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25 October, 2013

Why Europe Attracts Russians?

I’ll begin with a well-known Czech joke. “As long as the Czech Republic agrees to the American radar near Prague, Russian missiles will target the Czech capital,” Vladimir Putin tells the Czech President on the phone. “Then, our aviation will bombard Karlovy Vary,” he replies.

Karlovy Vary is a world-renowned Czech spa city and one of the Russians’ favourite resorts since the early 1990s. It has lured people with health issues, investors, entrepreneurs and anyone seeking a safe harbor for their money and families. Therefore, the Czechs think of Karlovy Vary as a “Russian city”. 

Weeks after the summer holiday season, many Czechs who returned from Montenegro, Italy, Bulgaria and other South European countries were surprised to see the unstoppable inflow of Russians – not for short-term tourist trips alone. Many Russians open companies, set up bank accounts and buy real estate abroad. Thousands prepare for comfortable long-term residence in Europe. By contrast to the 1990s, these are not oligarchs or millionaires. Modern Russian migrants are mostly middle-class people who buy apartments on the Bulgarian coast as good strategic investment.  Is this a tribute to trends? Spare money? Or an attempt to leave Russia?

More and more Russians will leave unless Russia makes this more difficult. This is despite the growing propaganda about “decay in the West.”

Why do many Russians travel to European coasts for vacations, not Russian ones? Because they get better quality for less money there.

Why do they buy apartments and villas in beautiful places abroad? Because they are more affordable. Plus, real estate allows the owner to get a residence permit.

Why do Russians open companies and bank accounts in Europe? Because they try to hide and safely invest the money they earned in the unpredictable Russia, plus this guarantees them long-term European visas.

Why do Russians need companies, bank deposits, private real estate and residence permits in Europe? Because they do not expect any political or economic development at home, nor do they trust their leaders.

Why don’t Russians trust their leaders (election results are very persuasive)? Because their life experience tells them that orchestrated elections is one thing, and security and future for families and property is something different altogether.

What will be the climax of all this? Unless Russia restricts possibilities to leave the country, more and more Russian immigrants will appear elsewhere. To prevent this, President Putin has already banned Russian MPs, politicians and officials to have bank accounts and real estate beyond Russia. They now register other people as owners of their property. The main thing is that the ban does not eliminate the cause of migration.

Europeans respond to this differently. Bulgaria and Montenegro are enthusiastic about Russian investment into infrastructure of recreation and resort areas.  Austria and Czech Republic are on the contrary changing their visa policy.

The inflow of Russians to Europe shows in other aspects, too. As representatives of the “grand nation”, they find it hard to integrate into other communities and try to set up typical Russian traditions in theirs.  They often include the launch of illegal practices in companies. Unlike, say, Ukrainians, the Russians do not work in construction or at farms. They come to Europe to “do business” rather than work hard, and that business fits their business concepts, i.e. does not entail payment of taxes. There are around 60,000 Russian-owned companies registered in the Czech Republic. Few actually pay income taxes. Therefore, Czech lawmakers are drafting a new law for foreigners living in the Czech Republic. Slovakia has enacted an amendment whereby foreign citizens with residence permits based on their business activity have to pay flat income tax to its financial regulator.

The Kremlin does not need people who evade taxes. Europe does not welcome them either. The only mutually acceptable option is effective democratization in Russia, harmonization of its laws and norms with European standards and a climate that will revive confidence for the sake of a positive prospect for the country and its people.   

This may help Russians realize that they should build Russia as a friendly and wealthy European state rather than as a fearsome empire. Then, they will not have to go abroad in pursuit of happiness. But is that possible in Putin’s Russia? 

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