The stars of the European Union (EU) sit on banners flying outside the European Central Bank (ECB) headquarters stands in Frankfurt, Germany. (Photographer: Krisztian Bocsi/Bloomberg)

EU's Fastest Growth Rate Masks Deepest Level of Deprivation

(Bloomberg) -- Romania may have the European Union’s fastest-growing economy, but it’s also unrivaled in a less flattering indicator: social deprivation.

One in two Romanians cited problems including an inability to keep their homes warm or afford a meal with meat or fish every other day, according to a Eurostat report this week. That’s more than three times the EU average. Romania’s economy grew 8.8 percent in the third quarter, the most in almost a decade.

EU's Fastest Growth Rate Masks Deepest Level of Deprivation

Despite Bulgaria being the bloc’s poorest country in terms of gross domestic product per capita, Romania fared worse than its neighbor in the annual deprivation survey. The data show some ex-communist EU members will need to maintain their recent economic outperformance to significantly narrow the wealth gap with the continent’s richer west. That may not be easy.

Romania’s government “cut investment to the lowest level on record, failed to absorb EU funds and stoked uncertainty in the private sector by changing taxation,” said Dan Bucsa, a London-based economist at UniCredit Bank AG. “All these will weigh on potential growth and will prevent a faster convergence in living standards.”

It wasn’t all bad news for eastern Europe. Levels of deprivation in the Czech Republic and Poland dropped below those of France and the U.K. That may provide hope for Romania and others still struggling.

To contact the authors of this story: Zoltan Simon in Budapest at zsimon@bloomberg.net, Marton Eder in Budapest at meder4@bloomberg.net.

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