This is common sense. If it would be reversed, the EU funds would be used unfairly and inefficiently. What this graph does not show is the benefits the EU funds bring, like helping countries with low investment budgets or too high corruption to afford having infrastructure being built under a foreign power’s authority. They generate wealth and rapid economic development that would be difficult to achieve otherwise.
Delete this or you’ll offend many western snowflakes
When you read Estonia as España ☠
Yes, that’s how FDI works. The foreign investor invests in a country because he expects a return greater than the invested capital.
Can you add how much profit Eastern European companies generate from investments in Western Europe to the graph? Or do you only want to compare apples and oranges to create maximal divisiveness?
bad graphs for 100
And? That just means that businesses agreed that EU investment will lead to economic growth so they’re adding their money to the pile.
This looks at Taxpayer money spent on the Eastern parts of Europe and asks “but how mch money did some private companies make?”
I am not sure what you want to tell us with that graph. If EU contribution would be zero, do you imagine that the red graph would be zero? Companies literally doing no business in markets that they have available to themselves? If not, then were is the correlation between these points?
Cringe post. Clearly has an agenda
Yet there are condescending comments suggesting that the recipients of EU funds are somehow accepting charity, as if though the arrangement is a one way street and the benefactors bought the right to look down on the recipients.
Does ‘Annual outflow of profits’ include outflow to non EU countries?
Misleading headline. It should read that investments by Western companies in Eastern Europe yield good return.
I see that someone has invested in Eastern Poland.
The inconvenient truth you don’t like to be reminded of.
Only the litany about “the recipient countries of the East and their benefactors in the West” is the accepted truth.
And yet in Western Europe both right and left wing bigots use the “we are bankrolling the East” narrtive to fuel antislavism, romaphobia and magyarophobia.
Cool! Everything works as it should!
Politico Is really not a good source, most of is content is sensationalistic.
Also, money Is not something that gets taken from something or somewhere where It already exists, It doesn’t work like that.
A currency Is nothing else a common commodity for the exchange of value, and for such value to be exchanged, well It has to be created First.
For example, if a foreign company opens, let’s say, a textile manifacture in a country in Eastern Europe, It will pour a certain amount of capital in such country as investment: It will commission a local construction company ti build the factory, It will need to employ people and therefore It will need to compete with other local factories for salaries or work conditions (having more jobs offer than demand Is always a good thing for the workers)
It will need to pay them salaries, to the state taxes, and will need to contract with local companies (for example transport companies) as such pouring recurrent capital into that area and that state.
If the textile factory Is efficient and can compete locally/internationally for the quality of goods or for their price, It will have created value and therefore It will be in profit.
So yes the profit a foreign company (not differently from a local company) can make Is hopefully in green, It will create value, exchange such value for currency, and be profitable.
So yes if foreign It will have capital outflow, the point Is that such value Is created by that company to begin with.
Having local companies which are internationally competitive Is good , having foreign companies which are internationally competitive Is still pretty good, having no companies or having companies which are unable to compete and need subsidies and protectionism is pretty bad.
Look at China, It has been built with foreign companies.
Thats disguisting…
Well isn’t that the whole point to begging with?
I knew this graph was familiar…
That is a bullshit comparison. Completely bullshit and likely made in bad faith.
The two numbers are not related at all.
Money doesnt flow from East to West, it doesnt work like that. Its not a zero sum Game!
The problem with this is that it ignores the inflow of investment from Western Europe to Eastern Europe from which these profits were generated to begin with. Foreign investment as a general rule is beneficial for the countries invested in, as even though profit outflows from these investments do extract a small portion of the revenue from such companies, the seed capital allowing for businesses to grow has a much greater effect as these gains are multiplied over time whilst profit outflow tends to decrease as the local economy becomes wealthier (due to there being more opportunities for diversification).
Hmm.
I’m not sure that there’s grounds for comparing the two.
You need to have capital to do a business. It’s gotta come from somewhere. If it wasn’t coming from Western Europe, then it’s going to come from somewhere else. It might be domestic investors or another country in Eastern Europe or somewhere outside the EU. That is, if today you stopped investment in Eastern Europe from Western Europe and also stopped EU funds, you’d tend to benefit people with capital for investing in Eastern Europe, harm people with capital for investing in Western Europe, hurt business in Eastern Europe, and benefit business in Western Europe. It’d be harder for those businesses in Eastern Europe to expand, be harder for them to hire people at competitive rates.
