After Brexit and in the wake of Donald Trump’s improbable victory, France has rejected the nationalist economic agenda of Marine Le Pen. It is not just Emmanuel Macron who reprimanded populism as an unfeasible solution to globalization. Romanian President Klaus Iohannis has endorsed the virtues of capitalism as part of an open political system, which promotes the freedom of movement for goods, capital, services, and peoples. And he did so in perhaps the most pointedly cosmopolitan way possible: by welcoming foreign investors to become part of the Romanian economy.
Romania is a strategic ally of the United States of America and a well-positioned country in terms of geography. Its land connects the steppes of Central Europe with the shores of the Black Sea, via the Danube River and the Carpathian Mountains. For centuries, commerce and agriculture were thriving in this part of the world. Communism, however, brought about the misery and poverty so aptly described by David Landes.
Since 1989, the Romanian economy has recovered slowly but surely. For nearly two decades, the political elites encouraged the administrators of the welfare state to exercise monopoly over many important industries. In the most arbitrary manner, the government has offered electoral bribes to ordinary people and subsidies for its leaders’ many business friends.
After Romania jointed NATO and the EU, its economic vibrancy started to pick up. In 2016, this former satellite of the Soviet Union boasted one of the strongest rates of economic growth inside the EU (nearly five percent of its GDP). Foreign investments increased 20 percent from the previous year, and the unemployment rate in Bucharest and Transylvania is remarkably low.
President Iohannis - a former mayor of Sibiu, a scenic medieval town built by the Saxons - has “categorically rejected recent populist attempts to oppose foreign investments to Romanian capital, multinational companies to Romanian SMEs [small and medium enterprises],” according to Romanian press reports. On April 25, the head of state addressed a large group of business leaders, telling them that his “deepest conviction is that Romanian entrepreneurship will be strengthened by a stronger cooperation with foreign investors.”
At a pivotal moment, facing nationalist pressures within his own country, Klaus Iohannis did not say “Buy Romanian, Hire Romanian.” Why? Because everywhere in the world, smaller countries are bound to buy products they themselves do not produce. Since no Eastern European country makes competitive airplanes, the owners of low-cost airlines (such as Wizz Air from Hungary or Blue Air from Romania) are bound to buy planes made by Airbus in France or Boeing in the United States.
Protectionism doesn’t work.
The president of Romania knows very well not just the syntax of the German language, but also the secret of the German economy: a large number of companies which export their goods worldwide. This is why for Angela Merkel, Emmanuel Macron, and their Eastern European counterpart, any form of economic protectionism spells disaster. An economy which heavily relies on exports is constantly searching for new markets and a cheaper labor force.