Central and Eastern European countries after relatively good results during the last 25 years have diminished the distance from Western Europe economically and socially. Is it possible for them to catch up with Western Europe?
In my opinion, this is something that is not going to happens at least during the coming decades. Let put an example. The eastern part of Germany (former DDR) after two decades of effort is still well behind the western part of the country (west Germany). Germany is a strong country from the economic point of view and has not solve the differences between this two parts of the country. Other central and eastern European countries have not the resources to improve their economies and to reduce the gap between these two regions and western Europe at least during the coming decades.
CEE region may catch up with the Western Europe in the next decades in terms of economic and social development, based on a new growth model “The Warsaw Consensus” focused on the following 10 pillars:
· High domestic savings and investment
· High employment rate
· High labor productivity growth driven by innovation and skills
· Controlled real exchange rate appreciation
· Openness to immigration
· Low income inequality
· Diversified exports
· Strong supervision over the financial sector
· Full integration of the EU market and further EU enlargement
· Focus on well-being and happiness going beyond GDP.
http://www.financialobserver.eu/poland/macroeceonomy/a-new-growth-model-for-central-and-eastern-europe/
There is some catch up, but one should not expect too much in 25 years. In Czech Republic (one of the best economies in CEE) in 1992 average nominal monthly income was barely $300, and now is much higher. But the prices also grew, so PPP income did not change too much as nominal. See graph here: http://www.tradingeconomics.com/czech-republic/gdp-per-capita-ppp . In 1992, PPP GDP/cap was $18,000 and now is $30,000.
And here one can see EU countries in 2014 in comparison, both for nominal and real GDP/cap: http://statisticstimes.com/economy/european-countries-by-gdp-per-capita.php . In PPP terms, Czechs are not much below Austria (about 2/3), and very close to Spain. Hungary and Poland are less successful, but closer to EU mean than other new EU members (especially Romania and Bulgaria).
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