Thomas Piketty: 2018, the year of Europe

There are some truly shocking numbers in Piketty’s blog:

But in Warsaw or in Prague, events are interpreted quite differently. They point out that the rate of return on the private investment from the West was high and that the flows of profits paid today to the owners of the firms far exceeds the European transfers going in the other direction.

Western investors (especially Germans) have gradually become the owners of a considerable proportion of the capital of the ex-Eastern European countries. This amounts to roughly a quarter if we consider the complete stock of fixed capital (including housing), and over half if we restrict ourselves to the ownership of firms (and even more for large firms).

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