Regional Update

CEE Covid-19 & Political Overview

31 MAY – 30 JUNE 2021

Table of Contents

CROATIA ...... 3 CZECHIA ...... 5 HUNGARY ...... 8 POLAND ...... 10 ...... 12 SLOVAKIA ...... 15

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CROATIA (prepared by CEC's Croatian partner - Vlahovic Group) COVID-19:

• The number of active COVID cases dropped by 85% within the past 30 days (from 2,726 to 418), while dozens of delta variant cases have been recorded. Since the last week, entire Croatia is marked in green on the European Center for Disease Control (ECDC) map. Ahead of the European Council, the PM stated that Croatia advocates freedom of movement as a fundamental value of the EU to be re-established because it allows a normal life, normal circulation of both people and capital and trade and, ultimately, tourism. The health minister sent an open letter inviting all citizens to get vaccinated, adding that it is very unlikely that Croatia will reach the target of 55% of the vaccinated population by the end of June.

Business and economy:

• Labor Minister Aladrovic pointed out that there are 50,000 more employees now in Croatia than last year, which was achieved by the Government’s economic intervention on a scale never seen before, where the Gov’t had spent approx. HRK 11.5 billion on job preservation measures due to the COVID pandemic. • The Croatian Regulatory Authority for Network Industries (HAKOM) has launched a public auction for 5G frequencies. It is expected that licenses will be allocated by the end of August, and revenue is expected to be at least EUR 40 million. • Sberbank CEO Herman Gref announced that Sberbank would sell its share in Croatian conglomerate Fortenova Group within two years. He said the Russian bank's goal is to increase the value and exit from the company that employs 50,000 people and is probably the biggest employer in the region, without losses. Sberbank was the biggest creditor of Croatia's now- defunct conglomerate Agrokor with €1.1 billion and now holds 44% in Fortenova Group, which was formed in April 2019 following a settlement reached by Agrokor's creditors.

Politics and legislation:

• After the last European Council meeting in Brussels, PM Plenkovic said that Croatia expects the to approve the National Recovery and Resilience Plan in July. He also pointed out that Croatia meets all the criteria from the Action Plan for the European Exchange Rate Mechanism II and has the ambition to become a euro area member at the beginning of 2023. At the beginning of June, the European Commission called for the Schengen Border Area to be expanded to include Croatia and Bulgaria and Romania. “I am firmly confident that both goals of deeper integration will begin in 2022 with Croatia joining the , and then followed by the Eurozone", said PM Plenkovic. • Croatian Minister of Foreign Affairs Goran Grlic Radman participated in the Diplomatic Forum in Antalya, where he underscored the great importance of transatlantic partnership for Croatia. „Transatlantism is based on our common values, which are the foundation of global security and stability. We must adapt to the new multipolar power relations and oppose authoritative trends around the world," the Minister said, stressing the importance and necessity of coordinated action in multilateral forums and institutions because they are crucial for setting

3 global standards and maintaining peace and international order. He then reminded that Croatia is committed to multilateralism and the renewal of transatlantic relations, and as a co-founder of the Three Seas Initiative, which focuses on strengthening Central European cooperation to contribute to European energy, digital and transport cohesion.

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CZECHIA (prepared by the CEC Government Relations office in Prague)

COVID-19:

