Wilkommen, Bienvenue

The Weekly Standard, December 30, 2013

Riga, Latvia, November 2013 © Andrew Stuttaford

They take austerity seriously in Latvia. After each meeting with a government official he or she would turn off the lights as we walked out of the room. More than five years after the global financial crisis finally burst Latvia’s fragile economic bubble, scrimping is second nature. Given the direction this small, resilient Baltic country took after Lehman fell, that’s no surprise. The usual prescription for cleaning up the mess that overheating leaves behind, particularly in an export-oriented economy (exports amount to some 60 percent of Latvian GDP), centers around a sharp devaluation of the currency to restore international competitiveness. There were quite a few (including within the IMF) who suggested that Latvia should break the peg fixing its currency—the lats—to the euro, leaving the lats to sink to a level that more accurately reflected uncomfortable new market realities.

Riga, Latvia, November 2013 © Andrew Stuttaford

That’s not what Latvia did. The relatively low value added within Latvia to its exports, and the difficulty that it would have faced in satisfying domestic demand with domestic production, meant that a conventional devaluation would have struggled to work its naughty magic, even if the export markets had been there (by no means assured after the slump in the international economy). Tipping the scales further, local business and the nascent middle class—most of whose boom-bloated -borrowing had been in euros—would have faced catastrophe had they had to repay those debts in suddenly depreciated lati. That would have threatened both social disaster and a dangerous breach with the Nordic banks responsible for a large portion of that lending—banks that would now have a vital role to play in maintaining financial liquidity in the country (the only sizable Latvian bank had foundered).

Base of Freedom Monument, Riga, Latvia, November 2013 © Andrew Stuttaford

So Latvia stuck with the peg and opted for “internal devaluation,” shorthand for an attempt to mimic the competitive benefits of a traditional devaluation, but by squeezing costs (primarily labor costs) and excess demand out of the local economy rather than by depreciating the currency. This won Latvia financial backing from a group comprising the World Bank, the IMF, the EU, and the Nordic countries, support that had to sugar some very bitter medicine. Government expenditures were slashed (large numbers of public sector employees were fired and many of those who hung on saw their salaries cut by 20 percent or, indeed, much more) and, to a lesser extent, taxes increased. Between 2008 and 2012 total fiscal consolidation amounted to some 17 percent of GDP.

Most of the pain was front-loaded, both as a matter of practical politics (better to strike before austerity fatigue set in) and a matter of practical economics: Latvian interest rates had soared to damaging heights and confidence had to be rebuilt.

Central Market, Riga, Latvia, November 2013 © Andrew Stuttaford

Seen in that context, the 2009 declaration by Valdis Dombrovskis, the dourly impressive center-right prime minister, that Latvia would continue to seek membership in the eurozone (and, more specifically, get there by 2014) made sense. Whatever the mounting problems in the EU’s gimcrack currency union, it appeared to offer a comparatively safe haven from the Baltic storm. For investors and lenders, the obvious seriousness of this commitment, together with the external support that the government had won, significantly reduced the exchange-rate risk associated with doing business in Latvia. It was no coincidence that with the “devaluation ghost” (as the central bank delightfully puts it) held at bay, lats-denominated interest rates started to tumble.

On top of that, targeting eurozone membership provided a benchmark against which the performance of the Latvian economy could be measured. The country would only be eligible to switch over to the euro if it met the currency union’s “Maastricht criteria.” Its budgetary position would have to be on a sound footing, its inflation subdued, and so on.

Perhaps most important, the march towards the single currency signaled to Latvians that their reconnection with Europe would not be derailed by the economic crisis. Austerity was a means to an end, not just an end in itself. Many Latvians had (and have) their doubts about the wisdom of adopting the single currency (over half are still—to a greater or lesser extent—opposed), but the broader aim of anchoring their state more firmly in the West helped them to stay the course through the brutally tough times that followed the financial collapse.

Central Market, Riga, Latvia, November 2013 © Andrew Stuttaford

There are plenty of dismal statistics to choose from, but unemployment stood at over 20 percent in early 2010 (compared with an average of 6.5 percent in 2007), and GDP shriveled by 18 percent in 2009, after a 4.2 percent decline the previous year. Despite this, Dombrovskis was able to prevail in the October 2010 general election and then weather (albeit precariously) a snap election called in slightly murky circumstances the following September. The fragmented and incomplete development of political parties in Latvia means that general elections are not the best gauge of public opinion, but Dombrovskis’s survival (he went on to become Latvia’s longest-serving democratically elected prime minister) says something. He resigned only in late November, after the deadly collapse of the roof of a Riga supermarket, a tragedy for which he took “moral and political responsibility.”

But by then the economy was well on the mend, bolstered by a revival in global demand partly stimulated, of course, by less austere policies elsewhere. Quite why Latvia was able to resume its pre-boom trajectory as quickly as it did remains the subject of lively academic debate, but a low level of public debt was one crucial advantage: Latvia could persist with its tough approach without falling into the debt-deflationary trap that is crippling recovery in Greece and other grisly corners of the eurozone’s ER.

Latvia’s GDP growth began to turn positive during 2010, coming in at a total nicely above 5 percent for both 2011 and 2012, and is on schedule to be comfortably over 4 percent in 2013, the fastest growth in the EU. The current account deficit is again at a manageable level, the unemployment rate has shrunk to a number marginally below 12 percent, inflation is running at less than 1 percent (as opposed to nearly 18 percent in May 2008), and the budget deficit has returned to respectability after coming close to 10 percent of GDP in 2009. In 2012 it was only a little above 1 percent, while government debt stood at around a modest 40 percent of GDP, easily below the Maastricht requirement of 60 percent.

It is no surprise that Latvia’s formal application to join the euro in March was approved by the relevant EU authorities within a few months. Ordinary Latvians were not given an equivalent say. Calls for a referendum were rejected, not least on the grounds that the matter had long been decided. Any country joining the EU after the Maastricht Treaty came into force in 1993 (Latvia became a member in 2004 after—it is fair to note—a referendum) is obliged to sign up for the euro as soon as it meets the Maastricht tests, a proviso that the Swedes (joined 1995)—who wisely retain their krona—have ignored. Some seats at the EU’s table are more equal than others.

Central Market, Riga, Latvia, November 2013 © Andrew Stuttaford

In any event, Latvia will swap the lats for the euro on January 1 at the rate, to be precise about it, of 0.702804 lati per euro, although it will still be possible to pay for goods and services in lati for another two weeks thereafter. The conversion process within the public and private sector is well under way, as is an extensive program of public education (meetings, leaflets, advertising). Most visibly to the visitor, all prices now have to be given in both lati and euros, and from what I could see in Riga, that was happening everywhere. Even in the converted zeppelin hangars (history here is complicated) of the capital’s picturesque (and somewhat law-unto-itself) central market, everything was properly priced: I had been issued a nifty lenticular currency conversion card and could check that that was so. Watchdogs are in place to stop the changeover being used to hike prices (a common, if exaggerated, fear that has accompanied the introduction of the euro in other countries). To reinforce this, dual pricing will be mandatory until the end of June.

After the changeover, lati will be convertible into euros (at the fixed rate) at rural post offices for three months, at commercial banks for six months, and at the central bank in perpetuity. This matters. Ask officials why there is still so much opposition to the switch, and—perhaps a little condescendingly—they cite folk-memories of the damage caused by previous currency conversions, especially the abrupt introduction of a “new ruble” in 1961 during the Soviet era.

But there is more to it than that. Geopolitical realities (yes, we are talking about Russia), the size—and open nature—of the Latvian economy, and inadequate domestic capital formation all make a decent, if downbeat, case for Latvia to enter the eurozone, despite that currency union’s profound problems. Its flaws (to use a gentle word) have not escaped the attention of the man in the Latvian street. He also does not appreciate the fact that if there is another eurozone bailout (Greece, yet again?), frugal, hardscrabble, post-Soviet Latvia, one of the poorest countries in the EU, will have to chip in.

For a country to abandon its own money is to throw away an essential attribute of sovereignty. In a lovely but manipulative gesture, Latvian 1 and 2 euro coins will bear the image of Milda, the “Latvian maiden” who adorned prewar Latvia’s gorgeous—and emotionally resonant—5 lati piece. This time she is decorating a symbol not of hard-won independence but of a sadly withered autonomy.

