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> Government can improve infrastructure, but cannot literally hand out cash to build a factory, or anything like that. Yes, because such "subsidies" would cre

> Government can improve infrastructure, but cannot literally hand out cash to build a factory, or anything like that. Yes, because such "subsidies" would create competition for companies from more developed EU countries, the same countries that drive the acceptance of new EU members. Removing these obstacles crushed local industry, which is why less developed countries ended up with close to zero industrial production after joining the EU (thus starting the social, employment and competitiveness problems most smaller EU nations are facing). Nevertheless, EU nations keep subsidizing "selected" businesses, especially for big foreign companies outsourcing their operations, using tax benefits.

Brakenshire 9y ago
> Removing these obstacles crushed local industry, which is why less developed countries ended up with close to zero industrial production after joining the EU (thus starting the social, employment and competitiveness problems most smaller EU nations are facing). These sorts of talking points exist everywhere, in the West and in the East, state aid is one of the most attacked elements of the EU. Actually the talking point is near identical in the UK, that manufacturing has died because the government hasn't been able to step in (in effect, to prop up uncompetitive industries). Manufacturing has in fact plummeted in most developed countries, and it's easy for governments to pass the blame onto the EU.
mschuster91 9y ago
> Removing these obstacles crushed local industry Not really. The problem with most of the small-ish EU countries is that with the exception of Cyprus, Austria, Finland and Sweden, all the 13 countries that joined after GDR/BRD unification were former USSR or Yugoslavian countries + the GDR itself which was USSR allied. This means that their entire industry companys were either uncompetitive since decades (but kept artificially alive by the realo-socialist states) or got fleeced by local or foreign mafia (or, in the case of former GDR aka East Germany, by the Treuhand which has had its fair share of scandals) after the fall of the USSR. In addition, there's a _massive_ wealth gap between the EU/EEA core (Germany, France, the Nordic states, Switzerland and UK), which bled all other EU nations dry of young people (they went off to study and stayed) and loads of working-age people (they went off to earn money to support their families at home, and stayed). The people "left behind" tend to be old-ish and politically conservative, which doesn't exactly help when everything around is changing at an unknown (for Soviet/Yugoslavia) pace... and what's left of young people today flees from the corruption and religious-conservative politicians. What saddens me is that I have no idea if the situation can be fixed at all. Manufacturing or heavy industry isn't going to come back, no matter how hard Trump or his ideological "friends" try. It will stay in China or maybe migrate to Africa as soon as Chinese labor gets too expensive/the Chinese politics too restrictive. All that remains is agriculture (which is going to be more and more automated), tiny chunks of natural resources exploitation, and tourism. Maybe a bit of IT stuff, but people are highly skeptical of nearshoring/offshoring since the "big companies" (Accidenture, IBM, whatever) spoiled the well, and the local markets by far don't have as much demand... Source: am half Croatian, half German (born and raised in Germany though).

Brakenshire 9y ago

> Removing these obstacles crushed local industry, which is why less developed countries ended up with close to zero industrial production after joining the EU (thus starting the social, employment and competitiveness problems most smaller EU nations are facing). These sorts of talking points exist everywhere, in the West and in the East, state aid is one of the most attacked elements of the EU. Actually the talking point is near identical in the UK, that manufacturing has died because the government hasn't been able to step in (in effect, to prop up uncompetitive industries). Manufacturing has in fact plummeted in most developed countries, and it's easy for governments to pass the blame onto the EU.

mschuster91 9y ago

> Removing these obstacles crushed local industry Not really. The problem with most of the small-ish EU countries is that with the exception of Cyprus, Austria, Finland and Sweden, all the 13 countries that joined after GDR/BRD unification were former USSR or Yugoslavian countries + the GDR itself which was USSR allied. This means that their entire industry companys were either uncompetitive since decades (but kept artificially alive by the realo-socialist states) or got fleeced by local or foreign mafia (or, in the case of former GDR aka East Germany, by the Treuhand which has had its fair share of scandals) after the fall of the USSR. In addition, there's a _massive_ wealth gap between the EU/EEA core (Germany, France, the Nordic states, Switzerland and UK), which bled all other EU nations dry of young people (they went off to study and stayed) and loads of working-age people (they went off to earn money to support their families at home, and stayed). The people "left behind" tend to be old-ish and politically conservative, which doesn't exactly help when everything around is changing at an unknown (for Soviet/Yugoslavia) pace... and what's left of young people today flees from the corruption and religious-conservative politicians. What saddens me is that I have no idea if the situation can be fixed at all. Manufacturing or heavy industry isn't going to come back, no matter how hard Trump or his ideological "friends" try. It will stay in China or maybe migrate to Africa as soon as Chinese labor gets too expensive/the Chinese politics too restrictive. All that remains is agriculture (which is going to be more and more automated), tiny chunks of natural resources exploitation, and tourism. Maybe a bit of IT stuff, but people are highly skeptical of nearshoring/offshoring since the "big companies" (Accidenture, IBM, whatever) spoiled the well, and the local markets by far don't have as much demand... Source: am half Croatian, half German (born and raised in Germany though).