The economic performance of Poland is puzzling. The government proudly emphasises the growth of GDP, approaching 5 per cent in the second half of 2017. Industrial output is expanding, exports and domestic sales are booming, the unemployment rate has reached historically low levels. Good market prospects are reflected in business surveys and firms’ profitability. The Warsaw Stock Exchange index is establishing new historic records. Moreover, the fast growth is accompanied by a satisfactory level of the economic stability. The exchange rate is stable and inflation, while increasing slowly, still remains below the central bank’s target. The fiscal deficit is well below the 3 per cent of GDP EU threshold, while the current account deficit remains at a comfortably low level. Such an outcome, as the government is pleased to underline, has been achieved despite a criticism of the economic policies by the opposition parties, liberal economists, and the majority of market analysts.
When discussing entrepreneurship and start-ups in Europe, Sofia, let alone Bulgaria, is not among the usual destinations that gets mentioned. And yet surprisingly enough, the country that joined the European Union eleven years ago and currently holds its first ever Presidency of the Council of the European Union, is now proud of an emerging start-up ecosystem that is now spreading from its capital city of 1.3 million people to some other major cities.
January 8 marked one hundred years since President Woodrow Wilson went before Congress and delivered his fourteen points aimed at ending the war in Europe and building a lasting peace. The world is a much different place than it was in 1918, and while technology, markets and alliances have developed in ways never foreseen, key ideals in Wilson’s vision have resonance today.
In a world where the impact of global market forces on businesses can be ruthless and unforgiving, strategic partnerships are becoming increasingly driven by hard economic necessity. The notion of seeking and finding a compatible partner then, where a meaningful relationship can truly flourish and be both rewarding and fulfilling for both sides may seem somewhat romantic to many.
The success of the FPO party in the Austrian parliamentary elections, coupled with billionaire upstart Andrej Babiš in the Czech Republic becoming prime minister in the waning days of 2017, means that it appears that Central Europe will be facing another year of political upheaval in 2018. Governments in Poland, Hungary, the Czech Republic, and Austria (and more conventional left-wing politician Robert Fico in Slovakia) have rearranged the political map substantially from where it was just three years ago. At a loss for how to describe this phenomenon, political commentators and the EU especially have been lazily relying on terms such as ‘right-wing’ or ‘far-right’ to describe what is more accurately an upsurge in populism. In fact, the one thing uniting these disparate governments across the region is a very left-wing trait, a reliance on government planning that can only be called socialist. And Poland’s ostensible ‘anti-communist’ government has been the greatest proponent of these socialist policies in the region.
During the last summit meeting of the European Council in December 2017 the newly-elected Prime Minister of Poland Mateusz Morawiecki left the gathering ahead of schedule, asking his Hungarian counterpart Victor Orbán to sign the final documents on his behalf. Symbolic gesture or something deeper?
In a joint statement issued in mid-December, the three Baltic nations of Estonia, Latvia and Lithuania promised to pursue policies promoting healthy lifestyles. Lithuanian Minister of Health Aurelijus Veryga, Latvian Minister of Health Anda Čakša and Estonian Minister of Health and Labour Jevgeni Ossinovski signed a memorandum of intent on cooperation in reducing alcohol consumption, smoking and malnutrition. Continue reading Why the Baltic States Should Reject the Nanny State
Despite the ruling PSD-ALDE coalition’s chaotic fiscal policy, and its ongoing attacks on the justice system, Romania can and will continue to be a factor of stability in Central and Eastern Europe. Concerns regarding the country’s evolution are justified – up to a point – but they will not affect the fact that Romanian citizens are amongst the most pro-European of the 28 EU member states. Moreover, Romania does not have the luxury of taking a path towards illiberal democracy. Continue reading Romania Can Still Provide Stability Within the EU
Serbia took another large step towards accession to the European Union (EU) last week, opening two more chapters in its negotiations and reiterating its commitment to joining the EU in a timely fashion. As the largest economy in the region, Serbia has naturally been the focal point of EU efforts in the Western Balkans, with massive amounts of EU assistance and aid directed towards Belgrade. However, as our recent report for the European Parliament on Serbia’s recent foreign policies has showed, the increasing interest of Russia and China in the Balkans and especially in Serbia places Belgrade in a difficult position. With so many suitors, it is likely that Serbia may attempt to revert to its historical type and play a balancing act between the West and the East, using the interest of outside powers to remain preeminent in the region. The danger, as in the past, is that Serbia’s short-term regional aspirations could derail its longer-term economic security.
Since the annexation of Crimea and the beginning of the ongoing war with Russia, Ukraine has been branded as a villain seeking foreign assistance. With National Bank reserves of 5 billion euros and a public debt equal to 80.2 per cent of GDP, Ukraine will have to repay 38 billion euros of EU loans over the next five years. As with people, help from the outside usually brings bad results if there is no incentive to take responsibility over one’s own future by reflecting on past mistakes. So what went wrong for Ukraine – and when?
Judges in central and eastern Europe are under attack.
The most frightening thing about this is that the judges are under attack from their own governments. The authoritarian, populist style governments arising across the region have repeatedly shown that they seek to curtail and control judicial independence, subjecting judges to direct governmental control and limiting their ability to act independently. As an independent branch of the state, the judiciary poses a potential obstacle to those bent on the consolidation of power. The assault on an independent judiciary is part of a larger trend, documented across the region, to stifle dissent, whether it comes from civil society, the media, opposing political factions, or judges acting as an independent check on government actions.
I have always been amused by the geography of regions within global companies. Names like Central Europe, Central and Eastern Europe and East Europe have always meant different things to different companies. My favourite was when a global company’s Eastern European region included Switzerland. Why? Because the regional head’s family lived there, so it was added to CEE. Continue reading CEE: Innovate or Get Eaten
Anytime Beijing ventures into intra-European relations, trepidation ensues. The “16+1” meeting between Beijing and a group of Central and East European states on November 27 brought particular interest. The goal was to discuss Beijing’s investments in the region. But the event coincided with rise of populism in Central Europe, which, in turn, has spawned tensions between the EU’s newer and more established states. China has been blamed for exploiting these divisions, and for trying to break EU consensus on subjects that matter to Beijing. But on closer inspection, the rising power’s influence is less than it appears.