And the eurozone’s long agony may bring with it another twist of the knife. The convenient fiction that made it politically possible to establish the euro in the first place was that this was a shared currency that could work with a minimum of pooled sovereignty, a stretch at the best of times, an impossibility in the case of a monetary union that is very far from being an optimal currency area; Germany is not Greece, Finland is not Portugal. If the euro is to survive in its current form, the eurozone will require much deeper fiscal and budgetary integration. Quite what will be left of Latvia’s low tax, fiscally responsible regime or, in any real sense, its self-determination, by the time this process is finished is anyone’s guess.

And what is to remain of Latvia itself? It emerged from nearly half a century of cruel Soviet occupation with its identity savagely battered—not least by the presence of a large Russian settler population (even today ethnic Latvians account for only some 62 percent of the country’s two million inhabitants)—but its heart intact. Membership in the EU has represented a kinder, subtler challenge. The opportunities it has brought to live in lusher lands to the west has led to a steady stream of emigration, a stream that became a torrent during the slump before dwindling again today. All told, the population has shrunk by over 10 percent since 2000. Exporting surplus labor helped Latvia manage the crisis, but at what longer-term cost?

Riga Castle, Latvia, November 2013 © Andrew Stuttaford

I spent the evening of November 11 down by Riga Castle. It was Lacplesis Day, the anniversary of the victory in 1919 by freshly cobbled-together Latvian forces (helped by Royal Navy guns) over a Russo-German army (as I said, history is complicated here) in the battle that effectively secured the new state’s independence after centuries of foreign rule. An ever-swelling crowd, talking quietly, proud to be there, had gathered, lighting row upon row of candles that flickered against the old castle walls, a tribute to the men who had fought so courageously for their country’s right to be. Bonfires did their best against the cold, clear northern night; once-banned flags—carmine and white like the ribbons everyone seemed to be wearing—waved in the chill breeze. A group of children sang folk songs of simple, crystalline beauty.

Behind us a series of tiny vessels had been launched into the River Daugava. Each bore a candle and some a miniature flag, too. They formed a brave, bright, glowing flotilla that sailed off into the dark, its destination unknown.

Wrong Place, Wrong Time

Prit Buttar: Between Giants -The Battle for the Baltics in World War II

The Wall Street Journal, August 15, 2013

The finest English-language portrayal of the fate that came calling for the Baltic States in 1939 is  William Palmer’s  “The Good Republic,” a short novel written on the eve of the breakup of the U.S.S.R. that evokes both the horror that engulfed these nations and the monstrous dilemmas that the war left in its wake. Early in its pages, an aging émigré, back in his homeland after nearly 50 years, ruefully remembers how his (unnamed) Baltic country had, for a while, led “a charmed life . . . between mad giants.” That characterization is recalled in the title of Prit Buttar’s history of what happened when Nazi Germany and Soviet Russia carved up northeastern Europe between them before turning on each other.

The Nazi-Soviet pact of 1939 consigned the Baltic trio of Latvia, Lithuania and Estonia to Moscow’s sphere of influence. Mr. Buttar, a British physician and independent military historian, recounts how these three small countries were first forced to accept Soviet garrisons and then incorporated into the U.S.S.R. in August 1940 after elections that were as bogus as the choreographed “popular” revolutions that preceded them. The arrests, deportations and executions that followed were the standard Stalinist script.

When the Germans invaded the U.S.S.R. in June 1941, they quickly rid the Baltic States of their Soviet occupiers and were initially welcomed as liberators. This was an illusion that the countries’ Jews obviously didn’t share. Though Estonia had only a tiny Jewish minority, about 5% of the Latvian population (some 95,000 people) was of Jewish descent, as was around 9% of Lithuania’s (roughly 250,000). Most of these people were dead at the end of 1941, murdered by the Einsatzgruppen, German mobile killing squads.

The perception that the Jews had collaborated with Soviet rule reinforced older prejudice, and all too frequently Hitler’s butchers had local assistants. Mr. Buttar relates the dismal chronicle of the Baltic’s willing executioners with some skill, if, perhaps, with too little consideration of the way in which the Soviet destruction of the established political, economic and social order had eliminated the elements that might have put some brake on the descent into atrocity.

The danse macabre of ethnicity and ideology didn’t stop there. Had the Germans so chosen, they could have restored a measure of self-determination to the Baltic States and bought some strategically useful loyalty. But Hitler had other plans for the region. In his Teutonic take on manifest destiny, the indigenous populations, even purged of the Jews, offered little more than prospective labor for the greater German good.

As the Red Army pushed back and then west, though, the Reich’s leadership began to view the Baltic nations as a source not just of auxiliaries but of front-line troops. Latvian and Estonian formations were established within the Waffen-SS and fought in battles on the Eastern Front. Some of these recruits were true believers in the Third Reich, and some were simply opportunists. But a good number—knowing what the return of Soviet power would mean—signed up in the belief that they were choosing the lesser of two evils, their countries’ last hope, however remote. Others were the conscripts of any war, young men in the wrong place at the wrong time.

Mr. Buttar neither judges nor whitewashes these soldiers. But after going through his carefully balanced account of the predicament in which Balts found themselves in those years, readers will find it easier to understand why today’s reunions of Baltic Waffen-SS veterans, which include an annual parade through Riga, the Latvian capital, trigger not only outrage but also a degree of local approval.

The Red Army re-invaded the Baltic States in 1944 and in a sequence of brutal autumn battles evicted the Germans from Estonia and Lithuania. Several hundred thousand troops were cut off in Latvia’s “Courland Pocket” and continued fighting until war’s end in May 1945. Mr. Buttar is himself an army veteran, and it is from the military perspective that he relates the savage unraveling of the Baltic world during World War II’s last year. There’s plenty here on weaponry, on tactics and strategy, on the movement of units—and, as so often in volumes of this type, who won what decorations for what actions. Thus we are told that in January 1945 the soldiers holding out with desperate effectiveness against the Soviets were each “awarded a ‘Kurland’ badge or armband.” But what conditions were truly like in that cutoff redoubt has largely to be guessed from glimpses of exhausted men, references to continuous fighting and laconic details of “increasingly meaningless” battles fought on until the fall of the Reich many months later.

The Soviet “liberation” of the Baltic States, and their postwar reabsorption within the U.S.S.R., restarted the cruel machinery of Stalinist repression on an even more hideous scale than before. Unlike in 1940, however, tens of thousands of Balts took to the forests and staged a lonely epic of defiance often overlooked by historians. To his credit, Mr. Buttar takes his story through the postwar period. Partisan activity peaked in the mid- to late 1940s but was severely hampered by a wave of mass deportations—over 90,000 Balts were sent to Siberia in 1949. Despite this blow to its base, the resistance struggled on, outnumbered and outgunned, well into the next decade. They were hoping for effective Western support. It never turned up.

Landscape After

Marci Shore: The Taste of Ashes - The Afterlife of Totalitarianism in Eastern Europe

National Review, April 3, 2013 (April 22, 2013 Issue)

Warsaw, Poland, May 1998 ©  Andrew Stuttaford

The new dawn that broke over Eastern Europe in 1989 was bright, but the landscape it illuminated was exhausted, a territory of shadows and regret, where hope was jostled by apprehension and old demons stirred. To read some of the accounts of that time and that place is to confront sadness unexpected after the jubilation on the Wall, the Hungarian border, or Wenceslas Square — a melancholy echoed in Marci Shore’s beautifully written, discursive, and by her own admission “deeply subjective” new memoir, a work of well-told history and perceptive reporting that is both less than its title promises and rather more. Either way, it could have done with an index.

Don’t read The Taste of Ashes expecting a survey that covers all of the old Eastern Europe. With the exception of Romania (does that count?), the Balkans do not really feature, nor do Hungary and the former East Germany. There’s a brief excursion to Lithuania, but the other Baltics and the rest of the Soviet far west are notable only by their omission. This is a volume centered on Poland, the Czech Republic, and Slovakia, but quite a bit of what Shore discovered there could easily have been found elsewhere in the region. Thus, in early 1995, she returns to Prague and visits the house of an apolitical elderly couple, all too typical of a generation throughout Eastern Europe whose lives had been impoverished by Communism, but ruined by its fall:

The Velvet Revolution had brought freedoms they had no use for, and in any case had not the money to enjoy. Their whole adult lives they had worked under the Communist regime, and that regime had promised they would be cared for in their old age. Now the social contract had been broken. For their generation the revolution had come too late. For Pan Prokop and Paní Prokopová, it would have been better had it not come at all.

