(Bloomberg) -- As European governments stake out positions for talks that will shape the continent's post-Brexit future, their priorities offer a glimpse into the wiring that holds together the world's biggest trading bloc.
For the former Communist east, where 11 countries have joined the European Union since 2004, the deal breaker is the free movement of labor. While richer nations pour billions of euros into the economies of their neighbors to help them catch up, opinion polls show that for the more than 100 million people who live in the area that stretches from the Baltic to the Black Sea, the ability to live and work anywhere in the EU outweighs all other aspects of membership.
The eastern countries, often seen as the U.K.'s natural allies in battles against the EU's more dominant power centers, are presenting a united front. Backed by some western European governments, notably the region's most powerful in Berlin, leaders from Riga to Sofia are drawing a red line on the four freedoms of movement for goods, services, capital, and, especially, people. Their message is simple: no unfettered market access without the continued ability of their citizens to work and live in Britain.
“It's not all about the money, a lot of it has to do with respect, being treated equally with others,” said Joerg Forbrig, a senior program director at the German Marshal Fund of the U.S. in Berlin. “If the Brits go in with the expectation that the EU will broadly support compromises on the four freedoms, then we're in for a clash.”
For a breakdown on the specific stances of each EU member, click here
It would be difficult for the eastern governments to compromise, given the attitudes of their voters. In a Eurobarometer study, all 11 countries saw the free movement of people, goods and services as the most positive result of the EU.
In a separate survey by the Friedrich Ebert Stiftung, a German foundation associated with the Social Democratic Party, 74 percent of Slovaks and 64 percent of Czechs said workers should have the unconditional right to seek jobs in other EU states. That compared with an average 57 percent of eight countries also including Spain, Italy, Germany, Sweden, France, and the Netherlands. In contrast, only 32 percent of Czechs said wealthy members should support the poorer financially, versus a group average of 47 percent.
“To be able to pick up and work abroad seems right to me,” said Lucie Capouskova, a 42-year-old Czech tourism consultant in Prague. “Some people stay abroad, but a lot come back speaking foreign languages and with skills they wouldn't get here, which enriches others who couldn't leave or who didn't have the courage.”
The sentiment has galvanized leaders across the region. Slovak Prime Minister Robert Fico said this week that his country will “fight hard” for his fellow citizens' rights in the U.K., and Brexit talks must prevent the creation of “second-class citizens.” Tomas Prouza, the Czech Republic's lead Brexit negotiator, said there's “zero chance” for the U.K. to curb migration from EU states if it wants to maintain full free-market access, and that every EU member would have a chance to veto the negotiating mandate if they disagreed with any of its points.
On Friday, Polish Deputy Prime Minister Mateusz Morawiecki said his country will “make sure that these freedoms are protected better than now, so that we're treated no worse than the biggest EU members,” while Czech Prime Minister Bohuslav Sobotka told U.K. Premier Theresa May in a phone call that the four freedoms can't be separated.
“The governments in the whole region know how economically important for their citizens this is by the fact that millions of people have left to seek a better life in the old EU” members, said Anna Materska-Sosnowska, a political scientist at Warsaw University. “The four freedoms of the single market are important because if you leave them out, what's really left from EU membership? Not that much.”
EU funds are a different matter. While visa-free travel can enrich every-day lives, people find the impact of funds harder to assess. The 439 billion euros ($494 billion) spent since 2007 --and 454 billion euros more earmarked through 2020 -- have boosted the region's economies and are felt deeply when they ebb. They've also helped lift living standards that lagged those in western Europe after four decades of centrally planned communist rule.
The payments themselves probably won't be up for direct debate during Brexit talks. The U.K. won't cease contributions -- which amounted to 7.46 billion euros or about 5 percent of the bloc's spending in 2015 -- until it leaves near the end of the current budget cycle.
Still, the subject highlights conflicting perceptions among EU members. Before they voted to leave the bloc, 58 percent of U.K. voters saw “having to pay for other countries' economic problems” as a disadvantage to EU membership, according to a February survey conducted by Lord Ashcroft Polls. It was the second-biggest perceived negative after “the scale of immigration from EU countries.” Yet in eastern Europe, development grants are seen not just as a way to boost economic output, but also as a vehicle for more of the corruption and cronyism that reigned when they were part of the Soviet bloc.
While projects include highways, stadiums, parks and other contributions, much of the coverage in local media is related to graft or waste, including reports of under-used airports in Poland, a 40-centimeter (15-inch) lookout in Hungary, or an EU-funded hotel that advertises sexual services in the Czech Republic. The latter two, along with Bulgaria, have had funds temporarily frozen over suspicion of misuse.
According to Gabriella Nagy, head of the Public Funds Program at Transparency International Hungary, 90 percent of EU-funded projects are overpriced by an average of a fifth to a quarter, with some costing seven times more than they should.
“The single most important factor that raises people's awareness of these funds is the deeply entrenched corruption that affects a very large percentage of these projects,” Nagy said. “Public awareness of EU development funds is very low, and most people never experience the impact of these funds in their lives.”
--With assistance from Ladka Bauerova and Peter Laca To contact the reporters on this story: Edith Balazs in Budapest at ebalazs1@bloomberg.net, Marek Strzelecki in Warsaw at mstrzelecki1@bloomberg.net. To contact the editors responsible for this story: Balazs Penz at bpenz@bloomberg.net, Michael Winfrey, Andras Gergely
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