• According to the latest data from the Ministry of Health, the pandemic situation in Czechia continues to improve and Covid-related hospitalizations are declining. • 55.7% of the adult population has received at least the first dose of the vaccine. 31.9% of the adult population is fully vaccinated. • The State Health Institute stated that the delta variant is already spreading communally in the country. • Among the regions of the Czech Republic, Prague is currently the region with the highest incidence of the covid-19 disease in absolute numbers. In the Prague region, there has been a halt in the decline of new cases on covid-19. On the other hand, in some other regions, covid- 19 has practically disappeared. • As of Saturday 26 June, another package of loosening restrictions began to take effect: o There can be one person per 10 m2 in an establishment (shops, services, museums and galleries). o The condition that a service can be provided to one customer at a time is removed. Similarly, the obligation to keep records of customers is no longer required. o The capacity of visitors to the pools and spas increases from 50 to 75%. o Live music is now allowed in pubs, restaurants and nightclubs; however, dancing is still forbidden. o The maximum number of visitors at outdoor cultural events has increased to 5,000. o Indoor events can have 2,000 visitors, and the capacity can be filled to a maximum of 75% instead of the previous 50%. • Although there was speculation about replacing respirators with face masks, the expected change did not happen. • Starting 25 June, people can apply for a vaccination appointment as soon as their two-week isolation period ends following a positive covid-19 test result. The Ministry of Health has lifted the previous 90-day period after recovering from covid-19, preventing people from registering for a vaccination. • CZK 50 million (EUR 2 million) to boost the vaccination campaign to be approved by the Czech government at a meeting on 28 June.

Business and economy:

• Fitch Ratings has reaffirmed the Czech Republic's AA- credit rating. The outlook for the rating is stable, as it was in January, which means that Fitch does not intend to change it in the foreseeable future. • The Czech Statistical Office stated that confidence in the Czech economy rose again in June, by 4.3 points month-on-month to 104 points. Industrial enterprises evaluate their economic situation very well throughout this year's second quarter. Moreover, in June, the number of enterprises reporting a recovery in demand increased compared with previous months, which contributed significantly to higher expectations of the pace of growth in production activity in the summer months.

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• On Wednesday, 23 June, the Czech National Bank (CNB) raised the base interest rate by 0.25 percentage points to 0.5%. According to its governor, Jiri Rusnok, the CNB's monetary policy has thus entered the phase of interest rate increases. In addition, it can be expected that rate hikes will continue in the second half of this year. Commercial banks expect loans, especially mortgages, to become more expensive. The rise in interest rates will influence the strengthening of the Czech Crown (currency), higher repayments, tighter credit conditions, growth in savings, and reduced corporate investments. • On 21 June, the company Elektrarna Dukovany II from the CEZ Group sent a safety questionnaire. It started a safety assessment of three candidates to construct a new nuclear unit at the Dukovany power plant. It has approached the French company EdF, the American Westinghouse and the South Korean company KHNP. As expected, the safety questionnaire was not sent to the Russian company Rosatom and the Chinese company CGN, which the Czech government decided not to invite to the upcoming tender due to safety concerns.

Politics and legislation:

• After a tornado struck and devastated several villages in southern Moravia on Thursday, 24 June, there has been great solidarity towards the citizens affected by the tornado. Among the volunteers were also some political party leaders such as Marian Jurecka (Christian Democrats) and Vit Rakusan (Mayors). Furthermore, Prime Minister Andrej Babis (ANO) and other members of the Czech government also visited the site and spoke with residents of the affected villages. President Zeman addressed the nation a few days later on television. However, he was criticised for his slow and weak response. • On June 9, the condemned the conflict of interest of Czech PM Andrej Babis in a resolution with a clear majority. The legally non-binding resolution, which calls on the European Union and Czech authorities to take a stronger approach to subsidies for the Agrofert holding, was supported by 505 MEPs, 30 MEPs opposed, and 155 abstained. In the adopted resolution, MEPs insisted that Andrej Babis should completely give up ownership of Agrofert or not serve as a high-ranking politician. Agrofert tried to convince several MEPs by sending direct messages to MEPs’ social media accounts. PM Andrej Babis considers the EP's resolution to be interference in domestic affairs and an attempt to influence the upcoming parliamentary elections. Moreover, Czech prosecutors have handed over the case of PM Babis to the new European Public Prosecutor's Office (EPPO). In addition, the Czech Police department has now obtained new evidence in a case against Andrej Babis as key HSBC bankers have decided to testify against Babis. According to the new testimony, the bankers have now stated, on the record, that the Stork's Nest (Capi hnizdo) resort received the loan due to the role of Andrej Babis breaking the conditions of the subsidy. Initially, bankers from HSBC, which provided the financing for the resort's construction, trivialised the documents that proved that the project was firmly tied to Agrofert and Andrej Babis from the beginning. • On June 3, the minority government of Andrej Babis survived a third no-confidence vote initiated by the opposition parties of the two formed coalitions (coalition Pirates & STAN, coalition SPOLU – ODS, KDU-CSL, TOP09). The outcome was decided by the Communists, who terminated their pact of support to the government in mid-April. Though previously indicating their willingness to bring down the Government, in the end, the Communists left the Chamber, thus indirectly helping Babis to remain in power until October general elections. Communist Chairman Vojtech Filip said that "the Government may not have our confidence,