That, of course, assumes that — had it survived — the crumbling economy of Communist Czechoslovakia would have been in a position to deliver on those undertakings, something that is by no means certain.

Shore is an associate professor of history at Yale, a Generation X intellectual of somewhat progressive hue. Thus it may not be surprising that her description of her time in the Eastern Europe of the “post-Communist moment” — doubtless further skewed, in a form of confirmation bias, by the views and experiences of those with whom she chose to associate — comes with a sigh of disappointment. History failed again. The rise of the philosopher king, Vaclav Havel, was not accompanied by the rise of a philosopher people.

There’s prim tut-tutting about the profusion of pornography, and, more justifiably, about the increase in crime and the persistence of the inertia, passivity, and conformity of the “realm of the not possible” that was so much of the Communist state. There is little about the revival in free enterprise, but plenty on the resurgence in national tensions. Shore spent time “working as an intern for an ethnic-conflict project at an American-funded research institute.” Ex-Yugoslavia was in flames, and other long-suppressed conflicts had reemerged into the space that Moscow had once policed. In Romania, Shore investigated tensions between ethnic Hungarians and ethnic Romanians. Fair enough, interesting enough, but all this risks giving an unbalanced impression of a region where most just wanted their lives to be “normal,” an adjective that Shore happens to hear used by a Romanian politician, but that was voiced often in Eastern Europe in those days. When the old regimes fell, achieving a “normality” defined in largely Western terms was a widespread objective.

This idea is reflected in a clever phrase deployed by Shore to describe 1989’s upheavals: “Time, seemingly halted for so long, suddenly leaped forward.” And if the results of the leap have been uneven, they have still been impressive: “To tens of millions of East Europeans the end of Communism brought countless good things — above all a freedom the vast majority of people never imagined that they would live long enough to see.”

But in one sense, time did count, and it counted very much. Shore trains her historian’s eye on the impact of the Communist years, with a keen focus on the telling detail and defining atrocity. And she takes a longer view than most. The rise of the red flag over what her husband, Yale professor Timothy Snyder, dubbed the “bloodlands” in his magisterial book of the same name cannot, she correctly stresses, be seen in isolation. The subtitle of Shore’s book refers not just to Communism but to totalitarianism. In her view, the different stages in the evolution of Eastern European Communism must be read as links in a chain that stretches back to World War II, Nazi occupation, and the Holocaust and, before that, to the Depression, the rise of Fascism, and even to “the dizzying possibilities of the 1920s.”

It is widely recognized that war and Nazi misrule were critical in clearing a political, military, and (perversely) moral space for Eastern European Stalinism, and the link between the war and the troubled decade that preceded it is hardly a secret. The connection to the “unhinging” 1920s is more novel. Shore uses the microcosm of a group of 20th-century Polish poets as a window into the revolutionary fervor that enveloped large sections of the European intelligentsia in a decade happier, luckier Americans remember for jazz and Al Jolson.

Those poets — many of them of Jewish descent — dominated her book Caviar and Ashes and crop up again in The Taste of Ashes. From the later 1920s onward, they exchanged the (to them) ultimately unbearable uncertainties of nihilism for the messianic determinism of the far left, a faith that they — and a number of their associates — were eventually, and crucially, to put at the disposal of Stalin’s Poland. That’s a timetable that suggests to me that the original sin from which the nightmares Shore describes were to flow was the Bolshevik Revolution of 1917. After all, it was Lenin’s blood-soaked millennial upheaval that frightened many into Fascism as a supposed last bulwark of civilization. And it was Lenin’s revolution that drove its followers worldwide into a Communist cult that became dangerously intertwined with Stalinism years before the alibi that was Auschwitz.

To attribute so much of the blame to Lenin fits awkwardly with the emphasis that Shore’s narrative places on Hitler. The Holocaust is justifiably central to our reading of Eastern Europe’s dark 20th century, but its role as Stalin’s enabler needs more nuance than Shore gives it. Equally, notwithstanding the pantomime anti-Semitism (a gargoyle hounding of phantoms) that still, shamefully, persists in these lands, the horrors of the Shoah are less critical — other than for the hideous absence that it left behind — to our understanding of the region today than Shore appears to suggest. In a book billed as wide-roaming, she devotes perhaps too much space to what is now, tragically, only a tiny, introspective, often conflicted minority of Polish Jews. A minority of a once slightly larger minority (the Communists arranged a final anti-Semitic purge in 1968), they stay put in a country that groups of visiting Jewish teenagers — there to mourn at the death camps — regard (Shore recalls) “as a cemetery.”

Theirs is a disturbing, compelling story, but it crowds out a broader discussion of the encounter with a Communist past in which so many Eastern Europeans were profoundly compromised and then, “in a world where all the rules had changed,” left exposed by the opening of files that were either devastatingly ambiguous or, worse, all too clear.

There could have been more too in this book on the appeal of totalizing ideology to so many intellectuals. It is a topic that obviously interests Shore (it surfaced in Caviar and Ashes), but she gives too little attention to a phenomenon that still endures, if more benignly, even in the attitude of those such as the former dissident and Velvet Revolutionary who opts out of the, yes, normal politics of the new era: “To be engaged” is, in his view, “to forgo clean hands,” an abdication that is itself a declaration of absolutist thinking. Shore notes that “dissidence . . . had often been born of communism”: Once a believer, always a believer — all that changes is in what. That dangerous thrill remains.

Shore concludes the book with a tale of meeting a “bright young” member of the Polish new Left, who thanks her for Caviar and Ashes — a work he regards as rehabilitating those Marxist intellectuals of seven decades ago. Shore contradicts him, explaining that their fate is a “tragedy.” “But I didn’t read it as a tragedy!” says the bright young man. “I read it as a romance.”

We have been warned.

Red Dawn

Robert Service: Spies and Commissars - The Early Years of the Russian Revolution

The Weekly Standard, February 4, 2013

Russian Civil War Monument, Archangel, Russia, August 1996 © Andrew Stuttaford

When everything changes, what should be done?

Over 30 years after Ayatollah Khomeini lit the Islamic fire, the West is still fumbling its way to a proper response. Imagine, then, the challenge posed by the Bolshevik Revolution in 1917. A key partner in the Allied war against Germany had just been hijacked by a fanatical cult intent on remaking the world, and the world had no clue what to do in reply.

That’s the background to this fine new work by Robert Service, a distinguished historian of Soviet communism perhaps best known for his biographies of Lenin and Trotsky, two monsters brought to unusually vivid life in these pages. Here’s Trotsky, flirting with Clare Sheridan (Winston Churchill’s embarrassing first cousin, as it happens) as she sculpts his bust in the Kremlin, and there’s Lenin, “shortish, pedantic and impatient. With his thumbs tucked into his waistcoat, he seemed at times like an angry Sunday preacher.”

This is a deftly drawn book, illuminated by the author’s eye for detail, ear for a good quote, and nose for a ripping yarn.

And what a yarn it is. The ancien régime is no more. We are given a quick look at the deposed and imprisoned Czar Nicholas, the most prominent, if far from the most important, of all the “former people” (to borrow the chilling Bolshevik phrase), reading “Turgenev .  .  . [and] anti-Semitic tracts.” Meanwhile, the armies of his kinsman, the Kaiser, are tearing chunks off what once was the Russian Empire, before dissolving into confusion after defeat on the Western Front.

All is flux. The territory controlled by the Bolsheviks shrinks and grows in a mirror image of the tides of a vast, bloody, and chaotic civil war, and the Kremlin’s efforts to export its revolution to Warsaw and beyond. National independence movements rise and fall. Estonia, Latvia, and Lithuania get clean away (for now), Ukraine and Georgia are not so lucky. Hovering uncertainly on the fringes are troops dispatched to Russia by its erstwhile allies in the hope that they might somehow reverse the worst of the revolution. They were never able to do so.

Service gives an excellent overview of this bewildering series of conflicts, and of the dawn of revolution as a whole, but this is just the frame for his picture of a country where nothing was as it had been and everything was up for grabs. Older, more genteel techniques of influencing events no longer worked. Traditional diplomacy was dead.

But both Russia and its revolution were too big to ignore. Although foreign governments may have dithered, some of their citizens did not. It is around their stories that Service shapes his narrative. The Bolsheviks might have thought that they were steering immense, impersonal, and unstoppable historical forces, but the new world that they created was so fluid and so fragile that the individual could, and did, make a difference.

