Emerging Europe Autumn 2019

Autumn 2019

emerging-europe.com

Doing business in Georgia Emerging Europe's quiet energy revolution Nagorno Karabakh: Forgotten conflict in the South Caucasus Beyond Prespa: Outlook on the Macedonian Economy

WHY IT'S TIME TO DITCH COMMUNISM FOR GOOD

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9 772399 760018 €5.99

INBRIEF The 41-year-old former comedian Volodymyr Zelensky has won a landslide victory in Ukraine’s presidential election, securing more than 70 per cent of the vote.

Later in the summer, Mr Zelensky's political party, Servant of the People, won a majority in a snap parliamentary election.

The Czech Republic had by far the lowest unemployment rate in the European Union in the fi rst half of the year, at just 1.9 per cent.

Next was Germany with a rate of 3.1 per cent. According to Eurostat, all of the EU member countries of emerging Europe boasted unemployment rates lower than the EU average of 6.3 per cent, except Latvia, where 6.5 per cent were unemployed. The region’s best performers aside from the Czech Republic were Hungary (3.4 per cent), Poland (3.8 per cent) and Romania (four per cent).

(51 per cent) are the other emerging Europe nations where a majority of the population trusts the European Union. In Croatia (46 per cent), Slovenia and Slovakia (44 per cent) and the Czech Republic (36 per cent) less than half the population trusts the EU. German automotive giant Audi announced that it is expanding production capacity in Hungary, investing a further 126 million euros in its plant in the western city of Győr. As well as creating 250 new jobs, bringing the total number of workers at the plant to 13,000, Audi’s investment could contribute to sett ing a new Hungarian export record. “Thanks to the investments of recent years, Hungary is now among the leaders of the new automotive industry, and has acquired investors from both East and West amidst stiff competition through its economic policy measures,” said Minister of Foreign Affairs and Trade Péter Szijjártó.

Moldovan PM Maia Sandu

in 2018 to 58 per 100 workers in 2050. Poland, alongside Italy and Greece, is one of those countries where there could be nearly as many or more older people out of the labour force as workers by 2050.

Estonia is the most innovative economy in emerging Europe, and the 24th most innovative globally, according to the 2019 Global Innovation Index. The index also A report conducted by reveals that Armenia and Georgia, the European Commission found that as well as Montenegro, North The European Commission Romania had the most dangerous Macedonia and Ukraine, are more approved, under EU Merger roads in the European Union. The innovative than expected for their Regulations, the proposed country had the highest number of level of development. Lithuania acquisition by Vodafone of road deaths per one million people, meanwhile, is less innovative than Liberty Global’s cable business with a fatality rate of 96. Bulgaria should be expected for its level of in the Czech Republic, Germany, and Latvia were the next most risky development. Every year, the Global Hungary and Romania. Vodafone countries in which to drive with 88 Innovation Index, the result of a and 78 accidents per million people, agreed to acquire Liberty Global in April 2018 for an enterprise value collaboration between Cornell respectively. Croatia (77), Poland University, INSEAD, and the World of 18.4 billion euros.

(76) and Hungary (64) also came Intellectual Property Organisation in with high fatality rates. The UK (WIPO), ranks the innovation In the face of rapid population was Europe's safest country to drive ageing, governments must promote performance of nearly 130 economies in 2018, with just 28 deaths per one around the world. more and better job opportunities million people. at an older age to protect living There was double glory for standards and the sustainability Levels of trust in the European emerging Europe at the Wimbledon Union are higher in Lithuania than of public fi nances, according to a new report from the Organisation tennis championships, where in any other country in Europe, Serb Novak Djokovic defeated for Economic Co-operation and a new report from Eurobarometer Roger Federer in an epic men's has found. More than 72 per cent of Development (OECD). The report fi nal, and Romanian Simona Halep Lithuanians trust the EU, well above projects that the number of older people (50+) out of the labour force breezed past Serena Williams to Denmark in second place, where take the women's title. Both players because of inactivity or retirement 68 per cent trust the bloc. Estonia took home 2.35 million UK pounds (60 per cent), Bulgaria and Hungary in the OECD area who will need in prize money. to be supported by each worker (55 per cent), Poland (54 per cent), could rise from 42 per 100 workers Romania (52 per cent) and Latvia

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Lublin, the capital city of the Lubelskie Region, is a driving force of Eastern Poland and a growing BPO/SSC/IT hub, boasting more than 60 R&D centres

Lublin has one of the highest office-space growth dynamics in eastern Poland, with a current office stock of 180,000 m2, planned to rise to 300,000 m2 by 2020. Costs are competitive: 8-12 euro per m2

Lublin Airport is only 8 miles form the city centre with flights to many cities including London and Munich

Over 50% of Lublin’s residents are under 40, and almost two-thirds of the 350,000 population is of working age.

One in five of Lublin’s population is a student

Lublin was named the “Emerging City of the Year in Poland 2018” at the CEE Shared Services and Outsourcing Awards

Marshal Office of the Lubelskie Region Department of Economy and International Cooperation Trade and Investment Promotion Section Artura Grottgera 4 St., 20-029 Lublin Investors and Exporters Assistance Centre +48 81 537 16 15 / +48 81 537 16 21 coie@lubelskie.pl Find us on: invest.lubelskie.pl/en

FROM THE EDITOR M

y role as editor of Emerging Europe requires me to chair or take part in a large number of panel discussions covering a wide range of subjects, from investment and education to the future of the European Union and Brexit. These debates are always hugely enjoyable, not least as we try to ensure that as wide a range of opinions as possible get a voice, something which usually leads to lively and constructive debate.

