Stability over Everything

Stabilitt ber alles
The Transition of German and Hungarian Politics since 1989
There can be little doubt when studying the political transition within Germany and Hungary that since 1989 there has been a change in ideology since the collapse of the communist regime in Eastern Europe and the reunification of East and West Germany. Nevertheless it must be acknowledged that the truly astonishing events of 1989/90, which even at the beginning of 1989 could not have been predicted, brought about the most exciting and far far-reaching changes in life and society in Germany and Hungary since 1945. Through the various paradigms Globalization, Europeanisation and Democratisation, we are able to come to an understanding of the politics in transition and also highlight and explain several key aspects of the political, economic, social and cultural life in contemporary Germany and Hungary.
The trend of globalization is attracting more and more attention and with this is transforming the historical approach that state, society and economy are, as it were co-extensive within the same national boundaries. The international economic system, in which states draw the borderline between the domestic economy and foreign trade relations, is being metamorphosed into a transnational economy in the wake of the globalization of markets. These trends are mirrored by the current emphasis of Germany to grow as a major leader within the European Union and Hungary in their approach for acceptance by the European Union as a member.
Since the fall of the Berlin Wall, we have seen Germany come forward as one of the forefront leaders in the European market. From an economic perspective, globalization has brought incontestable welfare gains to Germany and Europe through an enhanced international division of labour (e.g. trade and investment). Yet globalization has also exposed and intensified weaknesses in growth, investment, and innovation in Europe and has led to exceedingly high unemployment rates. For ten years now the German economy, has been transferring DM 150 billion in net payments from the West to the East. This is not a symptom of the economys weakness, but rather a symptom of strength, and is maintained by the fact that few economies in the world could do this successfully, and none is required to do so. Undoubtedly it puts an enormous strain on the German economy, but it is shouldering it well. Even though Germany has been transferring money to the East, it has still managed to register a trade surplus of DM 100 billion annually. Although, with the immense costs of unification, recession or slackening economic growth in many export countries and increasing globalization of economies, have plunged the state into deficit. It can easily be seen why many of the German population have a negative outlook on globalization.

Paving the way for globalization is a technical progress, created by improved transportation methods and modern information and communication technologies. Also important is how recent decades have seen national boundaries (e.g. tariff barriers) being torn down, and both factor and product markets liberalized. With the breakdown of tariff barriers and a compromise of European unified laws between the participating European Union members the basic idea of a free market has been widely accepted with both optimism and scepticism. With the increase of globalization of the economy, the introduction of the Single European Market and competition through cheaper products from low-wage countries, many employers feel this stability is turning into a strait jacket.
Globalization and the end of the Cold War have brought about a shift to a post industrial economy, in not only the reunified Germany but also Hungary. Statistics show that since the rise of globalization the amount of people employed in the industrial sector in both countries has fallen considerably. Unemployment rates have also risen, especially in the former East Germany and the rural regions of Hungary.

Table 1.1 Unemployment rate in Germany (per cent)
GermanyWest GermanyEast Germany
Unemployment %*17.617.4
Table 1.2 Unemployment rate in Hungary (per cent)
Unemployment %0.0*1.78.512.311.07.13
* Under the communist regime unemployment was said to have been nonexistent.

Table 2.1 Change in Employment in Industry* (per cent)
Employment in Industry27.
* Industry including Manufacturing and Construction.

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** West Germany
*** Prediction for 2002.

For Hungary and East Central Europe, the state socialism produced by the Yalta system collapsed after almost 50 years because of the globalization of the world system. The first blow of globalization for Hungary came in the 1970s with the transition from extensive to intensive industrialisation. Hungary had to open up more and more to the world economy, but was increasingly unable to compete in the world market, so their reaction became a running ahead with loan-based modernisation projects which produced heavy indebtedness. In the 1980s, globalization appeared via penetration of global communications. State socialist regimes were based not only on economic isolation but first and foremost on cultural and communication isolation. When East Central Europe began to feel the impact of globalization from the west, they were inevitably led the way step by step on how to soften up. These steps however led Hungary into the heaviest per capita debt of any of the East Central European countries. In Hungarys strive to compete within the global market, inflation rates have see-sawed dramatically along with a rise in unemployment and a recession which became evident in 1990 did not recover till 1997.Hungarys industry requires a stable macroeconomic environment within which to restructure its recovery.
Table 3.1 Rate of Inflation in Hungary (per cent)
Rate of Interest0.0*35.022.51911.27.0

* Inflation was nonexistent under the Communist regime. It was not until November 1989 when Hungary joined the global market.

