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Just happened to read about Hungary, the way things are looking: a third of youth talking of leaving, the newspaper headline (from couple of years ago) stating that it’s all over with Hungary. A million is getting out. Folks can’t pay for their homes any more. All is bad, the country is bleeding, something needs to be done. Sound familiar? Sure. Estonia’s the same, both the talk and the deeds.
And yet: all is not alike in Hungary and Estonia. Over there, they’ve done it left-wing in politics, for over twenty years. You know the stuff – all people centred, some would say. Hoping that, as the soup is vigorously stirred from one end of the plate to the other – it somehow turns thicker. Like Centre Party and social democrats would like us to have it.
Therefore, the Hungarian tax burden exceeds the one we have, and the German and Holland ones, too. And is nearing Finnish levels. Up to recently, Hungarians had graduated income tax with 36 per cent ceiling. Corporate profits were taxed, and, in addition to that, a solidarity tax was wrung out of companies. The state interfered heavily, took loans, invested, was active in economic politics. Compared to Estonia, a contrasting path was chosen, generally speaking. How well they had it with their redistribution policies, that’s another matter. Public debt is many times that of Estonia, and still poverty risk of Hungarians is larger by a third (comparatively speaking)…
Well, so be it. For European borders are open for both Estonians and Hungarians, with higher salaries beckoning. So, the troubles are the same. What do we do? Curiously, contrasting solutions are being offered in Hungary and Estonia. Indrek Neivelt, for instance, proposes for Estonia the formed Hungarian way («To curb exodus, let’s redistribute tax burden», Estonian Daily, February 2nd). Hungarians, however, are trying to stop the downhill slide the Estonian way: they have reformed themselves, done away with graduated income tax, levelled corporate tax load.
Looking around in Eastern-Europe, it’s quite the same story all over. Latvia, Lithuania, Poland, Czech Republic, Slovenia etc fear the same: masses might leave. No matter the different policies, more to the right or to the left, taxes lowered or raised, social housing provided or not, wealth redistributed or left untouched. Emigration is still the same.
Hence, apparently, the conclusion – whatever the politics, right or left, if the borders are open and much wealthier countries close by, some slice of the nation is leaving anyhow. There’s nothing you can do. Except for two options: close the borders or create faster-than-neighbours economic growth. The latter will take time, however. And, should we opt for Hungarian-style redistribution, it will take a long long time.