[Marxism] Hungarians fed up with "globalization"

[Louis Proyect <lnp3@xxxxxxxxx>]

http://www.latimes.com/news/nationworld/world/la-fg-hungary-levis29-2009mar29,0,3266649.story
 From the Los Angeles Times
EUROPE OR BUST
In Levi factory town in Hungary, promise of globalization fades
A jeans plant that helped usher in capitalism is expected to shut down 
in June, another victim of the worldwide economic crisis.
By Jeffrey Fleishman

March 29, 2009

Reporting from Kiskunhalas, Hungary — Nearly everyone old enough 
remembers that day when Levi Strauss & Co., whose jeans evoked the 
rebellious allure of the West for millions of youths trapped in the 
Soviet bloc, opened its doors at the edge of town and began hiring box 
men and seamstresses.

It was 1988. The Berlin Wall was months away from tumbling down. And 
there was Laszlo Varnai, a worker at a state-owned cooperative farm, 
watching with delight as spools of thread and crates of indigo blue were 
hauled into a factory beyond a row of trees.

"It was a grand miracle of the times," said Varnai, recalling how road 
signs went up pointing traffic to the plant. "They brought a production 
mentality and a way of working that was alien to the socialist system. 
It changed us."

The town grew. Varnai became mayor. But the fable-like quality has 
vanished. The Levi factory is closing.

The company's troubled balance sheet is another creak in the global 
economy, but Kiskunhalas, named for a clan that centuries ago sharpened 
swords on this furrowed land, is bitter that its fate is woven into 
market whims. Nearly 550 townspeople, many of whom ride bikes to work, 
are expected to lose their jobs in June.

"It's the suddenness that's unacceptable," said Varnai, sitting in the 
town hall with a big hole in his budget and a lot of worry outside his door.

"Those are people in that factory. Life is more complex than just 
shutting something down. It might not be to Levi's, but it is to this 
small town. The inhuman nature in the cold numbers of capitalism, that's 
what stuns you."

The global financial crisis has battered Hungary's economy, raising 
worries across the continent that 20 years after the Berlin Wall fell, 
former Soviet bloc nations are becoming costly burdens to the European 
Union.

The EU's goal of cohesion is straining relations between Western and 
Eastern Europe, and between formerly communist nations, the more 
prosperous of which, such as Poland and the Czech Republic, don't want 
to be lumped with laggards such as Hungary and Latvia, which this year 
have seen riots and protesting farmers.

Hungarian Prime Minister Ferenc Gyurcsany, who unexpectedly announced 
his resignation this month over the slow pace of fiscal reforms, has 
warned that a new economic "Iron Curtain" is stretching across Europe. 
That may be overly dramatic, but it's telling on a continent where the 
ideal of Europe crystallized in a West that has reluctantly embraced 
eastern nations. Grand plans, ideals and visions are colliding with 
widening debt and plummeting currencies.

The EU recently rejected a request for a $240-billion loan to Eastern 
Europe, even though the crisis is the worst on the continent since the 
rise of fascism in the 1930s. It later agreed to double a credit line 
available to the East to $68 billion, and European leaders have endorsed 
a doubling to $500 billion of International Monetary Fund loans to 
struggling countries around the globe.

Officials in Central and Eastern Europe are concerned that their Western 
neighbors, facing pressures from unions and anxious voters, may abandon 
solidarity for protectionism. France has hinted as much by vowing to 
prop up its carmakers, and German Chancellor Angela Merkel does not want 
the prospect of Eastern European bailouts to taint her country's 
parliamentary elections in September.

The EU has expanded to 27 members, including Hungary and Romania, but 
the fit is akin to well-to-do cousins tolerating their unpolished kin on 
the other side of town. The financial crisis has highlighted these 
divides, especially in Hungary, which has entrenched corruption and has 
failed to reform a bloated welfare state regarded as a throwback to a 
Europe that no longer exists.

"We cannot afford to go through the big bust we are now going through," 
said Gyorgy Jaksity, managing director of Concorde Securities in 
Budapest, the Hungarian capital. "When communism ended 20 years ago, it 
was an historic moment, a time to put in a new structure to catch up 
with the developed world. But Hungary never put that structure in place. 
It's not what we did in 1989; it's what we didn't do.

"Our neighbors want to distance themselves from us, saying, 'You don't 
want to fall off the cliff with those irresponsible Hungarians.' "

But globalization has shrunk distances, whether between Levi's 
Kiskunhalas factory and the company's European headquarters in Brussels 
or between Budapest and Berlin.

Follow the global meltdown trail: German factory orders are down nearly 
40%, which means Hungary's exports to Germany have fallen, which means 
Budapest, carrying $100 billion in external debt, can no longer avoid 
reforms to its generous pension and health programs. If Hungary's 
currency continues to wither -- the forint has declined 25% against the 
euro in less than a year -- the country may default on its international 
loans, sending another jolt through Western banks.

Little sense of alarm, however, can be detected in the shopping malls or 
on the fashionable boulevards of Budapest. It's as if Hungarians there, 
from the chic to those just getting by, are in a glittery kind of denial 
over the financial crisis. They spend, sip espressos and polish their 
cars while their left- and right-leaning politicians argue in perpetual 
gridlock. But travel two hours south across the plains to Kiskunhalas 
and there is no sense of illusion, no pretty talk of better days.

"When communism ended, Hungary developed quicker than its neighbors. 
Back then we had new cars and Coke in cans, which was quite a 
development," said Akos Spitzer, who sells washing machines and 
refrigerators. "But maybe we developed too fast without having the real 
money to pay for it. This is the bubble that's bursting."

There had long been rumors that the Levi factory might close, but a 
small town runs on gossip and the plant stayed open.

"Levi's sponsored games and sports. They were active in the community," 
Varnai said. "About 100 of their employees are two-income earners from 
the same families: husband-wife, mother-daughter. . . . But now Levi's 
is leaving and they didn't want to talk about how we could get them to 
stay. They're acting like they never were part of us. It's a great blow 
to this town."

Gavin Moore, head of production for Levi Strauss in Europe, said the 
global downturn had slackened sales and "it just wasn't feasible" to 
keep the Kiskunhalas plant running.

Not much was moving through town the other day, except hail blowing off 
the plains, where horses pulled plows and farmers waited for the return 
of the storks, which brings out the TV news crews. The woman behind the 
counter at a bookstore, an at-home seamstress until Chinese blouses 
flooded the market, didn't know how bills and mortgages would be paid 
with so many Levi employees laid off at once. The man punching out 
lottery tickets wasn't so talkative.

Between 4 p.m. and 4:01 p.m., car ignitions clicked and bicycle tires 
hummed as the Levi factory shift ended. Marianne Szalay, a seamstress, 
walked along a path to her bus. She has a university degree in cultural 
management and will try to find other work. She remembers when a man 
with a microphone stood in the factory and told the workers their fate.

A few days later it was the national Women's Day, when employers and 
bosses traditionally bought flowers for their female workers.

"I received flowers from Levi's for nine years. It was a little thing, 
only a gesture, but it meant something," said Szalay, standing to the 
side as other workers hurried past. "This year, after they announced 
they were letting us go, they didn't give us flowers."

jeffrey.fleishman@xxxxxxxxxxx

________________________________________________
YOU MUST clip all extraneous text when replying to a message.
Send list submissions to: Marxism@xxxxxxxxxxxxxxxxxxx
Set your options at: 
http://lists.econ.utah.edu/mailman/options/marxism/archive%40archives.econ.utah.edu