There were the true believers—early fellow travelers not just along for the ride but eager to speed it on its way—such as the American journalists John Reed and Louise Bryant, and, more equivocally, the Briton Arthur Ransome. Reed, the author of Ten Days that Shook the World, ended up an honored corpse beneath the Kremlin walls; Bryant, his widow, was subsequently married (for a while) to the man later appointed the first American ambassador to the Soviet Union. Ransome became a much-loved children’s writer (Swallows and Amazons and similarly wholesome fare) and a less-loved husband of one of Trotsky’s former secretaries.

Not so idealistic, but in some ways no less credulous, were the prospectors among the rubble, the entrepreneurs and con men who saw the collapse of Russian capitalism as a business opportunity. And then there are the real heroes of this book, the remarkable band of (mainly) British or British-sponsored adventurers who did what they could to overturn Bolshevik rule.

While a small British expeditionary force gathered in the far north, His Majesty’s irregulars set to work in Moscow. At least three of them—Sidney Reilly, Paul Dukes, and George Hill—could, notes Service, “have supplied inspiration for James Bond.” No martinis, but in just one paragraph we read about Reilly’s involvement with Yelizaveta. And Dagmara. And Olga. We also read about that clever and unconventional thrill-seeker, Robert Bruce Lockhart, designated “Head of the British Mission” and the ideal agent-diplomat for a place where the rules of diplomacy had broken down. Between romances, Bruce Lockhart plotted coups. And the Britons were not alone: Uncle Sam was represented by the more staid, but not ineffective, “Information” Service, run by the marvelously named Xenophon Dmitrievich de Blumenthal Kalamatiano, a one-man tribute both to American’s melting pot and its enterprise.

If all this sounds like the stuff of John Buchan, only more so, that’s because it is. This is a story with room for Latvian riflemen, Czech Legionnaires, and a Polish Women’s Death Battalion; for failed revolutions across Europe, for conspiracies and spies, and for the daredevil aviator Merian Cooper, one of the American volunteers in an air squadron that helped Poland beat off Bolshevik invasion. (“Coop” was shot down but escaped after 10 months of Soviet captivity. A decade-and-a-half later, he coproduced, cowrote, and codirected King Kong.)

For all the tales of derring-do, however, it’s impossible to read this book without sadness and frustration. This was a tragedy that could have been cut short. Winston Churchill, a minister in the British government during this period, argued for more to be done against the Reds. He understood what his cousin Clare Sheridan did not: that this terrible infant revolution needed to be “strangled in its cradle.” Not for the last time in his career, too few listened until it was too late.

To some Western leaders, Bolshevism was a spasm that would pass. Russia’s counterrevolutionary armies—the Whites—would prevail with just a little support from the West; or maybe Bolshevism, an onslaught on human nature itself, would simply collapse, or be overthrown in its own heartlands. Others, not unreasonably, feared that their own, already war-weary peoples would be driven to revolt by the prospect of participating in what many were bound to see as a bosses’ crusade against a bright, brave experiment. So, denied the outside assistance that might have made a difference, the Whites were overwhelmed, beaten by an enemy that, in the end, proved more cohesive and determined than they were. The undersized and ultimately irrelevant Allied detachments—primarily French, Japanese, American, and British—slunk home from their beachheads, but the Western statesmen told themselves not to worry: Trade would blunt Leninist rigor, and a cordon sanitaire of new East-Central European states would keep Bolshevism confined to its birthplace.

Less than a quarter of a century later, the Red Army was in Berlin. As for His Majesty’s irregulars, most resumed lives of quieter distinction, but the (probably) Ukrainian-born Sidney Reilly (né Rosenblum) continued to fight. Lured back to the Soviet Union in an elaborate sting operation, he fell into the hands of the secret police, and, like millions to come, was killed.

Czy Warto Wrócić Do Dyskusji O Wprowadzeniu W Polsce Euro?

Forbes Polska, February 1, 2013

Polska powinna trzymać się z dala od strefy euro. Europejski Bank Centralny nie znalazł bowiem recepty na politykę monetarną, która respektowałaby interesy wszystkich jej członków. Polska, pozostając poza unią walutową, pozwala swojemu bankowi centralnemu prowadzić politykę monetarną i kursową, która odpowiada na jej specyficzne potrzeby. Nawet jeśli nie zawsze okazuje się skuteczna, to przynajmniej w ogóle istnieje.

Euro było i jest polityczną próbą zignorowania ekonomicznej, kulturowej i demokratycznej rzeczywistości, aktem pychy, który może wydawać się znajomy tym, którzy żyli w komunistycznym ustroju. Jeśli unia monetarna siedemnastu (lub więcej) państw ma mieć jakiekolwiek szanse na prawdziwy sukces, to musi się wiązać z zacieśnianiem budżetowym o wiele głębszym, niż członkowie Eurolandu byliby obecnie gotowi poprzeć. Przy bezlitosnej logice wspólnej waluty nie pozostaje im obecnie nic innego, jak trwać w niej w jej obecnym kształcie. Zresztą prawdopodobnie zanim Polska spełni warunki przystąpienia do strefy euro, będzie ona już istnieć w nowym kształcie. Wierzyć, że ieodpowiadające przed nikim elity technokratyczne, lojalne tylko wobec siebie i swoich własnych wizji, zapewnią Polsce dobrobyt, byłoby szaleństwem.

This piece was written as part of a debate on whether Poland should join the euro. And no, I don’t speak (let alone write) Polish.  Please see below the original English text that I submitted to Forbes Polska. I am told that the two versions are very much alike….

One size does not fit all. In a currency union encompassing very different economies, the ECB has long found it impossible to manage a monetary policy that is “right” for everyone. It could never accommodate Poland, developing at a pace that reflects both the rhythms of the European economy and profound structural change. With Poland outside the currency union, the Polish Central Bank can run a monetary and exchange rate policy designed for Poland’s distinctive needs. It may not always succeed, but the ECB would not even try.

If signing up for the single currency would be bad for Poland’s economy, it would be worse for its democracy.  The euro was—and is—a political attempt to override economic, cultural and democratic reality, an act of hubris that may sound a little familiar to those who once lived under communism. If a monetary union of 17 members (or more) is to have any prospect of genuine success it will have to involve far closer budgetary integration than the Eurozone’s voters are now willing to endorse, but the relentless logic of a shared currency may leave them (as they see it) no choice other than to go along. ‘Forced’ unions are generally unhappy, unstable and unproductive, but the chances are that, by the time that Poland is eligible to join, this tighter Eurozone will be in place.

It would preserve the rituals of democracy, but they would be without meaning. As Václav Klaus has observed, there can be no European democracy without a European demos. Instead the old nation-states will become provinces in a realm managed by an unaccountable technocratic elite that owes loyalty only to itself and its dreams. To believe that this would ensure the continent’s (or Poland’s) prosperity or, for that matter, security is madness.

Poland should stay out.

A Soviet Brigadoon

National Review Online, January 8, 2013

Sillamäe Town Hall, Estonia, August 2012 © Andrew Stuttaford

It’s not easy to surprise Toomas Hendrik Ilves, Estonia’s sharp and savvy president, but I reckon I succeeded. In September, I was in Tallinn, the Estonian capital, to interview him for National Review. In the small talk before we turned to the euro, economic recovery, Russia, the usual, he asked me where else I had been on this visit to his country. “Sillamäe,” I replied. The presidential eyebrows rose, just a bit. Maybe there was a word thrown in too, an “interesting,” something like that.

The author of the Lonely Planet’s 1994 guide to the Baltic States and Kaliningrad would have been blunter. After explaining that Sillamäe had been “built after WW II to support a military nuclear-chemicals plant,” an over-simplification that will do for now, he went on to tempt the tougher end of the tourist trade with this: “according to press reports, the plant’s waste dump contains several tons of radioactive and highly toxic wastes, surrounded only by an earth wall 10 meters wide and is already contaminating ground water and the Baltic Sea.”

It was worse than that. The waste dump, euphemistically a waste depository, was a large lagoon, a Leninist lake, toxic and vile, described by the man responsible for cleaning it up as a “uranium pond” hosting some twelve million tons of a sludge containing “uranium, heavy metals, acids and other chemicals.” A testament to Soviet environmental sensitivity, it was open to the air, set on far-from-ideal clay, encircled by a poorly constructed wall, and located just a few yards from the sea. It leaked, and the overspill after heavy rainfall added to the mess. In 1993 the International Atomic Energy Agency labeled the site a serious radioactive risk. Four years earlier the New Scientist had reported that many of Sillamäe’s children were losing their hair. The clean-up was finally completed in 2008. I was told that what’s left of the waste is buried (with other safeguards) under a man-made hill that juts out onto the Baltic shore.

