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№055: From the Periphery to the Core? Central Europe and the Economic Crisis

Author(s): Anita Sobják / Language(s): English

As a new test case for the resistance of Central European economies, the Cyprus banking crisis has already renewed speculation that Slovenia could be the next Member State in need of a bail-out. While other states in the region have sounder public finances and banking sectors, each of them continues to be exposed to the on-going instabilities of the eurozone. More than four years into the economic crisis, the time is ripe for reflection on the changes that the region has undergone in this period. Principally, it can be seen that both the similarities and the differences between these economies have been brought to the surface. This, together with the future course of economic governance reform of the European Union, might further deepen intra-regional splitting in the future. Overall, however, Central Europe has a chance to improve its relative economic position in the EU in the mid to long run, as the region has weathered the crisis better than the EU average.

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Aftermath of the Maidan. Ukrainian society two years after the revolution

Author(s): Tadeusz A. Olszański / Language(s): English

Two years after the Revolution of Dignity, it is clear that hopes of a quick reconstruction and modernisation of the Ukrainian state as a political and institutional system have not been fulfilled. The resistance of the bureaucrats, politicians and oligarchs who make up the informal, corrupt systems has proven to be very strong, and the will of part of the political elite and the EU and the United States to implement the procedures they have suggested has proved insufficient. If not for the war and the economic collapse, which forced Kyiv to seek external financial assistance and political support, the modernisation of the state would have proceeded even more slowly and with yet greater difficulty.

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A game played according to Lukashenka’s rules: the political opposition in Belarus

Author(s): Tomasz Bakunowicz / Language(s): English

The Belarusian opposition is currently experiencing its deepest crisis since Alyaksandr Lukashenka took power in 1994. Following many months of negotiations, opposition leaders failed to select a joint candidate for the presidential election scheduled for 11th October. The failure of this latest round of talks has proven that not only is the opposition unlikely to threaten Lukashenka’s rule; it will not even be able to demonstrate to society that it could provide a genuine alternative to the present government.The presidential election in 2010 was a painful landmark for the opposition. The repression that accompanied the election has largely weakened political circles opposed to the government. Against this backdrop, the traditional internal problems of the opposition have worsened, such as its incapacity to reach agreement and develop a common, coherent operational strategy, the excessive ambitions of the leaders of particular groups, the low level of political maturity, mutual distrust and frequent personal conflicts. As a result the opposition has for years been unable to gain confidence in society and reach beyond the limited number (20%) of staunch proponents of democratic transformations. Given the fact that the Belarusian opposition is fragmented and lacks one clear leader, the readiness to support individual leaders does not exceed several per cent, according to independent surveys. Lukashenka’s present political opponents rather resemble a group of dissidents, than constitute a genuine opposition to the government. The crisis and helplessness of opposition circles are more acute given Belarus’s internal situation since for the first time Alyaksandr Lukashenka will run his presidential campaign in the context of the economic crisis and a forecasted fall in GDP.

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Russian nationalists on the Kremlin’s policy in Ukraine

Author(s): Katarzyna Chawryło (Jarzyńska) / Language(s): English

On the Day of National Unity, celebrated in Russia every 4 November, members of nationalist movements organise a so-called Russian March in Moscow. In 2014 the nationalists took part in three competing marches, which illustrated the divisions present in these circles. The reason for these divisions is a difference of opinions on the policy pursued by Russia towards Ukraine. The pro-Russian, Russia-inspired protests in south-eastern Ukraine organised under the slogan of ‘defending’ the Russians living there (the ‘Russian Spring’) and the annexation of Crimea were received enthusiastically by the nationalists and contributed to a consolidation of these circles around the Kremlin which lasted for several months. In spite of this, opinions on the Russian government’s current policy towards the so-called Donetsk and Lugansk People’s Republics have been varied. The most radical groups have demanded that military support be offered, and that the ‘confederation’ of these republics, the so-called ‘Novorossiya’, should be officially recognised. They consider the Kremlin’s policy to have been too soft, and see the signing of the peace agreements in Minsk as a betrayal of the interests of the Russians. For the remaining representatives of nationalist circles, who are not so numerous and are less visible in the public sphere, finding a solution for Russia’s domestic problems remains a priority. Some of them oppose the very notion of Russia’s involvement in the conflict.

