Eastern Europe ready to go into the future

- My compatriots do not want poorly paid jobs in Western Europe, they are too proud of that. It is the Estonian politician Eiki Berg who makes the statement. Eiki Berg currently has a seat as an Estonian observer in the European Parliament in the Christian Democratic group. He is crystal clear when we ask whether Estonians will make a pilgrimage to Western Europe and Norway after 1 May when Estonia becomes a full member of the EU.

- Estonians will not search for poorly paid jobs in the west. IT geeks, financiers and other experts will travel. They go to the United States, Australia or Hong Kong. They do not go to EU countries with economic stagnation, says Eiki Berg.

He is a good example of the young emerging esters who have taken over the governance of their home country. The head of the Estonian Foreign Ministry is a 26-year-old young woman who was hired directly from university studies a year ago. The country's prime minister belongs to the elite of those who rule Estonia today. He is 35 years old. Eiki Berg himself is among the old young people with their 34 years.

He probably thinks that a number of nurses, doctors and other health professionals can try their luck in the west because their wages are so much higher in the west.

- EU membership will not mean a brain drain from Estonia. Those who wanted to travel have already done so since there has been no obstacle to traveling to the west since the early nineties, Eiki Berg states.

Optimistic

When the EU gets ten new member countries in a week, the smaller countries will emerge winners, while the larger countries will struggle with the new reality, says Karsten Stæhr.

He is an economist and is currently a guest lecturer at Tartu University of Estonia. He has worked with Eastern Europe for a number of years, including for Norges Bank.

- I am quite optimistic on behalf of the new member states of the EU. There is no indication that they will not make it. But it is clear there will be differences from country to country. Some will do better and adapt more quickly to Western Europe, while others will need more time before everything is in place.

Kartsen Stæhr believes that the four major countries Poland, the Czech Republic, Hungary and Slovakia will be somewhat heavier than Slovenia and the Baltic states of Estonia, Latvia and Lithuania. The enlargement also includes Cyprus and Malta.

Of the big four, it seems that Slovakia is in the most positive development, while the others are struggling. The four little ones seem to manage EU membership with flying colors, says Karsten Stæhr.

- The large countries may not have felt the same pressure to comply with the demands that both the EU and the new world have demanded. They have somehow felt that they are big enough not to take in everything that comes from abroad, says Karsten Stæhr, who believes that the four big ones have something to learn from the four small ones.

- Estonia and Slovenia seem to be the big winners in connection with the enlargement of the EU to the east. And not long after, we get the other two Baltic states. The four have shown a tremendous enthusiasm for building the country after the fall of the wall. I think the reason for that is that the smaller countries have felt that they now had a chance they could not let go. In addition, they probably had the old empires breathing down their necks, says Karsten Stæhr.

- The four little ones have proven that they can manage on their own, and they have managed to get rid of the fear that the empires would devour them again. In this context, the EU is not perceived as a threat, says Stæhr.

He tells of the historian who in the early seventies lost the opportunity to research and teach because of inappropriate attitudes according to the authorities. Instead, he was sent out to look after chickens, a job he had to continue until the fall of the wall. When Karsten stæhr asked him if it had been worth going against the authorities at the time, the old historian replied.

- We are on our way into the EU, and even NATO has welcomed us. We have got more than we could dream of, said the old historian.

Karsten Stæhr is not one of those who believe that we will see many traveling west, and do not believe in any permanent emigration from Eastern Europe.

- Eastern Europeans like their homelands like most of us. They do not want to move abroad more than anyone else, says Karsten Stæhr.

A new survey of the desire to travel to Eastern Europeans and Turks also shows that very few Eastern Europeans have the desire or desire to move to Western Europe. Turks, on the other hand, show to a much greater extent that they want to move to EU countries.

Skilled

Karsten Stæhr says that the survey clearly shows that Eastern Europeans have no major plans to move from their home country.

- But there are professions where there can be strong economic reasons why people choose to travel. An example is Estonian health workers who want to go abroad for a period. A Norwegian dentist's salary clearly tempts an Estonian dentist, says Karsten Stæhr.

For Western Europeans, it will be a big plus if Eastern European dentists, doctors and other health professionals found their way west. The old Eastern bloc countries have a very high quality of their education in this sector. Karsten Stæhr, who has experience with the health service from Denmark, Norway and Estonia, among others, says that he is in no doubt about where he prefers to have his teeth treated. He does not replace his Estonian dentist with Norwegian and Danish.

- But the authorities are aware of the danger of losing highly educated people in the health sector. Therefore, a country like Estonia has started a plan for how to raise Estonian wages so that it will not be tempted to move abroad due to the wage level.

Both Karsten Stæhr and NUPI researcher Per Bottolf Maurseth believe that the wage barriers between East and West can make more Eastern Europeans try their luck in Western Europe.

In the Estonian capital Tallinn, a dentist can earn around 4000 Norwegian kroner a month. It will therefore be no wonder that it will entice with a job in Oslo to 5-10 times this salary.

