Many Germans live with their image of the countries of Central and Eastern Europe from 20-30 years ago. Although there are still differences, 20 years after most of them joined the EU there are already enough similarities to make useful comparisons with conclusions for Germany, writes Stefan Kolev, director of the "Ludwig Erhard" Forum in Berlin in an article for "Frankfurter Allgemeine Zeitung" (FAZ).
The author gives an example of the growth of gross domestic product per capita in relation to purchasing power: by this indicator the Czech Republic is already at the level of Spain, and Bulgaria is on its way to overtaking Greece. The British media have noticed that the purchasing power of Polish citizens is approaching that of the United Kingdom.
Getting back on your feet after a fall
The publication also answers the question of how this catch-up happened. In this regard, the author provides a brief overview of the transition in the countries of Central and Eastern Europe. "The shocks came unexpectedly and at different levels: inflation waves, legal uncertainty, demographic collapse, political polarization, ideological disorientation. The crises of the 1990s transformed the economies of these countries, but also everything around them," Kolev points out.
However, something useful came out of this: the deeper the next crisis, the more people had to develop skills on how to cope and survive. Or as Kolev writes - it is about the ability to get back on your feet after falling for a short while.
Against the backdrop of so many crises in the world today, the experience of Eastern European countries, gained during their transition, is invaluable and can now be used by the "old" EU member states in the course of transformations and with them, claims the author, who also draws several lessons from this.
Growth is also possible in the EU
The experience of countries from the Baltic Sea to the Balkans shows that when you constantly have to reinvent yourself because old economic structures are falling apart, this productive destruction also leads to growth, writes Kolev. The conclusion for Germany: it can carry out the necessary transformation humanely - by using the advantages of the social market economy and helping the losers in this process to quickly get back on their feet.
Economic growth is also possible in the EU. The madness of regulations has reached proportions that are already damaging the dynamics of the economy. In this sense, there is a need for deregulation, which according to Kolev is urgently needed. But the EU should not be used as an excuse or, as the author writes, as a fig leaf in the face of policy failures at the national level. In this regard, the German tax system is cited, which has long since become uncompetitive.
The advantages of Eastern Europe
The profound changes after 1989 also led to a severe demographic crisis in most countries of Central and Eastern Europe: the birth rate fell significantly, the demand for labor decreased, internal migration intensified, which depopulated rural areas. A powerful wave of emigration followed: Bulgaria and Romania, for example, lost over 20 percent of their population, according to the FAC.
Nevertheless, Eastern Europe is coping: people are constantly adapting to the decreasing share of the working-age population by working longer - many of them even after reaching retirement age. Added to this is their openness to new technologies, which is often lacking in Germany, according to Kolev. Eastern Europeans are saving themselves a lot of analog bureaucratic procedures and are finding themselves directly in a new, digital administration - far from only in Estonia, the author specifies. And recently, there has also been a significant reverse migration of young people, apparently attracted by growth, we read further in the publication.
Perhaps this is the most important message from the perspective of the experience gained by Eastern Europeans: too often we assume that things in politics go from the top down, and then we get angry that something is not going well. The opposite direction seems more promising - to go from the bottom up, and for ordinary people to solve problems decentralized. And to not stop learning, so that they are prepared for the next crisis, Stefan Kolev, the head of the "Ludwig Erhard" Forum for Economy and Society in Berlin, writes in his publication for the FACS.