It would be amiss of me however not to admit that some panels are better than others. Occasionally, guests get tongue-tied, the conversation does not flow and I am left looking at the clock wondering how I might fill the allocated time slot. Fortunately, having been blessed with what we call the gift of the gab, I can usually find something to talk about, even if it means lapsing into what I was once told was ‘a poor attempt at stand-up comedy’.

Sometimes, the opposite happens: people have so much to say that there is simply not enough time in which to say it.

This happened earlier this year at the Emerging Europe Leaders Meeting and Awards, during a panel discussion which looked at the way the emerging Europe region is portrayed in the media. Held at the iconic Gherkin building in London, the panel was moderated by the BBC’s Kasia Madera and featured a number of leading journalists who spent an hour answering questions from a knowledgeable audience who primarily wanted to know why their countries (and

the region in general) was so often poorly represented in the media.

It was probably the liveliest debate of the two day event, and everyone concerned was disappointed that we had to end it after an hour: it felt as though we had just begun to get somewhere, to draw some early conclusions, when the conversation was brought to a halt.

Our cover story this issue is therefore a continuation of that debate. I have spoken to a wide range of senior journalists from across the region in order to find out more about the conundrum that is emerging Europe’s portrayal in the media. During the interviews I carried out, a number of recurring themes emerged, of which perhaps the most crucial was the need for all of us who write about the region to draw a line under communism once and for all.

Think about the last time you read an article about any of the 23 countries of emerging Europe in the Western media, be it political, business or travel-related.

The chances are that communism, or at the very least the fall of communism, was referenced. This is a problem, because it suggests that it is the region which is unable to move on, when in fact it is those of us who write about the region who are most guilty of perpetuating what are now, 30 years on, little more than lazy stereotypes. We need to find new narratives, new prisms through which we view the countries of emerging Europe.

That said, it is not a one-way street. The countries of the region need to do their bit. They need to

offer us new narratives, to ensure that there are positive stories for us to report. Our job as journalists is to interpret the region and make sure that we accurately convey the reality of today. Some countries have begun to understand that, the Baltic states especially, of which Estonia, often an example of best practice in the region, is not the least. Even the laziest hacks no longer refer to post-Soviet Estonia; they refer to technology hub Estonia, to digital Estonia.

This did not happen overnight.

It takes time. But just as journalists need to make a conscious effort to leave communism behind once and for all in the way we define emerging Europe, so the countries of the region need to make an equally conscious effort to find new ways of getting themselves noticed.

Together, we can, and will, change the narrative. •

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Craig Turp, Editor

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T +44 20 3808 8558 W emerging-europe.com E newsroom@emerging-europe.com Founding Partner, Strategy & Content Andrew Wrobel andrew@emerging-europe.com Editor Craig Turp craig@emerging-europe.com Editorial team Claudia Patricolo claudia@emerging-europe.com Dominik Istrate dominik@emerging-europe.com Jerry Cameron jerry@emerging-europe.com Portia Kentish portia@emerging-europe.com Contributors Juliette Bretan Linas Jegelevičius Frédéric Schneider Nikodem Chinowski Yoan Stanev Tamara Karelidze Shakhil Shah Graphic Designer Karolina Antipenko Cover Miroslav Lukič Video Editor Piotr Dobroniak Photographer Sabrina Bouchaala Partner, Growth & Partnership Emiliano Ramos emiliano@emerging-europe.com Managing Director Mariam Rachi mariam@emerging-europe.com

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BUSINESS

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Food for thought

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Emerging Europe Awards 2019

Paris, Beijing and Vienna

Table of contents

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Doing business in Georgia: Is it really that easy?

Can you really set up a Georgian business in just a few hours?

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Romania's far-right goes mainstream

World Bank Country Manager Marco Mantovanelli and Vice President of the International Finance Corporation (IFC) Georgina Baker speak to Emerging Europe's Andrew Wrobel about North Macedonia's investment outlook as the country seeks to reap what has become known as the Prespa Dividend.

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ICT in North Macedonia: Never more important The information and communication technology (ICT) industry is the fastest growing sector of the Macedonian economy, and it plays an important role in the economy as a provider of jobs and generator of exports.

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Emerging politicians: Sándor Rónai and Sona Ghazaryan

OUTLOOK ON THE MACEDONIAN ECONOMY

Investing in North Macedonia

18 A view from: Washington,

Despite the surge of populist forces in the European parliamentary elections, mainstream parties will continue to dominate. With Germany’s Ursula von der Leyen at the helm of the next European Commission, the new EU leadership is expected to slowly proceed with a renewed attempt at deeper integration, a factor likely to be the cause of dissent in emerging Europe.

Our quarterly look at some of the region’s most innovative companies.

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CURRENT AFFAIRS

A new EU parliament and commission: What should emerging Europe expect?

Made in emerging Europe

Emerging Europe's search for new narratives It's time for emerging Europe – and those of us who write about the region - to draw a line under communism: the divisions of the past should not define the future.

New narratives must be found, but who will provide them?

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Emerging Europe's quiet energy revolution With the region's north-south gas corridor approaching completion, Central and Eastern Europe is becoming more energyindependent, closer to the European Union and farther from Russia.

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EU accession, not Prespa, will make or break Macedonian PM Having concluded an agreement with Greece over the use of the name Macedonia, ending an almost 30-yearlong and often bitter dispute, North Macedonia is likely to be made a full member of NATO by the end of the year.

Membership of the European Union however is much further away – at least a decade – and failure to begin accession talks by the time of next year's general election could spell the end of prime minister Zoran Zaev's ruling coalition.