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Ukrainian economy overshadowed by war

Author(s): Tadeusz Iwański / Language(s): English

Ukraine’s financial results over the past few months prove that the economic crisis which has been ongoing since mid 2012 has exacerbated. According to data from the Ukrainian Ministry of Economy, Gross Domestic Product for the first six months of 2014 shrank by 3%. In the second quarter, it fell by 4.6%[1] and may further be reduced by as much as 8–10% over the year as a whole. After the first six months of this year, the balance of payments deficit reached US$4.3 billion. After deflation last year, prices grew by 12%, and the hryvnia dropped to a historic low. Although a surplus was seen in Ukrainian foreign trade in goods and services, reaching over US$3 billion at the end of June, its trade volume is shrinking. The main reason behind this deteriorating situation is the actions taken by Russia. Moscow has been fomenting the conflict in Donbas since April, has consistently imposed embargoes on imports of more and more Ukrainian goods and cut gas supplies to Ukraine in June. This has forced the government to focus on the current management of state finances and to carry out budget sequestration twice this year. The government has also used this as an excuse not to implement necessary systemic reforms. The increasing share of military expenditure, the shrinking exports (-5% in the first six months), including in particular to Russia, which until recently was Ukraine’s key trade partner, and the rapid fall in industrial production and investments have all made the situation even worse. All that saves Ukraine from an economic collapse is the loan from the International Monetary Fund and higher taxes, which allows the government to maintain budget liquidity. However, if the conflict in Donbas lasts longer and if Russia continues its economic blackmail, including withholding gas supplies, the economic crisis may prove to be long-lasting.

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Gagauzia: growing separatism in Moldova?

Author(s): Kamil Całus / Language(s): English

On 2 February, the regional authorities in Gagauzia - an autonomous region of the Republic of Moldova - carried out two simultaneous referenda. In the first, local residents were asked to declare their support for the country’s integration either with the EU or with the Moscow-led Customs Union (CU); the second referendum sought their opinion on the draft law "On the deferred status of the Autonomous Region of Gagauzia". Under the proposed legislation, if Moldova were to lose its sovereignty (for example, through the unification of Moldova and Romania, or even as some politicians have argued, through Moldova’s further integration with the EU), the autonomous region would automatically become the independent Republic of Gagauzia. As expected, the outcome of the vote has shown overwhelming support for both the CU and for the draft law. According to the figures released by Gagauzia’s Central Electoral Commission, 98.5% of the voters supported Moldova’s integration with the Customs Union, while 98% voted in favour of the ‘deferred independence’ bill. Support for closer integration with the EU was marginal, reaching just over 2%. Despite the one-sided outcome of the referendum, there is no reliable evidence to suggest that the ballot was rigged. It should also be noted that voter turnout was very high, reaching about 70%. Representatives of the Moldovan Central Electoral Commission, however, believe that the figure may have been artificially inflated by excluding many of the voters currently residing abroad from the count.

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Euro 2012 – Ukraine’s wasted opportunity?

Author(s): Sławomir Matuszak,Tadeusz A. Olszański / Language(s): English

Ukraine saw hosting the European Football Championship as an important project in terms of image-building and modernisation from the very beginning. The country’s government assumed, during the presidency of Viktor Yushchenko and Viktor Yanukovych alike, that Euro 2012 would provide a major impulse for economic development and show that the young Ukrainian state was capable of successfully preparing one of the most important sport tournaments in the world. Although UEFA’s decision raised eyebrows both in the West and in Ukraine, after initial delays the work gained momentum and, shortly before the championship, Ukraine’s progress could be evaluated as being satisfactory at the least. As part of the preparations, four stadiums were built or modernised, four airports in the host cities were developed and 1,600 km of roads were repaired or built from the ground up. The investments have doubtlessly contributed to an improvement of the infrastructure in Ukraine, but it would be rather inaccurate to say that Euro 2012 has brought about a real modernisation of the country. The funds allocated for the preparations were relatively modest, and part of them was spent in a non-transparent way, which gives rise to suspicions of corruption.

