. The conflict was settled, but the popularity of the government fell considerably. An undoubted success for the government is that the judges, who had been striking for months, suspended their strike and are now willing to negotiate, this at a time when the opposition is criticizing the government for the concessions given to lawyers. The Prime Minister promised a unique social crisis package for the summer, which is being worked out now. Lithuania also saw tensions in the governing coalition. Here anti-crisis measures caused the parties quarreling. These, drafted by the Conservatives were not voted by the coalition partners of the party. The finance minister, Algirdas Semeta, at the same time, would introduce even stricter measures. The minister called for a reduction of the minimum wage, arguing that the budget would need to be cut once again. The Prime Minister Andrius Kubilius denied this. What is for sure is that state contributions to the second pillar of the pension system will be reduced, at the same time reducing the budget of the state social fund. The speaker of the parliament, Arunas Valinskas canceled his candidature for the presidential election on the 17th May because of his growing unpopularity. Amending the budget is a difficult case in Estonia as well: the finance minister Ivari Padar, urging for the introduction of higher taxes became involved in a lengthy debate about this matter with the party’s centre-right coalition partners. For the time being, the minister has not been dismissed, but the Social-Democrats seem to propagate a new program, considerably different from the government’s. Contributions to the second pension pillar have been lowered in Estonia as well, and steps have been taken in order to join the eurozone sooner. This stands less and less chance because of the inner debates of the governing coalition. The hardest measures had to be implemented in Latvia, as it turned out that even the planned general budget cuts of 40% would not be enough to achieve a deficit of 5% that the IMF would have required to grant the country the next part of its loan. The Prime Minister Valdis Dombrovskis, for this reason, called a deficit of 7% negotiable. The finance minister Einars Repse announced further cuts for next year, with the education and health ministers already having denied to bring the cuts to effect. The parliament adopted the amendment to the constitution according to which voters will be able to initiate the dissolution of the parliament in the future. Meanwhile, in Serbia, unions protested against the anti-crisis steps, necessary to get a bigger IMF loan. The package was hard to push through the parliament, because the province of Vojvodina insisted on the increase of the budgetary funds allocated for itself. This was achieved, but the government may still count on a growing discontent, because of wage cuts in the public sector. The new law on parties has been adopted, but it caused an uproar, and the number of ministers has not been decreased yet either, due to the resistance of the Socialist Party and G17 Plus party. In Kosovo, on the contrary, the Prime Minister, Hashim Thaci is about to increase his government. The purpose of the reshuffle would be the integration of ethnic Serbs, which remains a seemingly impossible mission. In Mitrovica riots were restarted in April, possibly also strengthened by the visit of the Serbian President Boris Tadic. The question should be resolved before calling for the autumn local elections. The government, meanwhile, called upon the mission UNMIK to leave the country.

No riots, but large-scale protests took place in Georgia. The opposition movement, which started on the 9th, demanding the resignation of the president, has been going on ever since, although with a waning number of protesters. This is due to the tactics of the government: the speaker of the parliament, Davit Bakradze first proposed negotiations, then an increase of the ombudsman’s rights, and, after the denial of both, the government started to ignore the opposition. In Romania, the popularity of the president has decreased too, but, what is even more curious is that the candidate of the opposition National Liberals, Crin Antonescu, according to surveys, may stand a chance against Traian Basescu in the autumn presidential elections. The chairman of the Social Democrats, Mircea Geoana will probably be 'sacrificed' for the sake of distancing the party from the Democrat-Liberals and getting to a more advantageous position in a possible new government. The main sources of disagreement between the two coalition parties during the month were the Criminal Code, the Brasov airport, and local cooperation, although steps have been made to resolve the latter.

