PANEL DISCUSSION 2023
THE ECONOMIC MODEL OF THE EU DOES NOT ALLOW US TO
ACHIEVE A COMPARABLE LEVEL OF DEVELOPMENT AND WEALTH
Thank you very much, Professor Drulák, for inviting me.
I am a professor of finance from Warsaw School of Economics and I am also very much engaged in the activity of the Institute of Schuman's Thought. Robert Schuman basically said in 1962, we don't want to have a superstate. One year before his death, he just expressed that word, the sentence, so that in the future different leftists and neoliberals would not try to change the interpretation of his approach. And this is a mission of the Institute of Schuman's Thought. I think many expressions in the speeches of my friends here stress that we need to build a coalition, a coalition of Central European countries.
Robert Schuman, as you know, is in the beatification process. The formal stage has been finished and now we wait for a miracle. So you may pray for his intercession.
This is the major postulator – Professor Father Ardura.
And this is a prayer. You can copy that and you can pray for human intercession so that he will support the building, the community of Trimarium nations. Trimarium nations are all nations that are in that region between the three seas, including Serbia, Moldavia and many other countries. The community of Trimarium nations is not only the 12 countries which belong to the European Union. So this is a different, different approach to that.
In the Institute of Schuman Thought, we organized this year for the second time the Schuman Trimarium Forum. What is important out of this very great speeches. What kind of conclusions we can have and what action plans we can do. One of the action plans is the Schuman Trimarium Forum, which put together in this year 150 young people, young people up to the age 40 – so many in this audience, they are still young people – young people being active in the different social activities and as well politically active. So this is one of the platforms. We would like to suggest that this Schuman Trimarium Forum, which is going to be organized every year that you are invited as a as a co-organizer of that.
Under the platform we recently created the Human Optics magazine, which is presenting different approaches for building the community of European nations from the perspective of the Schuman optics. So I think that many speeches you presented today are very useful to be published in that magazine. We distribute this in the Polish and English language currently to 5,000 organizations around the Europe. And you can join to that activity as a co-producer, co-publisher. So this can be our common activity.
This is a book we published which is a just a synthesis of that major views and concepts of Schumann including his spiritual life. And we are currently translating into different Central European languages. So you can join, I invite you to translate it into Serbian. Right. This will be something we which will help us to be on the same basis.
One of the actions we suggest as well to do is the University of Applied Christian and Social Science and Education in Economics. Not only in economics but as well in economics. Nowadays, the teaching of the Catholic Church, social, economic, Christian thoughts, are put on the side. And this is important science. So the teaching of the Catholic Church is a science like economics. This is important to be promoted and to be used for the education.
We suggest to the audience present today to get together to build a network of associated universities in the Trimarium to support economic development. There are very weak relations between the universities in Central Europe. So establishing Schuman student scientific clubs at universities in the Trimarium countries, which will help to put together the young generation.
I think the great conclusions of all the speakers here are worth to say what to do next with the young generation. Without the young generation, without the formation of the young generation and education, we cannot see a positive future for our region and for the entire Europe. So we are losing more and more young generation.
So the next step could be establishing in Trimarium the University of Applied Economics and Social Sciences, based on the social Christian thoughts and using a distance learning model. It can be in English, it can be on MS Teams or another platform. So this is a suggestion to not only promote, and practically implement the Christian thoughts in different I areas, but also to build the network of scientific teams for development of the research and applications of socioeconomic solidarity. Nowadays, socioeconomic solidarity is something which is desired by people in every country. In Poland we tried we try with success to some extent since many years, since seven, eight years to implement this solidarity-based economics. And I think the solidarity-based economics gave Poland a very big progress in reducing unemployment. We have the lowest unemployment, almost the highest GDP growth, and a stable economy. This is due to the implementation of the solidarity economy.
And now, I will focus more on economics. The problem of the economic model of Europe and European Union is that there are increasing differences. Unfortunately. Everybody thinks that thing became better, improved in nominal terms, yes, but there are increasing differences. Globally, due to neoliberals and the activity of oligarchs, about 82% of the wealth created on the globe is flowing to the hands of the 1%.
This slide shows how big are the differences in the capital per capita in different countries in Europe. What does it mean? You know, the economic potential of our families is very important to develop various things you mentioned in your speeches. Of course, we know that Germany, Netherlands and France were on a different level when we joined the European Union. However, we would expect convergence in the economic capital and economic condition in such a community. In Poland, there were some meetings in the group of an old type of economist, liberal, leftist, conservative. And they all agreed that the economic model of the European Union does not allow to achieve convergence in the long term, i.e. achieving a common level of economic condition and capital.
This graph is showing what happened since our joining the European Union. You can see that the highest line is Netherlands, the lower one is France and Germany and the lowest is Poland and Hungary. I do not show other countries from the Central Europe on this picture, but other countries from the Central Europe are almost on the same level. What you see is financial capital, assets per capita. Okay, I do not think that our wealth, economic wealth should be measured by GDP per capita. It's a wrong measure. It's not enough. We should use at least four factors. As you know, in Africa there are some countries where the GDP per capita is very high, even higher than in our countries. But the population lives in poverty. So you need to use another measures like deposits on accounts, the property shares you have in your pocket. And you can see that these graphs are not converging. The differences are increasing.
This shows you know the current trade balance. Exchange trade by particular countries. In the European Union the majority belongs to Germany. Everybody else is just a small boy.
So there was a wrong decision made to implement the euro currency. You cannot implement common currency in a region where you have a different characteristics of the economies. Mundell, who was a Nobel Prize winner, made the very same statement.
Look at what happened between the introduction of euro and June 2019. The losers are Portugal, France, Italy and others. The winners are Germany and Netherlands. What value they lost – Italy. France, Portugal? They lost almost three times their annual GDP. It's a huge number. Thousands of billions of euros. We do not have our friends from Croatia with us, but Croatia joined recently and they really lost much. From day to day, the inflation due to the joining to the euro increased sometimes by 80%.
This slide shows productivity. Look that the highest average annual growth in productivity exists in our countries. Poland has a very high growth. Romania, Bulgaria. But look at the productivity in Germany. France is almost zero or negative. So we produce the wealth for Western countries. And if the companies, corporations from the West have a big share in the market, then they transfer much profit due to that increased productivity to their own countries. So we changed the rules and principles in Poland and what we saw was that over the last six years increased productivity generated higher salaries. We implemented some instruments to limit the transfer of a capital to Western countries and to keep more capital in Poland.
Look at this line. This is the average productivity in the euro area. It almost doesn't change over many years. No productivity increase. The blue line is Poland. You see how fast we are growing? And especially after the Conservative Party came to power. This is a good result of that.
And the last consideration and remark now. So that I do not exceed my time. I would like to say what we need to do as a community of Central European nations. We need to increase the trade between our countries. When joining the European Union, there was bilateral trade because of the interests of Germany, France, the Netherlands. But we didn't utilize the trade between us. Roughly speaking, if you import, your cash is flowing out, so you lose your capital. What I suggest to do is to increase the exchange between us. I buy from Czech Republic, so the money stays in the community of Central European nations. It does not go to Germany. Of course, we cannot cut all the imports from Germany or France. But according to my calculation, on the annual basis, we can keep around 100,000 billion euro.