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Manufacturing in Kosovo

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Automotive components: the rising star of the Macedonian economy North Macedonia is experiencing a surge in its automotive component sector, aided by generous government policy, location and a cost competitive market environment.

AFTER HOURS

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Book, Film, Exhibition

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Nagorno Karabakh: An ongoing humanitarian crisis The armed conflict between Armenia and Azerbaijan over the disputed territory of Nagorno Karabakh (Artsakh) is now in its 31st year, with no solution in sight. Those who live in the conflict zone, as well as those who flee it, are faced with a reality unlikely to change.

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Warsaw: A very contemporary capital of fashion

When people hear the words fashion capital their minds are often drawn only to the traditional centres of world fashion such as London, New York, Paris and Milan. To do so is a mistake however, for there is a new, booming fashion capital very much on the up, one that appeals to those who are looking to step outside the borders of the institutionalised fashion industry and into the contemporary.

Looking for Montenegro's finest restaurant? Forget Podgorica Craig Turp speaks to Lazar Ćatović, who has made a centuries-old mill in the Boka Kotorska one of the most talked-about restaurants on the Adriatic.

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Lublin city guide: 48 hours in Poland’s best little secret

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Batumi city guide: 48 hours in Georgia’s Black Sea paradise

52 Gearing up for investment: Doing business in the Macedonian economy

North Macedonia is the only country from the Western Balkans to make the top 10 of the World Bank’s Doing Business Index.

The country, which continues to aspire to Euro-Atlantic integration, is heavily dependent on foreign investors, and how it presents itself on the international stage is crucial.

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Transforming Tirana’s iconic pyramid For many years a symbol of the Albanian communist regime, Tirana’s iconic pyramid is stepping into the future.

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The Floating Voter

This story is from Mike Ormsby's collection Never Mind the Vampires, Here’s Transylvania.

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You what?

Emerging Europe launches a mini cultural revolution.

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FOOD

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THOUGHT Now is not a time to be complacent

Photo: Anne-Marie Martin

Anne-Marie Martin is the director for global business networks at the British Chambers of Commerce.

The CEE region, whilst still having a lot to offer UK companies, may soon have to face the prospect of being overshadowed by the renewed and invigorated interest in markets of strategic importance further afield. Data is beginning to show that UK businesses are increasingly conscious of potential around new export and investment destinations.

Increasing its number of markets, a business trades with reduced risk

and increases growth possibilities in the long term. In the light of Brexit and the cited new opportunities across global markets, companies that took comfort from a wellknown, abundant trading bloc are now considering expanding their horizons in earnest, with the top three contenders being the US, the Middle East and China.

The US economy is growing, and whilst China’s is slowing down, it is still a strong performer relatively speaking. The recent slowdown in eurozone GDP growth partly reflects moderating global demand and persistent Brexit uncertainty.

Th is should send a strong signal to the emerging Europe region that its work is not yet done. If it is to contend with both old and new competitors, it needs to sharpen its pencil.

There is no question that the European continent will continue to be of significant market interest for UK companies, but with Germany still leading the pack as the European market of most interest, the rest of the pack will need to learn to fight harder for market share. It’s time to really showcase the unique selling point and high value opportunities in each market in the emerging Europe region by clearly defi ning their value

proposition and distinguishing themselves from each other.

The recent Emerging Europe awards successfully demonstrated that some markets are very good at this and those agencies that are responsible for trade promotion across the region are working hard to improve their marketing portfolios, with one or two truly excelling at the job. Th is is a marked change from years gone by and it is absolutely a positive step, but the role of market promotion should not fall upon only a small number of incumbents. It is the role of the many to shout from the hilltops about market opportunities.

Chambers of Commerce have long been at the forefront of these activities and the British Chamber Network across the world has long demonstrated its commitment and strength in driving bilateral trade and investment and business relationships through clear marketing and promotion messaging and activities.

One of my favourite truisms is that every challenge brings opportunity. There has never been a more opportune time to amplify the region's att ractions and remind UK companies that the emerging Europe is a diverse and intriguing region, abundant in opportunities for trade and investment and very much open for business. •

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The EU in the time of Cold Peace

but to think beyond borders.

The goal of wise politics is to make Today the world is out of balance a nation educated and prosperous, and it will take time to fi nd a new to empower citizens, to create one. Today, power in the world is societies that are free and tolerant. shift ing and changing.

Peace is not given and it is up to Many predict a new, second every one of us to protect it. Peace Cold War. I truly believe that we are is not just the absence of war. Peace not heading into a new Cold War; is human rights, peace is the rule the situation today is not a replica of law. In the 21st century Europe’s of what happened in the past. We disagreements should be solved are not in a time of a new Cold War, in parliaments, not on batt lefields. but we are in a time of Cold Peace.

The European integration project Five years ago, at the Munich is making this dream a reality.

Security Conference, I pointed Of course, Europe today cannot out that Europe had entered a new be an island of stability in the period. The Ukrainian crisis was ocean of world instability. The EU the game changer. We have entered is facing a record number of crises. a new phase of development, which Additional crises are on our radar I call Cold Peace. Peace, because screen, for example Brexit, the rise Photo: Rosen Plevneliev nobody wants a war, but Cold Peace of nationalists and populists, because we see confrontation and migration and others. We must not the methods from the Cold War allow Europe to fall into a moral - propaganda wars, cyber-attacks, crisis – a crisis of lack of solidarity, proxy and hybrid warfare. a crisis of questioning our values, Rosen Plevneliev is a former a crisis of forgett ing who we are president of Bulgaria and honorary And some countries have been destabilised and weakened through and what we stand for. Whether it chairman of the Emerging Europe Alliance for Business Services, frozen confl icts. is migration or sanctions against Innovation and Technology.

