EU: Exports and low unemployment fuel rapid growth in central Europe - by James Shotter

Central Europe’s economies have continued their rapid expansion, outpacing their peers in western Europe as rock bottom interest rates and record low unemployment fuel consumer spending.

With the eurozone’s recovery also pushing up exports from the region, Romania’s economy grew at the fastest annual rate in the EU in the second quarter.

The Czech Republic, Poland, Slovakia and Hungary also reported strong growth, according to preliminary data on Wednesday.

Romania grew by 5.7 per cent year on year in the second quarter. The Czech Republic grew by 4.5 per cent, Poland by 4.4 per cent, Hungary by 3.6 per cent and Slovakia by 3.1 per cent. The EU grew by 2.3 per cent.

Read more: Exports and low unemployment fuel rapid growth in central Europe

Hungary - Poland: Central Europe's decline into authoritarianism - Edit Zgut and Wojciech Przybylski

It is time to accept that recent developments in Hungary and Poland, along with alarming reports on democratic standards in the region, are not just temporary turbulence, but a new type of political regime in the making.

The new Hungarian university law adopted this week by the parliament has already been branded a Lex-CEU.

This new legislation allowing the government to expel Central European University (CEU) from Hungary is like an X-ray image of a hybrid regime - a democracy drifting towards authoritarianism.

Moreover, it is not only an isolated case, but already more of a regional trend.

The alarming Nations in Transit 2017 report by Freedom House accounted for more countries in democratic decline rather than improving. As many as 18 of the 27 Central and Eastern European (CEE) countries fell in the ranking.

"This is the second biggest decline in the survey’s history, almost as large as the drop following the 2008 global financial crisis," wrote the authors.

One case helps to understand a pattern that can be later compared with other countries.

At the end of the day, it is not so new to observe a democratic decline. But it is surprising to find that the most prominent success stories of the democratic transition - Hungary and Poland - turn their back on the past achievements and move towards a hybrid regime.

Read more: Central Europe's decline into authoritarianism

Central Europe’s Outlook on the EU and Foreign Policy - by Milan Nič, Vít Dostál

A consortium of four Central European think tanks has published and presented a unique regional survey on foreign policy trends in the four Visegrad Group (V4) countries—the Czech Republic, Hungary, Poland, and Slovakia.

The study is based on data collected in mid-2015 that allowed the authors to examine and compare the views held by over 400 foreign policy experts and opinion makers from the V4. The survey looked at a variety of national and European policy issues such as foreign and EU policy priorities, allies and partners, successes and failures, cooperation among the Visegrad countries, EU policies, and transatlantic relations.

The survey was finalized at the beginning of September as the V4 leaders closed ranks amid Europe’s migration crisis to resist the EU’s refugee relocation mechanism. The leaders also reduced their previous differences of opinion on Russia and the Ukraine crisis.

An analysis of the responses gives an insight into the divisions and overlaps among national visions and perceptions in the Visegrad region, as well as expectations in the European context.

The results indicate several interesting trends. First of all, the Visegrad Group will remain a cohesive bloc on the EU level on some relevant issues such as energy and migration. Perceptions of priorities on the national and the EU levels overlap a lot. Also, bilateral relations within the Visegrad Group are now perceived as excellent—which has not always been the case and is part of the success of EU integration and Visegrad cooperation.

While the ongoing migration crisis has brought about a major parting between Berlin and the V4 capitals, Central Europeans still consider Germany their most important partner.

On the future of EU integration, Visegrad expectations are quite divergent and fragmented. Poles and Czech expect more differentiated (multispeed) integration, Hungarians think that larger member states will increasingly dominate, and Slovaks—the only eurozone country in the grouping—expect a reinforcing of the euro area.

Read more: Central Europe’s Outlook on the EU and Foreign Policy - Carnegie Europe - Carnegie Endowment for International Peace

Central Europe Floods Are Most Dramatic In A Decade

More than 80,000 emergency personnel including firefighters and soldiers were on duty Saturday, working aggressively to contain the most dramatic floods in Germany in a decade. Thousands of residents were still unable to return to their homes, and bridges and streets were impassable in many regions of eastern and southern Germany.

Twenty people reportedly have already died in the floods across central Europe after several days of heavy rains. Thousands have been put up in emergency shelters waiting for the waters to recede so they can get back to their homes.

German news agency dpa said people in Magdeburg in Saxony-Anhalt were anxiously waiting downstream as the crest of the Elbe river approached Saturday. Authorities evacuated a nursing home and turned off electricity in several parts of the city. Where the Saale river meets the Elbe, about 3,000 people had to leave their homes.

Read more: Central Europe Floods Are Most Dramatic In A Decade

Europe's insurers seen escaping brunt of flood damage - by Chris Vellacott and Jonathan Gould

As insurers start counting the cost of devastating floods across central Europe, many of the region's businesses and households are not covered and will have to foot the bill themselves.

Nicolaus von Bomhard, chief executive of the world's largest reinsurer Munich Re, attributed under-insurance for flood risk in the worst affected areas to a legacy of insurers' past reluctance to offer services in the region.
While this has changed and insurers are now prepared to insure almost all the risk, under-insurance remains a problem in the region, he said.

"On the losses, I can't give any numbers, it's way too early, but the macroeconomic loss will be much bigger than the insured loss," he said at an insurance industry news conference on how insurers and governments could work to reduce the impact of natural disasters.

But while waters were still rising and thousands of Germans, Hungarians and Czechs were evacuating their homes, some industry specialists said they expect the insurance loss to fall short of the last big floods to hit the region in 2002

Read more: Europe's insurers seen escaping brunt of flood damage | Reuters

Central Europe: coal demand still hot

Central Europe’s economies are slowing, but the region is still doing better than much of the rest of the continent, the reason that regional coal miner New World Resources says it was able to beat expectations for the second quarter of the year.

The company reported sales of €347.5m for the quarter, down 24 per cent over the same period a year earlier and in line with expectations, while net income came to €28.3m, down by 66 per cent but better than the average estimate of €18.3m in a Reuters poll, in large part due to successful cost cutting.


“We consider the results, which exceeded expectations mainly thanks to lower costs, positive. The proposed dividend is also a positive surprise. NWR raised production targets but the outlook until the end of the year is a challenge given the conditions in the region (high supply of coking coal and lower prices),” writes Bohumil Trampota, an analyst with the Czech Republic’s J&T Banka.

Read more: Central Europe: coal demand still hot | beyondbrics