Both Germany and Hungary realise with the rise of globalization that with the positives of an open international market, trade and enormous technological progress comes with the loss of employment and industrial productivity and rise in inflation.
Reunited Germany was officially born at the stroke of midnight on 3 October 1990, only 11 months after the wall had fallen. When the former territories of West and East Germany were merged in the autumn of 1990, it was the democratic polity of the old western federal states which prevailed. The newly formed democratic state had overcome many of its major hurdles in its wake to unification, but it still had many unanswered concerns to attend too. The fear of many of the surrounding states was of whether a resurgence of German nationalism would occur once the country was fully sovereign again, or if the Germans will get in peace what they couldnt get in war.Further problems are arising from the current European integration process. Although bringing the new states of the former GDR into line with the old ones as political entities within a democratic federal framework was not really problematical, the gross underestimates of the federal government of the economical reconstruction of East Germany:, is relevant to the European dimension, since the new eastern states are now part of the EU. Since the German states where developed as free-standing political entities with independent and constitutional status; they have gathered a wealth of experience and devolved decision making. Such a principle could make an essential contribution to the future development of an even tighter knit union in Europe, integrated politically and economically.
Where formerly the communist bloc kept a tight lid on any potential fascist inclinations amongst the population, the newly united Germany has removed these barriers, revealing a brew of xenophobia inflaming the disappointed and disaffected, especially amongst young people in the former GDR. While there had been episodes of aggression on foreign people living and working in both German states before the fall of the wall, attacks increased more than five-fold between 1990 and 1991. Right-wing extremist is not, a new phenomenon in Germany, nor is it anywhere in Germany, however the resurgence of Neo-Nazi parties and organisations has come about from the dissatisfaction in the political parties, increasing unemployment in the Federal Republic, also since the fall of the wall many Neo-Nazi splinter groups have appeared from obscurity mainly made up of hooligans. There may be dozen of Neo-Nazi groupings, and they receive much media attention, but their total membership is probably less than 10 000.
Decision about the shape of a post communist-Hungary had begun long before the regime fell. Democracy was initially taken with open arms by the Hungarian people, until in 1991 when a recession hit the country, and the inflation rose to 35%. Faith in the current democratic coalition in power fell, with the return to power of the former reform communists in 1994.Whilst the former reform communists played by the rules, they surrendered power when defeated in 1998. Hungary may follow now the path of democracy, but it has seen times in the past few years where this has been compromised.
Whilst Democracy holds strong key issues in todays societies, Globalization is at the forefront, leading Germany and Hungary down the path of post industrialisation and towards technological progress. Both states, whilst also making the most of the free market must also take into consideration that controls on inflation, and unemployment need to be acted upon seriously, and without a solution to these growing problems, an increase in backlash from the people may occur.

Stability over everything, used in the press by both the East and West German sides as the watchword during early stages of reunification. Tom Heneghan, Unchained Eagle, (2000), ch.2.

Peter James, Modern Germany, (1998), edited Peter James, ch.1, pp4.

Jrgen Habermas, The European State and the Pressures of Globalization, New Left Review, no.235 (1999), pp. 47.

Ernst Schwanhold and Reinhard Pfender, The Challenge of Globalization for Germanys social democracy: a policy agenda for the 21st Century, (1998), edited Dieter Dettke, ch.1.

Ernst Schwanhold and Reinhard Pfender, The Challenge of Globalization for Germanys social democracy: a policy agenda for the 21st Century, (1998), edited Dieter Dettke, ch.1.

Gerard Schrder, The Challenge of Globalization for Germanys social democracy: a policy agenda for the 21st Century, (1998), edited Dieter Dettke, ch.1.
Hanna Ostermann and Ute E. Schmidt, Modern Germany, (1998), edited Peter James, ch.5, pp.68.

Ernst Schwanhold and Reinhard Pfender, The Challenge of Globalization for Germanys social democracy: a policy agenda for the 21st Century, (1998), edited Dieter Dettke, ch.1.

Hanna Ostermann and Ute E. Schmidt, Modern Germany, (1998), edited Peter James, ch.5, pp.75.

Organisation for Economic Co-operation and Development, Germany, (May 2001), pp.37, 112.

Organisation for Economic Co-operation and Development, Germany, (1989/1990), pp.114-115, 118-119.

Organisation for Economic Co-operation and Development, Hungary, (November 2000), pp.156-159, 34.

Centre for Co-operation with the Economies in Transition, Review of Industry and Industrial Policy in Hungary, (1995), pp.12-13, 44-45.

Attila Agh, The Politics of Central Europe, (1998), ch.2, pp.25.

Attila Agh, The Politics of Central Europe, (1998), ch2, pp.25.

James Kurth, Mediterranean Paradoxes, (1993), pp.234.

Centre for Co-operation with the Economies in Transition, Review of Industry and Industrial Policy in Hungary, (1995), pp.12-13.

Peter James, Modern Germany, (1998), edited by Peter James, ch.4.

Thatcher, Margaret (January 22nd 1990) see Tom Heneghan, Unchained Eagle, (2000), ch.5, ch.1.
Peter James, Modern Germany, (1998), edited by Peter James, ch.3.

Peter James, Modern Germany, (1998), edited by Peter James, ch3.

David Kaufman, Modern Germany (1998), edited by Peter James, ch8., Bibliothek Rechtsextremismus (Library of Right-wing Extremism).

Graeme Gill, Democracy and Post-Communism Political Change in the Post-Communist World, (2002). Ch.1
See Table 3.1.

Graeme Gill, Democracy and Post-Communism Political Change in the Post-Commu