News & Analysis

Emerging Europe this week

Central Europe

Polish postal locker provider InPost is seeking to raise as much as 3.2 billion euros for shareholders with its initial public offering in Amsterdam, as its business is bolstered by an online shopping boom set off by coronavirus-induced lockdowns. InPost is marketing 175 million existing shares at 14 euros to 16 euros apiece, the company said in a statement on Thursday. The sale would value the company, which isn’t raising any money in the offering, at seven to eight billion euros. Selling shareholders include Advent International, Templeton Strategic Emerging Markets Fund and PZU Fundusz. The offer period is expected to run through January 28, with trading scheduled to begin on Euronext Amsterdam the following day.

Hungary’s economy could recover very quickly once restrictions to contain the Covid-19 pandemic are lifted, Marton Nagy, Prime Minister Viktor Orbán’s senior economic aide said on Tuesday. Nagy told private broadcaster InfoRadio in an interview that the economy could expand by five to six per cent this year and possibly accelerate to the six to seven per cent range in 2022, when the country votes in a parliamentary election.

Hungary’s government meanwhile, which has made hostility to LGBTIQ people a central part of its right-wing agenda, ordered a publisher on Tuesday to print disclaimers identifying books containing “behaviour inconsistent with traditional gender roles”. The government said the action was needed to protect consumers from being misled, after Labrisz, a Lesbian group, published a fairytale anthology, Wonderland Is For Everyone, which included some stories with gay themes. LGBTIQ rights groups said they would sue the government over the disclaimer requirement, which they called discriminatory and unconstitutional.

Czech lawmakers on Wednesday approved legislation requiring shops to sell mainly domestically made food that would benefit Czech producers, potentially putting the country on a collision course with the European Commission over EU single market rules. The measure stipulates that shops larger than 400 square metres must as of next year offer at least 55 per cent of items that can be locally produced like fruit, vegetables, milk or meat. The proportion would rise gradually to 73 per cent in 2028. The quotas are a part of a bill aimed at preventing double standards in food, an issue that some eastern members of the European Union have pursued for years, contending that inferior food products unwanted by consumers in richer western EU states were being sold in poorer eastern markets.

Romanian antitrust authorities have fined 31 timber producers operating in the country the equivalent of 26.6 million euros for forming a ‘wood cartel.’ Two Austrian companies netted sanctions of about 19.45 million euros. The Competition Council investigated 96 timber companies and found 33 had taken part in unfair competition practices from 2011 to 2016. Two of the firms have since closed. The highest sanctions were given to the local subsidiaries of Austrian groups Holzindustrie Schweighoffer and Kronospan which, the biggest players in the local timber industry

Financial and insurance group Eurohold Bulgaria said on Tuesday that it has received approval from the Energy and Water Regulatory Commission to acquire the assets of Czech energy group CEZ in Bulgaria for 335 million euros. “We can now proceed with the financing and completion of the deal,” Vasil Stefanov, head of mergers and acquisitions at Eurohold Bulgaria, said in a statement. The deal includes 67 per cent interest in power utility CEZ Distribution Bulgaria and power supplier CEZ Electro Bulgaria, as well as 100 per cent of the shares of the licensed electricity trader CEZ Trade Bulgaria, IT services company CEZ ICT Bulgaria, solar park Free Energy Project Oreshetz, biomass-fired power plant Bara Group, and CEZ Bulgaria.

Croatia’s registered unemployment rate edged up to 9.5% in December, from 9.3 per cent in November, the country’s statistical office said on Tuesday. In December, there were 159,845 unemployed people in Croatia, up 2.1 per cent month-on-month and 21.3 per cent year-on-year, the statistical office said in a statement. The Croatian economy, which relies heavily on tourism, has been severely effected by the Covid-19 pandemic. GDP fell 8.6 per cent in 2020, according to the World Bank.

Eastern Europe

Russia committed a series of human rights violations during its war on Georgia in 2008, the European Court of Human Rights ruled on Thursday, saying Moscow was responsible for the murder of Georgian civilians, and the looting and burning of their homes. In a landmark judgment, the court said the Kremlin was guilty of unlawfully rounding up ethnic Georgians and their subsequent “inhuman and degrading treatment”. This included the torture of Georgian prisoners of war and the expulsion of Georgian villagers from their homes in South Ossetia. The ruling comes 13 years after Russian forces invaded Georgia, provoking a bitterly-disputed five-day war. Russian forces continue to occupy one fifth of Georgia’s territory.

