A EUnified Europe?

Things have changed around here after the fall of communism

Since 2007, Bulgaria and Romania have been members of the EU. It seems like a tenuous relationship with the rest of Europe at best. The following observations were made from a very small number of people from various backgrounds in both countries, but I feel as if their opinions should be heard. You should not assume that these are or aren’t the opinions of the population at large. I’m also not an economist by any means, so please feel free to shed any light on the numbers as I’d love to hear more from all sides.

EU membership seems to work like the food chain. Wealth is not evenly distributed across the board. Then again, what capitalist nation does so? Germany and France both have well established economies with huge and growing corporations. These and other international corporations wield unprecedented power in not only their own countries, but in the many countries in which they’ve set up their satellite offices. From what I’ve seen and heard, such corporations as Siemens and Microsoft have sunk their teeth into the opportunity that was the fall of communism 20 years ago.

The story of Romania’s and Bulgaria’s entry into the EU was a romantic one, full of national pride. Romanians and Bulgarians alike were fighting for a spot in the elusive EU, figuring that it would pave the way towards a bigger and brighter future. Who wouldn’t be tempted by the bright lights of Berlin or Paris and think that Bucharest could reestablish its reputation as the Paris of the East? In the lead up to the assimilation, roads were built, factories put into overdrive, and a general state of elation filled the country. That was 2006.

2007 welcomed both countries into the EU and from the sounds of things, it has been downhill from there. More and more the grumblings of “why did we even join the EU?” can be heard. I see the loss of jobs affecting many of the people we met. Police buying their own weapons and armor in Romania, government employees moving back to subsidized housing when their paychecks took a 25% cut in 2010. Worrying signs for a country that should be extolling the benefits of EU membership.

Many of the large houses we passed in the countryside were also vacant. I was told that these houses were owned by Romanians or Bulgarians who were now working abroad in France or Germany. They send money home on a regular basis to build elaborate mansions in the countryside for their families to live in. The disgust with these houses was palpable. With options to invest more wisely in their home towns, the locals scoffed at the money wasted on these opulent homes. The disparity was sickening. It’s also hard to see how the money is going to filter back into these countries when the majority of income tax being charged is done so in the countries which the Bulgarians and Romanians are working. The psychological affect of all 20 somethings moving away from the country cannot be underestimated. The same is true in Japan and the US where many are seen migrating to the big cities to make higher wages. As a member of the EU, however, it drives those similarly minded people away from their country to find greener pastures in the west.

The fierce national pride that goes along with belonging to any one country also makes for a sticking point when it comes to distributing out the wealth of a nation. Why should Germany dole out money to Bulgaria? Why should France give a damn about Romania? Who cares if high paying and low paying jobs in Germany and France are being filled by other members of the EU. The cash was earned in those countries. Unlike a country where a single governing body with one national identity has sway over key monetary decisions, the EU will always be at odds with itself.

A few are thriving with the corporate giants who are taking advantage of the cheap salaries and IT savvy population. But I also heard just as many people suffering from corporate buyouts and factories being moved away. Car manufacturers, plastic producers, and more once had homes in Romania that employed hundreds, thousands of people who can no longer find jobs to match their skills.

The locals blame the politicians who they say are stuffing their own pockets and becoming rich by schmoozing with the foreign companies. At the expense of the locals of course. I hear time and again that the objectives and policies set by the politicians are too nearsighted. Each new deal is detracting from the foundation that was laid during the golden years of 2000 to 2007.

But all this negative talk led me to take a look at some rough figures on the web. The numbers don’t seem to match the stories I was hearing throughout both countries. GDP (PPP) has increased since 2007, but taking a dip like the rest of the world during the financial crisis. Unemployment rates are on the decline for the most part. A close look at the rates, however, shows that Romania’s rank compared to the rest of the world is dropping in 2010 and 2011. This seems to contradict the rising import and export numbers. Makes me wonder where all that money from this business is going. Our friend suffering the 25% pay cut in the government job may help explain how the public debt is dropping to all time lows.

The more I look at the numbers, the more it confuses me. From the outside looking in, it appears that Romania and Bulgaria are on the up and up and yet, when talking with the locals, I get this sinking feeling.

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