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European Neighbourhood Policy Package – Conclusions for the Eastern Partners

Author(s): Rafał Sadowski / Language(s): English

In 2011 the European Union began a process aimed at reforming its policy on the Eastern and Southern Neighbourhood. The change in circumstances in neighbouring countries following the Arab Spring, along with the lack of significant progress regarding Eastern Europe’s integration with the EU, formed the main driving force behind this process.The prime objective of the changes to the European Neighbourhood Policy (ENP) was the need to introduce new incentives for partner countries to modernise and integrate more closely with the EU Another aim was to increase the flexibility of EU instruments (by adapting them to the specific context of each partner state). One year later, on 15 May 2012, the European Commission and the EU High Representative for Foreign Affairs and Security Policy published the European Neighbourhood Policy Package which reported on the progress made in the implementation of the ENP over the preceding year and set out the aims and Action Plans for 2013.

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Beijing’s mistaken offer: the ‘16+1’ and China’s policy towards the European Union

Author(s): Jakub Jakóbowski,Marcin Kaczmarski / Language(s): English

Despite China’s growing political and economic involvement in Central and Eastern Europe (CEE), Beijing has not succeeded in making an attractive offer to the region’s EU member states – who make up the majority of the participants in the ‘16+1’ format. The financing model proposed by China, based on loans and favouritism towards Chinese companies, has proved to be unsuitable to local conditions. Therefore, the much-discussed infrastructure cooperation has not even started. Consequently, Beijing has failed to obtain the political tools which could have weakened policy coherence at the European level, or even divided the EU. In this context, the allegations appearing in the public debate that the countries of the ‘16+1’ have been fostering divisions within the EU seem to be substantially incorrect. As long as Central and Eastern Europe remains capable of pursuing its economic and developmental interests within the architecture of the European Union, the political risks coming from China’s capital inflow will remain limited. At the same time, the EU has room to facilitate constructive economic relationships between China and the Central European region. For example, it could reduce Beijing’s political pressure on CEE to use the specific, Chinese model for financing and building infrastructure. Cooperation at the EU level could also help to adapt the Chinese offer to the European business and regulatory environment.

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Wolne Państwo Bawaria i jego partia: CSU przed sprawdzianem wyborczym

Author(s): Kamil Frymark / Language(s): Polish

The Christian Social Union (CSU) has ruled Bavaria continuously for sixty years. The CSU’s domination of the province’s political scene, together with its influence on federal policies through its partnership with the CDU in the Bundestag, has made the party one of the most effective groups in Europe. In the medium term Bavaria will have to face challenges connected with the transformation and digitisation of industry, which could undermine the province’s current economic model. In addition, the CSU is being confronted on the political scene by Alternative für Deutschland (AfD), a grouping which has a similar profile to the CSU in several aspects. The elections on 14 October 2018 could permanently change the balance of power in Bavaria’s Landtag, lead to a serious weakening of the CSU’s dominance in Bavaria, and affect Germany’s federal politics. || The CSU owes its electoral success to a conservative profile combined with the province’s economic achievements, as well as the ability to adapt its programme to changing social trends. Voters see the party as both a guarantor of Bavaria’s economic success and the advocate of the interests of vulnerable social groups. However, the CSU is undergoing a transformation which may result in it losing its status as a mass party appealing to all social groups. These changes are structural in nature; they result primarily from the aging of its traditional electorate and the inflow into Bavaria of residents from other German provinces. This process is overlapping with a strong polarisation within German society (including Bavaria) regarding its approach to the migration crisis. The biggest beneficiary of these changes has been the AfD. A good result for this party in the elections to the Bavarian parliament could permanently change the balance of political forces there. The CSU would be unable to defend an absolute majority, and it would have to seek coalition partners in order to form further governments.

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Mundial w Rosji – igrzyska zamiast chleba?

