(Bloomberg) -- If rich European Union countries are scratching their heads over why their poorer eastern counterparts aren’t gushing with thanks for aid, Poland’s prime minister has an answer.
According to Mateusz Morawiecki, whose government is in a fight with the European Commission over democratic values that could curb development funds in the bloc’s post-2020 budget, more money leaks back across Poland’s borders than it gets. That’s despite Poland being by far the largest destination for financial assistance.
"Let me ask a question: Are we a net beneficiary or a net payer of foreign capital today?" Morawiecki told a conference in Katowice, Poland Tuesday. "Many would say we’re net beneficiary thanks to EU funds, but the answer is no, if you look at the flows. The foreign capital that owns our assets is benefiting by dividends of some 100 billion zloty, while from the EU, we’re getting a net 25 billion. So we’re a large net payer of capital abroad."
Morawiecki lays bare a rift that’s growing between the EU’s older members and newcomers. Now part of the world’s largest trading group for more than a decade, countries such as Poland and Hungary are reworking the previously accepted narrative from one in which they’ve been catching up with the EU’s help to one in which their benefactors have profited more by exploiting their markets and repatriating the spoils.
Poland’s ruling Law & Justice party’s answer is a plan to "Polonize" the economy by increasing state stakes and Polish ownership in industries that were sold to foreign owners after the fall of communism. It’s similar to what’s happening in Hungary, where Prime Minister Viktor Orban taxed big foreign banks and retailers and bought back some stakes in companies to put more of the economy under Hungarian control.
Downplaying the importance of EU aid isn’t without risk. Poland’s economic growth has far outpaced the EU average since it joined in 2004, and according to Oxford Economics, about 40 percent of the expansion can be chalked up to EU aid.
©2018 Bloomberg L.P.