Ever since central Europe’s transition to democracy, the Visegrád Group (V4) has been a cooperative project based on the principle of costs and benefits. In recent times however, the complex political processes within the European Union have brought new challenges to the group, and divisions within it might well be made permanent by increasingly diverse views on the institutional future of the EU.
The Ukrainian economic crisis of 2014-15 was caused by a number of factors, each one coinciding and reinforcing the other. Today, the country’s economy is recovering, but it remains highly dependent on the speed and the ultimate success of several key reforms, of which judiciary reform is the most important.
Twice a year, The Vienna Institute for International Economic Studies (wiiw) publishes its macroeconomic forecasts for 22 countries of Central, East and Southeast Europe (CESEE).
In April, news broke of a widespread anti-gay purge in Chechnya; in September, gay men and transgender women were rounded up in Azerbaijan; and in October reports emerged that a registry of gay men and lesbians was being compiled by the authorities in Tajikistan. How might we understand these disparate events as part of a trend in these three former Soviet countries?
The strategic joint military exercise Zapad-2017 took place from September 14-20 at several training grounds in Russia and Belarus. According to official statements, the total number of troops participating in this military drill was 13,000. However, the real figures could well have been significantly higher. The official scenario of Zapad-2017 was very close to that of previous Belarusian-Russian military exercises, which took place in 2011 and 2013. Belarusian and Russian troops were preparing to repel aggressive actions by their western neighbours, aimed at destabilising the situation in Western Belarus.
It would likely make sense to search for the causes of the euroscepticism of the citizens of the Republic of Serbia and other similar states in the region in the specific features, length and effects of a social transition which has been going on for more than twenty years. Disappointment, unfulfilled expectations under conditions of radical social change, and confusion in the understanding and promotion of EU integration could be considered general causes. Radical changes of the economic, political, legal and any other system have been going on for too long.
Following a game-changing decision of the Constitutional Court on March 4, 2016, Moldovan voters were keen to vote for a new, directly elected president. The idea of choosing the highest official of state in direct elections appealed to regular citizens: more than 90 per cent approved of the idea. It was the political parliamentary parties, who had elected the president until then, who were less keen.
On October 12 the Armenian government formally approved a proposal to sign an agreement “between the Government of the Republic of Armenia and the Government of the Russian Federation to provide a state export loan.” Armenia is to use the loan, which values 100 million US dollars, to purchase modern arms from Russia.
The future of Czech policy towards the European Union became very uncertain after the country held elections on October 20-21. Not only did billionaire Andrej Babiš’s party, ANO, often described as populist and Eurosceptic, secure a landslide victory; the remaining parties, of which four of the five most popular are anti-establishment, failed to secure enough votes to create majority without ANO.
Economic strategies are being questioned in several countries, both in Emerging Europe and elsewhere. Politicians have proposed more nationalist economic approaches, and in some cases are acting on them, in both Hungary and Poland as well as the US and the UK. In the former two emerging Europe countries, governments have consciously adopted policies of promoting nationally owned businesses, ostensibly out of concern that excessive foreign ownership hurts the country’s welfare. Continue reading Is the Level of Foreign Ownership a Problem in Emerging Europe?
Earlier this month I had the pleasure of chairing a panel of thought leaders and industry experts at the European Bank for Reconstruction and Development (EBRD) in London. The subject matter was centred on the ICT industry in the Ukraine specifically, and the broader Central and Eastern European (CEE) region in general. Continue reading Is the CEE Region About to Steal the Outsourcing Crown From India?
When, back in April 2015, I had the honour and pleasure of setting up NowoczesnaPL with Ryszard Petru and 19 other eminent individuals, we didn’t expect that Law and Justice (PiS) would be able to ruin Poland to the extent that it has. For ruining the country is exactly what it is doing. Continue reading Only a United Opposition Can Defeat Poland’s Ruling Law and Justice Party
Slovenia goes to the polls to elect a new president on October 22nd, and for the first time a majority of candidates are women: five, from a total of nine. The current president, Borut Pahor, is favourite to win a second term, and consistently tops opinion polls. Continue reading Slovenia’s Presidential Election: Pahor Expected to Romp Home
Belarus came in a lowly 153rd place (of 180) in Reporters Without Borders 2017 World Press Freedom Index. Other media freedom watchdogs and international organisations have reached similar conclusions: Belarus is ranked amongst the ten least free countries by Freedom House, although – credit where it’s due – it did move up from 194th last year to 192nd this year. Continue reading Belarusian Journalists Still Face Huge Problems
A long-awaited visit by Serbian President Aleksandar Vučić to Sarajevo finally took place in September, the first visit to the Bosnian capital by a Serbian president. Open disagreements between Mr Vučić’s predecessor, Tomislav Nikolić, and the Bosniak representative of the Bosnian presidency, Bakir Izetbegovic, had made any such visit impossible in the past. Indeed, personal conflicts between the two leaders had led to total alienation between the two countries at the state level, all the while deepening Serbia’s relationship with the Republika Srpska and its leadership. Continue reading Regional Relations in the Western Balkans: Moving Beyond Folklore
Some eight years since its launch, the EU’s Eastern Partnership (EaP) continues to offer up a mixed bag of results, including both achievements and failures. Continue reading Under Promise, Over Deliver: Prospects for the EU’s Eastern Partnership in 2018
Both the current president and government of Poland have stated time after time that they support further integration within the European Union, and such a view is broadly shared by the majority of Poles. Continue reading Will Poland Leave the European Union?
