Despondency is particularly great in the countries of eastern Europe and the former Soviet Union. The euphoria of 1989 has given way to widespread popular disillusionment not only with the realities of the adjustment process -- usually confused with the realities of the market system -- but also with their political leaders and their democratic institutions. In the new democracies there is widespread political apathy. Governments, most of them coalitions, are under pressure from the fragmentation of parliamentary parties and form populations increasingly discontented with the costs and duration of the transition process. The slump in output, falling real incomes and rising unemployment are creating uncertainty and fear of the future, while the rapidly widening income differences are creating resentment among those who are falling behind. As in western Europe, these resentments are often focused on immigrants and minorities, resentments which are difficult to defuse by pointing to the considerable progress that has been made in building the infrastructure of the new system. All these factors add up to a potentially dangerous situation which at any time could easily release some of the "bent twigs" of "wounded nationalism" which are prevalent in many parts of eastern Europe and the former Soviet Union. It is by no means certain that the emerging and still fragile institutions of democracy and the market economy could withstand such an explosion.