We are living in turbulent times, Russia – we need to stand and stick because world and regional leaders together. We are a family. A family It is our common cause to continue demonstrate different approaches in a crisis stands together And making and shaping history with and different goals in politics. A lot every member of the family has to our project for a Europe that is of international leaders pretend to contribute, to solve and not deepen united, prosperous and at peace. be strong, but not many of them are the problems.

Peace and freedom are today being wise. You can have a very strong The EU has unique significance tested, confronted. We witness army or propaganda machine, but I and strong political legitimacy, the worst security situation don’t think it is wise to occupy and because of the peaceful discussions since the end of World War II. destabilise your neighbour from and sett lement of differences, We see fundamental differences long term perspective. The cause because of the shared fundamental between world and regional of wise politics is to modernise, to rights and rules, and because powers. National borders and educate, to give way to diplomacy of the unprecedented level of international principles are and not to fight. But if you do not cooperation between all member questioned. We witness a more and have a cause, you need a war, you states. The EU is a unique project more dysfunctional international need a convenient enemy. It is easy for peace where every nation is system where world and regional to destabilise. States can be broken important. No state is peripheral institutions and powers are unable easily by powerful neighbours. or subordinate. The problems to prevent and solve a record But broken societies can only be of migration, terrorism, climate number of confl icts. In many repaired by people, not by Great change, economic crises and others regions war and terror prevail.

Powers. You can quickly destroy go beyond our borders. These States and institutions disintegrate. order but it takes a lot of time to problems are transnational and Today borders are making rebuild it. Unfortunately, this is require joint efforts. Cooperation a comeback. The same generation exactly what we see today in parts is no longer a matter of choice, but that brought down the Berlin Wall of Europe - frozen confl icts and of necessity. • is building new walls in the very occupation. In the 21st century heart of Europe. it is not wise to move borders,

"A lot of international leaders pretend to be strong, but not many of them are wise."

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Emerging Europe

Awards 2019 Emerging Europe recognises its 2019 champions.

The 2019 winners pose with their awards

WORDS JERRY CAMERON

The ceremony also saw the World Bank’s CEO Kristalina Georgieva, and two incumbent prime ministers, Alexis Tsipras of Greece and Zoran Zaev of North Macedonia, handed awards for remarkable achievement.

“It is a genuine thrill to receive this award,” said Dr Georgieva, winner of the Princess Marina Sturdza Award, who has built a reputation as a gender equality champion, humanitarian, and leader in the global fight against climate change. “I am grateful for the opportunities I have had in life to serve in public office. I am even more grateful for the chance in recent decades to help create a world of opportunity for young people, especially those from emerging Europe.”

Mr Zaev, the joint winner with UG, the Polish producer Other winners at the ceremony Mr Tsipras of the Günter Verheugen of lighting systems, has included Romania’s Grampet Award, for their role in resolving been named as Emerging Group, the Regional Champion of an almost 30-year dispute regarding Europe’s Global Champion of the Year. use of the term Macedonia, said “I the Year, an award which recognises Praga Koneser Center won would like to thank Emerging Europe companies who strengthened Best Urban Renewal Project for for this award,” also praising the role their operations outside the region the transformation of the former of the European Union in keeping in 2018, organically or through Warsaw Vodka Factory into acquisition. a business and cultural centre, with the peace across the continent. “Our In a ceremony held at Poland’s Holo4Labs taking the title fathers and grandfathers went to the headquarters of the European of Innovation Initiative of the Year. war. Today we trust our European neighbours. Eastern and Western Bank of Reconstruction In the social categories, there Europe are united. Our common and Development (EBRD) were popular wins for some in London, the award for City incredibly innovative programmes. European home safeguards peace.

We should be extremely thankful.”

Foreign Direct Investment The City of Ljubljana’s LGBT+ Meanwhile, Invest Lithuania was (FDI) Promotion Strategy Certificate was the winner of the named as emerging Europe’s leading of the Year went to Vilnius Equality-Friendly Initiative of the in Lithuania, with Estonian Year, with Pole Mateusz Hołda named Investment Promotion Agency (IPA) for the second year running.

Way being named Tourism the Young Influencer of the Year.

“There has been some Campaign of the Year. Hungary’s Insignes Lab, a start-up from improvement over the past year,” innovation-driven pharmaceutical Poland specialising in the said Andrew Wrobel, Emerging company Gedeon Richter won development which develops Europe’s founding partner, strategy in the Research and Development strategies for novel antimicrobial and content. “This year, the best Category, while Jaguar Land components was named the Social IPA scored 72.4 out of 100, up Rover’s state-of-the-art Impact Start-Up of the Year, and from 67.6 in 2018, and the top manufacturing facility in Nitra, Promocija, from Montenegro, was five IPAs scored over 50. Ten Slovakia, was named the Best given the award for Best Young agencies improved their position FDI Project.

Empowerment Initiative.

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High-level panel discussions form a key part of the event

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in the ranking. However, the five IPAs at the bottom of the list all scored below 20 points, less than the lowest-ranked agency in 2018.

The most worrying factor is that fewer agencies responded to enquiries from the investor who teamed up with us to carry out the research. The most promising one is that IPAs see the benefits of automating certain procedures.”

Mr Wrobel was one of a number of business leaders and officials who took part in a high-level roundtable discussion dedicated to the investment report which preceded the awards ceremony.

Many of those in attendance were encouraged that there had been progress.

