European Integration, Capitalist Diversity and Crises Trajectories on Europe’s Eastern Periphery

ABSTRACT

European policy responses to the Global Financial Crisis and its European manifestation have set off a scholarly debate whether different national varieties of capitalism are equally able to cope with deepened European integration. To date, this debate has mostly focused on the contrasting fates of the thriving northern export-oriented capitalisms and the ailing southern European ones. This paper seeks to broaden the debate by focusing on Europe’s Eastern periphery. It argues that a combination of domestic transformation strategies and the EU’s accession policies resulted in two different growth regimes on Europe’s Eastern periphery: a dependent export-driven in the Visegrád countries and a dependent debt-driven in the Baltic States. On the basis of the pre- and post-crisis trajectories of these two growth models, this paper finds that because East Central European capitalisms were profoundly shaped by EU integration, they are on balance also more compatible with deepened integration than Southern European capitalisms.

KEYWORDS:

• Growth models
• Eastern Europe
• Baltic States
• Visegrád countries
• dependency
• crisis

Disclosure statement

No potential conflict of interest was reported by the author.

Notes on contributor

Dorothee Bohle is Professor of Social and Political Change at the European University Institute and author of Capitalist Diversity on Europe's Periphery (Cornell University Press, 2012, co-authored with Bela Greskovits).

Notes

1. For reasons of space I will restrict my analysis to the Visegrád country group – Czech Republic, Hungary, Poland and Slovakia – and the three Baltic States: Estonia, Latvia and Lithuania.

2. It should be noted that for Nölke (2016), Beramendi et al. is part of the second wave of CC, as it lacks a critical stance towards power relations within models of capitalism.

3. Other authors distinguish between consumption-led and export-led growth (e.g. Hall 2014, Baccaro and Pontusson 2016, Johnston and Regan, 2016). It seems to me, however, that debt-led is more accurate, as it denotes the crucial factor that enabled consumption in the first place and also constitutes the major vulnerability of the southern and Anglo-Saxon growth models. Importantly, it also draws attention to the crucial but differentiated role of finance in contemporary growth models.

4. Only Hungary pursued a FDI-led strategy already from the early 1990s on. This was because of its massive foreign indebtedness, which left little room for manoeuvre for domestic privatization. In contrast to Poland, which received a debt relief, Hungary’s policy makers decided to pay back their debt (Greskovits and Bohle 2001).