I am writing this from a hotel room in Warsaw, surrounded by memorials to Frederic Chopin, the great Polish composer and champion of self-determination for the Polish people. This is a particularly appropriate time to be here, since Poland is locked in a battle with the European Union over the question of Polish national self-determination — more than two centuries after Chopin was born. Continue reading Poland Challenges the European Identity
Since the 2003 “Rose Revolution”, Georgia has been the darling of the former Soviet region, shooting up the business environment and anti-corruption rankings. This has done wonders for its international reputation, attracting significant foreign direct investment which underpinned robust economic growth in the years up to the 2008 global financial crisis. Continue reading After Its Significant Rise the Georgian Economy May Now Fall
Its opponents accuse Poland’s right-wing government of undermining confidence in, and weakening the country’s ties with, the EU. The government’s supporters argue that the ruling party is committed to defending national interests and sovereignty within a reformed Union. Poles are still overwhelming pro-EU but this support is shallow and increasingly instrumental. Continue reading Is there any prospect of ‘Polexit’?
In late July 2017, the European Court of Justice (ECJ) ruled that Croatia had broken the Dublin III Regulation during mass-arrivals of refugees and forced migrants in 2015/2016. The rule was supposedly broken by allowing the refugees to cross over Croatian territory. This lead to the refugees ‘irregularly’ travelling further to Slovenia and Austria without imposing legal mechanisms of interception and eventual examinations of the possible claims for international protection (asylum). Continue reading Political Tensions Rise As Croatia Allegedly Breaks the Dublin III Refugee Regulation
After years of heating up, the EU’s values crisis is close to boiling point. Defiance of core EU principles by the governments in Warsaw and Budapest is turning into a political crisis. The European Commission has taken legal action against both governments for violating specific EU laws and is threatening to go further on Poland. The European Parliament supports this course and is preparing further action against Hungary. But the Hungarian and Polish governments will feel the heat only if political leaders of the EU’s other member states get actively involved. Continue reading Defending EU Values in Poland and Hungary
French President Emmanuel Macron’s recent Central and Eastern European (CEE) visit was notable for what he discussed (stimulating the French economy), and perhaps even more notable for where he visited… and where he did not. While the tour may have accomplished his quest for regulating posted workers (he claimed current numbers harm the French economy), his policy objectives may have been overshadowed by the growing rift in the European Union (EU), and especially amongst the Visegrad countries of Central Europe. Continue reading Emphasising the Incongruence Between the V4 Countries
The new non-governmental organisations’ (NGO) law in Hungary made international headlines; however, the crackdown on independent NGOs, trying to hold the government accountable, is not a new phenomenon in Hungary. The newly adopted law is about the transparency of foreign funded organisations. Despite its title, the law does not further transparency, but rather serves as a tool to stigmatise independent voices. Continue reading Why Hungary’s New NGO Law Is Harmful for Business
India’s progress in the last two decades has been unique. Traditionally, the manufacturing sector is viewed as the key engine of economic growth. Western countries, China and South East Asia grew largely due to growth in manufacturing sector, but India’s economic growth is largely driven by the services sector. For example, in 2015-16, the services sector contributed around 66.1 per cent of the country’s gross value added growth. Continue reading Partnership is the Key to CEE-Indian Business
Last week, the Moldovan parliament adopted a declaration calling Russia to withdraw its troops from Transnistria and to reiterate its demand to transform the action into an existing Peacekeeping Operation (PKO). Continue reading Swimpassing Dniester Without Prejudice To Democracy
The Czech Republic, Hungary and Poland are pushing the Euro adoption process towards an unknown future, despite the fact that, within the last few years, some of them have been able to participate in the in ERM II mechanism, for a period of at least two years before they can qualify to adopt the Euro. Continue reading CEE-Benefits and Disadvantages of Joining the Eurozone
The new US sanctions against Russia overwhelmingly passed Congress. But in parts of Europe, they are far less popular. German Foreign Minister Sigmar Gabriel last week called them “more than problematic.” In diplomatese, that means the Germans oppose them.
Continue reading When Neutrality Isn’t an Option
Nobody questions any longer that the ICT (Cyber) revolution is now a permanent part of the landscape and that we should take advantage of it to make the world a better place for everybody. Cyber technology has come to stay, with all its benefits as well as challenges. Continue reading E-lifestyle and Cyber Security: Some Views From Estonia
Soon after the fall of the Soviet Empire, Hungary, alongside other former “Popular Democracies” and the newly-established Russian Federation, set up diplomatic relations with Israel. Continue reading Hungary and Israel: the Collision of Past and Present
A host of flash estimate GDP data released by Eurostat and national statistics offices on August 16th showed that the economies of EU-CEE had another highly impressive quarter of growth in April-June. In seasonally-adjusted terms, growth strengthened in relation to Q1 from already elevated levels in the Czech Republic, Latvia, Poland and Bulgaria. In Romania and Slovakia momentum was unchanged relative to the previous three months, while in Lithuania and Hungary it slowed slightly. Data for the other EU-CEE economies—Slovenia, Estonia and Croatia—are not yet available. Continue reading EU-CEE Is Still Growing at a Healthy Rate
In October 1999, Serbia entered the final and most intensive phase of the non-violent toppling of autocrat, Slobodan Milošević, whose reign was highlighted by rampant nationalism, cronyism, aggression and war crimes. Continue reading Serbia’s New PM Is Cut From a Familiar Cloth
The war in Ukraine stands as a pressing test of Western commitment and resolve towards European security. But another security threat is emerging, with a real risk of rapid escalation. This new threat, emanating from the Nagorno-Karabakh region, pits Armenia and the Armenian-populated Karabakh against Azerbaijan. Continue reading Nagorno-Karabakh Conflict Moves from Frozen to Kinetic
According to Viktor Orbán the V4 is “as strong as never”. Orbán considers the strengthening of this group as the most important event in recent times. Is this really so? Is V4 really strong? Does it even exist at all? Continue reading How strong is V4?