I suppose there might be other things going on. Like, okay, say normally Slovenia would permit investment from outside Europe, and EU market rules restrict that, requiring it to go more to EU capital markets, and much of the EU’s capital is in Western Europe. That *could* mean that Slovenia is getting a bad deal — basically, having to pay unreasonable amounts for the capital it gets, and funds from Western Europe could be seen as a form of tradeoff. But then there are other things that you’d need to know to assess that beyond just the two numbers above.
Honestly, if one wants to compare two numbers that show ways in which Eastern Europe may take a hit from being in the EU and where one could set numbers against fiscal transfers, I think that it’d make way more sense to look at loss of economic activity from workforce migrating to Western Europe. *That* could be a legit issue, and I’ve pointed out before that if Latvia pays to raise and educate someone and then they move to work in Germany, as things stand in the EU of 2023, where Brussels has no power of taxation, the wealth that they generate through their labor winds up in Germany, not Latvia, which is kind of a raw deal from Latvia’s standpoint. That’d be a good argument for having EU-wide pools for any subsidies to child-rearing and education, rather than doing it at a state level.
Ok, I get the people angry about this post but I think It brings forth a good discussion. It’s good to remember that the EU IS a two way street.
The poorer countries benefit from EU funds and the richer countries benefit from easier access to bigger markets. That is it’s a two way street and calculating how much goes in one direction and on the other IS kind of pointless, because the truth IS that this method has been shown to benefit both sides.
Like both estonia and Austria have greatly benefited in economic terms from the 2004 expansion.
So let’s just fricking drop the populist rhetorics of “the east/west steals our money” because neither IS true. This is a mutually beneficial arrangement and both sides should treat the other with respect.
Wow
The whole point of investment is to get a bigger return on your investment. It’s not some nefarious plot that THEY don’t want you to know about lol.
29 comments
Source: https://www.politico.eu/article/what-rich-countries-get-wrong-about-the-eu-budget-east-west-euroskeptic-cohesion-policy/
This is common sense. If it would be reversed, the EU funds would be used unfairly and inefficiently. What this graph does not show is the benefits the EU funds bring, like helping countries with low investment budgets or too high corruption to afford having infrastructure being built under a foreign power’s authority. They generate wealth and rapid economic development that would be difficult to achieve otherwise.
Delete this or you’ll offend many western snowflakes
When you read Estonia as España ☠
Yes, that’s how FDI works. The foreign investor invests in a country because he expects a return greater than the invested capital.
Can you add how much profit Eastern European companies generate from investments in Western Europe to the graph? Or do you only want to compare apples and oranges to create maximal divisiveness?
bad graphs for 100
And? That just means that businesses agreed that EU investment will lead to economic growth so they’re adding their money to the pile.
This looks at Taxpayer money spent on the Eastern parts of Europe and asks “but how mch money did some private companies make?”
I am not sure what you want to tell us with that graph. If EU contribution would be zero, do you imagine that the red graph would be zero? Companies literally doing no business in markets that they have available to themselves? If not, then were is the correlation between these points?
Cringe post. Clearly has an agenda
Yet there are condescending comments suggesting that the recipients of EU funds are somehow accepting charity, as if though the arrangement is a one way street and the benefactors bought the right to look down on the recipients.
Does ‘Annual outflow of profits’ include outflow to non EU countries?
Misleading headline. It should read that investments by Western companies in Eastern Europe yield good return.
I see that someone has invested in Eastern Poland.
The inconvenient truth you don’t like to be reminded of.
Only the litany about “the recipient countries of the East and their benefactors in the West” is the accepted truth.
And yet in Western Europe both right and left wing bigots use the “we are bankrolling the East” narrtive to fuel antislavism, romaphobia and magyarophobia.
Cool! Everything works as it should!
Politico Is really not a good source, most of is content is sensationalistic.
Also, money Is not something that gets taken from something or somewhere where It already exists, It doesn’t work like that.
A currency Is nothing else a common commodity for the exchange of value, and for such value to be exchanged, well It has to be created First.
