Without reform, Central Asia’s growth champion faces tougher times
July 18, 2024
Eastern Europe’s new diagonal, with ASEAN and the Gulf
July 19, 2024
Catch up quickly with the stories from Central and Eastern Europe that matter, this week led by news of the Russian Navy reportedly withdrawing its last remaining patrol ship from occupied Crimea.
Russia’s war on Ukraine
This week marked another milestone in the Battle of the Black Sea as the Russian Navy reportedly withdrew its last remaining patrol ship from occupied Crimea.
The news was announced by Ukrainian Navy spokesperson Dmytro Pletenchuk, who signaled the historic nature of the Russian retreat with the words: “Remember this day.”
The withdrawal of Russian warships from Crimea is the latest indication that against all odds, Ukraine is actually winning the war at sea.
When the full-scale invasion began, the Russian Black Sea Fleet had seventy four warships, most of which were based at ports in Russian-occupied Crimea.
In a little over two years, Ukraine managed to sink or damage around one third of these ships. In the second half of 2023, reports were already emerging of Russian warships being hurriedly moved across the Black Sea from Crimea to the relative safety of Novorossiysk in Russia.
By March 2024, the Russian Black Sea Fleet had become “functionally inactive,” according to the British Ministry of Defence.
Donald Trump will quickly demand peace talks between Russia and Ukraine if he wins November’s US presidential election and has developed “well-founded plans” for doing so, Hungary’s Viktor Orbán claimed this week after private discussions with the Republican candidate.
That prospect means the EU should reopen direct diplomatic communication with Russia and start “high-level” negotiations with China to find a peaceful solution to the war in Ukraine, the Hungarian prime minister said in a private letter to EU leaders following consultations in Moscow and Beijing.
Orbán also said in the letter that on the basis of his recent discussions with Russian President Vladimir Putin, Chinese President Xi Jinping and Ukrainian President Volodymyr Zelensky, the “general observation” was “that the intensity of the military conflict will radically escalate in the near future”. Moscow has relied heavily on Beijing to prosecute the conflict.
Donald Trump’s choice of JD Vance as his vice-presidential pick has meanwhile reignited fears in Europe that he would pursue a transactional “America first” foreign policy that could culminate in the US pushing for Ukraine to acquiesce to Vladimir Putin and sue for peace with Russia.
“It’s bad for us but it’s terrible news for [Ukraine],” said one senior European diplomat in Washington this week. “[Vance] is not our ally.”
Foreign diplomats and observers have frequently called Trump’s actual policies a “black box,” saying that was impossible to know for certain what the unpredictable leader would do when in power.
“Senator Vance was one of the leading opponents of the new assistance package to Ukraine last spring and has expressed indifference to what happens in that war,” said Michael McFaul, director at the Freeman Spogli Institute for International Studies and a former ambassador to Russia.
“By choosing Vance as his running mate, Trump has clarified a very clear choice for American voters in November on foreign policy.”
Other news from the region
Estonia’s Prime Minister Kaja Kallas this week stepped down as the leader of the Baltic country to become the foreign policy chief of the European Union later this year. Kallas, Estonia’s first female prime minister, handed in her formal resignation to President Alar Karis during a brief meeting at the Presidential Palace in the capital, Tallinn, on Monday. Estonia under Kallas, 47, has been one of Europe’s most vocal backers of Ukraine following the full-scale Russian invasion in February 2022. She replaces Josep Borrell of Spain, who has served as the EU foreign policy chief since 2019.
Georgian President Salome Zourabichvili this week asked the country’s top court to annul a controversial “foreign influence” law that has sparked mass protests and condemnation from the West. Initiated by the ruling Georgian Dream party, the law was adopted in May despite weeks of unprecedented street protests and warnings it would undermine Tbilisi’s bid for EU membership. The law forces groups receiving at least a fifth of their funding from abroad to register as “organisations pursuing the interests of a foreign power”. Lawmakers earlier overrode a veto by Zourabichvili to pass the law.
The European Commission has asked its commissioners not to attend informal ministerial meetings during the Hungarian EU presidency in protest at Prime Minister Viktor Orbán’s diplomatic solo efforts over Ukraine, a spokesperson for the EU executive confirmed on Monday. “In light of recent developments marking the start of the Hungarian presidency, [the commission] will be represented at the senior civil servant level only,” European Commission spokesperson Eric Mamer said. Hungary took over the rotating EU Council presidency on 1 July.
Romania’s parliament this week approved the culling of almost 500 bears this year in an effort to control the “overpopulation” of the protected species after a deadly attack on a hiker sparked nationwide outcry. The country is home to 8,000 brown bears, according to the environment ministry, Europe’s largest brown bear population outside Russia. After a young hiker was mauled to death on a popular trail in Romania’s Carpathian mountains last week, the prime minister, Marcel Ciolacu, summoned lawmakers back from their summer recess to attend an emergency session of parliament.
Polish airline LOT this week reported record net profits of 1.074 billion złoty (around 250 million euros) for 2023, having carried more than 10 million passengers—including more than one million in July 2023 alone. The airline’s most popular flights were those connecting Warsaw with Toronto, New York and Chicago, and between Warsaw and London, Vilnius and Amsterdam. Having recently added routes from Poland to Riyadh, Tashkent and Oradea, LOT added this week that it expects to open at least 20 new routes by 2028—both medium and long-haul.
Croatian food retailer Studenac said on Tuesday that it will acquire Slovenia’s Kea, its first acquisition abroad after tripling its business in Croatia under the ownership of Polish private equity fund Enterprise Investors. Studenac has become Croatia’s largest retailer by store count since its 2018 acquisition by CEE-focused Enterprise Investors, expanding nationwide through both organic growth and the acquisition of more than 650 stores. The acquisition of Kea, which operates 31 stores, is subject to approval from Slovenian competition regulators.
The EBRD this week made a minority equity investment into leading Romanian technology company, AROBS Transilvania Software, to support it in pursuing its regional growth strategy in Central and Eastern Europe. The EBRD investment was part of a larger primary and secondary share offering of 38 million euros subscribed by other retail and institutional investors. Founded in 1998 by Voicu Oprean, AROBS provides custom software development services across several industries, including automotive, marine, aerospace, healthcare, travel and hospitality, and fintech.
PayPal Europe was this week fined 27.3 million US dollars by Poland’s competition regulator for failing to adequately tell consumers in its contractual clauses activities which will get them fined, the Office of Competition and Consumer Protection (UOKiK) said on Monday. UOKiK claimed that activities which could lead to fines from PayPal were described in an unclear way. This could lead to users not understanding what was allowed and not allowed on the platform. “PayPal clauses are general, ambiguous and incomprehensible,” Tomasz Chrostny, the head of UOKiK, said in a statement.
Photo: NATO.
Unlike many news and information platforms, Emerging Europe is free to read, and always will be. There is no paywall here. We are independent, not affiliated with nor representing any political party or business organisation. We want the very best for emerging Europe, nothing more, nothing less. Your support will help us continue to spread the word about this amazing region.
You can contribute here. Thank you.
