The Failed EU Design – The Great Divide West v East

QUESTION: I saw you at your presentation in Dresden last year. Things in the East are rather different from the West in Europe. Do you have any comments on this great divide?

ANSWER: There is a great divide in Europe between East and West that is rarely, if ever, talked about. A tremendous disparity has emerged after the fall of the Berlin Wall. The Euroland is not one happy place. Indeed, some countries are members of all European integration levels (EU, Eurozone, Schengen), such as Estonia, Latvia, Lithuania, Slovakia, and Slovenia. This stands in contrast as other countries are members of the EU and of the Schengen area, but not the Eurozone such as Poland, the Czech Republic, and Hungary. Some others are just EU members, forming a second-class member status, including Bulgaria, Croatia, and Romania as well as Britain even before BREXIT. There remains a reluctance to provide these countries with the privilege of the freedom of movement within Europe (Schengen area). To this chaos, we add the candidate states who were promised to be taken into consideration for immediate membership, but remain in political limbo such as Georgia, Turkey, and Ukraine.

Then we have Central and Eastern Europe who are not one homogeneous culture and they are at a great disparity economically. Average wages in Central and Eastern Europe range between €350 in Bulgaria and about €1100 Slovenia, which is only on par with the poorest countries in Western Europe such as Greece and Portugal. Wages in Bulgaria are about €330, which is even less than the Chinese earn.

Therefore, the entire idea of federalizing Europe has utterly failed. Adopting a single currency becomes highly deflationary because of these great disparities.

Full article: The Failed EU Design – The Great Divide West v East (Armstrong Economics)

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