Hungarian Pleas for Aid Went Unheard by the EU

Slovak cartoonist Martin Šútovec nicely immortalized the occasion in his recent caricature. Hungarian portal Magyar Hírlap took the picture and translated it to Hungarian. The cartoon stars Slovak Prime Minister Robert Fico, famous for stressing the value of solidarity, and Hungarian leader Ferenc Gyurcsány. Here it is:English translation: "Solidarity? Are you nuts?!?"

Source: http://www.magyarhirlap.hu/cikk.php?cikk=161632

Prague the 12th Most Productive Region in the EU

According to data for 2006 released by Eurostat today, Bratislava region was the nineteenth most productive of all 271 regions in the European Union. Its GDP per inhabitant in purchasing power standards amounted to 149% of the EU average. This has to do with many large companies having headquarters and major facilities in the capital city, such as automotive manufacturer Volkswagen or oil refinery Slovnaft. Czech capital Prague ranked even higher – at place number twelve – and it is the most productive region of whole Central and Eastern Europe. Other regions of Slovakia ranked much lower, since their productivity ranged from only 44% of the EU average in case of Eastern Slovakia to 63% in Western Slovakia. Regional differences in living standards are thus quite pronounced in the country. However, this is the case of many other EU member states as well, such as Italy, Germany, Spain or the UK. The poorest regions of the EU can be found in Romania, Bulgaria and Poland.

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Workshop on New Institutional Economics

Ronald Coase Institute is organizing a workshop devoted to institutional analysis on May 10-15 together with the University of Economics in Bratislava. The deadline for applications is February 16 (Monday). The institute involves three Nobel Prize winners: Ronald H. Coase, Kenneth J. Arrow as well as Douglass C. North.

Germany as the Major Destination for Exports

Germany is the major trade destination for exports from five CEE countries:

1. Czech Republic - 30.9% of exports (1-11/08)
2. Hungary - 28.4% (2007)
3. Poland - 25.0% (1-11/2008)
4. Slovakia - 20.3% (1-10/2008)
5. Slovenia - 19.8% (1-11/2008)

Since exports-to-GDP ratios in Central and Eastern Europe are very high (roughly from 50 to 100%), a two-percent decline in Germany's economy this year is felt considerably in orders decline in the rest of "Mitteleuropa" as well.

Note: Lithuania's major export market is Latvia. Latvia's statistical office does not provide the necessary data. Estonia's major export partner is Finland. Croatia's major partner is Italy.

Brokered FDI down by Nearly 60% in Slovakia

Slovak investment agency Sario brokered almost sixty percent less foreign direct investment (FDI) last year compared to 2007. The amount of negotiated investment decreased from €1.28 billion to only €538 million (0.8% of GDP). Official central bank statistics of FDI inflow indicate a similar decline – by almost a third for the first ten months of the last year. However, the central bank data is often revised and contains estimates, which makes the overall numbers less reliable.
The reason for FDI inflow decline is that many companies scaled back their expansion plans due to global financial crisis. Japanese electronics manufacturer Sony, for instance, has been one of those belonging to this group. Other projects have been put on hold by hesitant firms facing uncertain times. Yet, there were a few significant large investments announced. For example, Bratislava-based plant of Volkswagen announced expansion worth €300 million last year.
Sario officials say that 2009 could witness resumption in FDI flows thanks to the Slovak adoption of common currency Euro as of January 1 this year. The agency is currently working on 122 projects bringing potentially more than € 2 billion of capital into the country. Five of the projects exceed € 300 million in value.

Grim Outlook for CEE from Lombard Street Research

In its daily note of January 16, Lombard Street Reseach writes via its analyst Maya Bhandari:

"The unwinding Eurasian savings glut will dominate 2009 economic outcomes. Emerging Europe faces the heaviest adjustment. The CEE-4 are amongst the biggest "borrow and spend" economies in Europe, with large external financing needs. But they also share the Asian Tigers' dependence on foreign demand for domestic growth, with two nasty twists – many banking systems are directly tied to the global crunch, and scope for policy action, both monetary and fiscal, is restricted."

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Hagara the New Chief Analyst of ING Slovakia

Since January 1, the new chief analyst of ING Slovakia is Eduard Hagara, aged 29. Hagara, born in Kežmarok, replaced Ján Tóth, the chairman of the Club of Economic Analysts, after almost ten years in this position. In 2003, Hagara co-authored a paper (in Slovak) on the similarity of demand and supply shocks in European countries with Jarko Fidrmuc. The study was published in Politická ekonomie in 2004. He obtained a degree in economic and financial mathematics from Comenius University in Bratislava, and worked for ING for almost five years. He is a four-time Slovak chess champion. E. Hagara this way joined the ranks of young economists in senior analyst positions in Slovakia, following Vladimír Vaňo (30), who became the chief analyst of Volksbank Slovakia in fall 2007.

Lipták on Sustainable Use of Natural Resources

An essay of one of our contributors, František Lipták, with which the author participated in the International Year of Planet Earth in Paris. The essay was presented at the National and Regional Economics conference in Herľany, Slovakia, held on October 1-3, 2008.
Abstract:

"In our paper, we analyze issues concerning sustainability of natural resource consumption involving contemporary problems emerging from their increasing scarcity. After brief historical outline, we discuss issue of natural resource use according to various policy approaches dealing with tax policy, externalities, institutions and technological progress."