The complacency of EU institutions regarding property rights in Eastern European countries cements the post-communist oligarchy, argues Karl Peter Schwarz, journalist at Frankfurter Allgemeine Zeitung, in a speech held at the European Ressource Bank in Bucharest on September 14.
There is no doubt that the communists robbed properties, killed the owners or put them in prisons, annihilated a whole class and thus violently destroyed the spontaneous order of the free market society. The only way to address this injustice after the failure of their bloody social experiment would have been the restitution of the stolen property to the legitimate owners or their heirs, a real and fair restitution, with no restrictions, regardless of nationality, ethnicity, language or religion. Eleven years ago, the Council of Europe adopted a resolution (no. 1096) and warned against the dangers of a failed transition process:
At best, oligarchy will reign instead of democracy, corruption instead of the rule of law and organized crime instead of human rights. At worst, the result could be the "velvet restoring" of a totalitarian regime, if not a violent overthrow of democracy. In the worst case, the new undemocratic regime of a bigger country can also present an international danger for its weaker neighbors.
Regarding restitution, the Council of Europe advised
that property, including that of churches, which was illegally or unjustly seized by the state, nationalized, confiscated or otherwise expropriated during the communist totalitarian regimes in principle be restituted to its original owners in integrum, if possible, without violating the rights of current owners who acquired the property in good faith or the rights of tenants who rented the property in good faith, an without harming the progress of democratic reforms. In cases where this is not possible, fair compensations should be given.
Unfortunately, this didn't happen, or it happened only partially.
The European Union has no problem with this: it excluded the monitoring of property and restitution legislation from the political criteria imposed to EU candidate countries. The denial or restriction of restitution leads to several negative consequences. If you don't give back the property to the legitimate owner or their heirs, you make way for greedy former communists who try to compensate their loss of political power with economic dominance. This contributes to the lasting power of the communist establishment in post-communist countries, which distorts competition and allows corruption and graft to flourish.
Yes, there is no more communism, but the communists are still in power. Sometimes they call themselves socialists, or social-democrats, sometimes liberals or even conservatives. In the meantime the old communist ties between state and companies have been inverted. Before, it was the party and the state which controlled and captured the economy. Now, the network of oligarchs captures and controls the state, the government and the political parties. This is one of the real successes of graft and corruption, the second being of course Big Government.
Post-communist oligarchies represent a collective security risk as well. They can be used and they are being used by a foreign power which tries to regain the influence it once had in this part of Europe. The old communist networks are the natural partner of this foreign power. We have witnessed these days how a Romanian oligarch sold an oil company to the state-run energy company of a foreign state. (see also Kazakhstan sets foot in the EU and Who is behind KazMunayGaz?) What happened was the re-nationalization of the oil company, the only difference from the communist era being that this time, ownership was given to a foreign state.
Last but not least, the denial of property rights to the legitimate owners undermines the legal order and the rule of law. In order not to give back stolen property, the state does not hesitate to manipulate and undermine the legal order. The government interferes in court proceedings, falsifies documents, controls and puts plaintiffs and lawyers under surveillance. All this doesn't bother the EU institutions, which cover these crimes with a veil of silence. Whoever acknowledges that liberty reigns only in a society where no one's property is molested, violated or taken over by someone else, will understand that the battle for private property rights and the rule of law is all but won in the European Union.
Karl Peter Schwarz offers several examples form the Czech Republic, among which the most prominent is that of Prince Kinsky. Born in 1936, the prince was a child when he inherited the fortune of his family. His father died in 1938, his mother emigrated in 1940 to Argentina, with all her children. Among her papers, after she died, Prince Kinsky found his Czechoslovak passport, based on which his Czech citizenship was re-confirmed.
The first 5 of 157 claims were successful. The Czech Civil courts confirmed in 2003 that the state had assumed ownership with no legal grounds. Then the socialist Minister of Culture rang the alarm. Politicians from all political parties got together to debate what to do in order to avoid the misuse of what they called "a few formal discrepancies". The Government created a 30 man Special Unit, named "Majetek" (Property) to block all property claims. This specialized police unit focusing on aristocratic restitution investigation asked the intelligence service in 2004 to collect evidence in Austrian and German archives against prince Kinsky. Czech police wiretapped in 2004 not only Frantisek Kinsky, but also lawyer Jaroslaw Capek and recorded the calls between Kinsky and his lawyer, which are considered inviolable. A Czech court approved the wiretapping. In the meantime the Parliament passed a so-called Kinsky law which enables the state to interfere in ongoing court proceedings with restitution plaintiffs, who are so rude to request properties from municipalities. Now the municipalities get legal aid payed from public funds, something the other party doesn't have the right to. Needless to say, the Czech Republic doesn't have a legal basis in order to allow free legal aid for those who cannot afford to fight for their civil rights. It is therefore an obvious discrimination of individuals and an act of favoritism towards state entities.
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