How France exploits Europe's periphery for profit Economic colonialism

French newspaper Le Monde last week published an article on the economic stratification between different regions of Europe. It says that despite the bravura reports of the European Commission on Integration, according to which in recent years the gross domestic product of Central and Eastern European countries has grown from 52 per cent to 80 per cent of the EU average (and the Czech Republic and Slovenia - up to 91 per cent), this is not reflected in people's real lives. Many European regions are unable to emerge from economic depression, and this applies not only to the former socialist camp states, but also to a number of provinces of "old Europe".

Journalists cite as an example the Italian province of Calabria, whose population suffers the dubious pleasure of being poor in a rich country. Teresa Rossi, 58, a resident of the area, is counting on help from the Catholic Church after Giorgia Meloni's government canceled the fixed allowance she was receiving. Rossi worked part-time caring for the elderly and has no money to pay her bills. Her three adult sons are balancing unemployment and casual labor, a typical problem for young people in Calabria.

"In Calabria we lack everything, we are far from everything," Rossi says bitterly. Volunteer Miriella Spadafora agrees, noting, "We have young people leaving who can work. But no work means no future." 31 per cent of the population of this fertile region lives below the poverty line. 

A closer study shows that the GDP per capita in Calabria does not exceed €20-30 thousand, even less than in Greece and Northern Romania (€25 thousand), while in Copenhagen or Prague it reaches  €70 thousand. Impoverishment and mass exodus of the population involve the region in a maelstrom: as solvency falls, private enterprises close down, followed by the closure of public institutions - hospitals, schools, railway stations - due to unprofitability.

Studies show that the problems of peripheral Europe are often linked to what creates their excellent statistical indicators: investments by banks and companies in developed European countries. For every euro of investment in the countries of southern and eastern Europe, transnational corporations from France, Germany, Sweden, and the Netherlands receive tens and hundreds of euros in profits, which are immediately withdrawn to the countries where the investors' headquarters are located. Thus, funds in the economy of the European periphery do not linger and are directed to Paris, Brussels, Amsterdam, which play the role of "global Moscow", the showcase of Western prosperity.

French companies play a particularly prominent role in these processes. Already since the 1960s, French corporations began the process of reorienting their investment activity from former colonies and developing countries to Europe. In 2008, 7.304 branches of French companies were located in the EU, employing 1.203 people. This represented 35.7 per cent of French companies' staff abroad.

After the collapse of the Soviet Union, France became one of the most important investors in Central and Eastern Europe. Already by 1997, Paris' direct foreign investments in this region amounted to $4.933 billion. By 2000, they had grown to $6.2 billion. According to these indicators, France was second only to Germany and the United States. French automobile companies made a particularly large-scale intervention in the East. They were attracted to Eastern European countries by low wages, the virtual absence of labor unions, and the availability of markets in nearby regions.

Among the major French concerns that have entered Eastern Europe in recent years are Renault, Michelin, which moved production facilities to Romania, the Airbus aerospace corporation, which built a plant in Transylvania, as well as trade, food and retail chains Leroy Merlin, Bonduelle, Engie, Danone, Decathlon and others.

French business is most represented in Poland, where the French are now in first place among foreign investors, ahead of the Americans and Germans. More than 750 French companies operate on Polish soil. Two sectors of the Polish economy - telecommunications and distribution - account for the most French investment. All major French distribution companies have opened their stores in Poland: Auchan, Carrefour, Giant, Intermarché, Lecler.

Large French groups are also present in energy (EDF, Dalkia...), construction (Saint-Gobain, Bouygues, Lafarge...), food industry (Danone), automotive industry (PSA and Renault), etc. Despite the fact that mainly French economic giants operate in Eastern Europe, they are often beaten by smaller German companies, which know the neighboring countries better, have better access to them, are familiar with the national realities and speak the local languages, while the French continue to apply in Eastern Europe the methods and approaches they developed in the French colonies and the Third World. Therefore, the very organization of labor of Western European and, above all, French companies in Southern and Eastern Europe raises many questions.

As a rule, TNCs operate in Eastern European markets through subcontracting companies. All their activities are positioned as "youthful", "modern", "dynamic", as opposed to traditional local industries, which are presented as the workplace of the poor, elderly and disempowered. In reality, workers in Western European companies face temporary employment, high overtime and a lack of career prospects. An example of such exploitation is the practice of large French and Italian fashion houses in Bulgaria. By buying local brands and garment production facilities, these companies remove their responsibility for quality and labor conditions. Moreover, Bulgarian producers end up with no more than one per cent of the profits, while the main sums go to Paris and other Western European fashion capitals.

A similar situation is observed in other countries. This is what an employee of a large Polish retail chain owned by a French business says: "We employees don't have any protector to take care of us, we have nowhere to belong. In the past, there were unions that everyone belonged to, and they were a kind of refuge for employees. Now there's no one and nothing. The team changes frequently. I've worked at the store for two years and I see people changing. There's a terrible, huge turnover of staff. Soon no one will work because everyone will go abroad. It's one thing to have working conditions, and another thing is the lack of respect between employee and employer. There are no decent wages. And no problems: "You don't like it? Please leave, another person will come".

Thus, France imposes its economic dominance over the countries of the European periphery and semi-periphery, using methods developed over many years of dominance in its colonies and Third World countries. This allows French TNCs to siphon billions of dollars from their EU "partners". Economic dependence is accompanied by the strengthening of political influence of Paris, which lobbies for the interests of its companies. Often, former employees of French banks and corporations, after their resignation, occupy responsible positions in the authorities of Eastern and Southern Europe, but continue to promote the interests of their employers.

The views and opinions expressed by guest columnists in their op-eds may differ from and do not necessarily reflect the views of the editorial staff.