The world may be focused on Syria and the U.S. government shutdown, but Central Europe will generate its share of news in the coming months.by Martin Ehl 8 October 2013
Hungary: Before the elections, Orban ‘fixes’ the constitution
The Hungarian parliament recently passed another, already the fifth, amendment to a constitution that itself was adopted less than two years ago over howls of protest from across Europe.
Partly a response to that criticism, this amendment removes some restrictions on political advertising, abolishes the government’s ability to levy a tax in order to pay fines imposed on it by international courts, and allows any group of religious people to gather and call themselves a church – although it still reserves for a parliamentary committee the right to recognize that church and therefore grant it subsidies. It also revokes the right of a top court official to move cases from one court to another.
It all looks nice on paper, but let next year’s election campaign show what that paper – even with a constitutional header – can bear.
Poland: Taking from the future to support the public coffers now
The Polish government must borrow from this year’s profits of several publicly owned companies in order to patch a hole in the poorly calculated and recently revised state budget. The PZU insurance giant will pay shareholders a partial 2013 dividend in mid-November (the government holds a 35 percent controlling stake) of 1.72 billion zloty ($557 million), but the national budget will remain quite short of cash. Likewise with other companies partially owned by the state, some of which are listed on the Warsaw Stock Exchange but have the government as a major shareholder.
The financial website Money.pl wrote that other big companies, Bank PKO and gas giant PGNiG, could similarly be asked to contribute to the state because there’s still a gap of a half billion zloty in the new version of the budget, which has been counting on GDP growth of 2.2 percent. Although the Polish economy has been showing signs of recovery after a slump of a year and a half – with especially exports and industrial production providing hope – the state coffers need to be filled quickly.
Slovakia: A lottery to impel higher tax collection
Don’t throw away any receipts from those Slovak cash registers. Starting this fall, you can use them to participate in a lottery, introduced by the government of Prime Minister Robert Fico in an effort to boost collection of the value added tax. The lottery will award a cash prize every two weeks and a car every month. But it has raised more questions than answers. How many receipts issued by Slovak vendors are real and how many are fake? And how many people will bother registering their receipts?
The main question will be how much – thanks to the lottery – the government will actually collect on taxes. According to critics, the Finance Ministry has not publicly the expected costs and revenues. In Georgia, a similar lottery was recently introduced and cancelled after a mere six months because it was expensive and didn’t work. In Taiwan, such lotteries have been in place for decades, but they have no effect on the state budget. According to Radovan Duran, director of the Institute of Economic and Social Studies in Bratislava, a blanket reduction in taxes would be a better tool for improving tax collection.
Croatia/Hungary: the Croatians take aim at a Hungary energy boss
Zsolt Hernadi is director of MOL, an oil and gas company owned partially by the government of Hungary that has no competition at home and has expanded abroad. Since he took the helm in 2000, Hernadi’s position has been unassailable, even as governments and prime ministers have come and gone.
But everyone has their weakness: Croatia reopened an investigation into Hernadi’s role in the acquisition of the Croatian oil and gas company INA in 2009.
The Croats are trying to prove that he (and MOL) bribed the former Croatian political elite. Zagreb has long been trying to push MOL, the majority owner, out of INA. The Croatian example might be interesting for other post-communist countries, which also have seemingly untouchable bosses of quasi-governmental energy companies. The Croatian authorities have had some success in this regard, even sending former Prime Minister Ivo Sanader to prison over corruption charges (for manipulating electricity prices to the detriment of the public company HEP).
Poland: Warsaw’s mayor could determine the fate of the entire government
If it’s not possible to win the parliamentary elections, then let’s slice the power of the government party up into small pieces. That pretty much sums up the strategy of the Polish conservative opposition. After the recent, successful recall of the mayor of the northern city of Elblag, a grand rehearsal for the general elections will take place this fall: a referendum to fire Warsaw Mayor Hanna Gronkiewicz-Waltz of the governing Civic Platform. The result will herald the major electoral battles that await Poland in the coming years.
The vote will be valid if three-fifths the number of voters participate who took part in the election that put Gronkiewicz-Waltz in office. The opposition thus needs to get at least 389,430 citizens to turn out. A recent survey suggests that might happen. The leader of the opposition conservatives, Jaroslaw Kaczynski, thus likes his chances.
A major NATO exercise will enrage the Russians and reassure others
In November, the Baltic states and Poland will witness the largest NATO exercises since the end of the Cold War, called Steadfast Jazz. After a long pause, the exercises, in which more than 5,000 soldiers will participate, will be the first demonstration of the alliance’s capabilities to defend its own territory. The Russians have referred to it as a return to the Cold War, even though we could say, in the style of childish games, that they started it.
In the fall of 2009, the Russian and Belarusian armies surprised their neighbors in the course of the Zapad (West) exercise by simulating an attack on the Baltic states and Poland, including the use of nuclear weapons.
Russian Deputy Defense Minister Anatoly Antonov has said this year's exercise of Russian-Belarusian forces, Zapad 2013, focuses on the fight against terrorists and that Moscow is angered by the fact that NATO wants, with its exercises, to test its ability to defend a member country under attack.
NATO members in Central Europe couldn’t have received better proof of the need for Steadfast Jazz.