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Central European Update CSIS New European Democracies Project Volume 4 ▌Number 27 ▌July 13, 2007 Central European Update Poland be discussed next month, accord- reported that Hungary is deter- Slovenia On 10 July Polish President Lech ing to Czech Finance Minister mined to complete the require- On 12 July Slovenia’s Public Kaczynski met his visiting Czech Miroslav Kalousek. ments for joining the euro by Agency for Railway Transporta- counterpart Vaclav Klaus. The two 2009. tion and SCT, a local construc- officials stated that they share Former Czech Foreign Minister tion company, signed a contract views on the future of the EU con- Cyril Svoboda revealed that the On 6 July, a delegation from for a EUR 12 million project stitutional treaty and the voting Czech government of former NATO’s Defense Review Com- aimed at improving the country’s weights in the Council of the Euro- Prime Minister Jiri Paroubek mittee urged Hungary to increase railway infrastructure. The project pean Union. They also discussed first discussed the missile defense defense spending and restructure is part of a larger initiative, which trade and economic collaboration radar proposal with the U.S. at a the armed forces. Hungary’s De- is sponsored by the EU and the and missile defense. The Czech NATO summit in Prague in 2002. fense Minister Imre Szekeres Slovenian government and is President also met with Prime Min- Technical negotiations were con- insisted that the defense budget scheduled to be completed by the ister Jaroslaw Kaczynski to dis- ducted only with the defense min- will remain at 1.2 percent of GDP end of 2009. cuss prospects for cooperation istry at the time. instead of increasing to 2 percent. within the Visegrad Group. However, Hungary will work with Slovenian Foreign Minister On 6 July Czech Foreign Minister NATO to effectively utilize avail- Dimitrij Rupel visited his Hun- Poland's two opposition parties, the Karel Schwarzenberg stated that able resources and eliminate inef- garian counterpart Kinga Goncz Democratic Left Alliance and Civic Russian criticism of the proposed ficiencies. earlier this week in Budapest. The Platform, initiated motions to dis- U.S. missile defense system in the pair discussed potential coopera- solve the lower house of parlia- Czech Republic and Poland is Slovakia tion between Slovenia’s and Hun- ment, the Sejm. The move comes merely a game with the United On 10 July Montenegrin President gary’s oil companies Petrol and after President Lech Kaczynski States that does not concern the Filip Vujanovic began his two- MOL, the possibility of connect- sacked Deputy Prime Minister and Czech Republic. He claimed that day official visit to Slovakia. Slo- ing the electricity grids of the two Agriculture Minister Andrzej Lep- Moscow is using this ploy to es- vak President Ivan Gasparovic countries, as well as the prospects per on 9 July due to corruption tablish recognition for Russia as voiced support for Montenegro’s for broader regional energy policy allegations. an equal power with a hand in future EU membership. Vujanovic collaboration. Another Slovene- decisionmaking in Europe. in turn mentioned potential oppor- Hungarian joint government ses- The Polish authorities plan to take tunities for Slovak firms to par- sion, which will focus primarily down Soviet-era monuments, but Hungary ticipate in the reconstruction of on energy policy and economic stated that graves of Soviet soldiers Hungarian Prime Minister Ferenc Montenegro's water-supply net- cooperation, is scheduled to take will not be relocated. “We are try- Gyurcsany met with Ukrainian work and to invest in his country's place in October of this year. ing to demolish them because we President Victor Yushchenko on power industry. think that this period was not the 10 July to begin talks on a one On 12 July Slovenian Foreign best and most successful epoch in billion cubic meter underground After several months of negotia- Minister Dimitrij Rupel met with Poland's history,” Polish Defense gas storage facility for Hungary tion and compromise, the Slovak the new British Foreign Secretary Minister Aleksander Szczyglo on Ukrainian territory. The cur- parliament has passed a series of David Miliband in London to said. rent negotiations are viewed as an amendments to the business- discuss EU issues and bilateral attempt to secure adequate energy friendly 2004 Labor Code. Both relations. While in London, Rupel Czech Republic supplies for the future. the business community and the is scheduled to attend a confer- EU finance ministers have in- labor unions seem to be content ence on EU global challenges. formed the Czech government that On 10 July, following a meeting with the final revision. its efforts to control the budget of EU finance ministers, the Com- deficit are “inadequate,” as the missioner for Economic and Vladimir Meciar, chairman of deficit is expected to increase to 4 Monetary Affairs, Joaquin Al- the Movement for a