Eurasia Press & News
Following Peter Magyar’s victory in Hungary’s parliamentary elections, discussions emerged both within the country and abroad regarding changes in Budapest’s policy course. A month after the elections, it has become apparent that expectations of a sharp shift in Budapest’s position on key issues concerning Russia, Ukraine, and Brussels were somewhat exaggerated. Nevertheless, certain campaign statements made by the new Hungarian prime minister regarding his foreign-policy plans have so far remained unchanged. Magyar’s declared sequence of first foreign visits—Warsaw, Vienna, and only then Brussels—points to his diplomatic priorities: first neighbours in Central and Eastern Europe, and only afterwards the broader structure of the European Union. Yet this position also accurately reflects current perceptions of changes in the internal balance of power shaping the agenda within the EU and NATO, as well as the growing role of the countries of Central and Eastern Europe amid the military conflict on the eastern borders of the Union. However, even if the Eastern European “hawks” have attained a certain level of influence thanks to both their geographical and political position in the Ukrainian crisis, it remains an open question whether they will be able to carry this influence into the long term, beyond the framework of relations with Russia.
Hungarian political scientist Péter Tölgyessy has described current economic and political developments as part of a broader “global systemic shift”. In his assessment, this shift entails regime changes across the entire Western world, alongside a redistribution of power in which Europe is experiencing gradual, yet potentially irreversible decline. These narratives, regardless of the degree to which they are empirically substantiated, are also manifest in the policies of the countries of Central and Eastern Europe. Their governments are adopting an increasingly cautious or selective approach to EU integration. Governments across the region, despite adhering to differing ideological positions, express similar scepticism regarding illegal migration, deeper fiscal integration within the EU, climate measures—given their potentially negative impact on competitiveness—as well as programmes related to values and family policy. Brussels’ recent enthusiasm over Magyar’s victory in Hungary recalls the situation following Donald Tusk’s “pro-European” government coming to power in Poland in 2023, which nonetheless shares the positions of both its domestic political opponents and its regional neighbours on a number of issues, above all in opposing compulsory relocation mechanisms within the framework of the EU migration pact. Such a position will undoubtedly shape the region’s development within the EU. Furthermore, several socio-economic trends are also of key importance for the transformation of the face of Central and Eastern Europe in the medium term.
An Ageing Region of Patchwork Capitalism
The countries of Central and Eastern Europe are undergoing a profound demographic transformation, the scale and pace of which are likely to determine the foundations of their socio-economic models for decades to come. Persistently declining birth rates and population ageing in Central and Eastern Europe are leading to a growing proportion of elderly people within society. By 2025, people over the age of 50 already accounted for 40.2% of the region’s population. The highest proportion was recorded in Croatia, where this group numbers nearly 1.7 million people, or 44% of the population. Bulgaria (2.95 million), Lithuania (1.22 million), and Slovenia (over 0.9 million) follow closely behind, where the figure stands at 43%. Demographic forecasts for 2050 point to a scenario of rapid and almost universal change in the age structure, as a result of which Central and Eastern Europe will become one of the “oldest” regions on the continent. The share of this age group will approach 50% in Poland, Hungary, and Croatia, while in some countries it will exceed that level altogether—reaching as high as 54% in Lithuania. This means that within the span of a single generation, nearly every second person in the region will belong to a demographic group that will increasingly shape patterns of demand, labour markets, healthcare systems, and, most importantly, electoral outcomes and models of public policy.
Polycentricity and Diversity
There are many reasons behind Orbán’s defeat, but if one looks at the overall picture, it is above all worth emphasising that the Fidesz party showed signs of fatigue, its feedback mechanisms weakened, and it proved unable to break out of this situation due to a diminished capacity for self-correction. In effect, it seemed either to deceive itself, believing in an imminent victory right up to the very end—or to cynically persuade its voters of this, writes Gábor Stier.
