Gábor Vona's address to the Krynica Economic Forum
Good afternoon ladies and gentlemen, let me greet you all and thank you for the opportunity to tell my opinion about such an important issue, in this great company.
The title only named two potential future scenarios: “the two-speed Europe or the two Europes”. Let me raise a provocative question: how did we end up here, where a single, integrated, powerful Europe of solidarity is talked about less and less? Do we really want a Europe like that, or are these just fancy but empty words aimed for the media and the public?
First of all, let me state that the two-speed Europe is not a future scenario. It’s the past and the present. This is the reality we live in. So the question is not really if a single Europe falls apart. On the contrary, the question is if the economically, socially and culturally fragmented Europe can be integrated at all?
In 2004, several Eastern European countries joined the EU. It was the largest expansion in the history of the community. The historic moment was celebrated with fireworks everywhere, the hearts of the people of the former Socialist block were filled with hope. Hope for freedom and wealth.
13 years have passed since then. The fireworks stopped. The hope has been lost. For the people of today’s Eastern Central Europe, the EU is not at all a happy historical fulfilment but a lost illusion. It is a place where they live in lack of a better one. I know these are harsh words but they are not exaggerating at all. All opinion polls show that the confidence in the EU has dropped dramatically in the region after the accession. The economies of the former Socialist countries were unable to truly integrate into the European economy. The free competition and the single market caused a deterioration of their national economies. The reality behind the often bright GDP figures is depressing.
While we are flooded by Western European industrial products, only a few Eastern Central European companies are able to enter the western markets. Dual economies were created with two separate worlds. There are the competitive and capital-intensive multinational companies with exportable products and there are the uncompetitive domestic enterprises that are poor in capital, have no exportable products and only a few of them can connect into the bloodstream of the global or even the continental economy.
But the people’s biggest disappointment was caused by the wages. As we can see, the single market did bring a certain kind of equilibrium in terms of prices. If a Polish, a Hungarian, a French and a German buys the same products in the supermarket, they will more or less pay the same amount at the cashier’s. When they get their paycheck at the end of the month however, the people in the Eastern region receive three-four times less money for the same work. If you look at buying power parity, the situation is not better, either. During the 13 years since the accession, the gap between the eastern and the western wages did not diminish at all; in fact, it even increased in some member states. People feel that the price union is already here but the wage union is not. If this is not a two-speed Europe, I don’t know what is.
This is the reason why millions (mostly young people) leave Poland, Hungary, Estonia, Slovakia and the other eastern member states behind. For them, it is not the free movement of people and labour; it is a social pressure. For them, it is not going on an adventure but becoming an economic refugee. They cannot prosper in their own homeland. If we cannot stop this process, and right now it seems we can’t, then our region will face unsolvable demographic, social security, labour market and family disasters.
I know it is a highly complex economic issue, I know that the problem has countless factors, and I am aware that the economic differences between the two halves of Europe have historical reasons which cannot be solved overnight, but we must finally ask the inconvenient and difficult questions, and we must find answers for them, too.
What is truly shocking is not the huge wage gap itself, but the fact that the situation is not at all better now than it was 13 years ago. The cohesion policies remained ineffective, which means that the EU has a system error which is never discussed. This system error causes the biggest division in the Union. The real division line is not that the west supports migration while the east rejects it, just as Hungary does. This is a huge challenge everywhere but, as I said, Europe’s real problem is not this, but the social and economic gap between the western and the eastern part. This fundamental problem cannot be solved without a real and effective cohesion policy.
Many of you may rightfully think of the question: “Come on, what else can the West do than to pay billions of Euros, as net contributors, to help the net recipient eastern member states to catch up? However, this question only appears to be justified at first sight. These Euro billions mostly go back to the western member states and fuel their national economies. This is not my statement, it was said by the German member of the European Commission: Commissioner Günther H. Oettinger. In an interview, he admitted that the money paid by Germany and going to the eastern member states like Poland and Hungary ultimately gets back into the German economy since the local tenders are often won by German companies operating in those countries, and the projects are implemented by using German products. The commissioner uttered this shocking sentence which reveals the Union’s system error. He said that, economically speaking, Germany is not a net contributor but a net recipient. If this sentence is true, and we must believe him, then we can understand why our hopes were unfulfilled, and why the Union gets stuck more and more in the swamp of a two-speed operation.
This fundamental problem prompted the launch of a highly important European Citizen’s Initiative under the name of Wage Union this year. NGOs, political parties and trade unions of eight Eastern Central European countries have joined their forces to reform the EU and bridge the economic gap by ensuring equal pay for equal work across the EU. We all know it cannot happen overnight, we know it’s a process but it should begin at last. We also know that wages depend on the economic output and not on Brussels, but if it’s so, then let’s finally create a European economic policy and a cohesion policy that give the eastern region a real hope for integration. Let’s correct this system error which keeps deepening the EU’s two-speed crisis!
In order to do so, we need the joint intentions and efforts of three parties. First, we need Brussels’ leaders to adopt a common sense approach and show real commitment for a one-speed EU. Second, we need the western member states to realize that it is in their interest if they want to get rid of the dumping Eastern European labour force. Finally, we need a paradigm change in the eastern member states, too: they need to eliminate corruption, adopt more efficient mechanisms to use the EU’s cohesion funds and focus on practical solutions instead of unproductive ideological fights.
So, my answer is: either we have a wage union and an integrated Europe, or Europe will remain two-speed for a while and finally fall apart.