Eastern Europe's takeoff

It is possible that Eastern Europe can converge with Western, in terms of per capita income, in even as soon as 10 - 15 years. Some people consider this completely impossible. Well, it is optimistic but not impossible. Western - Eastern Europe's converge depends on two factors a) how well Eastern Europe does b) how well or bad Western Europe does.

There is an economic plan for Eastern Europe. In that, certain scenarios exist in terms of growth rates. A realistic scenario is 3% average annual growth rate. There are also four other possibilities; extremely pessimistic 1%, pessimistic 2%, optimistic 4%, very optimistic 5%. Eastern Europe's economic plan has no effect on how well or bad Western Europe will do.

Western/Eastern Europe's ratio, in terms of per capita income is 1,7. This is when we use the original composition of Eastern Europe's Group 4. From Table 2, in the article "Two convergences", we see how long it will take for Eastern Europe to reach Western's level. With 4% it will take 10 - 15 years, with 3% it will take 15 - 20 and with 2% it will take 25 - 30.

This is how long it will take to reach CURRENT level. It is not affected by how well or bad Western Europe does in the future. In order for Eastern Europe to reach Western's FUTURE level of per capita income, those growth rates will have to be ABOVE Western Europe's. This is affected by how well or bad Western Europe does in the future. How well or bad will Western Europe do in the future?

During 2013 - 2021, these were average annual growth rates for certain Western European countries; Britain 1,448, France 1,026, Germany 1,122, Spain 0,941, Italy -0,254. Italy was even worse than EU disaster Greece ( 0,228). Britain had the highest and it is not in EU. It may join in the future with Norway and Switzerland. EU is one of the least growing areas in the World. Eurozone is even lower. Lately growth rates have been below 1%.

In the second half of 2023, EU marginally avoided a technical recession. When Eastern European countries leave, growth rates will fall, in what will be left of EU which will be Western European Union. Growth rates of around 0% are not impossible but quite possible. On the other hand, growth rates of 4% is an optimistic but possible scenario for Eastern Europe's Group. In that case, Eastern Europe could reach Western's per capita income in even as soon as 10 - 15 years.

Eastern Europe has the conditions for a take off in terms of development and growth rates. This does not happen with Western Europe because it has reached maturity. Suppose that Eastern Europe separates from Western but keeps the malfunctioning model that EU has. It will still be much better for Eastern Europe for two important reasons. First, per capita income disparity will be much smaller.

Second, instead of euro, there will be Eastern euro. It will start with an 1 exchange rate to euro but it is expected to fall. In this way, products and services in Eastern Eurozone will become more competitive and that will be a boost for Eastern Eurozone's economies. Two main factors that affect competitiveness are productivity and price level.

There are many more reasons that contribute to Eastern Europe' take off. EU's malfunctioning model will be replaced with a much better decentralized model that will cost taxpayers much less money. There is provision for energy resources and raw materials supply at better prices. Asia and Far East will come closer, especially with Russia's participation in the group which is certain.

The world's best systems will be implemented. This will not only be convenience for the Group's citizens but it will improve productivity. The countries of the group will be able to improve productivity of existing sectors and switch to sectors with higher productivity. Most importantly, Eastern Europe has more room for development, when compared with Western.

Because it is less developed, it can have much higher growth rates. This does not happen automatically but with the right economic policies which are in Eastern Europe's Economic plan. By being in the same group with Western European countries, Eastern Europe is deprived from the possibility to have much higher growth rates, for reasons explained.

What we mention here are only some points in Eastern Europe's plan. The plan itself is more than 200 pages long. It has detailed descriptions of the 30 - year economic policies. Some of them are confidential and will never come out. Others may come out much later. A 3% growth rate is a conservative forecast. It is possible that it could be 4%. Even 5% is possible but with few chances of happening.

A scenario where Eastern Europe has around 4% growth rates, while Western Europe is around 0%, is a possible scenario. In that case, Eastern Europe will reach Western's per capita income in 10 - 15 years. Time starts counting when economic plan starts being implemented. First the group must be formed. Then the model and the economic plan must be approved.

There may some modifications in both, before they get approval. There also might be some period of preparation before the plan is implemented. For Eastern European countries that leave EU, there will be a transitional period. During that time, matters will remain as they were in EU. This will make the transition much smoother.

So even if Eastern Europe Group 4 is formed tomorrow, there would be sometime before the economic plan starts. The more there is a delay in forming the group, the more every thing goes back in the plan. The time when Eastern Europe will converge with Western, in terms of per capita income, goes further away. It is crucial to expedite actions. Eastern European countries must leave EU ASAP. There needs to be an extreme urgency regarding this matter.