6 but the right-wing parties led by ODS, TOP 09, STAN, KDU-CSL, Pirates have definitely none."

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HUNGARY (prepared by the CEC Government Relations office in Budapest) COVID-19:

• There are 34 newly identified cases; Deceased: 2. 5,477,000 people are vaccinated. The EU’s Digital Green Certificate will enter into force in Hungary on 1 July.

Business and economy:

• National Bank of Hungary (MNB) raised its base interest rate by 30 basis points: The Monetary Council of the National Bank of Hungary (MNB) raised its base rate by 30 basis points to 0.9% on Tuesday. Following the decision, György Matolcsy, Governor of the MNB, spoke about the start of a cycle of interest rate hikes, which will be realised on a monthly basis. The decision was voted unanimously. The measure was intended to prevent inflation risks from having long-lasting effects, the MNB Governor explained. The Governor emphasised that the Hungarian economy is doing an excellent job in restarting and restoring the economy. Upcoming decisions will also be data-driven. Thus inflation and macroeconomic figures will determine the further direction, György Matolcsy added. The cycle of interest rate hikes will continue until the inflation outlook stabilises around the central bank target. As a result of the decision, the Hungarian Forint (HUF) began to strengthen significantly. The announcements bolstered the Forint (HUF) to a level of 350 per euro (EUR) from the previous rate of around 360. The central bank raised interest rates for the first time in ten years. The last downward cycle began in the summer of 2012.

Politics and legislation:

• The Hungarian government extended the country’s state of pandemic preparedness until the 18th of December 2021, which allows quick action for the government if the pandemic reappears. Pandemic preparedness measures will enable the government to: o apply restrictions or shut down events that may help the virus’ spread o restrict the operation of stores and regulate their hours o regulate the outdoor markets and fairs of municipalities o limit or ban the visit of certain institutes o apply regulations for epidemiological quarantines o enact measures on social distancing, mask-wearing rules o regulate domestic and international travel • The government will lift nearly all epidemic restrictions once 5,5 million people have been inoculated: A significant portion of the current epidemiological restrictions will be lifted by the government when the number of vaccinated people reaches 5.5 million, Katalin Novák, Minister for Family Affairs announced. The proposal was initiated by the Operational Board Responsible for Relaunching Community Life. Later, Minister of the Prime Minister's Office Gergely Gulyás reported on the details. As soon as the target number is reached, the mandatory mask-wearing will be lifted. As a general rule, masks will no longer be required indoors, and people will be allowed to go to hotels, restaurants, baths and water parks without an immunity certificate. Masks will remain mandatory in the healthcare sector. The use of immunity

8 certificates will be maintained for mass events, such as sports events, concerts and nightclubs. The European Union’s Digital Green Certificate will also enter into force in Hungary on July 1. Paper certificates will be available at government offices or printed out from the government’s Client Gate electronic administration portal. The certificate can be issued in case of being vaccinated, possessing a negative PCR test or after recovery from the disease.

