As with many global sub-regions, southern and eastern Europe (SEE) is slowly emerging from a period of stark economic slowdown as a result of the Covid-19 pandemic, with regional economies affected in a variety of ways. This ranged from tourism-reliant nations such as Croatia and Greece that faced an unprecedented plunge during 2020, relying on EU relief and revived capital spending intervening to restore growth, to Romania, whose resource-rich economy suffered from a decline in industrial production, only to recover during Q3 2020 after foreign trade and investment – particularly from Germany – resumed in earnest.

Although granular policy details have differed, governments have intervened to prevent the spread of Covid-19, while also seeking to protect key economic sectors and also balancing consumer demands and differing political situations. A number of SEE countries faced elections during the pandemic, a situation that has broadly favoured incumbents. Both the Romanian and Bulgarian governments returned, albeit facing a significant loss of support and ongoing questions over their futures, while control of the Cypriot House of Representatives shifted to the conservative opposition. Continue reading “Southern and Eastern Europe: A long recovery”

Having enjoyed steady economic growth following its accession to the European Union (EU) in 2013, Croatia saw an abrupt halt to its development in 2020. With a projected 10% drop in GDP, the depth of the economic trough appears similar to that of the 2008 financial crisis, though optimism remains that this downturn will be shorter as mitigatory factors, particularly Covid vaccines, begin to make themselves felt.

Aside from the global economic impact faced by most countries as a result of the pandemic, Croatia was perhaps most affected by the affect on the tourism sector, which naturally suffered considerably. However, continued progress on vaccinations and the creation of the EU’s Green Pass have bolstered expectations the sector will soon recover (although a similar pre-vaccine reopening of the tourist economy last summer led to a dramatic surge in infections). Continue reading “Croatia – ups and downs”

Romania has seen buoyant growth in recent years, with its economy upgraded to ‘emerging market’ by FTSE Russell in 2019. Gabriel Zbârcea, managing partner at Ţuca Zbârcea & Asociaţii, explains: ‘Until the coronavirus outbreak, business was flourishing in Romania: 26% more deals in 2019 as compared to 2018 with a value of €5bn; also real estate investments went past the €1bn line in 2019, standing 7% higher than in 2018.’

‘2020 has been an interesting year financially,’ says Răzvan Stoicescu, deputy managing partner of Muşat & Asociaţii. ‘We did see a slowdown during Q2 of 2020, but things picked up during the second half of the year and have been on a positive trend. However, since neither us nor our clients have gone through a situation of such a magnitude before, the process was not without challenges. For example, switching abruptly from what was essentially a direct contact way of working for our profession, to virtual meetings, unpredictable schedules and remote work was taxing even if ultimately manageable.’ Continue reading “Romania – bounceback”