In the Bosniak-Croat Federation of Bosnia and Herzegovina the broad coalition is clashing as well. The situation became even worse particularly after the Prime Minister Nedzad Brankovic had been accused with abuse of office. The party of Brankovic, the Party of Democratic Action is preparing for a congress, and the fate of the whole government is dependent upon the outcome. The Federation needs to implement further budget cuts of $ 350M to be able to get the loan of 400M $ from the IMF that would save the country from collapsing. The opposition parties of Republika Srpska, at the same time, are preparing for a possible fall of the Prime Minister Milorad Dodik, who may face further corruption charges in the coming month. Serbs have also protested against the USA’s will to appoint a special envoy to the country. Ukraine is also desperately trying to comply with the conditions of the IMF-loan. The inoperability of the parliament allows the measures to be taken only by ordinances of the government, and not without balks. April saw the nomination of a new finance minister, Igor Umansky. In the backround, we suppose that Yulia Timoshenko’s Bloc and the Party of Regions have been talking about a possible coalition, while the President Victor Yushchenko asked the constitutional court to decide on the constitutionality of the planned early presidential elections. There will probably be new, unknown candidates, from outside the world of politics. Poland will also get a loan from the IMF, using the so-called 'flexible credit line'. The accession to the eurozone will probably be postponed, as the country cannot join the ERM2 phase until July. After the falloff of the government’s corruption cases a major issue was the debated decoration of several members of the Institute of National Remembrance (IPN). According to the government the President Lech Kaczynski did this because of political considerations. The Prime Minister Donald Tusk, thus, recommended for the parliament to restructure the leadership of the organization. On the opposition side a source of conflict was that the Law and Justice party would not include the MEP Martin Libicki on its list for the European Elections, which caused several party members to quit the party. At the end of the month, a rather embarrassing case happened: the candidate for the ambassador to the UN, Anna Fotyga criticized the foreign policy of the government.

In the neighboring Czech Republic the government of Ján Fischer is about to be formed and to take over the powers of Mirek Topolánek’s cabinet. A considerable debate within the Christian-Democratic Union was caused by the fact that the party chairman Jiri Cunek did not support the new government, while his main rival, Miroslav Kalousek did, so the latter distanced himself from the party. The leaders of both political sides are preparing for the autumn elections. Topolánek called for the union of the right, with the emblem of the former president Václav Havel, while Social Democrats have been looking for possibilities to cooperate with Communists. In Belarus, a major government reshuffle is about to happen as well, according to the President Aleksandr Lukashenko, who, in April, dismissed the interior minister Vladimir Navumov, making yet another step towards a complete generational change in the country’s leadership. The government is still hesitating whether to recognize the independence of Abkhazia, demanded by Russia, but it is highly possible that this will be resolved only after the May summit of the EU, where a possible inclusion of Belarus in the EU’s Eastern Partnership Program will be decided. Lukashenko will not take part, but Belarus will be represented. In Montenegro the main issue was personal changes too. After it turned out that the National Coalition would not be included in the new parliament, the distribution of positions started. The legislature will have only two vice-speakers, one from the opposition and one from the governing Democratic Party of Socialists, while the president of the smaller governing party, Ranko Krivokapic will remain the speaker of the parliament. The Bosniak minority may have only deputy ministers, but there are still various disagreements within the governing parties, concerning positions. The privatization tender of the company Elektropriveda ended, and the government also announced a social program of € 41M and a new collective agreement for the striving aluminum industry, threatening with a considerable social crisis. 

In May, Albanian parties will start their election campaigns. The new Moldavian parliament will hold its first sitting, while Croatia, Lithuania and the city of Yerevan will hold elections. In the Czech Republic the Fischer-government will be sworn in. In Romania the congress of the Social Democrats will be held. In Bosnia and Herzegovina the fate of the Federation’s government will be decided. The Baltic States will adopt austerity measures. Croatia may carry on with accession talks with the EU.

7th May: an EU-summit in Prague, of key importance for post-Soviet countries

9th May: the government of Ján Fischer will start its tenure in the Czech Republic

17th May: the first round of the Lithuanian presidential election, and the Croatian local election

31st May: local election in Yerevan

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