As the global financial crisis deepens, the strongest reactions thus far are coming from the emerging democracies in Don Rumsfeld’s New Europe. Phillip Pan writes on the front page of today’s WaPo of a protest in Latvia’s capital that turned into a riot
Hundreds of angry young people, many drunk and recently unemployed, rampaged through the historic Old Town, smashing shop windows, throwing rocks and eggs at police, even prying cobblestones from the streets to lob at the Parliament building.
Similar outbursts of civil unrest have occurred in recent weeks across the periphery of Europe, where the global financial crisis has buffeted smaller countries with fewer resources to defend their economies. Especially in Eastern Europe, the turmoil reflects surging political discontent and threatens to topple shaky governments that have been the focus of popular resentment over corruption for years.
Europeans have compared the unrest to events of the 1960s and even the 1930s, when the Great Depression fueled political upheaval across the continent and gave rise to isolationism and fascism. But no ideology has tapped into public anger and challenged the basic dominance of free-market economics and democratic politics in these countries. Instead, protesters appear united primarily by dashed economic hopes and hostility against the ruling authorities.
FP’s Joshua Keating counts “Lithuania, Bulgaria, the Czech Republic and Hungary” in addition to Latvia in the list of those where we’ve seen such unrest. While we haven’t seen rioting, the downturn is surprisingly bad in the more powerful economies, too, as Anthony Faiola reported in Saturday’s Post.
Britain posted its worst quarterly contraction since 1980 on the heels of sharper than expected slowdowns reported from Germany to China to South Korea. The grim data, analysts said, underscores how the burst of the biggest credit bubble in history is seeping into the real economies around the world, silencing construction cranes, bankrupting businesses and throwing millions of people out of work.
Iceland’s government has fallen as a consequence of massive bank failures and the inability to reach political accord. Not that any successor government is likely to do any better. There’s no end in sight and the governments in Washington and elsewhere are mostly reduced to spending unprecedented sums of money in the perhaps vain attempt to stimulate multi-trillion dollar economies.
Atlantic Council vice president and director of international security programs Jim Townsend sees the potential for darker days ahead. He notes that the last time the global economy was this bad, during the depression of the 1930s, we saw it impact the social and political fabric of Europe. He fears if things continue to deteriorate, we might see a similar political impact in Europe—not the rise of fascism as in the Europe of the 1930s, thankfully, but “a political impact nonetheless that might surprise us.”
Beyond that, he wonders what it’ll all mean for the transatlantic alliance. He notes that there are already strains on NATO in terms of getting countries in Western Europe to live up to their commitments on spending and troop levels. Given the negative impact of the economic downturn on defense budgets, it will be even harder for Allies to afford deploying on NATO missions, especially with the tender economies in Rumsfeld’s New Europe, which in the past gamely participated in the Iraq and Afghanistan missions.
Such are the “events, dear boy” that Harold Macmillan warned us about. The truth of the matter is that none of us knows what impact the financial crisis will have in any particular country, much less in complex international relationships. But we can be sure that the impact will be significant. Likely, much more so than changes in elected leadership.