- I think that many Eastern Europeans will apply to the west due to the extreme wage differences, says Per Botolf Maurseth.

Vacancy

A common feature of most new EU member states is that they have high unemployment and that this unemployment is unevenly distributed in the individual country. It is common for there to be a shortage of labor in the capitals in the areas around these cities, while there is extremely high unemployment in the countryside and in the small towns.

Per Botolf Maurseth says that it is not interesting enough for most people to move to the districts and into the capital areas.

- It is more likely that they apply for jobs in the west that are far better paid than what they can get in their home country.

Karsten Stæhr points out that while the salary in Tallinn can be twice as high as in the university city of Tartu, a salary in Norway that is five times or maybe ten times as high will be far more interesting.

- I think that many Estonians and Eastern Europeans will say yes to working at a fish reception in Stamsund in Lofoten or in Gamvik in Finnmark. The opportunity to make a lot of money in a short time entices, says Per Botolf Maurseth.

But Eastern Europeans will not move permanently to Western Europe, believe both Eiki Berg and Karsten Stæhr.

Job placement

While Eiki Berg refers to the national pride that lies in the Estonians, Karsten Stæhr believes that it lies in the culture. Eastern Europeans will not move with their entire family when they get a job in the West.

- I reckon that the Eastern Europeans will find solutions similar to what the Portuguese got when they joined the EU. That is, some form of hiring out labor for specific tasks for limited periods, says Stæhr.

There is currently no employment service for Eastern European labor as the Portuguese had when they came in, but Stæhr reckons this will come into place quickly.

- They will find a sensible solution where you get a mediator of labor who makes sure to obtain the labor, get it to the client, and then make sure that they return to their home country after completing the assignment, says Stæhr, and adds that the Eastern European would like out and make money.

- But then he or she travels alone and leaves the family in the home country. They thrive at home and want to return, says Karsten Stæhr and points to an example.

- One of my students has had the opportunity to study at the University of Kiel in Germany. She has the opportunity to take a three-year doctorate in Kiel, and I have encouraged her to stay in Kiel for three years. But she has a strong desire to return to Estonia after a year, says Stæhr.

The privatizations

When the wall collapsed and the old Eastern bloc countries had to fend for themselves in a new world, they chose very different solutions. There was a huge need for a restructuring of the whole society.

Privatization of state-owned companies became a recurring theme. But the countries chose different models. For example, the Czech Republic chose a solution where they distributed coupons to the entire population. Coupons the people could redeem in shares of state-owned companies or put in investment funds. In Poland, they chose to sell everything to the highest bidder. The state took the money and the people did not directly benefit from these sales.

Per Botolf Maurseth has studied what happened in the Czech Republic.

- The Czech privatization was successful. They chose a model where the whole people got their share of the privatization. Many have used this opportunity to secure their own future. Although these public shares today are largely gathered on a few owners, I believe that it was a successful project.

Karsten Stæhr also highlights the Czech Republic as a good example among the major new member states.

- The situation in Poland, on the other hand, has been and is chaotic. They chose a model where everything was to be privatized as soon as possible, and they brought in foreign capital that bought most of it.

Money from the EU

During the membership negotiations, the EU was very concerned about avoiding the Greek disease. A term used in the experience of when Greece became a member of the EU. The EU was most of all concerned with getting Greece in to prevent a new military regime in the country. As a result, Greece was by no means ready to enter into this membership. The authorities did not have a system that worked. The result was that the EU sent money on a large scale to the country, which instead of using it to implement and continue reforms, used the money to deafen the problems that one had.

- There are still some who are afraid that the same thing could happen to the countries in Eastern Europe, when the money starts coming from Brussels. I myself am not so skeptical. The countries have implemented reforms and have adapted to EU requirements. The money from Brussels will be used to secure the reforms that are underway, says Karsten Stæhr.

Again, he highlights the small countries as exemplary.

- The four small ones, and especially Estonia and Slovenia, have solved the budget problems, they have an open economy and small debt. Estonia, for example, has cut the number of farmers from 120.000 to 15.000. Thus, they do not fall for the temptation to spend large sums to keep life in an agriculture that is not competitive.

- If, on the other hand, we look to Poland, I am more skeptical about how they will cope with the flow of money from the EU. They have chosen to keep artificial life in agriculture and the coal industry. Both industries should have been reformed a long time ago. But strong forces have prevented politicians from doing anything. The result is a coal industry that costs far more than it produces. The Poles should import gas and shut down the coal industry. The same applies to agriculture. There one has chosen to maintain far too many uses. These two industries will consume enormous amounts of resources from the Polish state in the future, says Karsten Stæhr.

Everyone wins

Per Botolf Maurseth says that the result of the eastern enlargement depends on how good the countries become at complying with the regulations.

- Although Slovenia, Estonia and perhaps Slovakia can be highlighted as those who want to win the most on membership, the other new member countries will not be losers. Losers in this context are countries such as Romania, Bulgaria and the Rest of Yugoslavia. They did not participate in this round, says Per Botolf Maurseth.