In what seems to most people of my generation a terrifyingly rapid process, the EEC has gone from being an economic community to a political free-trade bloc and then a hopelessly botched attempt at currency and fiscal federalism. After 1990(ish) however, the EU lost its mind…and borrowed others belonging to idiots – based in Brussels, but increasingly genuflecting towards Berlin. The Belgian Rome has since morphed into the an expansionist EU…aka Empire of the Unhinged.
The degree of marble-loss became really clear when the van Rompuys and Barrosos began gaily talking of recruiting from the Arab Spring, via the introduction of Turkey into the EU. But long before that, the collapse of the USSR gave the Eunatics (prodded from behind by Washington) the chance to annexe twelve former Soviet satellites: these were Finland (1995), the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, Slovenia (2004), Bulgaria, Romania (2007), and latterly Croatia (2013). They effectively whipped 11 satellites from under the Russian bear’s twitching nose in nine years.
This was about geopolitics, not sound fiscal economics and gradual organic growth. In one year – 2004 – the Euronauts added eight new East European members. One might more exactly say that this was egopolitics. And although myriad other factors were at play (of equal malignancy on both sides of the conflict) it inevitably set up and exacerbated the Ukrainian crisis.
As the egopolitics of Brussels-am-Berlin were lubricated by Washington’s energy obsessions in these early years of the new millennium, I doubt whether anyone thought much about the third dimension being added to the cage these clowns had built for themselves. Not only had they corruptly allowed far too many countries into the eurozone – and thus created the makings of a brittle, inflexible currency – they now admitted former Communist countries to EU membership: countries where the nature of living standards and marketing expertise were in almost every case several divisions below those of Western Europe. Further, they inherited a surprising number of former soviet functionaries whose only motivation was the continuation of life in a feather bed. Overnight, the Zil drivers became, variously, trade emissaries, eurofanatics and lickers merely of a Brusslin arse – as opposed to the rather more ample one in Moscow. (The ease with which these leaches made the transition says a great deal about the true nature of the EU).
But the killer effect has been the speed, vigour and commercial acumen with which the poorer central and Eastern novices grabbed the opportunity offered by free movement of labour…and the increasingly obvious advantage of not being in the euro.
As early as 2008, the world economic trade institute was writing about ‘rapidly growing [Polish] exports to western Europe’ and adding – significantly – “income disparities and rapid adoption of high-technology in Poland offer enormous opportunities for growth”. In fact, six years on, the growth centres in Warsaw, Poznan and Wroclaw – spreading to Cracow – are making huge continental share gains against Western countries in several key basic industrial sectors – multiple retailing, metal, wood, stone, plastics, decor, automotive software…and the poorer areas to the east received €2.3 billion from the EU’s structural and cohesion fund Between 2007 and 2013. For along with growth, Poland’s parallel problem has been chronic agrarian unemployment.
Brussels has handed three things to the Poles on a plate: market access minus import duty, freedom of labour movement plus welfare, and investment in the economic infrastructure. As a result, In Q1 2014, the Polish economy grew by 3.4% – and is expected to grow by 3.4% in 2014, 3.7% in 2015 and 3.9% in 2016. Since 2011, Polish exports have doubled. It is now the 6th largest economy in the Union.
In Germany, competing with those advantages is meat and drink: in France, Italy and Portugal, it isn’t. Poland’s young workforce and growing entrepreneurial class are today supplying anyone in the West who wants it with better made, cheaper, and far more reliably delivered materials….and labour that costs half the French equivalent with almost twice the productivity.
Far from blaming the former centro-eastern Soviet satellites for grabbing this opportunity, I salute them. But for those supposedly in charge of ‘running’ an EU already in need of reform, creating higher costs alongside tough margin competition before that reform had been undertaken was a crass, uncommercial and disastrous decision taken on the basis of dick size rather than left brain.
For most Western EU members, the Eastern imperial ambitions of Brussels have thus been the equivalent of taking poison with one hand and giving money away with the other.
While it is smaller and has further to climb as yet, the economic situation in Hungary is if anything even more dynamic. It has a debt/gdp ratio of 80% – which is too short term in some structural elements, but well below most Western competitors. In turn, it has the florint rising against the euro, and thus offering potential to cut that sovereign debt. And its controversial but hugely popular leader Viktor Orbán has kept the euro-sellers, IMF leaches and Banker-prodded globalists at bay.
Everything is a trade-off between competiveness and debt these days, but the Hungarian leader both knows his mind and is good at reducing his strategies to easy-to-grasp populism. Speaking last Saturday in Székesfehérvár, 60 kilometres west of Budapest, Orbán said that the coming development period will be an era of giving Hungarian businesses with the will to expand “colossal new opportunities”. Expressing as usual his preference for local nationalism over global colonialism, he added that he expects “Hungarian businesses to grow stronger, expand, innovate and help make the create the five million jobs Hungary needs”.
Orbán thinks that Hungary’s economy will be safe from “the coming global cataclysm” if Hungary’s companies have sufficient local business power to keep the economy running. Either way, there have been some notable successes: in 2013,, economic trends developed even better than expected: budget deficits levelled off at under 3% of GDP, public debt was reduced, and in the third quarter of 2013, Hungary’s economy grew 1.8%, rising to around 2.5% by the year end.
It has the same three advantages that Poland enjoys: an expansion of manufacturing (by 10% YOY), employees prepared to work better, harder and cheaper than the West, and a currency not tainted by the euro.
It will come as no surprise to most better-informed observers that Brussels is working very hard to destabilise the Orbán regime because it doesn’t kiss ass – and succeeds where they have failed. It has a successful mining sector, and rapidly growing exports in metallurgy, construction materials, processed foods, textiles, chemicals (especially pharmaceuticals), and cars. Again, all these are of higher quality and at lower prices than those on offer in the Western EU.
French difficulties in particular have been increased massively by imperial EU expansion. What an irony it would be if Marine LePen rides to victory in the Presidential elections by blaming the country’s ills on foreign workers and EU membership. It suits her book perfectly, and the case is easy to make. Once more, the EU’s greed will have spawned a lurch to the intolerant Right. Plus ca change, and all that.