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POLAND (prepared by the CEC Government Relations office in Warsaw) COVID-19:

• Infection rates remain low, with a weekly average of 150 cases. The number of vaccinated persons is continuously increasing. The initial target of 20 million doses by the end of June has already been met. Over 27 million doses have been administered. This means that almost 12 million Poles are fully vaccinated, which amounts to a third of the adult population. Poland must still meet the required immunization level. Otherwise, a new wave of the pandemic might occur. In high-risk groups, e.g. senior over 70, 77% have been already vaccinated or await their appointment. The youngest group is the least mobilised. Only 35% of the 18-29 age group has been vaccinated or scheduled an appointment. As a result, the government is allowing single- dose Johnson&Johnson vaccinations at new locations. There are already 450 pharmacies and 8 shopping centres with vaccination points. • The government remains primarily concerned with the spread of new, more transmissible variants of the COVID-19 virus. As a result, a 10-day quarantine for non-Schengen visitors has been in place as of 24 June. However, a negative test result after 7 days may exempt from the quarantine. In addition, it does not apply to those who are fully immunized and their accompanying children under 12 years of age

Business and economy:

• According to UNCTAD’s recent World Investment Report 2021, in 2020, Poland was the 5th country in the world with the most greenfield investments. UNCTAD calculated that the global investment flow decreased overall in 2020 by 35% compared to the previous year. However, the inflow to developed states decreased by over a half and to the European Union alone - by 73%. However, in the case of Poland, the drop was calculated at 7% in the period discussed. Poland also ranked 23rd among the countries with the most significant nominal investment inflow - directly ahead of the Russian Federation and the Republic of Korea and behind Japan and Vietnam. In nominal terms, the total value of FDI in 2020 in Poland was similar to that recorded in 2017 and 2018. However, it remained over 35% lower than in 2016 and 2019. Notably, Poland came out 5th in terms of the value of greenfield investments - requiring comparatively significant resources and prepared from scratch. It was outranked only by the USA, the , China, and Germany • PM announced the launch of the Polish Deal Fund during a press conference yesterday. The programme will allow local authorities to apply for funding for planned or previously postponed investments. According to Morawiecki, the value of investment projects initiated using funds from the new programme might exceed PLN 100 billion in the next three years. The fund will be jointly controlled and governed by the Chancellery of the Prime Minister and the state-controlled development bank – Bank Gospodarstwa Krajowego (BGK). The funds will be used primarily for local investments such as heating systems, water management and new roads. The political element of the decision- making process (committee from the PM's office) is already raising worries among commentators that the fund will ostracize local governments ruled by the opposition.

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• The government proposed to increase the minimum wage in 2022 by 7.1% to PLN 3000 per month, and the minimum hourly rate would increase to PLN 19,60. For reference, the current lowest remuneration equals PLN 2800. Commentators argue that the proposal is not significantly higher than what would be achieved through the valorisation of the minimal wage - a formula accounting for inflation and GDP growth - approx. PLN 2984. Most employers consider the government’s proposal satisfactory. However, trade unions hoped for an increase of PLN 300-500 compared to 2021. At the same time, experts point out that if the United Right manages to fulfil its Polish Deal promises of PLN 30000 tax-free income, the lowest-earning Poles could benefit from an additional PLN 153 to their net monthly income. Still, the slower minimal wage growth rate (7.7% in 2021) could mean that PiS will have difficulties keeping its previous promise of a PLN 4000 minimal wage by 2024.

Politics and legislation:

