Petőcz Kálmán (szerk.): National Populism and Slovak - Hungarian Relations in Slovakia 2006-2009 (Somorja, 2009)
Zsolt Gál: Argentina on the Danube - Populist Economic Policy as the Biggest Enemy of Sustainable Economic Growth
Argentina on the Danube... ous sect may degenerate into a political faction in one part of the Confederation but different sects scattered around the Confederation provide a certain guarantee that central organs will not face any imminent danger. A fierce campaign for printing out paper money, for abolishing debts, for equal distribution of property or any other erroneous or dangerous proposal is more likely to engulf an individual state rather than the entire Union; similarly, it is more likely that such a malady may sweep some parish or county rather than an entire state. Therefore we believe that spaciousness and suitable structure of the Union is a remedy for most frequent maladies of the republican government" (Hamilton - Madison - Jay: Listy federalistov, (Bratislava: Kalligram, 2002, pp. 124-125). 4 For a more detailed description of populism in Central Europe and Slovakia, please sec Smilov - Krastev, 2008, pp. 7-10, or Mcscžnikov - Gyárfášová et al, 2008, p. 101. 5 Based on these characteristics, the authors labelled the following administrations in Latin American countries in the 1970s and 1980s as populist: Salvador Allende (Chile, 1970-1973), Juan Perón (Argentina, 1973-1976), Alán Garcia (Peru, 1985-1990), José Samey (Brazil, 1985-1990), Luis Echcverria (Mexico, 1970-1976) and Andres Pérez (Venezuela, 1974-1978); the former three administrations particularly strongly fit the definition in terms of political goals pursued and economic tools applied (Kaufman - Stellings 1991, p. 16). 6 The Bulgarian government was unable to implement a decisive and drastic austerity package and the consequences were catastrophic: hyperinflation, the national currency’s fall, the banking system’s collapse, a significant GDP decline, mass protests, eventual fall of the cabinet and holding early elections. As a direct result of the banking system’s breakdown, 17 banks (approximately one third of the country’s banking system) folded; in 1996, nine out of ten state-run banks that controlled 80% of the country’s financial reserves posted negative capital reserves and half of all private banks declared technical bankruptcy. People stood in long lines before exchange offices in order to exchange the Bulgarian currency into any foreign currency. With respect to American dollar, the Bulgarian currency depreciated by 589.3% in 1996 and by 264.5% in 1997. Due to the currency crisis, political instability, financing budgetary deficits by printing uncovered money and strong inflation expectations, the year-on-ycar inflation rate exceeded 2000% in March 1997. The average annual inflation rate reached 310.8% at the end of 1996 and 578.5% in 1997. The gross domestic product dropped by 10.9% in 1996 and by further 6.9% in 1997. The currency’s breakdown, the banking system’s collapse and hyperinflation strongly devalued the population’s savings. In early January 1997, mass rallies and strikes engulfed the country, forcing the government in February 1997 to agree to call early parliamentary elections for April 1997. In elections that followed, the ruling socialist party suffered a crushing defeat (Bulgaria: the Dual Challenge of Transition and Recession, 2001; Tomšík, 1999, pp. 28-32). 7 While ‘soft’ populists threaten only parties of the incumbent administration (i.c. they want to replace them at helm), ‘hard’ populists pose a threat to very foundations of a democratic constitutional system (e.g. minority rights or independent institutions) and strive to criminalize their political opponents. In Central Europe, typical representatives of the former arc Fidesz from Hungary or -SD from Slovakia; typical representatives of the latter include the HZDS and SNS from Slovakia or various parties in Poland such as the League of Polish Families and Self-Defence but also the Law and Justice (Smilov - Krastev, 2008, P- 9). 8 Csaba admits that in the globalized economy of the 21 st century, these countries may have lost the leverage to inhibit unsound growth in consumption and credit in a significant way but still criticizes them for failing to use at least those means they do have on their disposal. Due to free movement of capital as well as the fact that financial sector is mostly 217