At least 15 people were killed on Thursday after a blaze tore through a residential home for the elderly in the eastern Ukrainian city of Kharkiv. Ukrainian President Volodymyr Zelensky described the incident as “a terrible tragedy” and said 33 people had been in the building when the fire broke out. Photos distributed by the emergency services showed smoke billowing from charred windows on the second floor of the building, while firefighters in heavy coats worked to assess the damage. Zelensky confirmed the death toll of 15 reported by emergency services, adding: “We all pray that there will be no more.”

Azerbaijan sees economic growth rebounding this year as it emerges from a Covid-19-induced slump and the war with neighboring Armenia that restored its control over formerly occupied territories, Economy Minister Mikayil Jabbarov said this week. Gross domestic product is forecast to increase by 3.4 per cent after contracting 4.3 per cent in 2020, Jabbarov said in an interview on Tuesday. “Our projections are more optimistic than those of the International Monetary Fund and the World Bank,” he said.

Moldova’s constitutional court threw out a law on Thursday that would have given special status to the Russian language, passed last month by parliament over the objection of the country’s newly elected president Maia Sandu. The law would have made Russian the language for communication between ethnic communities, and required the names of goods, services and medicines to be translated into Russian. The court ruled it unconstitutional. “The law presupposes giving the Russian language a status similar to the state language, which is not provided for by the Constitution,” said Domnica Manole, the head of the court.

North East Europe

Lithuanian MEP Viktor Uspaskich was expelled from the Renew Europe group on Wednesday after he referred to gay and trans people as “perverts” and “deviants.” Renew Europe’s leader Dacian Cioloș said in a statement that, “there is no place for homophobia in the Renew Europe family. We are deeply committed to safeguarding and expanding the rights of LGBTIQ people. Mr Uspaskich’s comments are incompatible with the values we hold dear and put himself outside of our family.” In a Facebook video posted on January 10, Uspaskich — who serves as leader of the Lithuanian Labor Party — said that in some European countries it is “dangerous” to be “a representative of a natural orientation.”

Lithuania emerged this week as the most likely co-host of the 2021 World Ice Hockey Championships, replacing Belarus which was stripped of its right to co-host the tournament on Monday. Belarus was due to co-host the championship with Latvia, however the International Ice Hockey Federation (IIHF) said that its council had decided to move the tournament from Minsk “due to safety and security issues that are beyond the IIHF’s control”. Lithuania’s Education, Science and Sports Minister Jurgita Šiugždinienė said on Wednesday that she has discussed the issue with her Latvian counterpart, and that Lithuania was “ready to help out”.

Estonia’s prime minister-designate Kaja Kallas moved closer towards forming a government this week, and said on Thursday that she hopes to take office on January 26. Kallas will lead a coalition comprising her Reform party, and the Centre party of Jüri Ratas, which together have a comfortable majority in Estonia’s parliament. Mr Ratas was forced to a resign two weeks ago following a corruption scandal involving members of his party. The Christian Democrats (Isamaa) and the far-right Conservative People’s party (EKRE), which propped up the government of Mr Ratas, will not form part of the new coalition.

South East Europe

Bosnian authorities should immediately provide adequate, winter accommodation for migrants and asylum seekers stranded in freezing temperatures in the northwestern part of the country, Human Rights Watch said this week. After a fire destroyed the temporary emergency camp in northwest Bosnia and Herzegovina on December 23, 2020, hundreds are housed in tents that do not meet basic humane housing conditions. “Hundreds of migrants and asylum seekers in northwest Bosnia are spending the winter in dire conditions because the authorities have repeatedly failed to address their basic needs,” said Lydia Gall, senior Europe researcher at Human Rights Watch. “Local, federal, and national authorities in Bosnia and Herzegovina should immediately take concerted urgent action to ensure that the migrants have access to winterized housing and the medical and other assistance they need.”

A Bosnian court on Friday convicted a former senior officer whose troops included Islamic volunteer fighters during the 1992-95 conflict of war crimes and sentenced him to 10 years in prison. The court ruled that wartime Bosnian Army Third Corps commander Sakib Mahmuljin did nothing to prevent crimes against Serb prisoners by the El Mujahedin unit. Mahmuljin had pleaded not guilty, with his lawyers insisting he had no real command over the unit that consisted of volunteers from the Middle East. The indictment said members of the El Mujahedin unit killed at least 55 imprisoned Bosnian Serb soldiers between July and September 1995 in the areas of Zavidovici and Vozuca, in central Bosnia.