“Will that do the trick?”

“Hope so.”

Where the waste is (somewhere), Sillamäe, August 2012, © Andrew Stuttaford

Other traces of Sillamäe’s strange history remain well above ground.

A three-hour trip to Tallinn’s east on a bus that will end up in St. Petersburg, this sleepy, gently-shrinking, largely Russian-speaking town of some 14,000 people is located at a point just a few miles from the Russian border — and at a moment poised somewhere between Estonia’s painful history and its infinitely more promising present. Before the war, there had been just a few houses here, and a Swedish-owned shale oil processing plant. When Estonia’s Soviet “liberators” returned in 1944, the local variety of oil shale (dictyonema argillite, in case you were wondering) interested them very much indeed. Among the minerals that lurked within it was uranium, something which Stalin had — up to then — found rather hard to obtain, but wanted very badly.

The old Swedish works had been destroyed during the war, but a new production unit — Kombinat no. 7, and a new town that was intended to support it — was built, much of it by the forced labor of convicts and POWs. The latter included many Balts caught up in the conflict between their homelands’ Nazi and Soviet invaders. More than half a century later, the facility’s new Estonian owners stripped away sheetrock in its administration building to reveal well-crafted brickwork. A section has been kept exposed as a memorial of sorts to those that worked — and died — here, often in appalling conditions. Just outside is a small Soviet-era monument to the Great Patriotic War, a war that Estonia was doomed to lose regardless of which of its totalitarian occupiers might prevail. History is a via dolorosa in this part of the world.

After the prisoners came yet more wreckage of war, those still remembered in Sillamäe as “the orphans.” As the plant — the USSR’s first fully operational uranium-processing facility — was completed, teenaged survivors of the siege of Leningrad were shipped in to be trained as additions to its workforce. Production started up, beginning with local material, but then switched to higher-grade ore shipped from all over Moscow’s empire. Some 100,000 tons of uranium were produced between 1946 and 1990 for both civilian and military use, a total exceeded in only two other sites in the whole Soviet bloc.

The town grew, but behind a cordon of secrecy, denial, and security. It slipped off and on the map. Sometimes it had a name, sometimes a code. It was a closed town. Access was strictly restricted. It was years before Estonians were allowed to work there (and only a handful did thereafter). For a while, the town was administered, not as a part of Soviet Estonia, but as an exclave of Soviet Russia itself.

There was something else that set Sillamäe apart. Narva, a larger city nearby, and once a jewel of the Northern Baroque, was brutally and slovenly rebuilt after the war as a generic Soviet settlement with a population to match. To be sure, there’s some of that in Sillamäe, but this was a town with a very special purpose. Those who controlled it understood that it would work better if its inhabitants — who included some highly qualified technical staff — were treated better than the Soviet norm. Sillamäe’s center is, I’ll say it, nice, a beautifully preserved showpiece for a Stalinist architecture that is, for once, neither botched, nor slum, nor Mordor. But in feel and former function, if not in appearance, it is also faintly reminiscent of the unsettling picturesque of the Village that housed The Prisoner’s Number Six.

Sillamäe , Estonia, August 2012, © Andrew Stuttaford

This creates a vague sense of unease only underlined by the extent to which the past still lingers on here. This must be one of the few places in Estonia where the symbols of the old regime, the hammers, the sickles, the stars, can still be seen in public, discreetly incorporated into the pale, pastel facades of the buildings of downtown. That they are still in place speaks volumes about the attitude of the locals, and, rather more reassuringly, about the self-confidence of the re-born Estonian Republic, and the relative sensitivity with which it handles the ethnic Russian minority (reduced now to perhaps 25 percent of the country’s population) that remains the most troubling relic of Moscow’s colonial rule.

2 Mere Puiestee, Sillamäe Estonia, August 2012, © Andrew Stuttaford

 
The predominant architectural style at the town’s heart is what came to be known as “retrospectivist” (yes, really), backward-looking, fortified by the reassurance of a past that predated the storms of the 20th century. Many of the buildings play with neoclassical themes. Beyond that there are stately white staircases with a touch of old Odessa about them, a neatly laid-out park, a curious statue of a man lifting, I think, a symbolic atom, a lovely tree-lined avenue, a dignified cultural center, and a fine cinema by the name of Rodina. That’s Russian for “motherland,” but whether that referred to the shared Soviet home or Mother Russia herself was never quite clear. Neither interpretation was likely to appeal to Estonians, but Estonia is a tolerant sort of place and the cinema, along with the cultural center, has enjoyed protected status for over a decade. Across the street stands the town hall, inspired by the design of a traditional Estonian Lutheran church, something that the Soviets must have thought was innocuous enough to be the subject of pastiche. The same, presumably, could be said of the nods to traditional Estonian manor houses that can be seen elsewhere in town.

Mere Puiestee,Sillamäe, Estonia, August 2012, © Andrew Stuttaford

Uranium production in Sillamäe was abandoned in 1990. Soviet rule in Estonia collapsed the next year, and Sillamäe rejoined the world. The facility, renamed Silmet, was privatized, sold, resold, and sold again. Since 2011, by which time Silmet had become one of only two centers in Europe for the processing of rare earths (elements that are crucial for a wide range of electronics), it has been owned by the U.S. mining group, Molycorp.

Atom monument, Sillamäe, Estonia, August 2012, © Andrew Stuttaford

But Sillamäe itself, adrift from time and place, a Soviet Brigadoon but forever in full view, endures. There’s a tucked-away town museum (judging by the friendly, but astonished, welcome I received from the three or four ladies who preside there, I was the first visitor for weeks). Apart from some atrocious local art and a collection of dolls that looks as if it has been curated by a serial killer, it boasts a couple of rooms that give a bric-a-brac impression of everyday life during Sillamäe’s Soviet past.

Town Museum, Sillamäe, Estonia, August 2012 © Andrew Stuttaford

Then again, wandering around town will do pretty much the same thing (if you ignore the well-stocked shops). Ethnic Russians continue to make up the overwhelming majority of the town’s population. Dreaming, perhaps, of the lost certainties of Brezhnev’s day, babushkas still wander down Mere Avenue as it sweeps grandly down to the Baltic. Lenin Avenue has gone, but there are streets named after Russian literary figures and the first cosmonaut too. Up by the bus station, there’s an imposing Soviet war memorial with flowers at its base.

Soviet war memorial, Sillamäe, Estonia, August 2012, © Andrew Stuttaford

But, despite pot-stirring by the Kremlin, and the occasional eruption (most notoriously over the removal to a less prominent place of another Soviet memorial — this time in Tallinn), time, the passing of the older generation, Estonia’s remarkable economic performance, and access to the rest of the EU have all brought a measure of live-and-let-live to relations between the country’s two principal ethnic groups. Unlike in Latvia, where the demographics are even more delicately balanced, there is no specifically “Russian” party represented in the Estonian Parliament, and once-noisy calls for the autonomy of the still hardscrabble Russian-speaking Northeast have died down. Both in Sillamäe and in Tallinn I was assured that younger Russians are at last learning Estonian (even if, understandably enough, their Estonian peers are reluctant to learn Russian, the language of their country’s former oppressor), something that may even give them something of an employment edge in a country that is in practice, if not in law, bilingual.

When it comes to this topic, David O’Brock, the engaging Ohio native (and long-time resident of Estonia) who runs Molycorp Silmet, is cautiously upbeat about what lies ahead. Almost all the workers at his factory are ethnic Russians and many, even the middle-aged and older, are studying Estonian, or other languages that could be of use in a world that now extends far beyond Moscow’s reach.

A once-closed town is opening up. And in more ways than one.

Estonian Economics

National Review, September 27, 2012 (October 15, 2012 issue) 

Raekoja Plats, Tallinn, August 2012 © Andrew Stuttaford

Tallinn, Estonia – Sitting shirt-sleeved and without, sadly, his trademark bow tie, in his official residence here in the Estonian capital, this Baltic nation’s Swedish-born, New Jersey–raised president, Toomas Hendrik Ilves, looks pained. He’s chewing antacid pills (I’d guess), but it’s the name that I just mentioned that is the problem, not indigestion: “Krugman.”

He sighs.

“I know this has been done to death,” I admit.

Ilves does not disagree.