In 2010, when Viktor Orban took over Hungary’s government, he seemed like a typical mainstream-conservative European politician. But as soon as he announced his ‘voting booth revolution,’ we, who knew him, were aware that this would be the start of a new era in Hungary. Within a year, Orban’s one-party government rammed a new basic law through Parliament that tailored the constitution for his party’s interests. Indeed, his changes proved to be revolutionary. He established the first 21st-century populist state within the European Union. Continue reading 2018 Elections — Vital Decisions for Hungary’s Future
According to a recent (May 2017) public opinion poll, 72 per cent of Czech people favour keeping their national currency whereas only 21 per cent would welcome a switchover to the Euro. Continue reading Czech Own Currency Insures Against Euro Losses
Geography and history are political tyrants and nowhere more so than for in Armenia. For all the emphasis, nowadays, on the potential of regional trade, Armenia is boxed into a situation that offers little or no openings. History, distant and none too distant, rules our alliances with Turkey or Azerbaijan and Russia’s brutal show of force in Georgia, in 2008, casts a sombre shadow on Tbilisi’s room for manoeuvre. Continue reading Can Armenia Keep a Foot in Both Camps?
It goes without saying that the state visit that US president, Donald Trump, paid to Poland and his meeting with the leaders of the Three Seas Initiative (TSI) countries was a great success. This achievement has not only shown the ability and perseverance of the Polish diplomatic structure, but also underlines the interest of the new American administration in the Central European region, which was doubted by some commentators and analysts. Continue reading How Will Trump’s Visit Affect Polish Politics?
Azerbaijan is a small but energy-rich country in a strategically sensitive location. Its leaders have had many choices about pathways to the future and through consistent decisions over two decades, have created a repressive oligarchic regime that is ruled by one family. How did Azerbaijan, which started on the path to political pluralism in 1992, become a corrupt state that abuses human rights and the media? Continue reading Azerbaijan: The Rich Get Richer and the Poor Get Nothing
As Adam Smith once said, the sufficient conditions for the economic prosperity of a country are “peace, easy taxes, and a tolerable administration of justice”. Continue reading Adam Smith’s Warning for Poland
Since Poland’s conservative Law and Justice (PiS) government was elected in October 2015, it has systematically moved to consolidate its power. The country’s public media have lost their independent voice. The powers of the supreme court have been curtailed. Managers of enterprises have been replaced. Human rights, especially for women, have been constantly undermined. Continue reading Poland’s Drift Away From Democracy
The crisis created by Poland’s ruling Law and Justice (PiS) party is nearing a boiling point. Having taken control of the Constitutional Tribunal last year, PiS is pushing new legislation through parliament that will place the rest of the judiciary firmly under the political control of the party’s majority in parliament. The European Commission is urgently examining whether it should an initiate an Article 7 proceeding against Poland for violations of fundamental rights. Continue reading PiS Uses Media Control to Bring Poland to Heel
Parliamentary elections are a good time to evaluate the functioning of democracy in a country such as Albania. Continue reading Albania’s Election Apathy
Moldova and Romania have long toyed with the idea of (re)unification. The two countries, which were a single entity until Russia annexed present-day Moldova in 1812 (and then again in 1940), have much in common in the way of language, culture, and history. Both countries are predominantly Romanian speaking, have populations that are closely-related ethnically, and are successors to the premodern Romanian states. Continue reading Good Match But Unlikely Marriage
In the 27 years since the transformation, Poland has been preoccupied with catching up with the more civilised and developed economies of Western Europe. Moreover, it has not suffered a recession since 1991, when the GDP dropped by seven per cent per annum. For these reasons, we have seen the longest period of constant and stable global economic growth ever. The economic upturn has also fostered foreign investment. Continue reading Poland’s Capital Saturation Lower Than the Czech Republic’s
It has been almost five years since the Georgian Dream’s (GD) substantial and unexpected victory in the parliamentary elections in Georgia. During these five years, the frenetic pace of events that defined much of the previous nine years, when the United National Movement (UNM) was in power, has ebbed. Continue reading Stuck in Neutral: Georgia’s Constitutional Reforms
The inflow of FDI had long been considered the main driver of economic growth in the countries of Central and South-eastern Europe. During the transition to a market economy, FDI provided much-needed capital and knowledge, as well as access to technology and markets. Continue reading Ex-Transition Economies’ FDI Recovery
There is not, and there has never been, a more important mission for the generation, which spans communism and a free Poland, than a permanent anchoring in Western structures. Joining NATO and the European Union seemed to be a happy outcome of that mission. Unfortunately, it is still far too early to rejoice. Continue reading Poland Needs to Cling to the Eurozone
On 2 February 2017, the inhabitants of Georgian capital, Tbilisi, saw the city’s two landmarks — the Bridge of Peace and the TV tower lit up in the colours of the EU flag, marking the day when the European Parliament adopted a visa-free regime for Georgia. Continue reading EU Visa-Liberalisation Strengthens Georgia’s Pro-Western Path
Brexit negotiations started in Brussels on June 19, almost exactly a year after the UK’s vote to leave the EU. Continue reading Impact of Brexit on EU-CEE Not Overstated
A recent public opinion poll confirms that Moldovan society is highly divided as regards its approach to the EU and Russia. 52 per cent, of those surveyed, would choose integration with the Moscow-backed Eurasian Economic Union as its preferred foreign partner, while 48 per cent favours European integration. Continue reading Moldova Falls Victim to Politicising
Macedonia has a new coalition government comprised of SDSM (the former communist party) and two ethnic Albanian junior coalition partners: DUI (a party founded by the members of the local KLA) and DR-DPA (a coalition itself of smaller parties, led by the mayor of Struga). Continue reading Macedonia’s Controversial Coalition Government
Bulgaria is still the poorest EU member state, although its GDP is now around 50 per cent of the Bloc’s average, while it was only 25 per cent back in 2000. The country has a rather dynamic and often turbulent political life, but its democracy is more pluralistic and less polarised than Hungary and Poland. In a rather competitive environment, one party – the centre-right GERB — and its leader Boyko Borissov have dominated the political scene over the last ten years. They emerged as the biggest party faction in the National Assembly after the latest parliamentary elections in March. On May 4, the third Borissov government was sworn in. Continue reading Bulgaria Needs a Reform-Oriented Government to Take Full Advantage of its EU Membership
Universities are among the oldest organisations in the Western world. The University of Bologna was founded in 1088, Oxford and Cambridge not long thereafter. Some forty European universities that continue to operate today were founded before 1500. Dozens of American universities have been in existence longer than the United States. Continue reading Hungary’s Nationalist Assault on Free Enquiry
Joining the EU has unlocked robust GDP growth and continues to aggregate positive energy in the Central and Eastern European (CEE) countries. Adhering to the common market has brought a surge in trade, positive institutional changes and improvements in the business environment. However for many countries, it has also led to a migration of the labour force, which could affect long-term economic growth prospects. Continue reading The Competitive Edge in Central and Eastern Europe
