Page 43 - BNE_magazine_12_2019 dec19

bne December 2019 30 Years of transition I 43
Nominal hourly labour costs, whole economy
% change compared with the same quarter of the previous year, calendar adjusted, Q2 2019
Source: Eurostat
When it comes to purchasing power, however, a Gfk study finds a broad east-west divide, but its data, which is broken down by region within countries, shows that parts of Central Europe
and the Baltic states have similar levels of purchasing power to consumers in Greece, Portugal, the southern two-thirds of Spain and parts of southern Italy.
“The ten EU nations with the highest per capita purchasing power gains this past year all have below-average purchas- ing power and were admitted into the EU as part of or after the eastward enlargement,” says the GfK report.
“Increasingly tight job markets in
these nations have led to sizeable pay increases. For example, citizens of
the growth forerunners Latvia and the Czech Republic have €8,030 (+10.3%) and €9,492 (+9.3%) at their annual disposal, respectively. This moves them closer to the European average of €16,878 (+3.0%), although continued progression in that direction is likely to require the ongoing support of the European Union.”
Despite all of these advances, consumers in the eastern EU member states are still viewed differently from their peers in the west – at least by some companies.
A scandal erupted when it revealed
that multinationals were selling lower quality products for the same or higher prices in eastern EU countries. This led to interventions by top government officials, and this spring the European Commission approved rules that ban identically
branded products being sold with different ingredients in different markets.
The high tech divide
In addition to manufacturing industries, Central Europe has also become an attractive location for IT and business process outsourcing. This has helped the development of local ICT sectors, and the success of this sector has also led to international businesses locating increasingly more sophisticated functions to the region.
Nonetheless, Eurostat data shows that when it comes to basic indictors such as the number of houses in EU countries with internet access, CEE countries are clustered at the bottom of the list, along with some of the southern European countries.
The lowest number of households with internet access were in Bulgaria, Greece, Lithuania, Portugal, Slovakia, Romania. The highest ranked CEE country was Baltic tech champion Estonia in eighth place, still beaten by seven mainly northern European countries.
There has, however, been a lot of prog- ress made in the last few years in CEE. In Bulgaria, for example, the share of households with internet access shot up from 54% in 2013 to 72% in 2018.
There is a similar pattern for online shopping, with Romanians the least likely nation to buy goods online.
And while the ICT sector is blossoming in a number of CEE countries, especially in the region’s university towns, the
Proportion of ICT specialists in total employment, 2018 (%)
Source: Eurostat
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