Hungarian passports; or, dumbest Stratfor article ever

This sort of thing is why I have trouble taking Stratfor seriously.

Short version: the new, center-right Hungarian government is reviving the plan to offer Hungarian citizenship and passports to ethnic Hungarians living outside Hungary. (There are a couple of million of them. Most live in Hungary’s neighbors Romania, Slovakia and Serbia, with smaller numbers in Croatia and Ukraine.) Stratfor sees this as “an insurance policy — a way of broadening [Hungary’s] power and securing itself should its protectors, the European Union and NATO, weaken.”

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Slovakia: Hm

Last month I posted about the elections in Slovakia. Robert Fico’s “Smer” party — leftish nationalist-populists — had beaten the center-right technocrats.

Well, Fico and Smer have formed a government. And it’s… interesting.

They chose two coalition partners: the right-wing hyper-nationalist, vaguely racist Slovak Nationalist Party (SNS), and the aging ex-Communists of Vladimir Meciar’s HZDS. (You may remember Meciar as the sort of Milosevic/Lukashenko wannabe from the ’90s.)
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Slovakia swings left

Slovakia had elections this weekend. They don’t seem to have attracted much attention, but I think they’re worth a quick look.

Short version: a center-right government that was committed to controversial social and economic reforms got thrown out in favor of a left-wing populist.

Now, depending on what corner of the political spectrum you come from, your reaction to this may be, “Aw, shucks” or “At last!” What makes it interesting, I think, is that this is Eastern Europe, where everything is a bit rawer and the safety catches are off. PM Mikulas Dzurinda and his SDKU party, in power for the last eight years, had an economic program that would have made Margaret Thatcher go dizzy and weak in the knees. Privatization, a flat tax, brisk reorganization of social programs… it was quite something.

Especially since Dzurinda came into office after Vladimir Meciar. Remember him? An obnoxious Communist-turned-Nationalist of the Milosevic-Lukashenko sort, but without even the modest redeeming qualities (i.e., intelligence and a grasp of basic economics) of a Lukashenko. Meciar was a buffoon, a demagogue, and an incompetent; whether you like Dzurinda or not, there’s little doubt that he was the best choice available back in ’98.

Anyway. Dzurinda’s policies saw some results. Slovakia got hothouse economic growth and a surge of foreign investment that has turned it, against all expectations, into the automotive manufacturing center of Eastern Europe. But it also saw sharply increased inequality in income and wealth; and while unemployment went down, the jobs created were mostly available to the young, the urban, and those willing and able to pick up stakes. Jobs may be going begging in the capital, but a few hours west, on the Ukrainian border, the unemployment rate is over 25%.

Without getting into a debate over the merits of SDKU’s policies (though that’s very interesting in its own right), it’s clear that the Slovakian electorate has decided to swing left for a while.

Numbers below the fold.
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And speaking of Eurovision

Just a quick update on Croatia’s EU candidacy.

Eight countries have signed a letter to British PM Tony Blair supporting Croatia’s membership. The letter was presented to Blair — who currently holds the rotating EU Presidency, and will until January 1 — in the recent confence at Newport, in Wales.

The signing countries were Austria, Greece, Italy, Latvia, Luxembourg, Malta, Slovakia, and Slovenia.
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Narodwagen?

BusinessWeek spills a lot of ink on the rise of the car industry in Central and Eastern Europe. The idea that a lot of manufacturing is headed east is nothing new, but to see the numbers and changes laid out so explicitly gives a much clearer idea of the challenges that Western societies are facing.

Volkswagen [in Germany has] the highest labor costs in the industry — close to $50 an hour for a 28-hour workweek, some 20% over the already high average wage for German auto workers. In contrast, Slovaks [at another VW factory] cost $6 an hour and work a 40-hour week, netting VW annual personnel cost savings of $1.8 billion, according to analysts at Germany’s Bank Sal. Oppenheim. If [Thomas] Schmall [chairman of VW Slovakia] needs to boost production suddenly to meet a surge in demand, the new shifts can be arranged overnight. In Germany, negotiations with unions to alter work-time models can take up to six months and cost more in overtime premiums.

Ouch.
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Hyundai Goes to Slovakia

South Korean manufacturing giant Hyundai has picked Slovakia as the site for a new $870m (?466m) car plant, one of the biggest deals in the car sector this year. The factory, which will open in 2006, is intended to produce up to 200,000 vehicles a year under Hyundai’s Kia brand. The north Slovak city of Zilina beat a Polish location in what had been a long-running contest to get the plant. Both countries offered incentives for the investment, but Slovakia boasts slightly lower costs for manufacturers. In fact Slovakia has arguably the lowest business cost base of any of this year’s new EU members, and enjoys a strategic location on the border with Austria. All of which means that it is rapidly converting itself into an auto manufacturing hub since this is the second big car project that Poland has recently lost to Slovakia: last year, France’s PSA Peugeot Citroen said labour costs had persuaded it to pick Slovakia for a new plant roughly the same size as Kia’s.

This of course is neither outsourcing, nor is it job-migration. But it certainly is a news item which doesn’t go down too well here in Spain, which feels it is rapidly losing its pride of place as the European car components centre.
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