The future of Europe is at stake, and the reasons extend far beyond such obvious challenges as the migration crisis and the political turbulence that led to Brexit. Continue reading Poland’s Unicorn, Slovakia’s Flying Car and the Future of Europe
Recently, there has been increased interest amongst businesses and technology companies in the concept of a “sharing economy”. However, there has been a lack of proper debate on this concept and the impact it could have in a wide range of industries and sectors, particularly in the CEE countries. Although it’s quite a recent trend in the CEE region, there are new start-ups emerging there, despite there being some barriers to entry. For a sharing economy to become mainstream in CEE Europe, all those involved need to change their mind-sets, from the idea of ownership towards more of an access approach. Continue reading The Sharing Economy Could Bring New Business Models to CEE
While Belarus will not have its Euromaidan any time soon, recent developments at home and abroad suggest that the country’s political course is not set in stone. Continue reading Not All Quiet on the Eastern Front
We are now potentially only weeks away from the triggering of Article 50. This all-important section of the Lisbon Treaty sets out the process by which a member country can leave the EU. No country has ever left the EU before and some experts are predicting a ten-year timeframe to negotiate a new trade deal: In this case, the UK Government has its work cut out for it if it is to complete Brexit negotiations within the two years stipulated by Article 50. Continue reading The Voice of European Business Must Be Heard Loud and Clear by Brexit Negotiators
Brexit means that Poland’s right-wing government is losing its most important EU ally and the opposition warns that the country could end up marginalised on the European periphery. However, the ruling party argues that Warsaw is a leader in debates on the EU’s future and is calling for a re-think of the trajectory of the European project. However, the future status of Poles, living in the UK, could complicate its plans to ensure an amicable Brexit settlement. Continue reading How Will Poland Approach the Brexit Negotiations?
The Deep and Comprehensive Free Trade Area (DCFTA) negotiations between the European Union and Ukraine began in 2018, after the country joined the World Trade Organisation (WTO). Despite having started on the wave of the Orange Revolution of 2003-2004, they were continued, or even accelerated, by President Viktor Yanukovych, who was elected in 2010 and is known for his pro-Russian. Continue reading Finalising the DCFTA is Expected to Bring Multiple Benefits to Ukraine
Since gaining its dependence Ukraine’s economic and political priorities have been to attract foreign investors. Ukraine is a country with a population of 45 million. The country’s leadership’s main arguments to attract foreign investors have been its abundant and cheap labour force as well as a large market and fast growth of consumption. But is that supply of labour sustainable? Continue reading Ukraine’s Reputation for Cheap Labour May Not Ring True in the Long-term
At the start of 2015, Switzerland ended a cap on the value of the Franc relative to the Euro. Before this, it had been pegged at 1.20 Swiss Francs for one Euro. After the cap was removed, the Swiss Franc increased in value against the Euro by 30 per cent. The currency increased by 25 per cent in value against the United States dollar, also. However, this change in valuation has the greatest impact on nations with weaker economies, whose citizens borrowed heavily in Swiss Francs at the old exchange rates. Continue reading Examining How a Strong Swiss Franc Could Single-Handedly Topple Poland’s Economy
When I first came to Romania in 1990, the revolution had just finished. Ceausescu was dead and the political classes were forming into parties. That was 27 years ago. Even in 1990, people were on the streets, elated by what had been achieved. The then Government party was the party which eventually morphed into the Social Democratic Party (PSD).
Despite its natural beauty spots and historical sites, Belarus isn’t a top tourist destination. As a matter of fact, it has been one of the least visited countries in Europe. Unfortunately, Belarus remains unknown to both foreign tourists and large-scale international business, primarily because of its visa regime. However, this is expected to change now, as Belarus is striving to overcome this stereotype and 12 February 2017 marks the important day when the visa regime changed. Continue reading Will the New Five-day Visa-free Regime Encourage More Visitors to Belarus?
In the current geostrategic environment, it is impossible to divorce political development from economic development. The prospects for the global economy and, by implication, for individual economies are intricately driven by significantly changing and unpredictable geopolitical trends. Continue reading European Volatility Makes Economic Development Slower for Ukraine
“Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidise it.” The words of US President Ronald Reagan are still a useful shorthand to understanding government’s approach to the economy, even after the economic changes of the last thirty years. Continue reading The Morawiecki Plan Promises a Brighter Future for Poland
Across 62 economies around the world, more than two-thirds of the adult population believe that entrepreneurs are well-regarded and enjoy high status within their societies. At the same time, Europe has the lowest belief in entrepreneurship as a good career choice — 58 per cent. Positive perceptions about entrepreneurship as a career choice range from 40 percent among the Finns and Swiss, to 78 per cent for the Netherlands. Continue reading A Positive and Modern View of Entrepreneurship
In his autobiographical and excellent overview of culture and society in Europe at the turn of the 19th and 20th centuries, ‘The World of Yesterday’, the Austrian writer Stefan Zweig showed how quickly the categories and concepts that describe the world around us can become obsolete. The lead up to World War I and the 1920s were separated by a mere decade, but when viewed in retrospect, these two decades seem to have little in common. For Zweig, writing in 1940, that entire bygone world was nothing more than an implausible legend. Continue reading Prepare for a New Europe
Despite the uneasy relations between Europe and Moscow, Gazprom’s gas supplies to European consumers set a new record in 2016. Still, Russian gas imports to the EU is a heavily politicised issue that is often attacked from the viewpoint of the security of supply or the environment. While the Nord Stream 1 project was completed with EU backing, and mainly because of the gas crisis which left several EU countries in the cold during 2009, the pipeline’s expansion has left European powers divided. Continue reading Europe at Odds over OPAL and Nord Stream 2
The Statistics Office of Poland has just announced that GDP growth in 2016 was 2.8 per cent, which is quite a decent result, by European standards, as the EU Commission estimates only eight (out of 28) EU countries are expected to grow faster, with the Block’s forecasted average being below two per cent. Continue reading Poland’s Confusing GDP Growth
During the summit marking the 25th anniversary of the Maastricht Treaty, in December 2016, the president of the European Commission, Jean-Claude Juncker, called for a move forward with a two-speed Europe and also for the creation of a different orbit for those EU Member States who do not wish to take part in all facets of EU integration. If implemented, this approach will have far-reaching consequences for the CEE region, especially for the countries of the Visegrad group (the Czech Republic, Hungary, Poland, and Slovakia), which could effectively be side-lined in a two-speed Europe. Continue reading Will a Two-speed European Union Side-line the Visegrad Four?
