Moldova: Good Grades, but Could Try Harder

Author(s): Anita Sobják / Language(s): English Publication Year: 0

This section presents how budget support has been used in Moldova. In this country, several budget support programmes were launched in the years 2007–2013. Currently, there is one implemented operation in social assistance, five operations ongoing in the health, water, rural development, energy and justice sectors, and two new ones planned for launch on visa liberalisation and vocational education. The total amount of money planned for these eight operations (including the two newest ones still under preparation) is €332.2 million, of which some 52% has already been disbursed. Sector budget support has been the main EU assistance tool in Moldova, making up about 74% of the overall financial envelope proposed by the National Indicative Programme (NIP) for 2007–2010 (€209.7 million) and approximately half of the budget in the NIP for 2011–2013 (€273.14 million). Such a contribution looks particularly impressive if compared to the state budget of Moldova, of which it represents about 4–5% (the highest contribution among the EaP countries). Moldova has obtained additional resources under the “more for more” principle (€28 million).

Georgia: A Bright Spark Struggling with the Homework

Author(s): Elżbieta Kaca / Language(s): English Publication Year: 0

This section presents how budget support has been spent in Georgia. Budget support expenditures amounted to €258 million in 2007–2013 and made up 60% of Georgia’s national budget. This sum consisted of €216 million planned for budget support, including €49 million allocated under the “more for more” rule to some operations and the rest for technical assistance and other grants. In this period of time, 12 programmes were planned, out of which two projects were finalised, six are still under implementation, and four are in the planning process. The majority of the financial resources have been disbursed, as the level of EU conditions met for each tranche hovered around 90%. The EU de-committed only €2.5 million as Georgia had not fulfilled some EU conditions due to changes in the government’s political priorities.

Armenia: Butter Wouldn’t Melt

Author(s): Konrad Zasztowt / Language(s): English Publication Year: 0

This section presents how budget support has been used in Armenia. In 2007–2013, several budget support operations were implemented in Armenia for an overall sum of €134.9 million. The programmes have seen 85% of targets achieved on average. Some delays in paying the tranches took place when specific conditions were not achieved. Such cases are not publicized by the EU delegation, probably in order not to strain cooperation with the government. In terms of management, the Armenian Ministry of Economy is the major coordinator, while on the EU side the delegation manages the process, both in its operational and financial aspects, with a staff consisting of 7–8 people. The programming usually takes 1–2 years, while implementation of budget support operations usually lasts 3-4 years. The programmes are helped by a set of all of the usual TA tools.

Azerbaijan: Just Boxticking

Author(s): Konrad Zasztowt / Language(s): English Publication Year: 0

This section presents how budget support has been used in Azerbaijan. The EU has planned relatively modest financial resources for Azerbaijan in the scope of budget support. This is not only due to the fact that it is the wealthiest country in the EaP region and can finance its own ongoing reforms but also because of its limited absorption capacity and the execution of the “more for more” rule. Azerbaijan has oil and gas reserves that provide significant revenue to the budget and it has a relatively stable economy. This, unlike other EaP countries, implies no great interest on the government’s behalf for financial assistance from the EU. Moreover, contractual relations with the EU are not as dense as, for instance, with Georgia or Moldova. Azerbaijan does not aim to integrate economically with the EU, therefore the scope of potential legal approximation is limited. In the years 2007–2013, four operations took place of the overall planned amount of €60 million (which is almost half of all EU assistance planned in Azerbaijan in this period), while only one operation in energy was finalised.

Poland: The (Success) Story So Far

Author(s): Anita Sobják / Language(s): English Publication Year: 0

In the midst of a whole series of accelerated changes in and to the EU, Poland’s role in the Union has undergone a spectacular evolution. For anyone who had not earlier noticed this process, last year’s crisis-dominated European debates certainly made it clear. As only a narrow circle of Member States seem to be setting the pattern and rhythm for shaping the future track of the EU, Poland has so far been able to keep up with them. Yet with the change of both the domestic and European setups, Poland needs to rethink its strategy to maintain its European profile. For this, a number of questions need to be clarified: what are the roots of Poland’s recent advancements? What is the Polish vision of the future Europe and where does it see itself in it? What are the potential obstacles standing in Poland’s way of reaching its objectives? What are the stances of other Member States towards the Polish project?