Author(s): Iwona Wiśniewska,Jadwiga Rogoża / Language(s): Polish

For the purposes of the World Cup, the Russian leadership created an image of Russia as a country that is safe, modern and open to the world: they made sure that the organisation of sports events was efficient, security was guaranteed, visitors had various conveniences at their disposal and that the attitude of law enforcement officers towards them was friendly. Paradoxically, the implementation of many of these arrangements was facilitated by Russia’s authoritarian model of governance, including a comprehensive law enforcement system the Kremlin has at its disposal and the state’s control of the key groups involved. Moscow has used this image, especially by including the enthusiastic opinions voiced by foreign football fans, as one of its soft power tools to contradict the negative image of Russia present in the narrative supported by Western politicians and media, and to solidify Russia’s position in the international arena. Moreover, Russia has used the presence of leaders from Western states, who attended various World Cup matches, to bolster its narrative emphasising the absence of unity among Western states and the rightfulness of Russia’s foreign policy stance. However, there is no indication that Russia’s improved image could have a measurable impact on the betterment of its relations with the West, which is confirmed, for example, by the extension of US-imposed sanctions. Similarly, in domestic politics the World Cup merely brought a temporary wave of enthusiasm within society that quickly subsided, giving way to social discontent triggered by the government pushing through unpopular social reforms. The World Cup is now over and Russia is returning to its inveterate domestic problems and moving to another phase of its confrontation with the West.

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Ukraina – Węgry: narastający spór o prawa mniejszości węgierskiej

Author(s): Andrzej Sadecki,Tadeusz Iwański / Language(s): Polish

Od niemal roku stosunki między Węgrami a Ukrainą znajdują się w najgłębszym kryzysie od upadku ZSRR. Główną przyczyną napięć jest przyjęta we wrześniu 2017 roku przez ukraiński parlament ustawa oświatowa, która wprowadzając całościową reformę systemu edukacji, jednocześnie przewiduje poważne ograniczenia w stosowaniu w szkolnictwie języków mniejszości narodowych, w tym węgierskiego. Budapeszt zareagował gwałtowną krytyką pod adresem Kijowa oraz blokowaniem zbliżenia Ukrainy z NATO, domagając się zmiany ustawy. Ukraina z kolei podjęła kroki, aby doprowadzić do złagodzenia stanowiska Budapesztu, poddając ustawę pod ocenę Komisji Weneckiej, a następnie deklarując realizację rekomendacji zawartych w tej ocenie. Wieloletni deficyt zaufania, a także brak realnych działań z obydwu stron na rzecz kompromisu uniemożliwiły rysujące się w maju i czerwcu br. porozumienie. Do kolejnej eskalacji konfliktu doprowadziło powołanie przez węgierski rząd pełnomocnika ds. rozwoju obwodu zakarpackiego, co spotkało się w Kijowie z gwałtowną reakcją i zostało zinterpretowane jako ingerencja w sprawy wewnętrzne Ukrainy. Spór o prawa mniejszości węgierskiej na Ukrainie dotyczy kwestii historycznych i tożsamościowych o ważnym znaczeniu dla obydwu stron i jest mało prawdopodobne, że przez kolejne miesiące zostanie rozwiązany. O ile sprawy te zawsze były fundamentem polityki zagranicznej Budapesztu, szczególnie wobec państw zamieszkanych przez mniejszości węgierskie, Kijów aż do 2014 roku problematykę tę bagatelizował. Jednak od rosyjskiej aneksji Krymu i agresji w Donbasie Ukraina podejmuje kompleksowe działania o charakterze dekomunizacyjnym i derusyfikacyjnym, których konsekwencją jest z jednej strony ukrainizacja przestrzeni publicznej, mediów i systemu oświaty, a z drugiej ograniczanie praw mniejszości narodowych na Ukrainie w zakresie używania języków narodowych w systemie oświaty. Z tych powodów obie strony będą raczej twardo stać na swoich stanowiskach i szukać bieżących korzyści politycznych wynikających z konfliktu, niż podejmować działania na rzecz kompromisu.

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Temporary stabilisation: Russia-Ukraine gas transit deal

Author(s): Szymon Kardaś,Wojciech Konończuk / Language(s): English

A five-year contract concerning Russian gas transit via Ukraine was signed after four days of negotiations on 30 December 2019. The previous contract expired on 1 January 2020. The EU-brokered talks between Moscow and Kyiv preceding the deal lasted many months and ended in the signing of a political protocol on 20 December which defined the terms of a package agreement. Gazprom has been obliged under the new transit contract to transport 65 bcm of gas in the first year and 40 bcm in the next years based on the ship-or-pay formula. Four other documents were also signed: (1) an agreement between Naftogaz and Gazprom waiving counterclaims linked to the gas contracts of 2009; (2) an interconnection agreement between Gazprom and a company named Operator of the Gas Transmission System of Ukraine (OGTSU); (3) a settlement between Gazprom and the Ministry of Justice of Ukraine; (4) a transport agreement between Naftogaz and OGTSU. The Russian company had to pay US$2.92 billion in damages under the Stockholm Arbitration Court’s ruling before the documents could be signed; it did this on 27 December.