“The quality has improved from last year and it’s great to see that the promotion of our market is improving,” said Olga GrygierSiddons, former CEO of PwC CEE. “However, the [investment promotion] agencies don’t appear to have addressed all the challenges.

Digital capabilities, for example, are not used everywhere. Investors look for skills, especially digital skills, so the role of websites is crucial as they symbolise digital competencies.

More needs to be done here.”

Peter Stračar, former CEO of GE CEE, and like Mrs GrygierSiddons a member of the Emerging Europe Council, also welcomed the progress that had been made but called on the region to do more to promote its know-how.

“There was a time that labour costs were the only thing that mattered,” he said. “Now things are different. Now is perhaps the time for the IPAs to start cooperating with research and development centres and universities to showcase the know-how. This is very important in the region, this is what the region wants.”

In the Emerging Europe Business Friendly City Perception Survey, which looks at the business environment in the region’s key cities, Polish and Lithuanian cities led the way. Alongside winner Warsaw, six other cities from Poland and Lithuania made the top 10: Vilnius, Poznań, Łodź, Kaunas, Wrocław and Gdańsk. Prague, Ljubljana and Budapest were the other cities to make the top 10.

A panel of 25 global location advisers and foreign direct investment experts weighed up the various merits of the 75 cities of emerging Europe which are either capitals or have a population of more than 200,000 inhabitants.

“A large number of the region’s cities have begun to take the initiative and do things for themselves in recent years, often in spite of the wishes of central governments,” said Mr Wrobel.

“The reason is simple: these cities and the regions in which they are found no longer want to be held back by long, cumbersome decision-making processes which stifle initiative, innovation and

hinder foreign direct investment.

At Emerging Europe, we believe we should acknowledge the cities that are perceived as top performers.”

“I believe that open and friendly Warsaw is an excellent place for innovation,” said Rafał Trzaskowski, the mayor of the Polish capital, whose city topped the overall ranking. “Investors, ambitious students and specialists want to be a part of the city because of access to finance, attractive geographic location, architecture and high quality of life. It is creative people who develop our local economy. We offer them a wide range of office, commercial and warehouse spaces. We are a city that continues to develop dynamically.”

Mr Trzaskowski also highlighted the city’s modern and environmentfriendly transportation system, and the length of the cycling network: now close to 600 kilometres. Besides taking the overall crown, Warsaw ranked first in two categories, Brand and Pool of Talent.

“Warsaw is a modern, smart city, following global trends, aiming at sustainable and intelligent development,” the Polish capital’s mayor told Emerging Europe.

A total of 31 cities in 16 countries made the top 10 in the index’s seven categories. Besides the Polish capital, leading performers include Vilnius in Lithuania, which ranks first for Business Climate, and which was second overall. •

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Emerging Europe Awards 2019 Winners The Professor GĂźnter Verheugen Remarkable Achievement Award Alex Tsipras, Prime Minister of Greece, and Zoran Zaev, Prime Minister of North Macedonia The Princess Marina Sturdza Remarkable Achievement Award Kristalina Georgieva, CEO, World Bank

North Macedonia's PM Zoran Zaev with Emerging Europe's Andrew Wrobel

FDI project of the Year 1 Jaguar Land Rover, Slovakia 2 Continental, Lithuania 3 Milteks, Georgia Global Champion of the Year 1 LUG, Poland 2 Adamed, Poland 3 Blue Projects, Romania Regional Champion of the Year 1 Grampet Group, Romania 2 United Group, Serbia 3 Tucano Coffee, Moldova Research and Development Project of the Year 1 Richter Gedeon, Hungary 2 Acronis, Bulgaria 3 Hello2, Kosovo

Innovation Initiative of the Year 1 Holo4Labs, Poland 2 ROL, Lithuania & Warsaw Genomics, Poland 3 QuickCash AI, Georgia, and eInspektor, Serbia

City FDI Promotion Strategy of the Year 1 Vilnius, Lithuania 2 Poznań, Poland 3 Debrecen, Hungary Social Impact Start-Up of the Year 1 InsignesLab, Poland 2 Glucocarer, Lithuania, and Genomtec, Poland 3 Echo, Georgia

Kristalina Georgieva

Urban Renewal Project of the Year 1 Praga Koneser Centre, Poland 2 Skanderbeg Square Tirana, Albania 3 UBB HQ Gallery, Bulgaria

Once again, the Emerging Europe Leaders Meeting and Awards brought together a wide range of key decision makers, innovators and businesses bringing about real, positive change across the region.

While we list here only the winners, the success of the event lies in the active participation of hundreds of other nominees and progressive voices throughout emerging Europe.

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Former Greek PM Alexis Tsipras

Business Friendly City — Brand Warsaw, Poland Business Friendly City — Economic Potential Łódź, Poland Business Friendly City — Business Climate Vilnius, Lithuania Business Friendly City — Infrastructure & Connectivity Prague, Czechia Business Friendly City — Pool of Talent Warsaw, Poland Business Friendly City — Quality of Life Ljubljana, Slovenia and Prague, Czechia Business Friendly City — Local Authority Support Poznań, Poland

Equality-Friendly Initiative of the Year 1 LGBT Certificate in Ljubljana, Slovenia 2 “I See” Theatre, Belarus 3 Matra Resort, Hungary Tourism Campaign of the Year 1 Estonian Way, Estonia 2 G-Spot Vilnius, Lithuania 3 Visit Poland, Poland Young Empowerment Initiative of the Year 1 Promocija, Montenegro 2 Ukraine Reformers Architecture, Ukraine 3 Go Beyond, Latvia Young Influencer of the Year 1 Mateusz Hołda, Poland 2 Edvin Kanka Ćudić, Bosnia and Herzegovina 3 Olga Kudinenko, Ukraine National Investment Promotion Agency of the Year 1 Invest Lithuania, Lithuania 2 Enterprise Estonia, Estonia 3 Czech Invest, Czechia Business Friendly City of the Year (Final ranking) 1 Warsaw, Poland 2 Vilnius, Lithuania 3 Prague, Czechia

Current Affairs

Georgia's booming tourist industry has been badly hit by a Russian ban on flights to and from the country.