EMU and Economic Policy: Prospects for an Inclusive Recovery?

Author(s): Paweł Tokarski / Language(s): English Publication Year: 0

Despite the current considerable relief in the development of the Eurozone sovereign debt crisis, predicting the EU’s economic future can be a risky venture. Media continue ruthlessly to give new doses of pessimistic information: potential future bailouts, weakening economic conditions, toppling governments, and the growing risk of social unrest. Therefore, any attempt to define more precisely what happens in a week, month or a year, especially in economic terms, carries a high risk of negative verification or at least randomness of judgment. However, some long-term processes do support the attempt to sketch out the upcoming economic challenges for the EU in the next several decades. These challenges can be described in two blocks. First, the consequences of the sovereign debt crisis for the EMU’s architecture, and second, the question of growth and competitiveness.

Political Union: Can the Euro-outs Rely on the Community Institutions?

Author(s): Agata Gostyńska / Language(s): English Publication Year: 0

The debate about a political union, on standby mode since the fiasco of the Treaty establishing a Constitution for Europe, has been reinvigorated by EU actions to fight the sovereign-debt crisis. The recent shift in the division of competences strictly reserved for national parliamentary oversight and concerning sensitive matters of budgetary policy meant the question would not remain untouched, especially given, first, the insufficient democratic legitimacy and accountability of the Eurozone decision-making process, second, insufficient political leadership to take the EU out of crisis, and third, a lack of political consensus on measures to tackle the crisis, reinforcing the tendency to opt for integration at different speeds.

Financing: Who Pays for the Catch-up States?

Author(s): Patryk Toporowski / Language(s): English Publication Year: 0

Without Community financing it is difficult to imagine how the EU would function. Money legitimises the decisions made at the EU level, meaning that a focus on the current system of financing and its likely development is key to the question of EU-wide cohesion. The picture, however, is becoming increasingly blurred with the weakening of democratic control of the process: the EU budget—controlled by Parliament, and fiercely negotiated by the Member States—has been relegated to the status of just one of the sources that finance EU activities such as substitutes for the Eurozone budget, other funds, and money under the control of the ECB, EBI and others. It is difficult to say whether such a complex system will help the EU meet challenges such as increasing competitiveness, emerging from the financial crisis and hastening long-term economic growth. A more suitable solution lies in a system transparent to the decision-makers in all Member States and to their citizens, which may react to unpredicted events.

Neighbourhood Policy: “Let Economics Do the Job”

Author(s): Elżbieta Kaca / Language(s): English Publication Year: 0

As a foreign policy player, the EU has the clearest priorities in its direct neighbourhood: it must shield itself from numerous threats, such as irregular migration flows, conflict and energy insecurity. However, its political leverage over the region has weakened even as a new union diplomacy has been created. The reason lies in the fact that EU policy tools do not meet reality and changing trends. The European Neighbourhood Policy was created in 2004, a time when the EU was self-assured due to the successful accession of 10 new Member States and wanted to impose upon its neighbours its political vision by using strategies replicating enlargement. It is no longer the same story. Internally, the EU integration model is being rethought and is developing into multi-speed formats from which the 2004 members find themselves rather marginalised. No further accession commitments are likely to be undertaken by the Member States in the medium term beyond those already made to the West Balkans.

