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CEE Covid-19 & Political Overview 30 June 2021

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CEE Covid-19 & Political Overview 30 June 2021 Regional Update CEE Covid-19 & Political Overview 31 MAY – 30 JUNE 2021 Table of Contents CROATIA ................................................................................................................................ 3 CZECHIA ................................................................................................................................ 5 HUNGARY .............................................................................................................................. 8 POLAND ............................................................................................................................... 10 ROMANIA ............................................................................................................................. 12 SLOVAKIA ............................................................................................................................. 15 2 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 European Commission 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 Schengen Area, 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. 4 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. 5 • 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 European Parliament 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.
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