• The newly-established Republican party held its inaugural convention. Amongst others, the event was attended by PiS leader Jarosław Kaczyński who delivered a speech on the future cooperation of the party in the United Right coalition. The Republican party, led by Adam Bielan and composed of former Agreement party MPs, is set to focus its political ideology on what it considers traditional Polish values, embracing the religion, culture and European identity of Poles. Primarily, the party hopes to attract entrepreneurs and specifically those manufacturing Polish goods. In terms of key policy focus areas, Adam Bielan highlighted: family as a key pillar of the society; the professional career of young Poles; the liberalisation of business activity; healthcare, efficient judiciary; and the depoliticisation of local governments. Importantly, Adam Bielan also pledged the party's support for the Polish Deal - the PM's new development plan. • MP Zbigniew Girzyński announced his decision to leave the PiS parliamentary club. Along with two other PiS MPs Arkadiusz Czartoryski and Małgorzata Janowska he now plans to create a new parliamentary group “Poland Choice” (Wybór Polska). As a result of this move, the United Right will now only count 229 MPs. Formally this means that the ruling bloc will lose its majority. In reality, however, PiS’ new conditional alliance with Kukiz’15 MPs may mean that the United Right will maintain its ability to win parliamentary votes. Furthermore, while the “Poland Choice” group will become a separate entity in the Sejm, it may still side with the ruling coalition. It is important to note that a loss of parliamentary majority, regardless of its duration, does not equal an early election. The United Right may effectively continue maintaining control over the Sejm by skilfully manoeuvring various alliances. It is also possible that PiS will quickly lure in a few MP transfers with offers of governmental positions. Nonetheless, this is the first time in the past 6 years that the ruling coalition formally loses its Sejm majority. While the ruling bloc may continue to function, each future vote in parliament could result in a significant political crisis. In the upcoming hours and days, it will be important to gauge the reactions of PM Morawiecki, PiS leader Kaczyński, and their coalition partners Deputy PM Gowin and Minister Ziobro. At this moment, it is still unclear as to how significant of a crisis this is for the ruling party. Still, this presents an opportunity and additional motivator for the opposition to come together and exploit PiS’ weakness. In the past, PiS was able to use a conflicted opposition to claw back from similar crises. If opposition parties manage to come together, the situation might be harder for the ruling camp this time around.

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ROMANIA (prepared by CEC's Romanian partner - Serban & Musneci Associates) COVID-19:

• PM Citu announces that vaccines have helped Romania reach its goal of ending the pandemic: Throughout a declaration where he announced that Romania would sell 1 mln vaccines to other countries, PM Citu stated that “the goal of the vaccine was to eliminate the pandemic, and that goal has been reached.” Over the past month, Romania registered below 100 new daily cases, and in the last days of June, no new registered cases in . • Romania, the first EU country that started vaccination for teens aged 12 to 15. Almost 2,000 vaccinated in the first day: Romania is the first country in the European Union that kicked off the vaccination campaign for the 12-15 age group, due to the vaccination strategy that allows in the third phase this age group to be eligible, doctor Valeriu Gheorghita, the coordinator of the national vaccination campaign, told a press conference on Thursday the 3rd. • The European digital certificate for Covid-19 will be operational in Romania from July 1: The Secretary of State in the Ministry of Health, Andrei Baciu, announced that the European digital certificate for COVID-19 will become operational in Romania on July 1st and can be downloaded in one of the three variants from a secure website.

Business and economy:

• IMF foresees “strong economic recovery” in Romania: A strong, 7% real GDP rebound is projected for 2021 in Romania, according to the conclusions of the International Monetary Fund (IMF) expressed after the annual macroeconomic review carried during -28 under (Article IV Consultations). In recent months, the stronger than expected economic recovery has helped the fiscal outlook, the Fund says, recommending the Government to save the revenue windfall, which would result in a 6.8%-of-GDP public budgeted deficit versus the initial 7.2% target. PM Florin Citu welcomed the announcement. Romania's inflation is expected to rise until the end of 2021, mainly on the back of electricity and fuel-related price adjustments, but these are projected to fade away in 2022. International Monetary Fund experts recommend Romanian authorities to re-energize the fight against corruption and efforts to improve government effectiveness and also improve the governance of state-owned enterprises (SOEs). • Romania's Govt. earmarks EUR 750 mln in subsidies for large-sized investment projects: The Romanian Government is continuing its commitment to supporting large-sized investment projects, of over EUR 100 mln each, with a budget of RON 3.75 bln (EUR 750 mln) over the next five years, Ziarul Financiar reported. The vast majority of such subsidies paid from the state budget under this initiative so far have helped multinational companies build manufacturing factories, according to the same source. The subsidies can go up to 50% of the value of the project. "The [lower] limit of RON 500 mln (EUR 100 mln) is enormous. • World Bank improves the outlook for Romania's GDP growth: Romania's economy will grow by 6% this year, fully reversing the 3.9% contraction caused by the COVID-19 pandemic last year, according to updated Global Economic Prospects the World Bank. The global outlook remains subject to significant downside risks, including the possibility of additional COVID-

