Brief

Potential for growth in Eastern Europe remains significant

Growth in Eastern Europe

Summary The Eastern European countries are Europe’s answer to Asia’s tiger economies. They have been among the fastest growing economies in the European Union since their accession to the EU 10 years ago. Their significant growth means that their living standards have also improved, but Think Tank EUROPA’s calculations indicate that it will take 20 years before they match those in Denmark.
 
There is a trade deficit between Denmark and the Eastern European countries, but this will even out as the Eastern European countries become wealthier. There is great potential to increase exports to these countries as their economies grow. However, Hungary is lagging behind in terms of growth as a consequence of, among other factors, a flawed economic policy.
 
Since the eastern enlargement of the EU, the Eastern Europeans countries have received a considerable amount of financial support from the EU. But all evidence suggests that this support has contributed positively by increasing growth in these countries, and that there is a correlation between the countries that have received the most funding and the countries in which their economies are growing the most.

Main conclusion
  • With growth rates of more than 6 percent per year since their accession to the EU, the Eastern European countries are Europe’s answer to the Asian tiger economies.
  • However, it will take even the fastest growing Eastern European countries up to 20 years to reach the same income level as Denmark.
  • Danish exports to the Eastern European countries have increased since the eastern enlargement of the EU, but there is even greater export potential in this region as many of these countries’ economies are not yet fully developed.
  • An uncertain political situation and a protectionist policy have hindered growth in Hungary and have caused the country to drop from being the third wealthiest to the poorest A8 country.
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