In response, the country's allies have a launched a campaign to persuade more western Europeans to visit Georgia.

A raft of new flights to the country from Western Europe, including some operated by Ryanair, which has entered the Georgian market for the first time, should help.

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CURRENT AFFAIRS

A VIEW FROM...

Washington

The Caspian region is located in the heart of the Eurasian landmass, squeezed between two economic and political behemoths: Europe and Asia. Th is civilisational dichotomy is constantly at play in the region as these titans batt le for influence, particularly for energy resources to meet their Anthony Kim, Research Manager respective market demands. and the Editor The region encompasses the eight of the Index of countries on the southern rim of Economic Freedom, There is no description.

The Heritage Russia that emerged from the fall Foundation. of the Soviet Union—Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan.

According to the International Monetary Fund, average economic growth in the Caspian region as a whole is around four per cent, after recovering from large external shocks during the years from 2014 to 2016. By and large, economies in the region are benefiting

from efforts to strengthen macroeconomic policy frameworks, including the adoption of new fi scal frameworks. In addition to maintaining overall monetary stability, a move towards greater exchange rate flexibility have also helped authorities manage external pressures and contain inflation.

The abundance of natural resources is also one of main reasons the region is prone to outside influence. Turkey, though not a Caspian littoral state, maintains very close cultural, linguistic, historical, and economic links to the region. Russia and Iran continue to insert and propagate pro-Russian and anti-Western narratives and perspectives to the governments and peoples of the region, and see themselves as having a special role in Caspian affairs due to their previous engagement with the region. China

has attempted to make greater inroads to the region as part of its Belt and Road Initiative.

By contrast, while increasing, European and US involvement have been less pronounced, which some consider to be extremely shortsighted considering the region’s economic and energy potential.

Nonetheless, the Caspian region is gaining renewed strategic significance. As a matter of fact, the region has always been, and will remain an area of geopolitical importance and competition. It may well be the time for the US to pay greater attention to the Caspian region.

Washington’s engagement with the Caspian region merits a more holistic and proactive approach that encompasses good governance, economic development, and energy cooperation.

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Paris

Thibault Muzergues Europe Programme Director at the International Republican Institute

A year ago, I wrote in this column that emerging Europe was looking for (and desperately looking for) its Macron. One year later, it seems that this wish has been fulfi lled in quite a few countries in the region: the impressive electoral victories achieved by emerging political parties in Latvia, Romania, and of course by Zuzana Čaputová and Volodymyr Zelensky in Slovakia and Ukraine show that Central and Eastern Europe is now ripe for a new generation of politicians to take over.

Not that all these successful political formations are defi nitely on Emmanuel Macron’s side: in Latvia, Jānis Bordāns’ New Conservative Party is certainly no friend of the progressives (unlike the country’s other emerging party, Att īstībai/Par!). But all of them share a common willingness

to renew the political landscape of their country, fi ght more decisively against corruption in government circles and provide a new electoral framework that will seem more familiar to Western audiences than the current ones: just like Volodymyr Zelensky managed to completely overrun the old (some might say artificial) dichotomies between Eastern and Western Ukraine during the past elections, Latvia’s New Conservative Party and Att īstībai/Par! are providing a new Conservative vs. Progressive framework that could well supercede the Latvian speakers vs. Russian speakers dichotomy that has defi ned much of Latvian politics since the country reclaimed its independence in 1991.

Th is of course does not mean that everything has immediately

changed for the bett er: for those emerging politicians that have been elected to the highest functions, the hardest part of the work starts now, and we know that governance can only bring disappointment over time. On the other hand, the much needed rejuvenation of the political landscape (whether inside the existing party system or not) is still very much ongoing in many other places in emerging Europe, but we can defi nitely see a trend here – and a positive one, if only because it is breaking the myth (unfortunately persistent in Western Europe) that portrays emerging Europe as uniformly grey, authoritarian and reactionary. Well, parts of it may well be, but it is now becoming clear to all that this is not the whole story.

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Beijing

Abhishek Pratap Singh Visiting Scholar, Beijing International Studies University (BISU).

In the Chinese public discourse, Europe has mostly been understood as a progressive and integrated force, which is capable because of its economic strength and normative appeals. To the Chinese, the development of Europe exhibits a unique example of political and economic integration, a kind of sub-international system with multifaceted cooperation between states. From the Chinese perspective Europe’s institutional cooperation, policy coordination and its economic output are matters of great interest and enquiry.

The diplomatic relations between both goes back to 1975, and have evolved in a consistent manner with a growing Chinese economic and political footprint in Europe emerging over the last few decades.

The role of the EU-China Higher Education Cooperation Programme

in the late 1990s was a major breakthrough for the development of EU studies in China, which also played a significant role in increasing understanding about Europe among Chinese academia. During this time Europe was mostly understood as an attractive welfare state with a sustainable development model and regionally integrated economy.

As a normative power, Europe was much liked for its cultural diplomacy, seeking peace and harmony in a multilateral institutional model.

Europe’s record on global issues like climate change, energy security and human rights also attracted interest among new urban Chinese.