Estonia has a tragic history of being a battleground for other people’s wars. Thankfully, the latest conflict into which the country has found itself unwillingly drawn — the debate over how the West can emerge from its post-Lehman malaise — has involved nothing more than a “snide” (to borrow Ilves’s adjective) bit of blogging by Paul Krugman for theNew York Times. And even that, the president concedes, ultimately turned out to be “good publicity” for a tale of economic recovery.

In 2008, Estonia’s boom, fueled to overheating by (primarily Scandinavian) banks attracted by the country’s post-Soviet revival, turned, like so many others, into bust. GDP fell by 3.7 percent in 2008 and by 14.3 percent in 2009, taking tax revenues with it: The budget went into a deficit of 2.7 percent in 2008, shocking in a country that aims to run a structural surplus. Unemployment soared to 16.9 percent in 2010, from 4.7 percent in 2007. Housing prices crashed 40 to 50 percent from their peak.

In response, the country’s governing coalition of conservatives and classical liberals cut spending and raised taxes (Estonia’s flat-rate income tax was, however, left untouched at 21 percent) in a squeeze equivalent to over 9 percent of GDP. But it was what happened next that must have really bothered Krugman: After pain came gain. GDP jumped 7.6 percent in 2011, and should grow by 2 to 3 percent this year and next. Unemployment has dropped to 10.2 percent and seems set to fall farther.

That did not fit comfortably with the sometimes-cartoonish Keynesianism that the professor has been pushing since the era of hope, change, and stimulus. So he took to his blog, cropped a graph, and took aim at “the poster child for austerity defenders” — not a role that the Estonians had sought for themselves. There had, wrote Krugman, been a “depression-level slump” (true enough) “followed by a significant but still incomplete recovery. . . . This is what passes for economic triumph?”

Well, no, but that is not what the Estonians, a modest bunch, are claiming. No one I talked to described times as easy, but progress is progress. What’s more, if you push the graph back a touch earlier than 2007, which Krugman used as his starting date, the broader picture is revealed to be rather prettier than the Nobel laureate let on. Yes, it was true that GDP had yet to return to 2007 levels, but it still stood slightly higher than in 2006, no plague year. President of one of Europe’s tech-savviest countries, an irritated Ilves turned to Twitter to rough up the “smug, overbearing & patronizing” Krugman.

Let’s take a step back: Estonia is not Greece. Government is transparent and thrifty. Taxes are paid. Private borrowing ballooned during the bubble years, but that of the public sector did not. At the end of 2008, the state’s debt stood at a sober 4.5 percent of GDP, a figure that might have tempted some governments to try to splurge their way out of recession. In rejecting that route, Estonia did the right thing. It depends on its external trade: Exports amounted to 79 percent of GDP in 2010 (compared, for example, with Greece’s 22 percent). With the European economy in savage, sudden free fall, efforts to pump up domestic demand would have achieved little.

Instead the government concentrated on maintaining the fiscal discipline that is one of the country’s most valuable assets and waited for better times, helped in the meantime by the fact that its banking system (dominated by the subsidiaries of large, well-capitalized Swedish banks) kept liquidity flowing. The wait was not too prolonged. Benefiting from policies often very different from those pursued by the tightwads of Tallinn, many of Estonia’s trading partners pulled out of their post-Lehman dive rather more rapidly than might otherwise have been expected, dragging the Estonian economy up in their wake as exports picked up again. The budget is (broadly) back in balance, and the ratio of central-government debt to GDP stood at 6 percent at the end of 2011, a time, ahem, when the U.S. number was over 100 percent. Estonia’s finances remained intact.

And so, largely, did the population. Demography is a sensitive topic in the three Baltic states, small nations with (in the case of Latvia and Estonia) ethnic balances severely distorted by the influx of Russians who arrived in the Soviet years. The slump has triggered a large wave of emigration. Estonia has been spared the worst of this, not least because of the presence of Finland (Finnish and Estonian are closely related languages) just across the Baltic Sea. Why emigrate if you can commute? There’s probably something else at play, too. All three countries have come a long way since their escape from Moscow in 1991, but Estonia has gone the farthest: Perhaps its citizens were more willing to believe that hanging on would be worth their while.

Estonia’s is an impressive story, but it is a distinctive one, with specifics — including a history of budgetary prudence, the presence of those Swedish banks, a heavy export orientation, assistance from the EU’s structural funds, and a windfall from the sale of emissions quotas — that mean that advocates of an Estonian solution to the euro-zone crisis should proceed with care. Crushing the economic activity on which tax revenues depend is increasing the burden of government debt in many of the PIIGS. In that sense, Krugman was right. Estonia is not a poster child for “austerity defenders.”

But it is a poster child for Estonia: Its frugal, free-market, low-tax, and transparent democracy is indeed something to emulate. An Estonian-style tightening could never have ended Greece’s slump, but if the Hellenic Republic had earlier taken a path that was more Baltic than Balkan, it would not be in the mess that it now is. Coulda, shoulda, drachma.

The sting in this tale is that the euro’s distress may mean that Estonia will not be allowed to follow its own example much longer. This will not be the first time that the trickster currency has caused trouble in Tallinn. It was the prospect of Estonia’s adoption of the euro that triggered that last, fatal surge in Scandinavian lending. On the other hand, it has also represented an additional incentive (and some political cover) for the maintenance of that budgetary discipline without which — ironically, in the light of the shambles elsewhere — the country would not have been eligible for membership in the currency union.

Switching to the euro was seen by most of the Estonian elite as final confirmation that the country had left its Soviet past behind. Even though the Estonian kroon had been pegged to the Deutsche mark, and then to the euro, since its rebirth, many ordinary Estonians were not so convinced that it should be swapped for the single currency, but the terms of the country’s accession into the EU in 2004 rendered their discontent moot. Calls for a referendum were ignored, and Estonia moved over to Brussels’s funny money on January 1, 2011.

If the alternative approach, retention and then devaluation of its own currency (frequently a useful tool in an economic crunch), was considered, it was not considered for long. Exports are vital to Estonia, but it adds comparatively little value to them. Devaluation would therefore have had little impact on their cost to international customers. What it would have done, however, is risk importing yet more inflation into Estonia’s small, open economy. Above all, devaluation would have, as Ilves explains, “wiped out” the middle class. Typically, the mortgages — often on properties that had since collapsed in value — that Estonians had taken out from those generous Scandinavians were denominated in euros. To repay them in depreciated krooni would have been a Sisyphean nightmare. Another alternative, redenominating those loans in local currency, was never a serious option: The liquidity that the Swedes provided throughout the crisis would have dried up overnight.

That was then. The problem now is that Estonia arrived in the euro zone at a very bad time. The safe haven has turned out to be anything but. And it could prove an expensive place to stay. Estonia dutifully helped underwrite the European Financial Stability Facility, the currency union’s temporary bailout fund, and just a few weeks ago ratified its commitment to the fund’s permanent successor, the European Stability Mechanism. If things go badly, that could leave this small country on an unnervingly large hook.

This has not played very well with the electorate. To date, the country’s voters, many of whom remember the infinitely harder Soviet period, have supported the hair shirt. The government was reelected with an increased majority last year. But bailing out feckless, richer folk in Europe’s south (for example, Estonian average earnings are only about one-third higher than the Greek minimum wage) has been a tougher sell. Most Estonians opposed participation in the EFSF and ESM. By contrast, the political class remains willing to trudge through euro-Calvary, although there are some signs that this resolve may begin to crumble if the bailouts grow bigger (and thus potentially more costly to Estonia) and more widespread. And it would be the insult, not just the cost. Should still-poor Estonia really be asked to stump up for Spain? Or Italy?

Ilves points out that, “to put it crassly,” Estonia has profited nicely from its membership in the EU (not least from the financial support that Brussels channels to the union’s less prosperous members), and it has — so far. But there’s an obvious danger that Santa could turn Fagin.

And the euro’s woes menace more than Estonia’s coffers. It now seems clear that attempts to fix the single currency will revolve around trying to integrate the euro zone into a deeper political and budgetary union. Such a union, were it to be formed, would be launched with promises of financial discipline, transparency, and democratic accountability, none of which, given such a construction’s artificial, ill-fitting, and unnatural character (not to speak of the EU’s own lamentable track record in these respects), are even remotely credible. And what then would happen to Estonia, trapped within a Frankenstein union that could be held together only by methods — budgetary and otherwise — that would be the antithesis of everything that independent Estonia has come to stand for?

