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Emerging Europe this week

Central Europe

Polish pharmaceutical company Biomed Lublin claims to have successfully completed the production of a drug for Covid-19. With the firm saying on September 23 that its initial research “has confirmed its efficacy”, it now plans to begin non-commercial clinical trials, and – if all goes well – Poland could be the first country in the world to have an effective drug capable of neutralising the SARS-CoV-2 virus at some stage over the next few months.

The leader of Poland’s ruling Law and Justice (PiS) party, Jarosław Kaczyński may take over supervision of the powerful justice ministry, officials said on Thursday, as PiS and its allies in government hold talks to avert a breakdown of their three-party coalition. The move could herald some softening of the government rhetoric over Poland’s opposition to gay rights and on relations with Brussels, issues at the heart of the internal rivalries and disagreements among the country’s ruling conservatives. If the emergency talks fail it could force PiS to govern as a minority administration or even trigger an early election.

One of the largest Czech media groups, Economia, has pledged to donate 200,000 euros to a new independent Hungarian website called started by former journalists of website Index, who quit en masse in July citing government pressure. Index has been the largest media organisation in Hungary that is critical of the government, and almost its entire staff resigned over what they called an “open attempt to exert pressure” on the site after the owner sacked their editor-in-chief.

Moscow on Thursday expressed regret at Bulgaria’s decision to declare two Russian diplomats ‘persona non grata’ and promised details on retaliatory measures at a later date, the foreign ministry said in a statement. Bulgaria on Wednesday said it had expelled two Russian diplomats who prosecutors suspect were involved in spying, giving them 72 hours to leave the Balkan country, a move the Russian Embassy in Sofia described as “groundless”.

Romania’s parliament voted on Tuesday to raise all state pensions by 40 per cent, undoing a smaller hike by the centrist minority government and opening the way for potential ratings cuts two months before a parliamentary election. The centrist minority government of Prime Minister Ludovic Orban, which has raised pensions by 14 per cent and has tried to curb other social spending initiatives by opposition lawmakers will challenge Tuesday’s hike in the Constitutional Court. The 40 per cent increase was first approved last year by the then ruling Social Democrats, which remain parliament’s biggest party, even though their finance minister at the time warned the stretched budget could not accommodate the higher spending.

The Romanian unit of Ford Motor Company said on Thursday that it had started production of the Ford Puma ST crossover (pictured above) at its plant in Craiova. The Ford Puma ST is the sport version of the subcompact crossover Puma and the first Ford performance model produced in Romania. Ford started producing the Puma crossover model in Craiova in October 2019, following a 200 million-euro investment in the assembly line. In October 2017, the company started EcoSport SUV production at Craiova following another 200 million-euro investment.

The European Commission this week approved the proposed acquisition of Slovenian retailer Mercator by Croatia’s Fortenova Group, successor to the collapsed food-to-retail concern Agrokor. The Commission said in a statement that the transaction will not harm competition in the European Economic Area, considering that both Fortenova and Mercator are active in the supply of daily consumer goods, with the former currently active in Croatia and Slovenia, and the latter primarily located in Slovenia, with a significant presence at retail level where Fortenova is not active.

Eastern Europe

Alexander Lukashenko is not the legitimate president of Belarus, the European Union said on Thursday, saying his abrupt swearing-in the previous day went directly against the will of the people. The swearing-in ceremony accelerated EU plans to boycott Lukashenko following a disputed election on August 9, as the European Parliament had earlier decided not to recognise the veteran leader from November, when his term as president was due to end. “The so-called ‘inauguration’ … and the new mandate claimed by Alexander Lukashenko lack any democratic legitimacy,” the EU’s 27 states said in a statement.

Ukraine has begun a large military exercise in response to the Caucasus-2020 drills in neighbouring Russia, aiming to show the preparedness of its army to repel any attack from Russian soil, the Ukrainian military said on Wednesday. Around 12,000 servicemen and dozens of armoured vehicles were taking part in the land-based drills, part of broader exercises including naval forces in the Black Sea. Last week, Ukraine and the United States held joint military exercises a few days after Russia began military drills together with forces in neighbouring Belarus.

Armenia’s Ministry of Education, Science, Culture and Sports this week announced that it has significantly expanded funding for the teaching of Armenian and other Armenia-related subjects abroad. In 2020-21 academic year, teaching will be expanded to 10 institutions across eight countries: Czechia, Romania, Italy, Austria, Germany, Egypt, Argentina and Russia. The ministry says that the new funding will boost international interest in Armenian culture and promote the preservation of Armenian values among local Armenian diaspora communities.

