Letter: Eastern Europe’s economic success has political costs

This letter was published in the Financial Times and addresses exactly the debates in Taking Stock of Shock:

From Christopher Huhne, Former Member, UK National Security Council 2010-12, London EC1, UK

Ruchir Sharma’s account of eastern Europe’s development (“The rise of eastern Europe is a forgotten development success story”, Opinion, September 13) is unusually one-eyed. As he points out, gross domestic product and GDP per head have grown rapidly. But there have been vast human, social and political costs. These costs are now undermining the EU’s consensus on democratic values, and threatening longer-term eastern European economic progress. Three of the formerly communist eastern European economies — Bulgaria, Lithuania and Latvia — have suffered population declines since 1989 that are greater than the decline of one-fifth in Ireland’s population in the decade of the potato famine from 1841 to 1851, rightly regarded as one of Europe’s human cataclysms. Overall, the population decline since 1989 of the 11 EU member states that were part of the Soviet bloc is 7 per cent. The cause of eastern European population decline, thankfully, was migration not starvation, but the impact on small towns and rural areas has been devastating. We forget the human attachment to familiar places at our peril. The brightest, best educated and often most liberal people have moved either to big cities or to the developed EU (and former EU) countries, creating the conditions for the rise of eastern Europe’s rightwing populism. Moreover, many of those well-educated émigrés are now performing roles in the developed EU economies (and Britain) that are suboptimal for their skills. The process has weakened the EU, since the extraordinary migration of the past 30 years was probably the biggest single cause of the anti-migrant sentiment behind Brexit. Some 5.3m people from the EU have applied for settled status in the UK, some 8 per cent of the population, substantially bigger than the previous official estimates. The largest numbers are from eastern Europe. In retrospect, longer and more conditional periods of transition before freedom of movement might have served both eastern and western states better, and have led to more rapid and sustainable improvements in the east. But that horse has bolted. The real lesson for policymakers is to think more carefully in future about the sequencing of reform and liberalisation: EU freedom of movement should have depended on closing income gaps. Economics affects politics, and politics matters. There is now an alarming amount of work to do to bolster eastern European democratic values and the foundations of eastern Europe’s new prosperity. Christopher Huhne Former Member, UK National Security Council 2010-12, London EC1, UK