On Wed, 6 May 1998, Bertil Haggman wrote:
> The problem of the euro and EU is of course the tremendous task of the
> European Union to contribute to the rebuilding of the economies of
> Eastern Europe so badly affected by the marxist-leninist regimes.
The Eastern bloc regimes, for all their hideous faults (and there were
many) grew a heck of a lot faster and had more social and economic
equity under neo-Stalinism than many other peripheral countries in Asia,
Africa and Latin America (many of which had no less barbaric governments).
Eastern Europe ran into problems only when it tried to marketize
everything all at once -- now the smarter countries, like Poland and the
Czech Republic, are instituting Central European-style controls over the
marketplace and creating developmental states of their own. You could
argue that the 50-year-old guerilla struggle between Eastern European
citizens and noxious governments/the Soviet Empire gave them the political
and social tools, ironically enough, to deal with the new imperialists:
the finance-mad elites of the European Union, who send trade delegations
and bankocrats to Prague the way Moscow sent emissaries to the
Czechslovakian Politburo.
> The question is if a Marshall plan would not be necessary. One only has
> to take a look at the former GDR to see what enormous problems Bonn
> (soon) Berlin has had with the new Bundeslaender in the east.
Problems, but also vast opportunities. Germany has, so I'm told, something
like 50% of the external debt of Russia; European banks own most of
Eastern Europe's debt, and have been financing mini-booms in Poland and
Slovenia. West Germany's absorption of the East has cost money, yes, but
the $100 billion in annual subsidies from West to East has also spurred a
round of new investment, and kept the German economy relatively insulated
from the overaccumulation crisis which hit the US in the early Nineties,
and Japan in the mid-Nineties. The EU will blossom only if a similar
redistribution takes place from rich EU lands to the poorer ones -- say,
something like 5% of EU GDP or some $400 billion a year. You could give
them the money, or just raise it via Euro-denominated debt.
-- Dennis