When it joined the European Union in 2004, Poland was obliged to adopt the Euro (providing the country meets the Maastricht criteria) in the same manner as the other nine new member states and the three which entered the Block in 2007 and 2013 — at some undefined point in the future. Since then, the Baltic countries, Slovakia, Slovenia, Cyprus and Malta have all changed their national currencies, but Poland, the Czech Republic, Hungary, Romania, Bulgaria and Croatia have not yet done so. Continue reading Poland: Is it Ready, and is it Time to Adopt the Euro?
The new year has just begun and already it has brought a few events that will have a massive impact on what emerging Europe will face in 2017: on 17 January, the British Prime Minister laid out the foundations and the 12 objectives for untangling Britain from the European Union; three days later, the inauguration of Donald Trump, as the 45th president of the United States, marked the commencement of his four-year term. Less than a week later, the two politicians met to discuss the “special relationship” between the US and the UK. Continue reading January Kicks Off an Exciting Year for Emerging Europe
The European Commission has been preparing a technical communication that focusses on waste-to-energy (WtE). It aims to explore the opportunities this offers, particularly with regard to the synergies between resource and energy efficiency. The communication was scheduled to be published at the end of 2016 together with the reviewed Renewable Energy Directive. Continue reading The CEE Region Is Making Advances in Prioritising Waste-to-Energy Projects
In November 2016, the Romanian Ministry of Economy posted a preliminary draft of the energy sector 2016-2030 for public consultation, with a year 2050 perspective. It tackles all energy resources such as crude oil, natural gas, coal, biomass and energetic waste, and includes special sections for electricity. This is, therefore, the occasion for a review of the Romanian power sector and its evolution over the past 25 years. Continue reading After 25 Years of Restructuring, the Romanian Power Sector Is at a Crossroad
Nowadays, consumers are more demanding than ever before, when it comes to products, services and brands and they are using digital tools to articulate and fulfil their needs. The 2017 consumer is harder to characterise, not least because their identity is multidimensional and in flux, with shoppers more likely to have a hand in defining themselves and their needs. Continue reading Central and Eastern European Consumers Are Joining the Global Trends for Change
Investors’ feelings concerning the outlook for Ukraine’s economy improved slightly in late 2016, although the economy remains fragile as the pace of reforms is still too slow. Continue reading Business Moving Forward with Cautious Optimism — Can Investors Win the Confidence Game?
The turning of the calendar to a new year is a natural point to reappraise the legacy of the year just passed; searching for clues as to what will come and what must be avoided in the future. Such an exercise is particularly useful in the case of Ukraine, which has a large milestone coming up. February 2017 marks three years since (now) former President Yanukovych fled to Russia with large quantities of Ukraine’s treasury, a signature event which also sparked three years of tangible economic reform and political change. Continue reading Falling into Old Ways in 2017? Ukraine’s Struggle for Functioning Economic Institutions
As I look forward into 2017, I see great developmental opportunities for Poland. There is an opportunity for an investment boom whose range and significance will propel the Polish economy into the future, breaking with imitations of the past. We have laid a solid groundwork for fostering sovereign savings and encouraging solidarity in the consumption of growth fruits, whilst improving public finances at the same time. But looking at foreign circumstances, we must remember one thing: today, in the globalisation era, the only certainty is uncertainty. Continue reading Breaking With Imitations of the Past
Ongoing research, conducted by our team with industry players in the US and Europe, reveals there is an average of 30-40 per cent of small-cap & mid-cap companies or VC-backed start-ups at any given time that are planning to expand their operations abroad in the near future. Continue reading The Long Tail of Global Expansion
In November 2016, Slovenia amended its constitution to make access to drinkable water a fundamental right for all citizens and to stop it being commercialised, thus becoming the first European Union country to include the right to water in its principal document. Only 15 other countries across the world have done this, before Slovenia, according to Rampedre (the online Permanent World Report on the Right to Water). Continue reading The Right to Water: Who Can Change Today’s Situation?
Moldova’s recent presidential elections which took place in mid-November, and which resulted in Igor Dodon’s victory, have shown that there is more than just a political divide between Moldovans. Continue reading Old Fashioned Skulduggery Overshadows the Elections in Moldova
The global economic environment continues to be challenging. The ‘wounds’ inflicted by the global financial crisis of 2008 have not yet healed completely and world economic growth remains rather subdued. This particularly applies to the advanced countries and especially to the Euro Zone, which is the most important trading partner for the Eastern European countries. Continue reading Are Labour Shortages Driving Economic Growth?
