By Jack Johnston
The global financial crisis has not only disturbed the previous course of capitalist economic development but also stalled many of its political projects. An example of this is the process of European Union expansion into the former non-capitalist states in Eastern Europe. While prior to the crisis these economies were enjoying high growth and falling unemployment, many have now been plunged into a severe downturn. This not only threatens their own internal political stability but also shakes the foundations upon which EU enlargement has been built.
The eastern enlargement of the EU, in 2004 and 2007, should be understood within the context of the restoration of capitalism that occurred throughout Eastern Europe from 1989. The economic collapse and social impoverishment, caused by the re-introduction of capitalism, were most severe and prolonged in the countries of the ex-Soviet Union. Yet the Central-Eastern European (CEE) states still suffered huge socio-economic declines. Ten years after the fall of the Berlin Wall, only Poland had crossed its pre-transition level of GDP; the Czech Republic, Hungary, Slovakia and Slovenia were just returning to this level, whilst the Baltic States still had a GDP level 20–40% below that achieved at the end of ‘communism’. Consequently poverty, unemployment and social inequalities all sharply increased, leaving millions of people with a standard of living worse than they had before capitalism was reintroduced.