Neither Ilves nor any other of the political figures to whom I have spoken in Tallinn appear to believe that this is what lies ahead, but, even amid the confidence that is the product of past success and satisfaction at Estonia’s hard-won arrival in “Europe,” it is impossible to miss some hints of uncertainty over what comes next.

That uncertainty needs to be replaced by alarm.

The Tragedy Europe Forgot

R.M. Douglas: Orderly and Humane - The Expulsion of the Germans After the Second World War

The Wall Street Journal,  August 9, 2012

By the late spring of 1945, Germany had lost a war, its honor and millions of dead. There was more to come. The Allies had decided that the country’s east should be carved up between Poland and the Soviet Union and that its German inhabitants should be moved to the truncated Reich. There they would encounter Sudeten Germans, Czechoslovakia’s second largest ethnic group, now also scheduled for deportation. In August 1945, the United Kingdom, the United States and the Soviet Union agreed at Potsdam that these transfers, which had in any case already begun, should be “orderly and humane.”

They were to be neither, and they rapidly evolved into the greatest forced migration of all time. In total, 12 million Germans or more—mostly women and children—were stripped of all they owned and expelled from a vast swath of Eastern and Central Europe. At least 500,000 lost their lives (some estimates are far higher) due to neglect, violence, disease and the debilitating effects of freight wagon and forced march. From the Baltic to the Carpathians and beyond, communities that had flourished for, in some cases, more than half a millennium were smashed and scattered until all that remained were buildings and graveyards.

In “Orderly and Humane: The Expulsion of the Germans After World War Two,” R.M. Douglas quotes the comments of a British diplomat who visited East Prussia in September 1945: “The towns of Deutsche Eylau, Freistadt and to a lesser extent Marienwerder, as well as the smaller villages, are not only devastated but also almost empty,” he wrote. “These are ruins in the raw, untouched and untidied, looking like horses disemboweled in a bull-ring.” Deutsche Eylau, a part of the Duchy of Prussia since 1525, is, like the other two towns, a part of Poland today.

Mr. Douglas is careful, however, to guide his readers away from any notions of moral equivalence between these events and the Nazi slaughterhouse that preceded them. The treatment of the Germans was savage, cruel and frequently murderous, but it most closely resembled (in type if not scale) the “ethnic cleansing” that would tear apart Yugoslavia during the 1990s. It was no new Holocaust: The “Germanic vermin” (to borrow the words of one Polish general) were to be driven to the west, not annihilated. There were shootings, but no Babi Yars; camps, but no gassings. Auschwitz was reopened, and prisoners again shuffled through the yard at Majdanek.

Mr. Douglas relies rather less on the chronicling of particular horrors than many who write about atrocity, a display of self-restraint that somehow makes his narrative all the more chilling. To be sure, widespread fears of yet another German resurgence coexisted alongside a general acceptance of the idea of German collective guilt and the necessity of teaching the Hun a harsh lesson. But Mr. Douglas shows that the expellees were the victims of realpolitik as well as rage, righteous or otherwise. In 1943, Gen. Władysław Sikorski, the leader of the “London Poles,” may have been moving toward accepting a postwar Poland shoved westward (to accommodate Stalin’s theft of the country’s eastern portion) at Germany’s expense, but he was clear that there would be no room within it for a substantial Jewish minority. If this was to be punishment for Hitler’s crimes, it was taking strange forms.

Even before the war, in the run-up to the 1938 Munich agreement, Czechoslovakia’s president, Edvard Beneš, had, as Mr. Douglas explains, already proposed the expulsion of Sudeten Germans (sweetened with the transfer of some territory to the Reich). No good could come of a Teuton presence in his Slavic republic.

After years of hard-fought Nazi occupation, Tito’s expulsion of Yugoslavia’s ethnic Germans citizens was perhaps no great surprise, but Moscow’s seizure of a slice of East Prussia was just the latest in a series of imperial land grabs engineered by Stalin. And the fact that Hungary and Romania, Axis partners for most of the war, turned on their Germans (admittedly prodded by the Kremlin) is yet another reminder that more than just vengeance was at work. The removal of this prosperous minority offered opportunities for looting, leftist social engineering and, for the region’s emerging communist parties, wrapping themselves in the national flag.

Above all, the expulsions of 1945 were, as Mr. Douglas shows, just the biggest in a series that had begun two to three decades earlier in Turkey, Greece, Central Europe and, even, France’s recovered Alsace-Lorraine. In many respects, the expulsion of the Germans represented the belated full flowering of the ideas that had shaped the Treaty of Versailles (1919). If ethnic self-determination was to be the basis of new European statehood, the multinational countries established by that treaty out of the wreckage of the Russian, German and Austro-Hungarian empires were a task half-completed, an invitation to instability and, as the world now knew, to war.

Most important of all, the “resolution” of what was left of Mitteleuropa’s ethnic muddle dovetailed with Stalin’s strategic objectives in lands now dominated by the victorious Red Army. The fate of the 12 million was sealed.

What followed was peace. Rather than attribute that to the brutal redrawing of Eastern Europe’s demographic and political frontiers (Germans were not the only expellees), Mr. Douglas gives most of the credit to the continent’s long Cold War domination by the two rival superpowers. Fair enough, but it’s impossible not to note that the only part of Europe to dissolve into war in the wake of the collapse of communism was Yugoslavia, a transnational federation whose blurred internal borders and overlapping ethnicities bore a resemblance to the old Eastern Europe and, in some respects, also to the more federal European Union that is now, however uncertainly, under construction. Brussels should take care: History does not always repeat itself as farce.

Stranger In a Strange Land

Alexander Theroux: Estonia - A Ramble Though The Periphery

The Wall Street Journal, December 15, 2011

Tallinn, Estonia, January 1995 © Andrew Stuttaford 

Looking for someone to turn lemons into lemonade? In his own distinctive way, Alexander Theroux might be your man. In 2008, Mr. Theroux, an American author (among his works are "Laura Warholic," a novel, and "The Strange Case of Edward Gorey"), moved to Estonia, the northernmost Baltic state, to join his artist-wife, who was then in the former Soviet republic on a "dismally small" Fulbright grant.

It didn't work out. It was never going to. But it appears that Mr. Theroux did not so much succumb to despair as embrace it. In "Estonia: A Ramble Through the Periphery," he mines his disappointment and catalogs his discontents to impressively crotchety effect. He detested the "unforgiving darkness" of Estonia's long winter; and in a country where conversation can be more elusive, and the company cooler, than the wan November sun, he was infuriated by what he regarded as the locals' "pinched unforthcomingness" and "Völkisch suspicion." He was no more impressed by the natives' often "concave, vaguely worn-out appearance." He does admit to the extraordinary allure of Estonian women (a concession on a par with saying that the Grand Canyon is quite something) but then mars the moment by wondering why such "perfect beauty" should be found in such an unpromising place.

But the flak is not confined to Estonia. Other targets include Israel, Ayn Rand, America's treatment of the Arabs (positively Nazi-like, apparently) and the "dunce" George W. Bush, a "smirking, bowlegged . . . frat-boy" who reduces the usually inventive Mr. Theroux to cliché. Diluting this leftist blah are gibes hurled at secularism, Woody Allen, Oprah Winfrey and a number of the other Fulbright grant-winners (including a "pedantic sod" and "a textbook miser").

Narva, Estonia, February 1996 © Andrew Stuttaford

The book's subtitle promises a "ramble"—a gentle, bucolic word that gives no hint of the bedlam to come. Mr. Theroux does offer a lightning tour of Estonia's chaotic history and a discursive but weirdly gripping introduction to both the Estonian language and the country's "cuisine." (The scare quotes are Mr. Theroux's: In truth, Estonian food can have a certain Breughelian élan.) For the most part, however, readers are left to wend their way through an often beguiling maze of digression, reminiscence, yakety-yak erudition and occasional unreliability.

Tallinn, Estonia, January 1995 © Andrew Stuttaford

It doesn't matter too much that the "techno lezpop duo called t.A.T.u." was Russian, not Estonian, or that the tap water in Estonia is in fact fine, but Mr. Theroux's decision to play down the remarkable progress that this robustly laissez-faire nation has made since breaking from the Kremlin two decades ago is perverse, even if it fits in nicely with his depiction of the country as a Baltic Dogpatch. More strangely still, Mr. Theroux says little about the fraught relations between ethnic Estonians and the large Russian minority that Soviet rule left behind.

