News2019.12.06 17:45

Western Europe profits from the East, claims Romanian MEP 2019.12.06 17:45

“Contrary to popular wisdom, most of the money in Europe flows from East to West, not the other way around,” Romanian MEP Clotilde Armand wrote in an op-ed published by Politico Europe on Friday.

Western businesses were able to make huge investments for a small price in the post-Soviet economies, whose newly freed residents were “impatient to make the most of their new capitalist lifestyle,” she wrote, adding that Western companies take part in EU-funded public projects across the continent.

This led, she argued, to a flow of profits out of Eastern Europe on par with net EU contributions, according to the figures by a French economist Thomas Piketty.

In Lithuania, the annual outflow of profits and other property income averaged 3.6 percent of GDP between 2010-16. The country, meanwhile, received 3.9 percent of GDP in net transfers from the EU, almost the same figures as the profits leaving the country.

Brain drain, she wrote, is another gain by the West that doesn’t show up on “EU budget negotiators' Excel spreadsheets”.

The story “the rich Western European countries tell themselves” doesn’t add up, wrote Armand. They’re not “generous souls helping out their poorer eastern neighbours,” nor are the former Eastern bloc countries “ungrateful aid recipients”.

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