Dutch Prime Minister, Mark Rutte, recently announced that his country is unlikely to give the green light to the EU Association’s agreement with Ukraine, following an improvised civic campaign against the deal. The Dutch government is faced with a difficult choice between sacrificing a treaty with immense geopolitical significance and defending it to its own political detriment, thus adding more fuel to the Euro-sceptic fire in the country. Continue reading The Netherlands’ Objection to the Ukraine-EU Association Agreement could be Costly to Europe
When I meet a foreigner for the first time, the moment I start a conversation about Romania, it seems as if we are discussing a topic where each of us has a completely different view. This proves that there is a significant gap between how people see Romania and what the actual reality is. That makes me determined to show people that Romania means culture, talent and technology. Continue reading Changing Perspectives and Showing That True Romania is a Vibrant Innovative Country
This has been a rough year for the countries of Central and Eastern Europe in terms of governance, with neighbours Poland and Ukraine seeing the biggest challenges. Continue reading History as Destiny? Institutional Erosion in Ukraine and Poland
“Republika Srpska (RS) is a state and Russia is its ally”. Milorad Dodik, the president of the predominantly Serb entity within Bosnia and Herzegovina, is not someone known for mincing his words. Continue reading A Bosnian Referendum Shows Russia’s Influence in the Balkans—As Well As Its Limits
Since the current Polish government came into power, last year, they have advocated the need to tighten up the existing tax system. They maintain that the current situation calls for a system that is more efficient and effective and they are looking to find ways to increase the budget’s income without hiking up the tax rates. They have inherited a tax system from the liberal government, which was in power for eight years (between 2007 and 2015), which is in deep crisis — the tax share of the GDP has fallen from 17 per cent to 14 per cent. Continue reading Polish Tax Laws — Fighting a Winning Battle Against Tax Evaders
With an average growth rate of 10 per cent over the last decade and an increasingly affluent population of 1.3 billion people, China is a dream market for many companies, including those based in Central and Eastern Europe. Small and medium firms are excited by the prospects of the Chinese domestic consumption because Chinese consumers are literally hungry for goods from the EU. In the past five years, exports from the EU to China have grown by 9.8 per cent, to €160 billion, while exports from China to the EU have only increased by 1.6 per cent. Continue reading China: A Giant That Is Hard to Crack
It is common knowledge that the German market for IT services is suffering from a severe shortage of IT skills. While the economy is thriving and order books are full across the production and service sectors, there’s a cap on growth in the IT industry – there are simply not enough people to fulfil all the orders. Since the IT industry is characterised by a high intensity of labour, the lack of developers, project managers, quality assurance professionals and consultants is having a severe impact. Continue reading Outsourcing in Germany: Stop Talking at and Start Talking to
The financial crisis has led to plenty of conclusions in Europe. One among the many is that capital markets and their use for the real economy have been far from optimal. If real improvements could be achieved in this this area in the next few years, then growth could be promoted, alternative financing could be offered, the cost of financing could be lowered and access to funding might be improved. In 2015, the European Commission announced the inception of the Capital Markets Union (CMU) which will be a flagship project from the EU. Continue reading The Capital Markets Union: a New Beginning in the European Financial Sector?
In this world nothing can be said to be certain, except death and taxes. Apparently these words, attributed to Benjamin Franklin, cannot be applied to all tax systems. Continue reading Fiscal Policy Predictability in CEE — It’s Time for Change
Outsourcing is being transformed; digitalisation, automation, the Internet of Things, these are only a few of the elements that are shaping it now. All of these factors, as well as the outcome of the recent EU referendum in the United Kingdom and the subsequent Brexit are all coming together to reduce the existing out sourcing landscape to ashes, not only on the domestic market here in the British Isles but also further afield. Continue reading The Global Outsourcing Industry — the Rise of the Phoenix
Want to drive a BMW? Easy, just make your contribution to the creation of a Central European (V4+) Innovation Hub! Continue reading CEE — Do We Need a Launch Pad For Our On-Site Tech Intelligence in the Silicon Valley
While the legal situation for gays and lesbians in post-communist Europe has witnessed some marked improvements over the past 25 years, social attitudes towards homosexuality in the Eastern half of the continent remains less positive. Continue reading LGBT in CEE — A New Acceptance Is Being Born From Migration
Romania has come a long way in the last twelve months. The technocrat government that was imposed on the country, following the resignation of the former Social Democratic Party (PSD) prime minister, has seen the country enter a period of quiet expansionism. Continue reading Romania Surviving the Waves of Recent Political Tsunamis in Europe
These days, there isn’t a company that would not acquire intangible assets. Tax regulations in Poland, just as in other European countries, define intangible and legal assets in a different way to accounting regulations. In addition to this, balance sheet amortisation can also be done in a different manner: independent of tax depreciation. So, in these cases, companies use depreciation rates as they are stipulated in tax regulations if this is possible, and legal. However, they do need to calculate a deferred tax, using the temporary differences between the accounting and tax depreciation and intangible assets value. Continue reading Are There Differences Between How Tax Regulations in Poland and IAS Treat Intangible Assets?
2016 has been a year of great challenges for Europe: the migration crisis which has brought up a discussion on how to tackle the immigration issue and the migrant quotas within the European Union; the terrorist attacks, the latest in Nice, France, where over 80 innocent people celebrating France’s National Day were killed; the last few weeks’ notable intensification of ceasefire violations in eastern Ukraine; the NATO Summit in Warsaw which has resulted in four multinational battalions being deployed to the bloc’s eastern flank and finally, the results of the EU referendum in the United Kingdom. Continue reading United or Divided? Europe in the Face of the Challenges of Tomorrow
Reality, as we Europeans knew it, is gone now. It’s been replaced by worry, concern, uncertainty and insecurity. Within the first 24 hours since the official result of the EU referendum was announced we have seen global stock markets lose about $2 trillion in value; Sterling suffered a record one-day plunge to an over 30-year low, which resulted in France overtaking the UK as the world’s fifth largest economy.