The gap left by those under-discussed Russians is filled by a large cast of characters united mainly by their lack of any obvious connection with Estonia and, frequently, distinctly faded fame. Thus, after noting the Estonian language's "primitive cast," Mr. Theroux turns his attention to Lord Monboddo, an 18th-century sage who believed that apes were essentially humans without the power of speech, enjoyably esoteric information that tells us little about Estonia but a lot about Mr. Theroux's magpie mind.

As Mr. Theroux eventually unnecessarily and endearingly explains, his book is as much about him as it is about Estonia. To be fair, amid all the grumbling he finds plenty to admire, not least the lovely medieval jumble of Old Town in Estonia's capital, Tallinn; the music of Arvo Pärt; the Grimm flair of Estonian names (Tarmo, Gerli, Epp); and, with characteristic contrariness, Vana Tallinn, a revolting liqueur of unidentifiable sickliness and bogus antiquity.

But like the country's many invaders—Russians and Germans, and, before them, Swedes and Danes—Mr. Theroux largely uses Estonia as a space for his own purposes, transforming this admirable country into a grotesque but clever caricature perfect for use as a foil. A rain-sodden backwater of "rough-hewn awfulness"—complete with "a queer language . . . rummy food [and] eccentric people"—becomes a stage for Mr. Theroux's verbal pyrotechnics and some fine jokes: "Regarding food, Estonians are accomplished generalists, like crows."

Tallinn-Narva Road, February, 1996 © Andrew Stuttaford

I laughed a lot, but guiltily. (I have been visiting Estonia for nearly two decades.) Then I re-read the book as the draft of a play about a grumpy, logorrheic stranger stranded in a strange, laconic land, an exercise that turned the joke back on Mr. Theroux. His frustration and mounting fury—by the end he even hated the cows—became the stuff of more respectably comedic delight.

But it is a comedy performed on a stage built on bones. Mr. Theroux is evidently appalled by the tyranny imposed on Estonia by Stalin in the wake of the 1940 annexation and, again, in nightmare reprise, upon its "liberation" from brutal Nazi occupation in 1944, even if he skimps on illustrations of the savagery involved. He understands how nearly 50 years of communist despotism still deform behavior in this "wounded country," in ways that cannot solely be put down to direct memory of atrocity. Some of the rudeness that Mr. Theroux encountered was simply the post-Soviet standard, seen from Vladivostok to Vilnius; and, as he grasps, some of the distance he felt in his interactions with Estonians was merely the product of the way that living under a dictatorship had curdled the reserve natural to the peoples of the eastern Baltic.

But his empathy only goes so far: Mr. Theroux wants the Estonians to overcome their "insistent and terrible past" by a collective act of "forgetting." A dubious suggestion made all the more so if it would mean bidding a final farewell to Estonia's prosperous interwar republic, the first period of self-government in seven centuries—the one time when Estonians were just themselves. The memory of that cruelly shattered idyll still haunts this indomitable people, but it inspires them too: Look at who we were. Look at what we did. Look at what we are doing again. Look at who we are. Mr. Theroux looked. But what he saw were extras in his own drama.

Eastern Reproaches

Max Egremont: Forgotten Land - Journey Among the Ghosts of East Prussia

The Wall Street Journal, November 11, 2011

In 1945, Stalin seized East Prussia, Germany's venerable redoubt on the Baltic Sea, as a spoil of war. A portion went to the "People's Republic" that the Soviets had just created in Poland. He kept the rest. The last surviving Germans were killed or deported. The cozy old Königsberg of the Teutonic Knights—the home, during the Enlightenment, of no less than Immanuel Kant—was transformed into Kaliningrad—a bleak Soviet place named after Mikhail Kalinin, the token peasant who was titular head of Stalin's USSR.

Nearly 70 years later, the countries behind these borders have changed, but the frontiers have not, and will not. The Polish part is finally and truly Polish; the sliver of East Prussia given to the Lithuanian Soviet Socialist Republic is now a part of independent Lithuania; the rest of the old Soviet slice is a seedy Russian exclave surrounded by the European Union. The only Germans there are tourists, in search of an elusive land that lingers on in family lore and in the dreams of the dispossessed for a vanished, fondly imagined, past.

Max Egremont's idiosyncratic, disjointed and beautifully written volume makes an ideal guide to this shifting, shadowy realm. In part a piecemeal history of the final half-century of German East Prussia, in part a travelogue through what was left behind, "Forgotten Land" is gently elegiac. Shifting constantly between present and a variety of pasts, it is as wistful as a flick-through of an old photo album, as melancholy as a rain-spattered northern autumn afternoon.

From East Prussia's tangled history Mr. Egremont extracts the one essential fact: To the Germans who lived there, this was the frontier, a vulnerable salient pierced deep into Slavic and Baltic realms. The Teutonic Knights of the Medieval Northern Crusades brought Christianity to the Eastern Baltic, and Germans into the region. Those who followed in their wake settled territories that became the Duchy of Prussia in the 16th century, then part of the larger Kingdom of Prussia in the 18th, before being absorbed into the German empire in the 19th. For all that, East Prussia was never quite able to shake off a vaguely colonial economy and a vaguely colonial unease, an unease exacerbated when the Treaty of Versailles left it separated from the Fatherland by a slice of newly reconstituted Poland.

The mansions of the Junkers that anchored this world—and this worldview—seemed frozen in a pre-industrial age, on occasion boasting moldering grandeur and aristocratic eccentricity on an English scale—Carol Lehndorff, owner between the wars of an ancestral pile that dominated Steinort (now Sztynort, Poland) rejoiced in alcohol, rejected vegetables and "when alone . . . lived in two rooms on the warm south side of the house, contemplating his collection of Prussian coins." Mr. Egremont grants us glimpses of an austerely gorgeous idyll, of untamed forests and wide Masurian lakes, of a "softly lit horizon . . . [and] the pale-blue East Prussian sky," of ice-sailing regattas and sleigh rides, of marzipan at Christmas.

The central tragedy of this book is the arrival of the Red Army in late 1944, raping, butchering and smashing its way through a civilization more than half a millennium old in a bloodbath that was both berserker vengeance and cold ethnic cleansing. But he does not let mourning for what was so cruelly lost obscure the edge to the old East Prussian idyll, the harshness that came from the hardscrabble rural life, an authoritarian culture and, always, the anxious politics of a borderland. Versailles turned this mix toxic; Hitler made it murderous.

And Mr. Egremont is unsparing in his account of the consequences. Thus he describes a massacre of Jews on the beach at Palmnicken (now Yantarny, Russia) just before the Soviets came, a killing field that, like so much in this area, came to be stripped of its story. When bodies were discovered in the 1960s, they were assumed to have been slaughtered Russian soldiers. A memorial went up. There was a wreath-laying each year and a parade. Decades later, a former Hitler Youth, returning to the scene of the crime, put the record straight.

Then there's the tale of Walter Frevert, senior forest master for Herman Goering at the kaiser's old hunting grounds at Rominten (now Krasnolesye, Russia). Asked to extend the estate into conquered Poland, Frevert complied, evicting inconvenient locals, a comparatively mild rehearsal for his subsequent transformation of another Polish forest, an exercise that involved the destruction of 35 villages and killing or deporting their inhabitants. After the war, Frevert published "Rominten" (1957), an evocative, if evasive, book about the "paradise" from which he—and Germany—had been expelled. It was a hit. And then the investigations began. The hunter shot himself. An accident, some said.

For others, confronting the past was easier. In early 1945, Marion Dönhoff, a countess long opposed to Hitler, jumped onto her horse and rode west, stopping off at the Bismarck estate at Varzin (now Warcino, Poland: Old Otto would not be pleased) to stay with the widow of the iron chancellor's youngest son. Dönhoff remained for two days listening to reminiscences of empire "as the refugees trailed by outside and an ancient butler served bottles of vintage wine." Then she rode on.

Dönhoff next saw her homeland 44 years later. In 1989, she gave Kaliningrad a statue of Kant, a symbol of reconciliation between old city and new. It was well-received. She was well-received. But the friendliness could not mask what everyone knew. East Prussia's mournful coda was coming to an end. The dwindling band of exiles grows smaller, and their sorrows, at last acknowledged, give off an ever fainter sound. Some buildings, some ruins and some tourists will soon be all that there is to show for the grand Teutonic centuries.

On visiting Kaliningrad in the 1960s, the poet Joseph Brodsky wrote that the trees "whisper in German." They don't any more. But Max Egremont heard their last words.