Retailers Lidl and Kaufland, which are owned by German Schwarz Group, have received almost USD 900 million in public development funds from a division of the World Bank and the European Bank for Reconstruction and Development (EBRD), to finance its expansion in Central and Eastern Europe, including Romania, in the last ten years.

According to the banks, financing Lidl and Kaufland helps the two companies expand in Central and Eastern Europe, create jobs and bring quality, but accessible products to poor consumers, reads an article by British newspaper The Guardian, cited by local Wall-street.ro. Unions, however, criticize the funding of private companies with public funds.

“The idea that injecting capital in multinationals will lead to durable development has always proven false in the last 20 years,” Luiz Vieira, coordinator of the Bretton Woods Project, a non-governmental organization that monitors the World Bank.

International public institutions such as the World Bank or EBRD are funded by taxpayers and owned by governments. Their explicit mandates to increase local development in the countries where they spend their money.

Kaufland and Lidl have been criticized in recent years for the working conditions in the countries they operate, according to The Guardian.

editor@romania-insider.com