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4/6/07

CBC.CA: As wages rise, eastern Europe could become a victim of its own success - by William Kole

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As wages rise, eastern Europe could become a victim of its own success - by William Kole

When the Communists were ousted across eastern Europe, the capitalists moved in. For foreign companies from McDonald's to Microsoft, it was an exciting new frontier - a cheap place to make things, with 70 million potential consumers to buy them. Now, 18 years after the East embraced economic freedom, come the first tentative signs that an unprecedented boom may be on the verge of going bust.

Although big business is still expanding briskly across the region, wages, real estate and taxes are rising fast. Put simply, for companies looking to outsource manufacturing or services, the newest corner of the European Union just isn't the bargain it used to be.

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