The European Council on Foreign Relations

Sovietology’s 10 lessons for Europe

Date: 12th December 2011 | Author: Ben Judah,

Categories: Euro Crisis, Wider Europe,
Tags: , eurozone, eurozone , soviet union, ussr, eurocrisis

A week or so ago I had dinner with an Eastern European politician whose work brings her into daily contact with EU policy-makers. The conversation started to drift away from the Eurozone crisis and strayed into memories of the Soviet and Yugoslav collapses. Then she said: “Having already lived through the experience of where everything is forever until it is no more, I am starting to become extremely worried about the EU.”

No parallels are perfect – and any comparisons between the collapse of a democratising totalitarian socialist empire and the financially palpitating EU should not be taken as direct analogies. But maybe they open up new ways of looking at the problem of complex political systems in crisis. Drawing from the conversation I had that evening and my own thoughts here are ten lessons from perestroika for the would-be builders of fiscal union:

A systemic crisis begins with a loss of economic truth
The Soviet and Yugoslav crises began with the discrediting of socialist economic truths, although discussion of this tended to happen in private kitchens rather than in public debate, where the familiar (but now empty) mantras were repeated.
The logic of impossibility
Elites in the USSR thought it was inconceivable that the Union could collapse, and so did not try to take drastic action to save or reform it until it was too late. Much of the Eurozone currently operates under a similar logic of impossibility.
Infectious peripheries
There is an imperfect but real parallel between ‘political contagion’ in the USSR and ‘economic contagion’ in the Eurozone – the first stirrings of revolution in the Baltics in 1987-1991 were viewed as local and specific.When Moscow showed it was unable to deal with the situation, more ‘People’s Fronts’ sprung up in the Caucasus and Moldova. The parallel with the EU’s failure to deal with Greece, and subsequent contagion, is striking.
The point of no-return goes unnoticed
My own view is that the USSR passed the point of no-return when it failed to implement the ambitious ‘500 day programme’ for the transition to a market economy in August 1990. Wrangling between Gorbachev, Yeltsin and the Supreme Soviet produced a watered-down version that proved incapable of tackling the systemic rot. Similarly, EU leaders seem more capable at kicking a can down the road than understanding that they may already have failed to save the euro.
Disintegration comes from no longer wanting to pay for the neighbours
In Soviet Russia the lack of food was often blamed on it all being sent to Cuba, Angola and Central Asia. Disintegration was driven by a Russian desire to discard Union Republics in favour of keeping ‘Russian money for the Russians’. A similar dynamic is at work in the EU today.
Aggregate power means nothing in political paralysis
The fall of the USSR was considered unthinkable because of its aggregate military and economic strength. As one Russian analyst told me, “Our USSR collapsed with our warheads in perfect order”. The EU may find that figures like aggregate debt ratios cannot be deployed if a political system is paralysed.
Treaty change (not just a coup) doomed the USSR
In early 1990 a New Union Treaty was proposed that would give a constitutional answer to the USSR’s economic and political crisis. This Treaty then ended up dominating discussion, diverting political attention from saving the USSR.
Leaders dithering
Gorbachev can be blamed for a personal failure to act decisively from 1987 onwards, instead looking to preserve a consensus and reorganise the Soviet Union on his own terms. By the time came when he tried to act decisively it was too late. Might the same happen to Mrs Merkel?
Secessionist chain reactions
The warning from the Soviet Union is that once one domino falls, others follow – just as Estonia’s declaration of independence in August 1991 was followed by nine others by September. An ‘orderly’ Greek default and Eurozone exit might not be the last.
Multinational identities survive only on success
A successful single currency requires an identity. The warning from the Soviet Union – and Habsburg, Ottoman and Yugoslav projects – is that such identities quickly collapse when things are going badly.

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1 comments

Kimi 14th December 2011 at 01:12am

Your point 10 seems to imply that the whole EU is only a fair-weather job. I tend to agree. Due to the guild-trip of the germans earing off over time there is no easy handle any more to bludgeon them into paying for the fair-weather party of the others (even france has to - since reunification - make a real net contribution to the EU budget… before it was neglectible).

I assume this trend will grow stronger with the continuation of the crisis and it will make a huge jump forward should merkel fall and the EU win in saddling all debts on the german nation.

The rest of the EU nations are utterly unwilling to pay their fair share for the further existence of the union, they got over the decades accustomed to having only rights and no duties towards the paying countries at all. Their citicens will cry, scream and hurl abuse to the north for this to return. They dont understand that they too will have to finally make a contribution. Greece, Ireland, Portugal, Spain… none of these countries have in all these years ever paid one single cent net into the EU coffers, they did nothing but draining it. How can the EU expect those people to understand that EU money comes from real working people who have to feed their family too? nobody ever told them in all those years.

All that was told to them was that “There will be money!” (Slogan of PASOK in their last election). And because they always thought that the money would just come from “somewhere” and they are entitled to it, that it is an enforcable right of them to take this money from their fellow europeans in the north… they will not bend. Unless the market pressure wears them down and they loose all hope in that the rest of the EU just takes over all their debt.

The question is… is merkel strong enough to force all those governments to explain this to their citizens? Can those citizens even grasp it?

As point 8 states, their leaders reacted slowly. Italy was utterly sure that in the end germany would introduce the eurobond and guarantee all italian debt just like that and then they could return to spending like cracy. Only by now did the italians figure that perhaps actually the germans could really not be impressed by the nazi rethoric any more and refuse to pay for the italians blunders. But is it too late already?

As for point 5… seeing in what bitter poverty the russians lived under soviet rule, comparing to the relative good life in the sister republics… I doubt germany wants this. Somehow I doubt that forcing the germans into poverty so that the french can life the fine life will make the EU loved in germany.

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