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19 waves and financial stress amid high EMDE debt levels, the WB cautions. The growth rate in Romania would further ease to 4.5% in 2022 and 3.9% in 2023, under the Bank's scenario. • Energy and food prices push up Romania's inflation to 3.75% in May: Romania's headline inflation advanced by 0.5pp in May, to 3.75% from 3.24% in April - gaining momentum from the 0.2pp advance seen in the month before. The figures exceeded expectations (3.57% Bloomberg poll), and another shock is expected in July when the electricity and natural gas prices will further rise. • Romania’s industry returns to pre-crisis maximum, but some sectors may never recover: Romania’s industrial production index soared by 68% on an annual basis in April, an expected correction after one-third of the industry stopped operating in April 2020 amid lockdown. The correction brought the overall industrial output this .1% above that of April 2019 - the equivalent of a tinny 1.5% annual advance. But Romania’s industry entered the crisis in decreasing mode: -4.4% YoY in the last quarter of 2019 after negative growth rates during the second half of the year. Therefore the 24-month recovery seen this April is excellent news. • Prime Minister Florin Citu: Gov't to allocate at least 15 billion euros annually for investments: Prime Minister Florin Citu said that the Government would allocate at least 15 billion euros annually for investments and stressed that this aspect, together with the 76 billion euros from European funds, represents an opportunity for companies that want to develop business in Romania. According to the Prime Minister, the 76 billion euros, coming from the Recovery and Resilience Plan, as well as from the other European funds, represents an important opportunity for Romania, to which will be added at least 15 billion euros spent annually by the Government for investments.

Politics and legislation:

• President invites US president Joe Biden to visit Romania: Romania's president Klaus Iohannis said on Monday, June 14th, that he invited his US counterpart Joe Biden to visit Romania. According to Iohannis, the US leader "agreed to try to organise such a meeting." The Romanian president made the statement at the end of the NATO Summit in Brussels, where he reportedly had two brief discussions with Joe Biden. • Romania submits to EC official Recovery and Resilience Plan: The European Commission confirmed in a release on Monday evening having received Romania's official National Recovery and Resilience Plan, noting that the proposed initiatives touch on all seven flagship areas of EU policies. "We received Romania's Recovery & Resilience Plan. It includes reforms & investments to support the green and digital transitions, smart growth, health and resilience, and policies for the next generation. #NexGenerationEU will help build a greener, more sustainable future in Romania," European Commission President Ursula von der Leyen wrote on Twitter. The Commission will now assess Romania's plan based on the eleven criteria set out in the Regulation and translate their contents into legally binding acts. This assessment will notably include a review of whether the plans contribute to effectively addressing all or a significant subset of challenges identified in the relevant country-specific recommendations issued in the context of the European Semester. The Council will have, as a rule, four weeks to adopt the Commission proposal for a Council Implementing Decision. • EC urges RO to come up with a "credible and sustainable" fiscal consolidation plan: The Council of the European Union established the deadline of October 15th 2021, for Romania to take effective action and, in accordance with the Union's regulations, report the