Turkish energy imports from Azerbaijan via the Trans-Anatolian Gas Pipeline (TANAP) increased by over 25 per cent compared to the same period last year, it was reported this week. Azerbaijan’s Ministry of Energy said that Turkey imported over seven billion cubic meters (bcm) of natural gas, of which 2.8 bcm was carried through TANAP. The 1,850-kilometre TANAP carries Azerbaijani gas from the Shah Deniz-2 field in the southern Caspian Sea to Turkish, Georgian and European markets.

North East Europe

Estonia’s Ministry of Defence has signed an agreement with the US Army that will enable the two countries to conduct future collaborative science and technology efforts in cyber defence. The Command, Control, Communications, Computers, Cyber, Intelligence, Surveillance and Reconnaissance (C5ISR) Center – a component of Army Futures Command’s Combat Capabilities Development Command – and the Estonian ministry of defence will establish a multi-domain operations, cyber domain working group to identify opportunities for interoperability experimentation and demonstrations, the US Army said in a statement.

Lithuania announced on Wednesday that it would purchase a possible vaccine against Covid-19 via the European Commission’s joint procurement mechanism. The country also said that it would diversify purchases from different manufacturers selected by the Commission and with which the Commission had already reached preliminary vaccine purchase and sale agreements. “We will not take risks by guessing which of the companies currently leading in clinical trials will be the first to develop the vaccine,” said Prime Minister Saulius Skvernelis. “If we do that, we may be left without any vaccine, which would be a real tragedy for Lithuania.”

South East Europe

The US confirmed this week that it plans to sign a memorandum of understanding with Serbia on the development of a secure 5G network infrastructure as part of Washington’s efforts to limit China’s expansion in the sector. “5G MOU’s are being planned with Ukraine, Georgia, and Serbia, to gain commitment from these partner countries to avoid using prohibited technologies,” said Acting Assistant Secretary of State in the Bureau of European and Eurasian Affairs Philip Reeker. In 2019, Serbia’s finance ministry said China’s Huawei expressed interest in cooperating with Belgrade on the development of a 5G network in the country.

An international tribunal investigating war crimes committed during Kosovo’s 1998-99 independence war has arrested its first suspect, a former commander of separatist fighters. The Kosovo Specialist Chambers, based in The Hague, said the former Kosovo Liberation Army commander Salih Mustafa was arrested based on a “warrant, transfer order and confirmed indictment issued by a pre-trial judge”. The court’s statement did not identify the charges on which he was indicted. The court said Mustafa would be transferred to its detention facilities in The Hague and “appear before the pre-trial judge without undue delay”. He is the first ethnic Albanian to be arrested by the tribunal on war crimes charges arising from the conflict.

Montenegro’s total budget revenues declined 22.9 per cent in the year to July, to 134.2 million euros, according to data released this week by the country’s central bank. Expenditure under the consolidated budget fell 1.5 per cent year-on-year in July, reaching 190.2 million euros, central bank showed.

Albania’s government plans to increase the minimum gross monthly wage in the country by 4,000 leks to 30,000 leks (around 240 euros), Prime Minister Edi Rama said this week. The increase apply to both the public and private sector, Rama confirmed on Wednesday. The Albanian government last increased the country’s minimum wage – to 26,000 leks – almost two years ago.

The European Union this week donated 900,000 euros worth of protective masks, ECG devices and other medical equipment to Bosnia and Herzegovina. The Head of EU Delegation and EU Special Representative Johann Sattler said that “over 30 tons of protective equipment and 40 ECG devices were donated today, for institutions in all parts of Bosnia. It is important that we have enough supplies. Equipment stocks are important because we do not know what autumn and winter will bring and it’s uncertain how long the crisis will last.”

Central Asia

Uzbekistan is turning to its massive gold reserves to help fight its way out of an economic impasse brought on by the coronavirus pandemic and has, in doing so, become a global leader in sales of the precious metal. The Uzbek State Statistics Committee revealed this week that the country had exported 5.8 billion US dollars of gold in the first eight months of this year, half of exports-based revenue. Uzbekistan exported 4.9 billion US dollars worth of gold over the whole of 2019.

Remittances from Russia to Kyrgyzstan have grown sharply over the past two months, exceeding 2019 levels, the National Bank of Kyrgyzstan reported this week. In July, Kyrgyz citizens in Russia sent 244 million US dollars back home – in July of last year the figure was 219.8 million US dollars). Russia accounts for 98 per cent of all remittance transfers to Kyrgyzstan. Some estimated put the number of Kyrgyzstanis working in the Russian Federation at more than one million.

Turkmenistan’s authoritarian government is failing to deal with serious food shortages and spiralling prices, exacerbated by the coronavirus, two rights groups said on Wednesday. US-based Human Rights Watch monitor and the Turkmenistan Initiative for Human Rights said “shortages of subsidised food, accelerating since 2016, have worsened, with people waiting hours in line to try to buy more affordable food products”. In many cases shoppers are “turned away empty-handed,” the groups said.

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