Transcript European Union Today

Post-Communist Countries in Central Europe
Emma Jane Riddle, 2012
Overview
• Statistics: population and GDP
• After Communism, What?
– The European Union and the euro currency
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Economic growth in this area
Economic developments since 2008
Business culture in Poland
Managing employees in the Czech Republic
Population (Millions)
2011 Estimates
Slovenia
2.0
Slovakia
5.5
Poland
38.4
Hungary
9.8
Czech Republic
10.2
0
5
10
15
20
25
30
Population (millions) - 2011 Estimate
U. S. Population = 314 Million
35
40
Gross Domestic Product (Billion $)
2011 Estimates
Slovenia
49.6
Slovakia
96.1
Poland
513.8
Hungary
140.3
Czech Republic
215.3
0
100
200
300
400
500
600
GDP (Billion U. S. $) - 2011 Estimate
U. S. GDP = $15.09 Trillion = $15,090 Billion
GDP Per Capita (Thousand $)
(Purchasing Power Parity)
Slovenia
29.1
Slovakia
23.6
Poland
20.6
Hungary
19.8
Czech Republic
27.4
0
10
20
30
GDP Per Capita (Thousand $), PPP
2011 Estimate
U. S. GDP Per Capita = $49,000
40
GDP Growth Rate (%) - 2011
U. S. GDP Growth Rate – 1.7%
Communism in Europe
1945 - 1989
• Soviet Union
• Soviet bloc countries: Czechoslovakia, Hungary,
Poland, East Germany, Bulgaria, Romania
• Yugoslavia, including present-day Slovenia
• Albania – allied with China
After Communism, What?
• Democracy
• Prosperity
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Market economy
EU membership
World Trade Organization (WTO) membership
Euro currency (still in the future for some)
• Security: NATO membership
• These goals promoted political, economic,
and cultural change.
Requirements to Join the EU
• Be a stable democracy, respecting human rights, the rule of
law, and the rights of minorities.
• Have a functioning market economy that can compete in
the EU.
– Many state enterprises were privatized.
– Foreign investment was needed to develop the
economies.
• Adopt EU laws, product standards, and regulations.
• The five central European countries joined the EU on
January 1, 2004.
European Union (EU) Before 2004 Enlargement
European Union Today
• 27 member countries
• Croatia is scheduled to
join in 2013
• Candidate countries
• Turkey
• Macedonia
• Montenegro
• Iceland
Benefits of EU Membership
• Ability to export to other EU countries, with
no tariffs charged.
• Citizens of an EU country can live, work,
and study in any EU country.
• Economic development aid from the EU
• Easier to attract foreign investment
Higher Education
• Mixture of public and private universities
• Higher education in the European Union
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Five-year Master’s degree program
Three-year Bachelor’s degree program
Two-year Master’s completion program
After completion of a Master’s degree, a doctorate can
be completed in three years.
• European Credit Transfer System (ECTS)
Requirements to Use the Euro Currency
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Stable consumer prices – low inflation
Government budget deficit <= 3% of GDP
National debt <= 60% of GDP
Stable long-term interest rates
Value of the national currency must be
stable relative to the euro
• Slovenia and Slovakia use the euro
Economic Growth in Central Europe
• Automobiles and parts
• Financial services
• Information technology
• Internet services
• Tourism
• Transportation, distribution
Economic News Since 2008
• In 2009, Poland was the only country in the EU to
have growth in real GDP.
• Hungary had a financial crisis.
– Real estate bubble, financed by loans that had to be
paid back in euros
– The Hungarian forint lost value, relative to the euro
– Many people could not pay off their loans.
Threats to Democracy in Hungary
• The central bank is now under political control.
• Judges were forced to retire at age 62, instead of 70.
• The head of the National Judicial Office names all new
judges.
• Public television is being told what stories to cover, whom
to interview, and what not to cover.
• The Media Council recently cancelled the license of an
independent television station.
• The Media Council can fine media outlets with whom it
disagrees.
Business Culture in Poland
• Design products for Poland.
• Win-win negotiations work well.
• Be prepared to provide data. People are not
impressed by "sales talk".
• Take time to build relationships and gain trust.
• Be willing to "give something back" to the
community.
Business Culture in Poland (2)
• Local governments have a large role in business
regulation. Some areas are more conducive to
business than others.
• Professional titles are used in Poland.
Example: engineer
• Do not call older people by their first names until
you are invited to do so.
• Business entertainment should be reciprocated.
• People are reluctant to share personal information.
Managing Czech Employees
• Establish a good rapport with employees.
• Managers must be trustworthy and credible
• Younger Czech employees
– Are eager to learn and often creative
– Want work that is meaningful and appreciated
– Want opportunities for professional development
• Some older Czechs may lack motivation and are
not accustomed to taking initiative
Managing Czech Employees (2)
• Czechs may be reluctant to tackle new
responsibilities because
– They tend to be perfectionists.
– They don’t want to lose the respect of colleagues by
making a mistake.
• Many Czechs do not like to take risks.
– Responsibilities and work procedures should be clear.
• People are reluctant to share personal information.
Source: Karin Genton-L’Epee, Prague Post, Jan. 6, 2005