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consolidation strategy that is envisaged to achieve the targets, including 3%-of-GDP public deficit by 2024. Romania is under excessive deficit procedures since its 2019 budget deficit (4.6% of GDP) exceeded the 3% threshold. October 15 is also the approximate moment for the first disbursements under the Relaunch and Resilience Mechanism, a program expected to bring Romania EUR 29.2 bln grants and soft loans conditioned on reforms consistent with the fiscal consolidation. A credible and sustainable adjustment path would require Romania to achieve a headline general government deficit target of 8.0% of GDP in 2021, 6.2% of GDP in 2022, 4.4% of GDP in 2023, and 2.9% of GDP in 2024, in line with the Government's targets, the Council says. But this is not likely achievable despite the Government's visible positive actions taken in the right direction, it also says. • Citu: All ministries, governmental agencies will be linked in a single network and a single interoperable database: The proposal for a public policy in the field of e-government, a strategic document for digital governance and management of electronic public services at the administration level, was adopted by the Government in a meeting on Thursday the 3rd. "We want to lead the public administration into the future, to improve the digital public systems in key-sectors of activity, such as Education, Health, Culture, Justice, Police. Today we approved a public policy proposal on the digitalisation of Romania, a roadmap for the next ten years. All ministries and governmental agencies will be linked in a single network and a single interoperable database through a government cloud, for which the Government has included in the PNRR funding of 500 million euros," Prime Minister Florin Citu said in a release from the Executive. • Romania’s lawmakers pass “anti-Huawei” 5G bill: The Romanian Senate on June 7th endorsed, as the decision-maker chamber, the draft law initiated by the Government regarding the 5G security regulations, which could remove Huawei from the list of suppliers of hardware and software used in Romanian 5G networks. If not certified as a supplier, the telecom companies will have to remove all the Huawei products from their networks within seven years (five years for the critical, core infrastructure). The Senate is the decision-making chamber. The bill will go to promulgation to president Klaus Iohannis unless it is referred to the Constitutional Court.

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SLOVAKIA (prepared by the CEC Government Relations office in Bratislava) COVID-19:

• 804 conducted PCR tests (15 positive); 133 hospitalized; 4 deceased; 18,849 inoculated (3,516,015 vaccines used in total) (daily update) • The epidemiological situation in Slovakia is very good, with nearly two million people have received the first dose of the vaccine and around 1.4 million with both. Health Ministry further plans to boost the vaccination also with the help of mobile units, and the vaccination in GP and paediatricians’ offices should start on 1 July • First cases of delta variant have been successfully contained; yet, Government is discussing with experts stricter border controls and measures to prevent any uncontrolled spread of this new mutation. A faster brake will be incorporated in the COVID automaton alert system to take measures immediately if the situation worsens.

Business and economy:

• Moody’s rating agency confirmed Slovakia’s A2 rating with a stable outlook • The registered unemployment rate in May in Slovakia decreased by 0.08 percentage point m- o-m to 7.92% • In May 2021, the year-on-year inflation rate reached 2.2 % • GDP is expected to recover faster, and 2021 growth should be on the level of 4.6%

Politics and legislation:

• EU Green (COVID) Pass app was launched in Slovakia on 26 June and included information on the vaccine, PCR tests or on overcoming the COVID-19 disease • Government-approved changes to traveller’s traffic light system managing quarantine requirements upon entry from abroad. Passengers returning from green countries (with the best epidemiological situation) will have to submit a 72-hours old PCR test upon entry to avoid quarantine (AG test possible previously; 24-hours old AG test can be used only in case of return from neighbouring green countries). Vaccinated people will be exempted from quarantine upon return from a green country already three weeks after the first jab of any EMA-approved vaccine (different deadlines applied for different vaccines previously). • The state will also provide job retention contributions to employers and the self-employed in the second half of this year. Still, the assistance will be tied to a pandemic control measure according to the COVID automat. Different aid intensities will be used based on different pandemics alert levels in a given region. • Ministry of Transport launched large tourism and HORECA state aid scheme of €37.25 million. Aid is dedicated primarily to large companies that surpass the limit of €200,000. • Travel agencies will get state aid in the form of repayable financial assistance that should boost their liquidity to return advance payments for trips that did not take place or were cancelled. The Finance Ministry estimates that travel agents will need approximately €60 million.

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