Economic Integration and FDI: An Empirical Analysis of Foreign Investment in the EU and in Central and Eastern Europe

AbstractThe economy of Latvia lags behind economically developed nations approximately fourfold in terms of labour productivity in the tradable sector, which is the key constituent of a modern economy, thereby affecting future sustainable development in the entire country, including the rural areas. The economic backwardness is characteristic of the entire Central and Eastern Europe. This is the heritage of a communist regime that lasted for about half a century and the economic system termed a (centrally) planned economy or a command economy. However, such a term for the communist-period economy is not correct, as it does not represent the purpose it was created for. Accordingly, the paper aims to assess the effect of the communism period on the economic backwardness of the Central and Eastern European region of the EU. A planned economy that existed in all communist countries, with the exception of Yugoslavia, was not introduced to contribute to prosperity. It was intended for confrontation or even warfare by the communist countries under the guidance of the USSR against other countries where no communism regime existed, mostly Western world nations with their market economies. For this reason, it is not correct to term it a (centrally) planned economy or a command economy; the right term is a mobilised (war) economy. An extrapolation of a geometric progression for GDP revealed that during the half a century, Latvia as part of the USSR was forced to spend on confrontation with the West not less than EUR 17 bln. (2011 prices) or approximately one gross domestic product of 2011. The research aim of the paper is to assess the effect of the communism period on the economic backwardness of the Central and Eastern European region of the EU.

Download Full-text

Central and Eastern Europe: The New Core or the Periphery of Europe?

European Integration ◽

10.3366/edinburgh/9781474455893.003.0008 ◽

2020 ◽

pp. 162-181

Author(s):

Ireneusz Paweł Karolewski

Keyword(s):

Eastern Europe ◽

Rule Of Law ◽

Central And Eastern Europe ◽

Domestic Politics ◽

Eastern European ◽

Refugee Crisis ◽

The Rule Of Law ◽

Policy Fields ◽

Visegrad Group ◽

The Eu

This chapter focuses on Central and Eastern European (CEE) member states of the EU, and how they positioned themselves in the new constellation of conflicts within the EU in the aftermath of the multiple crisis. It deals mainly with the Visegrad Group (V4) and explores its ‘repositioning’ in regard to two crisis-ridden policy fields of the EU: controversies about the rule of law and the refugee crisis. With regard to the former issue, the chapter discusses Poland as the most prominent case among the CEE countries. Against this background, it highlights two specific aspects of domestic politics: the memory games that the V4 countries play with their past and the Euroscepticism of government circles as well as a broader public.

Download Full-text