As both Europe and China grew economically stronger they reiterated their commitment to build a more constructive engagement.

Against the backdrop of European crises, the Chinese perspective

on Europe has attempted to revisit its understanding and has sought to take a more realistic view about Europe. This has resulted in exploring the limits of Europe’s universalism and its model of internal governance.

Interestingly, at the civil society level Europe remains one of the most favourable destinations for Chinese citizens given its beautiful landscape and clean atmosphere. However, with the growing Chinese geoeconomic presence in European countries, much discussion now relates to cooperation in areas like energy, transport and port development. Under the Belt and Road Initiative China seeks to align with Europe’s ‘technological power’ and balance of interests with south, central and core European economies.

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Vienna

Richard Grieveson Economist at the Vienna Institute for International Economic Studies — wiiw.

Prince Metternich, the Austrian foreign minister and chancellor of the early 19th century, is reputed to have said that “the Balkans begin at the Landstrasse," a road leading out of Vienna to the East. Seen from Vienna, the Balkans have always appeared to be very close, and their importance to the city continues to this day. Many people from the region have made Vienna their home, and firms headquartered here play a huge role in banking, retail and other sectors in the countries of the former Yugoslavia and Albania.

The 30 years since the fall of the Berlin Wall have been difficult for the Western Balkans. While many other CESEE countries have joined the EU and achieved respective levels of convergence with Western Europe, most of the Western Balkans has lagged behind. Only Croatia has joined the EU, and even that was nine years after the original CESEE accession wave. Meanwhile, per capita GDP convergence ranges from 20 per cent of the Austrian level in Kosovo to 36 per cent in Montenegro (the equivalent level for the Czech Republic, the CESEE frontrunner, is 71 per cent). And amid this difficult backdrop, several worrying challenges have either appeared or intensified in 2019.

First, EU accession prospects are fading. The EU Council decided

not to open accession negotiations with North Macedonia and Albania earlier this year, despite a commission recommendation to do so. France and the Netherlands appeared particularly opposed. This has caused great disappointment in the Western Balkans, not least in North Macedonia, which recently concluded a historic name change in order to placate Greece. There is a risk if countries do not see a realistic route to membership, reform progress will suffer.

Second, some of the historic political tensions appear to be heating up. The possibility of a land swap between Serbia and Kosovo has increased political and security risks, and brought to the fore historical grievances on both sides. Leaders in both countries have indulged in irresponsible threats of military action. Meanwhile internal tensions in Bosnia and Herzegovina also provide cause for concern.

Third, regional economic growth appears to be slowing, not least in Serbia, which is by far the biggest economy in the Western Balkans.

The Serbian economy grew by 4.3 per cent in 2018, but will only achieve a bit more than half of that this year. Domestic factors, not least shutdowns at the Fiat-Chrysler plant, are partly behind this. In addition, the 100 per cent tariffs imposed by

Kosovo on Serbian exports, and the barrage of external headwinds from the US-China trade war and a possible recession in Germany, is likely to be having an impact.

Fourth, the Western Balkans risks being sucked ever further into great power conflicts. Russia continues to meddle, but the real story is the arrival of China with its Belt and Road Initiative (BRI). The BRI could bring much needed infrastructure investment to the Western Balkans and improve connectivity, but also brings serious risks related to the environment, public procurement standards and unwelcome political influence from an EU perspective.

Unfortunately, it looks as if EU accession is still a long way off for the Western Balkans.

However, considering the changing economic and political backdrop, it is important that Brussels, Berlin and Paris think about how to further support development and connectivity in the region in the meantime. Greater integration with the EU market, access to more parts of the EU budget, and a strong role from the EU in helping to solve political conflicts in the region would all help with this. Considering the importance of the Western Balkans for Austria, the government in Vienna should take a lead in pushing this at the EU level.

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A new EU parliament and commission: What should emerging Europe expect?

Despite the surge of populist forces in the European parliamentary elections, mainstream parties will continue to dominate. With Germany’s Ursula von der Leyen at the helm of the next European Commission, the new EU leadership is expected to slowly proceed with a renewed attempt at deeper integration, a factor likely to be the cause of dissent in emerging Europe.

WORDS DOMINIK ISTRATE

T

he EU elections brought mixed results for the emerging Europe region. While most of Central and Eastern Europe’s populists came out stronger than five years ago, they failed to become a major force in the new parliament due to the surge of liberal and green parties.

At the EU parliamentary level, the loss of the illiberal influence is already visible: a number of MEPs from Poland’s ruling Law and Justice party and Hungary’s governing Fidesz party were prevented from obtaining key positions on the new parliament's committees.

The next European Commission might be different. The illiberal governments of the Czech Republic, Hungary and Poland all supported the election of Ursula von der Leyen, a moderate Christian democrat from Germany’s ruling party, to head the EU’s top executive body. The votes of their MEPs were crucial in her confirmation, given that she barely passed the 374-majority needed to become president-elect.

In her nomination speech, Mrs von der Leyen outlined an agenda that includes a “new burden-sharing mechanism” for refugees, stronger cooperation in defence and border control, an EUwide minimum wage scheme, strengthening the European Social Pillar and deepening the Economic and Monetary Union. With such progressive goals, clashes with Central Europe’s illiberals seem to be inevitable. The success of these pro-integration proposals, however, will heavily depend on what coalitions the incoming

president will be able to build in the European Council and the parliament.

Rule of law remains at the top of the agenda Mrs von der Leyen also promised to be tough when it comes to defending the rule of law. At the same time, she said the EU should be more understanding with Central Europe and initiate what she called “objective debates”.