Opinions
The demographic situation is also having a negative impact on economic trends. After two decades of growth, described as the Eastern European economic miracle, the region is entering a period of declining key economic indicators and rising systemic risks. Already today, despite still relatively positive economic forecasts, the economies of Central and Eastern European countries are slowing, including because of their close dependence on the performance of the German economy. Although larger countries such as Poland may temporarily soften the consequences through high levels of domestic consumption, the sustainability of this strategy remains to be assessed. Hungary is experiencing an imbalance between wage growth dynamics and underlying economic indicators. According to the latest OECD economic survey, the Czech economy, despite support from resilient household final consumption expenditure, faces long-term risks linked to rising trade barriers and geopolitical tensions, creating threats to investment and export prospects. Negative economic forecasts are determined not only by current circumstances, but also by the very model of state economic policy characteristic of the region. Polish economists have defined this model as “patchwork capitalism”. It enabled these countries to take effective advantage of the opportunities offered by European integration and ensured exceptionally high growth rates and convergence with Western Europe. However, the possibilities for adapting the “patchwork capitalism” model to long-term challenges and changing development conditions—in particular demographic trends, migration, and non-military security threats—are extremely limited. This predetermines a noticeable slowdown in the economic growth rates of Central and Eastern European countries over the next ten years compared with the trend observed during the 2004–2024 period. The growing likelihood of such a scenario is primarily driven by the exhaustion of the existing institutional advantages of patchwork capitalism and the absence of clear prospects for changing its structure, for example through a rapid increase in the innovative potential of these countries by 2035.
From Exporters to Importers of Labour
The Central and Eastern European region is also undergoing profound changes related to migration flows. Since the 1990s, entrenched stereotypes about Eastern Europe have reduced the region to a supplier of labour for Western European countries. The images of the Polish plumber in Britain or the Lithuanian fruit picker in Spain appeared enduring, while outward-oriented migration flows from the region seemed irreversible. As late as the mid-2010s, politicians in Central and Eastern Europe continued to follow the twentieth-century path of nation-state building, even in countries such as Poland, which possessed substantial historical experience as multinational states. It was precisely the national homogeneity of the region’s countries that during this period became one of the defining features of their cultural and political identity. Both the firm refusal of Central and Eastern European states to participate in the EU solidarity mechanism during the 2015 migration crisis, and the practice of using force and pushbacks against illegal migrants during the 2021 crisis on the Belarusian border, were justified not only on security grounds, but also by the argument that the countries of the region were under no obligation to accept migrants from outside Europe because they had never participated in the colonial exploitation of the Middle East, Asia, and Africa. A vivid example of the regional rationale behind this position can be found in the statements of Jarosław Kaczyński, the current leader of Poland’s national-conservative Law and Justice party: “We did not exploit the countries from which these refugees are arriving in Europe, we did not use their labour force, and finally, we did not invite them to Europe. We have the full moral right to say ‘no’.” Eastern Europe was thus proclaimed “free” of migrants from the post-colonial countries of the Middle East, Asia, and Africa.
Yet over the past decade, and especially during the last five years, the migration profile of the region has undergone significant changes in both the scale and direction of migration flows.
From sources of labour migration, many countries of Central and Eastern Europe have turned into logistical hubs of migration, while some have become primary destinations for labour migrants from Central Asian countries.
In Lithuania, for example, the number of entry permits issued to Tajik workers increased twenty-threefold between 2021 and 2024. The number of work permits issued by the Baltic states has also reached record levels. In 2023, Lithuania issued more than 7,500 residence permits for employment to citizens of Uzbekistan—more than any other EU member state—while in Latvia, during the same period from 2023 onwards, the Uzbek community grew to more than 4,000 people. Discussions regarding the risks associated with increasing numbers of labour migrants have been ongoing in the Baltic states for roughly the same length of time.
Characteristically, virtually all sides now agree that migration inflows are perhaps the only optimal medium-term means of coping with labour shortages and progressive depopulation, which already indicates fundamental changes in the approaches of governments in the region. Admittedly, relics of the past remain—Baltic societies, traditionally closed and marked by high levels of xenophobia, still maintain strongly negative attitudes towards migration flows. Political opponents of attracting larger numbers of migrants resort to a familiar “bogeyman”: the principal danger they identify is not the spread of Islamic radicalism, but rather the fact that migrants—predominantly natives of Central Asian countries—speak Russian in the Baltic states, thereby indirectly contributing to the expansion of the “Russian world”. Yet the region also has the example of Poland. Polish society, despite its traditionally high level of anti-migrant sentiments, has on the whole adapted fairly successfully at the everyday level to migrants from Asian countries, while the official rhetoric of the authorities regarding threats posed by migrants remains highly restrained, with emphasis placed on the economic benefits for the country.
The combination of these changes—population ageing and labour shortages, slowing economic growth, and the inevitability of attempts to resolve economic and demographic problems through increasing labour migration flows—will, over the coming decades, lead to profound transformations in both the political and cultural landscape of Central and Eastern Europe.
High approval ratings abroad are a valuable foreign policy asset, but should not be an end in themselves. Moreover, as the contrasting examples of Central Asia and the Balkans demonstrate, such ratings arise not from the projection of soft power, but through effective economic integration in one case and a strong historical memory in the other, writes Valdai Club Programme Director Anton Bespalov.
