Destination: Prosperity? East Central Europe’s transformation, 1979 to 2004

Ronald Reagan’s life-size statue on Budapest’s Freedom Square
The long shadow of Reaganomics? Ronald Reagan’s life-size statue on Budapest’s Freedom Square. The plaque reads: “A Country Boy against the Evil Empire.”

Dr. Victoria Harms

Since 2008, Europe has been mired in crises. They have shaken the foundations of the European Union and question its proposed unity. The persistence of the world economic crisis and the glaring absence of viable solutions in particular motivate this project about the economic, social and political transformations of Eastern Europe between 1979 and 2004 through the lens of a Hungarian weekly, the HVG (World Economic Weekly).

In search of lessons dismissed, learnt, and yet to be learnt, this study seeks answers to such questions as: Which economic and social models were debated in Eastern Europe before and after the end of state socialism in 1989? Which policies have been perceived as efficient, which countries as exemplary? How has Western economic expertise and advice (e.g. by the International Monetary Fund, the World Bank and the European Union) been received? How have experiences and decisions in neighboring countries influenced policy-making and opinions in Hungary? How has access to information, the media, and the public discourse changed throughout this period? Which lessons can be drawn from the 1990s to enlighten and better understand the current crisis?

The HVG makes for a compelling case study because it allows a representative assessment of how Europeans have discussed economic problems, policies, and their social impact from the ending of the Cold War until European enlargement. Unlike past analyses of the transformations, this study is not limited to Eastern Europe, but instead interrogates the entanglements of East and West and addresses the “co-transformation” of Western Europe following 1989. Hungary itself deserves special attention because of its seemingly counter-intuitive evolution: prior to 1989, the country was lauded as exceptional, prosperous and “liberal” – the proverbial “happiest barrack in the Eastern bloc.” Since then, however, it has since struggled to maintain the previously high living standards. The country seems to refute neoliberal theory, which maintains that liberalization and foreign investments promote economic stability and wealth. On the contrary, as in neighboring countries, nationalist critics of Hungary’s opening and EU membership present Western involvement as a threat to national prosperity and independence.