Annexes

Author(s): Author Not Specified / Language(s): English Publication Year: 0

France after the Elections and the Future of the European Union

Author(s): Olga Cichowlas / Language(s): English Publication Year: 0

The outcome of May’s French presidential elections reflected the will for change in France, in relation to both domestic and EU policies. Like numerous Member States, France is currently economically weak and requires extensive reform. Simultaneously, the European Union is experiencing a triple crisis in the economy, governance and political legitimacy. Low mobility and varying degrees of competitiveness between the countries that share the same currency sap the Union’s resources; inter-governmentalism, introduced as a replacement for the community method, has failed as a mode for solving the eurozone crisis; and European citizens increasingly view the EU with scepticism. In this context, François Hollande’s victory held out the promise of an improved political atmosphere for the discussion of EU policies and a novel means to deal with the eurozone’s long-standing financial crisis. By opening Franco-German cooperation to other Member States and broaching the debate on the EU’s “pro-growth agenda,” the French Socialist president is trying to reshape policies on both a national and European scale. François Hollande’s efforts to distance himself from his predecessor, Nicolas Sarkozy, are particularly evident in his attitude towards the financial crisis and the future of the EU.

CESTOVNÍ RUCH V ČESKÉ REPUBLICE OD POČÁTKU EKONOMICKÉ KRIZE

Author(s): Alena Hellerová / Language(s): Czech Publication Year: 0

Návštěvnost ubytovacích zařízení v období před začátkem světové ekonomické krize. Vrchol příjezdového cestovního ruchu, dopad krize na frekvenci a délku pobytu zahraničních návštěvníků, pokles tržeb českých ekonomických subjektů. Vývoj domácího cestovního ruchu, jeho specifika v době krize i před ní. Vývoj výjezdového cestovního ruchu, vliv na platební bilanci ČR.

Анализ на показатели за патентна активност и основни икономически показатели на световно известни компании в условията на COVID пандемията

Author(s): Alexander Alexandrov / Language(s): Bulgarian Publication Year: 0

This report aims to examine whether the differences in the economic status and innovation development of leading companies from sectors that have gained and sectors that have lost as a result of the COVID pandemic are present, as public expectations have been. This verification is carried out by comparing the growth rates of several main economic indicators and patent activity. The results expected by the author largely coincide with public expectations, but history has shown that large companies, even in the most difficult times, driven by their creativity, find a way out of the crisis by innovating their activities.

Georgia's Convergence with the European Union: Export Challenges

Author(s): Nino Papachashvili,Tamta Mikaberidze,Marine Tavartkiladze / Language(s): English Publication Year: 0

The paper aims to identify Georgia's export challenges in the context of Deep and Comprehensive Free Trade Area (DCFTA) and to present the theoretical findings for the assessment the results of the Georgia’s convergence to the EU under the free trade conditions. In order to assess its impact on export, the paper provides a comparative analysis of the results of the sociological survey of Georgian exporters conducted in 2016 and 2022 and also, an experimental study on the impact of institutional distance on export. Among the important findings are: exporters with more than 5 years of experience (mostly considering sanitary and phytosanitary standards) were positively affected by institutional proximity and export flows are in positive correlation with the state effectiveness (according to the WGI) in partner countries.

What Happened to Bulgaria and the Eurozone

Author(s): Yanko Hristozov / Language(s): English Publication Year: 0

The topic of the adoption of the euro in Bulgaria is as well-worn as it is relevant with each subsequent year because the country is on the threshold of the euro zone, but something is still missing. Expectations for admission at the beginning of 2024 turned out to be impossible because Bulgaria did not meet the requirements for inflation levels, although it was exemplary in this indicator in recent years. It turned out that all efforts were in vain, but there is still hope that within one to two years the economic indicators will stabilize and the country will become a full member of the Eurozone. The purpose of this report is to examine the state of convergence indicators in Bulgaria, Croatia and Romania for the period 2020-2022 and to try to trace the reasons for our not being admitted to this monetary union, which is so important to us.

Transition to Payments for Russian Gas in Rubles: One Step Beyond

Author(s): Vasily Tkachev / Language(s): English Publication Year: 0

Russia has long dominated in the supply of gas to many European countries, at the same time being heavily dependent on the foreign currency revenues from gas exports to cover its foreign currency demand. Therefore the Russia-Europe gas trade was considered mutually beneficial. Geopolitical tensions of spring 2022 changed this status quo. Russia required gas to be paid in rubles. The paper lays out an analytical framework for understanding the reasons and consequences of this drastic move based on the combination of macro- and micro-level challenges. We argue that the new mechanism of the Russian gas payments introduced in 2022 should be considered transitional to a potential future radical overhaul of the payments for Russian exports.