Recent statistics, for example, those from the Brookings Institution, prove there have been impressive reductions in the percentage of people living in poverty. Is the problem solved and should we all applaud? Well, no, as progress in improving people’s lives has been uneven at best. Often, economic growth has depended on industrial, agricultural, and economic processes that are not environmentally sustainable and which, in many cases, produce social inequity. While it was once assumed that economic growth would solve most problems, it is now clear that social and environmental improvements do not necessarily accompany sustainable economic growth. Continue reading Measuring Growth of Societies with GDP Alone Shows an Incomplete Picture
Silicon Valley is an almost mythical synonym for the home, in the minds of virtually everyone, to many of the world’s largest high-tech corporations and thousands of start-up companies. It has grown into an unprecedented economic powerhouse the size of which is well worth investigating. Continue reading Big Fish, Small Fish, Where to Fish? On the Eve of the Fourth Industrial Revolution
This week’s Emerging Europe Diplomats’ Meeting was the first in a series of events addressed at diplomats residing in London. It re-raised the dilemma of how to refer to that region, which comprises 23 countries, with some of them belonging to the European Union, some believing membership will come soon and still others having chosen the Eurasian Economic Union. Are they New Europe, New Eastern Europe, Eastern Europe, Central and Eastern Europe or maybe emerging Europe? Is it something else again? Continue reading Let’s Stop Wasting Time Redefining our Place in Europe
Historically, decisions related to corporate international expansion have been about investment in physical assets such as office buildings, roads, airports, factories, dams, labs and science parks. Continue reading Global Expansion in the Digital Age
The Czech government has decided to change the country’s name to Czechia, in an effort to better promote the national brand. While the official name of the country remains the Czech Republic, the country will adopt the shorter moniker (akin to France instead of the French Republic) and register the new name with the UN. Continue reading Czech Republic Renaming Has Real Economic Costs
In Ukrainian politics, a week is an age.
The last one began with President Petro Poroshenko being roiled by accusations in the Panama Papers that he set up a secret offshore company when his troops were being decimated by pro-Russian rebels. By Sunday, Prime Minister Arseniy Yatsenyuk had resigned, upending the ruling coalition. Continue reading Resignation in Ukraine: War, Revolution, Crisis — Some Things Never Change
The European Union is commonly described as an economic giant, but a political dwarf. Recent phenomena, such as the mass immigration into Europe, its anaemic economic growth and terrorist attacks – alongside the resulting radicalisation of the European political scene – may bring about the disintegration of the EU, making it a dwarf in the economic dimension as well as political. Continue reading The EU’s Choice: Fundamental Reform Or Disintegration
Until about a quarter of a century ago, in the countries of Central and Eastern Europe (CEE), which is my part of the world, every year on 8 March, female employees received flowers from the state-run trade unions. Sometimes they got a single carnation, sometimes a potted flowering plant — perhaps it was dependent on the country— but on that exact early March morning the flower was a wonderful promise of the coming spring, as well as the only token of our then-celebration of femininity. Apart from that single gesture, gender equal opportunities were never a topic of debate, although women were a huge part of the workforce behind the Iron Curtain. Continue reading International Women’s Day — Let’s Take Action And Then Celebrate
The latest presidential elections were held on 11 October 2015, when the incumbent President Alexander Lukashenko registered a first-round landslide victory with 83.5 per cent of the vote. His fifth term will end in the autumn of 2020. Continue reading Belarus 2020: Turning the Vicious Circle Into an Upward Spiral
The EU has been consistently very weak in dealing with post-Soviet countries (except the Baltic states) compared with the former Communist countries of Central Europe and Southeastern Europe. The latter knew exactly where they wanted to be after 1989: part of the Euro-Atlantic constellation. Joining the EU and NATO was their goal. It was about coming home to a reunited Europe. Continue reading The EU’s Benign Neglect Of Eastern Europe
Back in the 1990s and early 2000s, political elites in Central and Eastern Europe believed that their countries could be successful if they became more like Western Europe. This is no longer the case. The victory of Law and Justice (PiS) in Poland means that now three prime ministers in the Visegrad countries believe these differences between the East and the West are not there to overcome – but to build upon. The Visegrad countries now represent an alternative approach to democracy: more majoritarian, nationalistic and conservative, less European. Continue reading A New Division Between Eastern And Western Europe?
Armenia, located at the crossroads between Asia and Europe, has often been a victim of centrifugal forces from the centres of gravity it is surrounded by. Roman and Persian armies frequently met on Armenian highlands in fierce battles already in the first centuries of the new era. Having had one of the most tragic pages in the nation’s history in 1915 when almost 1.5 million Armenians were massacred by Ottomans, Armenia was left with no choice but to join the emerging new Russian-led empire of the 20th century — the Soviet Union. Continue reading Europe Needs To Be More Proactive In Embracing Armenia
The West cannot protect Ukraine militarily, but it could partially compensate Russia’s targeted subversion of the Ukrainian business and investment climate through a well-publicised and liberally operating guarantee fund aimed at insuring FDI against political risks. This would concern mainly Ukrainian regions threatened by military destruction (as has occurred in the combat zones), arbitrary expropriation (as has occurred in Crimea) and coercive measures enforced by the threat of force (as has occurred in the separatist-controlled Donbas areas). The local impact, model function and signal effect of increasing foreign investment in Ukraine’s hinterlands would accelerate the country’s modernisation and integration into the global economy. Continue reading Could the West At Least Help Ukraine To Insure FDI Against Political Risks?
Somewhere in Romania, a few days before the Christmas of 1989, there was a 10 year old girl whose mother came home from work early one day, told her and her sister to pack a few things, and as soon as their father had come home, they all left to stay with some friends for a little while.
What you need to know about the GREAT London Food Scene in 5 minutes……
We met up with Adrian and his friends and we went on tour round Clerkenwell, Smithfield and a whole area inspired by the arts and media scene. Before we do that we took stock of what is now arguably the GREATEST food cities in the world – London! I want to share what we discussed so here we go…. Continue reading The GREAT London Food Scene
I’d just like to make it quite clear this post is not about cheese! I am simply using the absence of GREAT British cheese in Poland as a synonym for a total lack of fine, specialty foods in this ravenous market. I am in the midst of a pasta, camembert and tapas revolution. Fast food is asserting its pole position and I have decided to take some action. Continue reading Where’s My Cheese? – The GREAT British Food Tour 2014