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Updated: May 7, 2025
Due to its collapsing competitiveness and rigid labor laws, Germany's multinationals relocate many of their operations to central and east Europe, Asia and north and Latin America. Even with its current malaise, Germany invested in 2001 $43 billion abroad and attracted $32 billion in fresh foreign capital.
Consider central Europe's most advanced post-communist economy. One third of Hungary's GDP, one half of its industrial production, three quarters of industrial sales and nine tenths of its exports are generated by multinationals. Three quarters of the industrial sector is foreign-owned. One third of all foreign direct investment is German. France is the third largest investor.
All others regard capitalism as yet another rigid and unforgiving creed, this time imposed from Washington by the IMF and multinationals rather as communism was enjoined from Moscow by the Kremlin. With eight of the former communist countries about to become members of the European Union albeit second rate ones transition is entering is most fascinating phase.
Last year alone, German corporations plunged $3.6 billion into the economies of the acceding countries. German multinationals like Volkswagen and Siemens employ almost 400,000 people in central Europe for one tenth to one eighth their cost in the fatherland. Germany runs the EU rather single-handedly, though with concessions to a megalomaniacally delusional France.
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