Serbian victims of the 1999 NATO bombing of Yugoslavia this week filed claims against the alliance over its use of banned chemical weapons during the devastating air strikes. Lawsuits were filed in five cities – Belgrade, Novi Sad, Kragujevac, Niš and Vranje – on behalf of those killed and survivors who are suffering the long-term effects of the depleted uranium ammunition. Lawyer Srdjan Aleksic confirmed that a team of legal experts has been working on the cases and has submitted claims for at least 300,000 euros for each of the victims. Some 2,500 people, including 89 children, were killed and about 12,500 people injured in the bombings, which took place throughout the spring and early summer of 1999, and which were a response to Serbia’s ethnic cleansing campaign in Kosovo.

Montenegro’s parliament has approved changes to a controversial law on religion that has dominated politics in the Balkan country for more than a year. The amendments to the Law on Freedom of Religion were backed by 41 deputies in the 81-seat legislature in a January 20 vote that was boycotted by the opposition. The amendments repeal provisions that have been contested by the Serbian Orthodox Church, its supporters, and pro-Serbian parties. The original law, adopted in December 2019, required religious communities to prove property ownership from before 1918. Under the new amendments, the government needs to launch legal proceedings if it wants to dispute the ownership of any properties.

North Macedonia’s lawmakers have passed a bill that could pave the way for the Balkan country to hold its first census in almost 20 years this spring. The bill was adopted by a slim majority of 62 lawmakers in the 120-member legislature, with the right-wing opposition VMRO-DPMNE party boycotting the vote. The draft law was pushed by the Social Democrat-led government of Prime Minister Zoran Zaev, whose coalition includes ethnic Albanian parties. Skopje has not organized a census since 2002, with attempts to hold new population counts being hampered by political disputes over the size of ethnic minorities, particularly the ethnic Albanian community.

Albania says it is expelling a Russian diplomat for allegedly violating lockdown rules aimed at stemming the spread of the coronavirus in the Adriatic country. The Albanian government declared Aleksei Krivosheev “persona non grata” and required him to leave the country within 72 hours, the Foreign Ministry said in a statement on January 21, citing “repeated” violations of pandemic restrictions by the diplomat since April 2020. The ministry said senior representatives of the Foreign Ministry first addressed the matter with the Russia ambassador in Tirana, but the diplomat continued to break lockdown rules.

Central Asia

Azerbaijan and Turkmenistan have reached a preliminary agreement on the joint exploration of a once-disputed section of an undersea hydrocarbons field in the Caspian Sea believed to hold lucrative energy reserves. The Azerbaijani Foreign Ministry said on January 21 that President Ilham Aliyev and his Turkmen counterpart, Gurbanguly Berdymukhammedov, supervised the online signing of a memorandum on the mutual intention to jointly explore and develop the Dostluq (Friendship) undersea field. The undersea field was discovered by Soviet explorers in 1986. Experts estimate that the Dostluk hydrocarbons field contains natural gas and at least 50 million tons of oil.

Tajikistan said on Wednesday that it plans to reopen thousands of mosques that were closed last year due to the Covid-19 pandemic, citing the “normalisation of the epidemiological situation” in the country. The government information service Khovar said mosques will reopen across the country on February 1 but will face immediate closure if they fail to adhere to sanitary norms. The statement said worshippers should “strictly observe” hygiene rules and “use medical masks during collective worship …especially during Friday prayers”. Tajikistan has recorded just over a dozen new coronavirus cases and no deaths since the turn of the year, although some health experts have cast doubt over the statistics and testing is not widespread.

A senior official in Kyrgyzstan has revealed that “several thousand” people may have died as a result of the country’s Covid-19 outbreak – a far higher number than the almost 1,400 fatalities that have been reported to date. Speaking last weekend as she unveiled the preliminary findings of a government investigation into how foreign aid earmarked for the coronavirus crisis was spent, Deputy Prime Minister Elvira Surabaldiyeva said government officials severely hindered the response effort through coverups and corruption. “In the midst of the first wave of Covid-19, some officials withheld documents, which caused chaos with treatment and [distribution of] drugs. There was inside dealing, someone was making money off the pandemic,” Surabaldiyeva said.


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