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Tymczasowa stabilizacja: porozumienie gazowe Rosja–Ukraina

Author(s): Szymon Kardaś,Wojciech Konończuk / Language(s): Polish

Po czterodniowych rosyjsko-ukraińskich negocjacjach 30 grudnia br. podpisany został pięcioletni kontrakt na tranzyt rosyjskiego gazu przez Ukrainę (dotychczasowy kontrakt wygasa 1 stycznia 2020 r.). Zostało to poprzedzone wielomiesięcznymi negocjacjami między Moskwą a Kijowem przy udziale Komisji Europejskiej, zakończonymi 20 grudnia podpisaniem politycznego protokołu, który określił warunki porozumienia pakietowego. Kontrakt tranzytowy nakłada na Gazprom obowiązek przesyłu 65 mld m³ gazu w pierwszym roku i 40 mld m³ w kolejnych latach zgodnie z formułą ship-or-pay. Podpisano również cztery inne dokumenty: (1) porozumienie pomiędzy Naftohazem a Gazpromem w sprawie rezygnacji z wzajemnych roszczeń związanych z umowami gazowymi z 2009 r.; (2) umowę o współpracy międzyoperatorskiej między Gazpromem a spółką pn. Operator Systemu Gazociągów Transportowych Ukrainy (OGTSU); (3) ugodę między Gazpromem a Ministerstwem Sprawiedliwości Ukrainy; (4) umowę transportową między Naftohazem a OGTSU. Warunkiem zawarcia tych dokumentów było wypłacenie przez rosyjski koncern 2,92 mld dolarów odszkodowania zgodnie z wyrokiem Trybunału Arbitrażowego w Sztokholmie, co nastąpiło 27 grudnia.

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German wind power sector in crisis. Energiewende under further threat

Author(s): Michał Kędzierski / Language(s): English

The slowdown in expansion of onshore wind farms poses a serious threat to the German Energiewende. In 2018, wind power accounted for half of the electricity obtained from RES, and is considered the driving force behind the Energiewende. In the first half of 2019, only 81 new turbines of a combined capacity of 271 MW were connected to the grid in Germany, compared to an average annual increase in installed capacity of approximately 4500 MW from 2015 to 2017. There are problems with the system of auctions for new capacities, with the sector complaining among other things of protracted construction permit procedures, court action being taken by environmental organisations and residents, objections being raised by the Bundeswehr and Aviation Safety Agency, and laws restricting the area that can be used for construction. The crisis is having severe repercussions for companies in the German wind power sector. Some have gone bankrupt, with the workforce decreasing by approximately one fifth. The crisis in the wind power sector began at a time when climate issues were coming under greater public scrutiny, rendering the crisis a political liability due to doubt about whether the German 2030 climate policy target could be achieved. The impasse in growth of wind power could also derail plans to decommission the last nuclear power stations over the coming decade, and especially implementation of the roadmap for the gradual departure from coal.

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Kryzys branży wiatrowej w Niemczech. Kolejne zagrożenie dla Energiewende