For example, if a foreign company opens, let’s say, a textile manifacture in a country in Eastern Europe, It will pour a certain amount of capital in such country as investment: It will commission a local construction company ti build the factory, It will need to employ people and therefore It will need to compete with other local factories for salaries or work conditions (having more jobs offer than demand Is always a good thing for the workers)
It will need to pay them salaries, to the state taxes, and will need to contract with local companies (for example transport companies) as such pouring recurrent capital into that area and that state.
If the textile factory Is efficient and can compete locally/internationally for the quality of goods or for their price, It will have created value and therefore It will be in profit.
So yes the profit a foreign company (not differently from a local company) can make Is hopefully in green, It will create value, exchange such value for currency, and be profitable.
So yes if foreign It will have capital outflow, the point Is that such value Is created by that company to begin with.
Having local companies which are internationally competitive Is good , having foreign companies which are internationally competitive Is still pretty good, having no companies or having companies which are unable to compete and need subsidies and protectionism is pretty bad.
Look at China, It has been built with foreign companies.
Thats disguisting…
Well isn’t that the whole point to begging with?
I knew this graph was familiar…
That is a bullshit comparison. Completely bullshit and likely made in bad faith.
The two numbers are not related at all.
Money doesnt flow from East to West, it doesnt work like that. Its not a zero sum Game!
The problem with this is that it ignores the inflow of investment from Western Europe to Eastern Europe from which these profits were generated to begin with. Foreign investment as a general rule is beneficial for the countries invested in, as even though profit outflows from these investments do extract a small portion of the revenue from such companies, the seed capital allowing for businesses to grow has a much greater effect as these gains are multiplied over time whilst profit outflow tends to decrease as the local economy becomes wealthier (due to there being more opportunities for diversification).
Hmm.
I’m not sure that there’s grounds for comparing the two.
You need to have capital to do a business. It’s gotta come from somewhere. If it wasn’t coming from Western Europe, then it’s going to come from somewhere else. It might be domestic investors or another country in Eastern Europe or somewhere outside the EU. That is, if today you stopped investment in Eastern Europe from Western Europe and also stopped EU funds, you’d tend to benefit people with capital for investing in Eastern Europe, harm people with capital for investing in Western Europe, hurt business in Eastern Europe, and benefit business in Western Europe. It’d be harder for those businesses in Eastern Europe to expand, be harder for them to hire people at competitive rates.
I suppose there might be other things going on. Like, okay, say normally Slovenia would permit investment from outside Europe, and EU market rules restrict that, requiring it to go more to EU capital markets, and much of the EU’s capital is in Western Europe. That *could* mean that Slovenia is getting a bad deal — basically, having to pay unreasonable amounts for the capital it gets, and funds from Western Europe could be seen as a form of tradeoff. But then there are other things that you’d need to know to assess that beyond just the two numbers above.
Honestly, if one wants to compare two numbers that show ways in which Eastern Europe may take a hit from being in the EU and where one could set numbers against fiscal transfers, I think that it’d make way more sense to look at loss of economic activity from workforce migrating to Western Europe. *That* could be a legit issue, and I’ve pointed out before that if Latvia pays to raise and educate someone and then they move to work in Germany, as things stand in the EU of 2023, where Brussels has no power of taxation, the wealth that they generate through their labor winds up in Germany, not Latvia, which is kind of a raw deal from Latvia’s standpoint. That’d be a good argument for having EU-wide pools for any subsidies to child-rearing and education, rather than doing it at a state level.
Ok, I get the people angry about this post but I think It brings forth a good discussion. It’s good to remember that the EU IS a two way street.
The poorer countries benefit from EU funds and the richer countries benefit from easier access to bigger markets. That is it’s a two way street and calculating how much goes in one direction and on the other IS kind of pointless, because the truth IS that this method has been shown to benefit both sides.
Like both estonia and Austria have greatly benefited in economic terms from the 2004 expansion.
So let’s just fricking drop the populist rhetorics of “the east/west steals our money” because neither IS true. This is a mutually beneficial arrangement and both sides should treat the other with respect.
Wow
The whole point of investment is to get a bigger return on your investment. It’s not some nefarious plot that THEY don’t want you to know about lol.
Plus the influence that comes with this 😉