Convergence of the GDP Structures of CEE Countries to the Euro Area

Author(s): Nikolay Velichkov,Dimitar Damyanov D. / Language(s): English Publication Year: 0

This paper attempts to find out to what extent CEE countries are converging towards the euro area in terms of their GDP structures. To achieve our objectives, we use a beta-convergence econometric approach that relies on fixed effects panel data estimation. We estimate a simple equation for all GDP structures and compare the results between two groups of countries. The results obtained from the empirical analysis indicate that there is a process of beta convergence in the GDP structures of the CEE countries towards the euro area. The intensity of this process shows certain specifics both in relation to the countries in and outside the euro area, and in relation to individual structural components. The increasing structural similarity does not exclude the manifestation of certain negative influences on macroeconomic dynamics, which could reduce the intensity of the real convergence process.

Some Speculations on Measurability with WERY (War Economic Recovery Index)

Author(s): Elena Simeonova / Language(s): English Publication Year: 0

The paper proposes and conceptually outlines an author’s composite indicator for measuring from political risk perspective the economic recovery after the current Russian-Ukrainian war. The core assumption is that the economic recovery is inevitable according to the general law of systems and the cyclicality. The aim is by combining and amending available measuring tools to propose new derivative which gives a different prospective economic recovery measurement. As a measurement tool, WERI is not yet complete and will be subject to future refinement and development. It should be perceived as a kind of manifestation of the author's passion for measurement and the construction of measuring tools.

Innovation in the Financial Sector (FinTech): Paradigms, Causes, Effects and Perspectives

Author(s): Ruxandra RÎMNICEANU / Language(s): English Publication Year: 0

The changes and evolution of the international and domestic financial-banking system, in the context of globalization, after the financial crisis of 2008, determined the emergence of global, virtual banks, megabanks, financial groups that use disruptive technologies and technological innovations. The first FinTech Action Plan (technology-based innovation in the field of financial services or financial technological innovations) of the European Union mark, as well, the first step circumscribed to the EU Digital Finance Strategy, in order to allow the expansion of innovative business models, but without forgetting to strengthen cyber security and to increase the degree of integrity of the financial system. In this context, however, it is important to take into account the variety of the institutions and the technologies in the countries participating in the Single Supervisory Mechanism (SSM), because the FinTech banks capture the different activities of the credit institutions in different jurisdictions to be closer to the customers and the investors and, in the same time, to expand the area of supervision of the problems related to the emergence of FinTech, because they exceed a sector of the economy or a geographical area and involves multiple financial-banking supervisory and regulatory institutions, belonging to various sectors.

Impact of Macroeconomic Factors on the Value of Loans Granted to Non-Financial Enterprises by Monetary Financial Institutions in the Euro Area Countries

Author(s): Agnieszka Anna Huterska,Robert Huterski,Justyna Łapińska / Language(s): English Publication Year: 0

The use of low interest rates by the European Central Bank as an instrument to counteract the effects of the financial crisis in 2008 seemed to create favorable conditions for a significant increase in demand from non-financial corporations for loans granted by monetary financial institutions. Indeed, the demand for loans in individual euro area countries reported by non-financial corporations is shaped by both conditions common for the entire euro area and numerous factors reflecting the specificity of a given national economy. The aim of the article is to assess the impact of key macroeconomic factors on the size of lending to non-financial enterprises by monetary financial institutions in the euro area countries. The macroeconomic factors examined include GDP growth rate, unemployment rate, wage growth, inflation and the long-term interest rate according to the Maastricht criterion. The survey covers the euro area countries in 2008-2015, without Estonia and Latvia due to incomplete data for these countries for the above period. The data comes from the databases of the European Central Bank and Eurostat. For the purpose of assessing the above-mentioned factors, an econometric model based on panel data will be created.