Europe, economy and populism

MP Kazys Starkevičius

Last month, Lithuanian MEPs (members of the European Parliament) contrived to lose sight of an important vote on the Mobility Package, a measure allowing major Western corporations and work-shy trade unions to banish competitors, including Lithuanian carriers, from the market.

The main idea behind the Mobility Package initiative is the following: carriers operating in the European Union will be obligated to periodically return the road transport vehicles to the country of registration. Another proposal within the package will limit opportunities for Lithuanian drivers to provide transportation services in other countries by obliging them to a several days’ rest period between sabotage operations. As a result, Lithuanian drivers engaged in transportation of goods to Germany or France will be left with limited opportunities for loading in any of these countries and carrying goods to another country without prior return to Lithuania.

Further steps in this ludicrous direction may, in turn, end up harming the interests of Lithuanian entrepreneurs in bus passenger transport who had gone to great lengths to penetrate the Western markets in general and the Scandinavian market in particular. They may need to move buses back and forth from, say, Sweden to Lithuania every few weeks in order to stay operational.

I agree with Minister Masiulis

Even though I represent the opposition, I cannot but agree with Rokas Masiulis, Minister of Transport, who is justifiably resentful about the nonchalant approach to the matter demonstrated by the Lithuanian MEPs. Yes, delayed flights and ill fate can be used as a justification. However, when it comes to voting on what is really important, a responsible politician should take all the possible obstacles into consideration beforehand. In Lithuania, we are often keen to talk about the EU as a provider of benefits and a source of demands and prohibitions. There is a serious lack, however, of any willingness and ability to negotiate and defend our own interests when it is absolutely necessary. No tragedy has happened yet, but I am stunned by the statements of some of the politicians and even candidates to the European Parliament.

Without naming specific surnames, as the people involved are well known anyway, I will make a comment on the absurd statements against both the Minister, who really worked hard for the benefit of Lithuania, and the whole road carrier sector. A well-known lady politician referred to the sector as one of the murkiest in the country. She went on to speak about the alleged massive gains accumulated on account of minimum wages paid to drivers, tax avoidance through paying daily allowances, and, to her horror, employing Ukrainians and other foreigners. The business was derided as generating low added value and allegedly receiving state subsidies in some kind of concessions. In summary, a sector generating 6 % of GDP is portrayed as a gang of kulaks that needs to be abolished, while the minister is dubbed as a lobbyist for the kulaks. I will leave the Minister to his own resources in defending himself, as he is well placed to do this as a politician. Let me address the issue of kulaks and lobbying instead.

Why Ukrainians work for Lithuanians?

Notably, Lithuanian drivers are not getting a minimum wage of EUR 555. To the best of my knowledge, Lithuania is the only country in the neighbourhood of Estonia, Latvia, and Poland to multiply the driver wage by a predetermined coefficient of 1.3. As a result, our ‘kulaks’ are paying at least EUR 721 to drivers. The rest of the information about the daily allowances is true. The same system is applied by the neighbouring countries, but without using the coefficient. This may be the reason why some Ukrainians, wanted by many other carriers, choose to work for Lithuanians. Moreover, trucks from Western Europe are very rarely driven by French or German drivers anyway. More often than not, their drivers are also ‘legionnaires’. Thanks to the flexibility of our entrepreneurs in the sector and diligence of our people, we are seen as a big and significant player on the market, whence the ‘brilliant’ ideas tailor-made to push us out from the market. Thinking that the scheme is based on some mystical kind of social empathy for our drivers is naïve at best.

International road freight transport is not a local business. It is international in scope, so transportation prices are more or less identical in Estonia, Latvia, Lithuania, Poland, and other Eastern and Central European countries. Simply clients from Western countries always tend to pay about 20 % more to their own carriers compared to their counterparts from Eastern Europe. This is a fact known to everyone with any insider know-how on the matter. The requirement to raise the salaries of the Lithuanian drivers so they match those of their French and German counterparts would make sense if the EU set at a uniform transportation rate, as was the case in the former Soviet Union. If vocal public figures and populists who talk against our carriers would aim for setting such a rate, it would at least make sense.

However, this is not the case and does not even seem likely. Reality is pitiless. For example, if our ‘kulaks’ raise the drivers’ wages up to EUR 1,200, the cost of employing a driver would increase by EUR 400 due to extra taxes. If Lithuanian carriers paid European salaries to their drivers, transportation prices would need to be increased. The profitability of international transport sector is already as low as 3 percent. Raising the wages would simply lead to Lithuania’s losing the market. This would mean a loss of jobs not only for drivers, but also for the people employed in the infrastructure business.

In her notorious oeuvre about the kulaks-carriers, the vociferous and charismatic lady politician and economist has come up with a figure of EUR 750 million amassed by the owner of one of the biggest transport companies in the country. However, as an economist, she should be well aware that the property is, as I suspect, not only held in the form of gilded water closets, as was the case with Yanukovych or Ceausescu (the latter also being famous for his vocal support to the proletariat and hatred for the kulaks). The property consists, I imagine, of thousands of vehicles, facilities, and equipment necessary to maintain and develop the business.

The real winners of the Mobility Package

The funniest thing is that, should the Mobility Package be adopted, big wigs will most probably find it easier to adapt: re-registering their companies and vehicles in other countries will do the trick, or else other solutions can be found. By contrast, the measure will totally kill off small carriers with between 10 and 20 vehicles each. This is what the seemingly socially sensitive concept will actually lead to: a predictable and tragic end of business for the small carriers.

The Eastern European drivers, who are suffering from pressures already, are in fact raising the GDP of other countries even in the tourism sector, as they are obligated to redeem night certificates for overnight stays in hotels, away from cabins. Truth be told, there are fairly few hotels that can offer nearby parking facilities for trucks. This plays out well for the hotels: they take money from the people who are not staying for the night and provide other clients with the same accommodation, thus reaping double benefits. It will only make me laugh if I am told that such behaviour is unthinkable for civilised Western Europeans. If those allegedly more transparent and civilised countries had no crime, they would not need criminal codes and the police. Even the famously non-corrupt Scandinavian region lacks transparency. The extent of the problem was recently demonstrated by the notorious stories about the Swedish banks. It is high time we stopped feeling inferior and living in a fantasy world. Business is business, interests are interests, and politics is politics everywhere.

I have no precise evidence, but logical thinking and my life experience tell me that the Mobility Package, allegedly meant to curb the Lithuanian ‘kulaks’ and ‘vampires’, could have also been drafted as a result of lobbying and populism. I mean, you need to appease the yellow jackets and other gangs of hobos and loafers wreaking havoc in Paris by showing that you do take the voice of the people into account.

In the run-up to the elections, we are likely to see even more similar attacks, reminiscent of the Lenin’s infamous speeches made from atop of an armoured vehicle. As a farmer, I have already heard on many occasions that farmers are kulaks as well; that they are not paying taxes; and that they are getting rich at the expense of teachers and medical staff. I have made my point on that loud and clear long ago and I will not repeat myself. Moreover, there is also inequality within the EU in the agricultural sector. Suffice it to say there are obvious differences in the calculation of direct payments for farmers per hectare. So, should you be elected to the European Parliament and put in charge of agriculture, you would also have your hands full, which means you would still need to make it to the important meetings. So much for Europe, economy, and populism.

Author: Kazys Starkevičius, member of the Homeland Union–Lithuanian Christian Democrat Political Group in the Seimas