Author(s): Michał Kędzierski / Language(s): Polish

Wyhamowanie rozbudowy farm wiatrowych na lądzie jest poważnym zagrożeniem dla powodzenia niemieckiej transformacji energetycznej. Energia wiatrowa odpowiadała w 2018 r. za połowę prądu pozyskiwanego z OZE i uchodzi za siłę napędową Energiewende. W pierwszym półroczu br. w Niemczech do sieci podłączono jedynie 81 nowych turbin o łącznej mocy 271 MW, podczas gdy średni roczny przyrost mocy zainstalowanej w latach 2015–2017 wynosił około 4500 MW. System przetargów na nowe moce funkcjonuje wadliwie: branża uskarża się m.in. na przeciągające się postępowania o wydawanie zezwoleń na budowę, pozwy sądowe organizacji środowiskowych i mieszkańców, obiekcje Bundeswehry oraz agencji bezpieczeństwa lotów, a także prawne ograniczanie powierzchni pod budowę. Kryzys dotkliwie odbił się na firmach niemieckiej branży wiatrowej, spośród których część ogłosiła bankructwo, a zatrudnienie zmniejszyło się o około jedną piątą. Kryzys branży wiatrowej rozpoczął się w okresie wzmożonego zainteresowania opinii publicznej kwestiami klimatycznymi i stał się w związku z tym dużym obciążeniem politycznym, ponieważ stawia pod znakiem zapytania realizację niemieckiego celu klimatycznego na 2030 r. Załamanie się rozwoju energii wiatrowej może także zagrozić zaplanowanemu na następną dekadę wyłączeniu ostatnich elektrowni jądrowych, a zwłaszcza dotrzymaniu harmonogramu stopniowego „wyjścia z węgla”.

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The consequences of Brexit for the UK’s security policy and NATO’s eastern flank

Author(s): Piotr Szymański / Language(s): English

Regardless of how the UK leaves the European Union and what final timetable it adopts, Brexit has influenced the British debate on security policy, and may have implications for Britain’s involvement in NATO’s defence and deterrence strategy towards Russia. The United Kingdom plays an important role on NATO’s north-eastern flank. London has deployed British troops to the NATO battlegroups in Estonia and Poland, and it is expanding its military cooperation with Norway in securing the maritime areas of the North Atlantic. The UK has also bolstered its military presence in Romania. After leaving the European Union, London will still be involved in the security of Northern and Central & Eastern Europe. However in the future, Britain’s strong military footprint on NATO’s eastern flank may be challenged by the increased activity of British armed forces beyond Europe as part of the ‘Global Britain’ concept, or by a change in the priorities of Britain’s security policy by the Labour Party, which wants to focus to a greater degree on global threats and the UN’s peacekeeping operations.

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Konsekwencje brexitu dla polityki bezpieczeństwa Wielkiej Brytanii i wschodniej flanki NATO

Author(s): Piotr Szymański / Language(s): Polish

Niezależnie od ostatecznego harmonogramu i formy opuszczenia Unii Europejskiej przez Wielką Brytanię brexit wpływa na brytyjską debatę o polityce bezpieczeństwa i może mieć konsekwencje dla brytyjskiego zaangażowania w natowską strategię obrony i odstraszania wobec Rosji. Wielka Brytania odgrywa ważną rolę na północno-wschodniej flance NATO. Londyn zapewnia obecność brytyjskich żołnierzy w natowskich grupach bojowych w Estonii i Polsce oraz rozwija współpracę wojskową z Norwegią w zakresie zabezpieczania obszarów morskich na północnym Atlantyku. Wielka Brytania jest też obecna wojskowo w Rumunii. Po opuszczeniu Unii Europejskiej Londyn nadal będzie się angażować w bezpieczeństwo Europy Północnej i Środkowo-Wschodniej. Jednak wyzwaniem dla utrzymania dużego wkładu Wielkiej Brytanii w obronę wschodniej flanki może okazać się zwiększanie aktywności brytyjskich sił zbrojnych poza Europą w ramach koncepcji „Global Britain”. Ponadto na brytyjską obecność na wschodniej flance może wpłynąć zmiana priorytetów polityki bezpieczeństwa przez Partię Pracy, która w większym stopniu chce koncentrować się na zagrożeniach globalnych i operacjach pokojowych ONZ.

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Barometru politic național: 9-16 februarie 2019

Author(s): Bruno Stefan / Language(s): Romanian

Survey conducted between 9 and 16 February 2019 on a national sample of 1106 people. He measured the perception of the public health system in Romania, the trust in the national political leaders, the evaluation of Traian Băsescu, the appreciation of the parties, the voting intentions.

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Percepții despre fiscalitatea din România

Author(s): Bruno Stefan / Language(s): Romany

The paper presents the results of a sociological research carried out in Romania on a national sample of 1,104 subjects. The data was collected between 9-14 June 2022, and the research was funded by the Tax Pact. The paper presents data on Romanians' preferences for a stable tax code, for merging some taxes and simplifying tax legislation, for certain legislative measures and proposals for the economic recovery of the country, about the progressive tax and about the perception of fiscal administrations.

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