Central Europe

The Visegrád group founded by Czechoslovakia, Hungary and Poland in 1991 represents a specific spatial cluster within the EU. Its political economy is characterized by three main features, which provide the functional focus of the chapter. First, the region’s integration into the Single Market converged on a foreign-led export-oriented model underpinned by adequate infrastructure development, generous incentive packages, and investment promotion agencies to attract transnational corporations (TNCs). Second, over the early 1990s and mid-2000s the Visegrád states kept in place relatively generous systems of social welfare uniquely geared towards the elderly ‘non-productive’ groups of society. Although the adopted industrial and social policies have not been without success, they are at odds with the Lisbon agenda that gives preference to alternative ways of combining economic competitiveness with social inclusion. Finally, the simultaneous pursuit of the above costly and contradictory agendas made the coordination of fiscal and monetary policies difficult. Hence the third peculiar aspect of the Visegrád path lies in contested and ineffective institutions of macro-economic coordination. Accordingly, on the temporal dimension of membership integration the region is differentiated by delays in the implementation of the Lisbon agenda and, with the exception of Slovakia, lagging compliance with the Maastricht criteria of macroeconomic convergence, which led to repeated postponement of eurozone entry. After substantiating in some detail the peculiarity of the Visegrád path, section two asks about the logics of its emergence.