France is the third largest investor. The situation is not much
different in the Czech Republic where the overseas sales of the
German-owned Skoda alone account for one tenth the country's exports.
The relationship between Germany and central Europe is mercantilistic.
Germany leverages the region's cheap labor and abundant raw materials
to manufacture and export its finished products. Central Europe
conforms, therefore, to the definition of a colony and an economic
hinterland. From a low base, growth there - driven by frenzied
consumerism - is bound to outstrip the northern giant's for a long time
to come. But Germans stands to benefit from such prosperity no less
than the indigenous population.
Aware of this encroaching "economic imperialism", privatization deals
with German firms are being voted down throughout the region. In
November, the sale of a majority stake in Cesky Telecom to a consortium
led by Deutsche Bank collapsed. In Poland, a plan to sell Stoen,
Warsaw's power utility, to Germany's RWE was scrapped.
But these are temporary - and often reversible - setbacks. Germany and
its colonies share other interests. As The Economist noted correctly
recently:
"The Poles may differ with the French over security but they will be
with them in the battle to preserve farm subsidies.
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