Eastern promise

‘We’ve been so low, that the only way left for us is up’ is the wry assessment of one Romanian managing partner. The central and eastern Europe (CEE) region has long endured a reputation as an unpredictable market. Political instability, the shadow of Communism and a troubled history resulted in extremely low levels of investor confidence. But EU accession has brought with it a sense of stability for many countries. Recent market reports signal increasingly strong deal-flow, with volumes of M&A transactions doubling in the last four years alone.

It’s now been ten years since the first wave of countries acceded to the EU. Even so, many of these are still trying to shake off the remnants of their difficult past. Mark Harrison, founding partner of Serbia and Montenegro-based firm Harrisons, claims that certain eastern European jurisdictions are finding it hard to rid themselves of their reputation for economic and political unpredictability. ‘Montenegro has really taken off in the past year since it became an independent country,’ he says. ‘Western companies have a certain perception of Serbia. Ever since Montenegro could hold up its hands and say that it is no longer anything to do with it, there has been a rush of interest. The government is trying to sort itself out, and things are taking off, but there is always the history of Kosovo in the background. The perception of the market is a problem – Serbia is still tainted by its past.’

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