Democratic percent this year. In order to curb munia, declared that Hungary is Slovakia (HZDS), voiced his dis- the growing deficit and bring it taking effective steps to cut the approval of the way the country's under 3 percent, Prime Minister state’s fiscal gap down to 3 per- intelligence service is run. He said Mirek Topolanek plans to imple- cent of GDP by 2009. Almunia that the services lack transparency ment spending cuts and a 15 per- warned that there is still a risk that and adequate supervision. HZDS cent flat tax on personal income the budget deficit will not be re- holds two out of sixteen ministe- from 2008. Further measures to duced quickly enough to meet the rial posts in the governing coali- bring the economy within the strict deadline. However, Hungarian tion in Slovakia. Featured Photo: Prague, Czech Re- rules of the Eurozone by 2012 will Finance Minister Janos Veres public Page 2 Select Briefing Europe East Baltic States Update Estonia independence from the Soviet Un- percent. In the first quarter of 2007 stan, promised more substantial aid Marje Josing, director of the Esto- ion in 1991 and was nominated by GDP grew by 10.7 percent. Main- to Afghanistan. The pledge was nian Institute of Economic Re- the ruling center-right coalition. taining control over inflation is an made during Friday’s ceremony search, has warned that the coun- During his inauguration the new essential criterion for joining the celebrating Afghanistan’s State- try’s economic growth might slow President pledged to unite Latvian Eurozone. hood Day. Since reestablishing down from the current 11.4 percent society and ease tensions between relations between the two countries Lithuania to 5-7 percent by 2008-2009. Ex- Latvians and ethnic Russians. in 2005, Lithuania has assisted On 9 July in Kabul, Birute perts claim that the greatest risks with reconstruction efforts in the Abraitiene, head of the Special lie in the current account deficit, On 9 July Latvia announced a new province of Ghor. Mission of Lithuania to Afghani- which was 17.9 percent of GDP, as rise in consumer prices despite the well as wage growth that exceeds growing fears of an economic Photo: Tallinn, Estonia productivity. slump, which has delayed the adop- tion of the Euro. The national statis- Latvia tics bureau reported that the con- On 8 July Valdis Zatlers was sumer price index rose by 0.9 per- sworn in as Latvia’s new President cent between May and June, thus replacing Vaira Vike-Freiberga, increasing the 12-month inflation who during her two terms success- rate to 8.8 percent. Latvia experi- fully steered the country into the enced the highest economic growth EU and NATO. Zatlers is the third in the EU in 2006, reaching 11.9 president since Latvia regained Southeast European Update Bulgaria for five Bulgarian nurses and a On 11 July Croatian President On 5 July the Government Infor- Palestinian doctor. The medical The Estonian and Romanian De- Stjepan Mesic arrived in Sofia on mation Service released official personnel were detained in Febru- fense Ministers met on 5 July to a two-day official visit and met economic indicators for 2006. ary 1999 for allegedly infecting discuss security in the Black Sea with his Bulgarian counterpart Budget revenues rose 11.2 percent 400 children with HIV at the al- region and involvement in inter- Georgi Parvanov. Parvanov reaf- year-on-year, amounting to an Fateh children’s hospital in Ben- national operations. Romanian firmed Bulgaria’s support to increase of 20,043 million leva. ghazi, Libya. During an address to Defense Minister Teodor Meles- Croatia’s EU and NATO member- The economy grew by 6.1 percent the European Affairs Committee in canu showed interest in NATO’s ship efforts and pledged to pro- in 2006, while foreign direct in- the Bulgarian parliament, the Por- cyber defense center to be estab- vide expertise assistance in the vestment accumulated a record tuguese Ambassador to Sofia af- lished in Estonia and expressed process. Mesic thanked Parvanov high of EUR 4,000 million. Un- firmed the EU’s commitment to the possibility of investing in its for the support and asserted that employment dropped to 9.1 per- resolving the controversial ruling. development. The ministers also the accession of all Balkan coun- cent, the lowest figure since the International observers note that discussed the importance of tries into the EU will ensure long early 1990s. the Supreme Court’s decision has NATO policing in Baltic air term peace and stability in the brought closure to the legal proc- space. Romania will contribute region. During his visit Mesic is On 9 July Foreign Minister Ivaylo ess, thus creating space for the four fighters in the air space secu- also scheduled to meet with Bul- Kalfin stressed Bulgaria’s interest international community to diplo- rity rotation between August and garian Prime Minister Sergey in deepening bilateral cooperation matically pressure Libya to release October.
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