The Long Shadow of the Cold War Over Central Europe

CEE countries lost almost 50 years stuck on the wrong side of the Iron Curtain. Although the Berlin Wall fell more than three decades ago, they still have not managed to make up for the years wasted by communism.

The Fall fo the Berlin Wall
People gather near a part of the Berlin Wall that has been broken down after the communist German Democratic Republic's (GDR) decision to open borders between East and West Berlin, Berlin, West Germany, November or December, 1989. Photo: Carol Guzy / The The Washington Post via Getty Images

To understand postwar Vienna, it is worth watching “The Third Man,” a film from 1949 directed by Carol Reed, voted in 1999 as the greatest British film of all time. It shows the Austrian capital as a dark, gloomy place hiding many secrets. The atmosphere of Vienna as a city that was the arena for the struggle of secret forces also recurred in other works. For example, in the James Bond films, or even recent “Gray Man” on Netflix.

James Bond in Vienna

In “The Living Daylights” from 1987, Agent 007 struggles with double agents typical of the Cold War era. In the same vein, the master of spy books John le Carré wrote about the Austrian capital. His “A Perfect Spy” is an excellent detective story that brilliantly demonstrates why Vienna is referred to as the ‘capital of spies.’

Theoretically, Vienna was on the western side of the Iron Curtain. In practice, this city became a sort of no man’s land, a grey zone between two ideological blocks. Until the collapse of communism in Central Europe, it was a meeting place for all kinds of intermediaries between the two blocs. Estimates are that around 7000 spies were working there at the height of the Cold War.

“Vienna is more of an Eastern European city than we perhaps sometimes think—east of Prague, closer to the tank-trap lined border of the old USSR than to France; the former last stop in the democratic west before you went behind the Iron Curtain. Therefore, it’s a listening post and a playground for spies,” writes Paul French, a British author, in his article about post-war Vienna, calling this city “a post-war frontier post.”

More than 30 years have passed since the fall of communism in Central Europe, but the shadow of the Cold War still hangs over the region. Vienna is still called “the city of spies.” The CEE countries face different challenges than those of the West. The differences in development between both parts of the continent are still evident. “Mr. Gorbachev, tear down this wall!” said Ronald Reagan in his famous “Berlin speech” in 1987. The wall became a museum exhibit two years later, but the stigma of the iron curtain has not yet disappeared.

Money, Shakespeare, and European differences

The easiest way to describe the differences between the two parts of Europe is through numbers. For example, those concerning the purchasing power of the citizens of the different EU countries. According to Eurostat, GDP per capita (purchasing power adjusted) in 2021 equaled to 32300 euros for the average EU citizen. However, the divergences between countries are enormous. For instance, Luxembourg’s GDP per capita is the highest in Europe at EUR 89,700. In Denmark, it is EUR 43,200, and in Germany – EUR 38,600. At the opposite end of the scale is Bulgaria, with a GDP for every citizen of EUR 17,800. In Slovakia – EUR 22,000; in Croatia – EUR 22,600. Clear proof of the principle: tell me which side of the Iron Curtain you were born on, and I’ll tell you what wealthy country you live in.

Post-communist countries have also lagged behind in the fields of the most advanced technologies. This can be clearly seen when the export figures are analyzed. The share of high-tech in total export is on the level of 17.9% on average for the whole EU. But in Ireland, this share is 34.7%, in Malta – 25.6%, in Netherlands – 21.3%, in France – 20.5%.  The situation is different for EEC countries, mostly at the bottom of the list. In Slovenia, this share is 5.8%. In Bulgaria – 5.9%. In Croatia – 8.1%. In Poland – 8.4%. This marks a stark contrast between two regions of one continent.

Taking a conservative approach

Another factor that shows the difference between Western and Central Europe is the attitude toward money. CEE countries take a much more conservative approach, above all with regard to debt. This can be seen from data showing the amount of public debt. According to figures from Eurostat, the debt of the general government sector in 2021 was at an average of 88.1% across the EU. But this debt is much higher in older members of the EU than in new ones.

For instance, in Greece, it reached 193% of GDP, in Italy – 151%, in France – 113%, in Germany – 69%. In Central Europe, these numbers look different. Estonia has the lowest level of the public debt of all 27 members of EU – 18%. In Czechia, it is 42%, in Latvia – 45% and Romania – 49%. Old wisdom from Shakespeare’s “Hamlet” says that “borrowing dulls the edge of husbandry.” CEE countries treat this phrase very seriously.

War is peace, freedom is slavery, and ignorance is strength

The differences between Central and Western Europe can be described by a myriad of other examples, such as the size of the wealth at the disposal of each country, the quality of transport connections between them, or the standard of living of the average citizen. Evidence could be multiplied. The vast majority of them are a consequence of the fact that Europe was divided by the Iron Curtain as a result of the Yalta Conference in 1945. The CEE countries remained on the side of it that did not have the chance to join the circulation of the global economy, to benefit from the fruits of dynamic international trade and technological development, and were deprived of the right to freedom of speech and the unfettered exchange of ideas.

For almost 50 years, they were stuck in a political and economic regime imposed by the Soviet Union, which blocked liberty, entrepreneurship, and creativity – and, by imposing a centrally planned economy, also prevented rapid economic development. It was then that the economic differences between the two parts of Europe occurred. The very fact that they have not been erased – even though more than 30 years have passed since the fall of the Berlin Wall – is the best proof of how inefficient the communism imposed by the USSR was and how deeply it has deformed and distorted the countries of the region. It is the main reason it is so difficult to erase the stigma of that system.

With ideological gloves on

These distortions are seen not only in the field of economy. “The post-totalitarian system touches people at every step, but it does so with its ideological gloves on. This is why life in the system is so thoroughly permeated with hypocrisy and lies: government by bureaucracy is called popular government; the working class is enslaved in the name of the working class; the complete degradation of the individual is presented as their ultimate liberation” wrote Václav Havel, leader of Czechoslovakian anticommunist opposition, in the essay “The Power of the Powerless: Citizens Against the State in Central-Eastern Europe” from 1978.

“Because the regime is captive to its own lies, it must falsify everything. It falsifies the past. It falsifies the present, and it falsifies the future,” as Havel described the rotten communist system. In his essay, one can hear echoes of George Orwell’s anti-utopia “1984” with the famous phrase “War is peace, freedom is slavery, and ignorance is strength.” Orwell’s book – written in 1949 – was fiction, but it was a detailed description of the communist system created by the USSR in Central Europe.

A radical flip

After the Velvet Revolution in 1989, a lot changed in CEE countries. They joined NATO and the European Union. They gave up centrally planned economies in exchange for the free market. Such a radical flip of the political-economic switch has translated into a marked improvement in living conditions in the CEE countries.

But in many elements of reality, the region’s communist past still significantly impacts the present. The legacy of communism makes the way Central Europeans think and act different from Westerners in many situations. This can be seen in things such as greater flexibility, the ability to adapt to changes in the situation, but also in a more conservative approach to life in social and cultural terms. Citizens of CEE countries also take security, understood in military terms, with much greater seriousness.

“You can avoid reality, but you cannot avoid the consequences of avoiding reality,” wrote Ayn Rand, an American writer, and philosopher, in her book “The Virtue of Selfishness” in 1964. Still very relevant to Central European countries. This needs to be remembered, especially when Russia – the legal and political successor of the USSR – has brutally violated the international order by attacking sovereign Ukraine.

Leave a Reply

Latest from Business