The new mechanism she proposes to defend the rule of law has yet to be made public, while critics fear that the presidentelect’s softer stance on the CEE region might result in a weaker approach when it comes to defending European values.

Introducing a new way of keeping CEE in check might be key, since the Council of the EU has so far been reluctant to continue Article 7 proceedings, started against Poland in 2018.

“The European Commission, together with the European Court of Justice, will be aiming to constrain Poland via infringement procedures,“ Edit Zgut, a political scientist and guest lecturer at the Centre for Europe of the University of Warsaw told Emerging Europe, noting that she does not expect any major shift in the new commission’s stance on Poland. She argues that so far only infringement procedures and not Article 7 - were able to slow down the Polish government’s efforts to build an authoritarian system.

“It is time to enforce currently existing regulations, such as Article 142 of the EU’s Treaty of Lisbon, which allows for the suspension of payments in case of systematic violations of the rule of law,” she continued, adding that the EU is already well-equipped “to restrict member states that strive to weaken or undermine the rule of law.”

Pressure is already mounting on the EU to take action. In August,

the outgoing commission introduced an additional mechanism to monitor the rule of law in not just countries criticised

by EU institutions, but in the whole European bloc, signalling the need for keeping the issue at the centre of attention.

In addition, Finland, now presiding over the Council of the EU, promised to initiate a hearing where the actions of the Hungarian government will also be debated.

A restructured EU budget “We are aiming at setting up a well-balanced and effective mechanism that will tie EU funding to compliance with the rule of law,” Finnish prime minister Antti Rinne told reporters in July, introducing his country’s EU presidency.

If successful, this may result in a significant drop in EU funds for Poland and Hungary, which are already projected to receive less support from the Multiannual Financial Framework (MFF), the EU’s long-term budget, between 2021 and 2028.

“The past few years have shown that the European Union does not have an adequate tool to handle challenges regarding the rule of law in a country that is already a member of the EU,” said István Ujhelyi, a Hungarian MEP of the Socialists and Democrats Group in the European Parliament who argues that the Council of the EU and the European Commission should implement “a new tool which is capable of protecting the EU budget - by interrupting payment deadlines, reducing pre-financing or suspending payments, but without jeopardising the final beneficiaries’ access to the funds.”

“In the current MFF (2014-20), the Central and Eastern European region has been a great beneficiary, with Poland alone receiving 100 billion euros, more than 10 per cent of the EU budget. Due to rapid growth and convergence, this is bound to change,” László Andor, a former EU commissioner for employment, social affairs and inclusion told Emerging Europe.

He noted that agricultural and cohesion funds, from which Central and Eastern European countries have greatly benefitted, were likely

to decrease as budgetary priorities might shift towards funding migration management, climate action, innovation and research.

“Mrs von der Leyen should launch not only a rule of law conditionality, which is difficult to trigger due to its politicised nature, but also a serious review of shared management and introduce direct or assisted management where needed,” he added.

Reassuring the EU’s neighbourhood “I want to reaffirm the European perspective of the Western Balkans and I see an important role in the continued reform process across the region,” Mrs von der Leyen has said. While she expressed strong support for securing the European path for the six countries in the region wishing to join the bloc, the decision of the EU heads of state and government in June to postpone the start of accession talks with Albania and North Macedonia came as a major blow to the procedure.

“For us, the Western Balkans is not the backyard of the European Union, but the inner courtyard,” Michael Roth, Germany’s minister of state for EU affairs said following the EU Council’s decision, trying to reassure Europe’s partners in the region.

Re-engaging with the Western Balkans states will be a major challenge, as some EU leaders such as Dutch prime minister

Mark Rutte or French president Emmanuel Macron remain sceptical about accepting new members. “I will refuse any kind of enlargement before a deep reform of the way our institutions work,” Mr Macron said in July.

The new EU structure will also have the chance to renew its commitment towards the Eastern Partnership (EaP), the bloc’s policy initiative involving Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine. “It might take some effort to ensure that the EaP stays high on the agenda of the European institutions.

Much will depend on the profile of the next commissioner who will be responsible for the EU neighbourhoods. The review of the European Neighbourhood Policy, of which the EaP is part, would also be timely,” said Natalia Yerasevich, director of the secretariat of the EaP Civil Society Forum.

“If the EU wants to preserve its strategic partnership with the EaP region, it should move away from carrot and stick logic and strengthen cooperation with democratically minded constituencies,” she continued.

After the EU’s failure to recognise the European aspirations of Georgia and Ukraine at the 10th EaP summit in May, it will now be up for the new EU leadership to deepen political and economic cooperation where applicable, as well as to take a firm stand against Russia over its actions in the common neighbourhood. •

Election Agenda It will be a busy autumn of elections in emerging Europe, with voters going to the polls across the region in a number of key votes. Besides parliamentary elections in Kosovo and Poland, Romania votes in a presidential election in November.

October 6 Kosovo (parliamentary) October 13 Poland (parliamentary); Hungary (local) October 27 Bulgaria (local) November 10 Romania (presidential, first round) November 17 Belarus (parliamentary) November 24 Romania (presidential, second round) December (date TBD) Croatia (presidential)

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CURRENT AFFAIRS

On these pages we provide a channel for young politicians from across emerging Europe to share their vision of the kind of Europe they want to create. All of the young people whose voices we feature are unblemished by their countries’ communist-era pasts. Where the current generation of older politicians has often failed, it is our hope that this young, free and enlightened generation will succeed.

Emerging Europe is delighted to be able to offer them a platform from which they can communicate with a wider audience outside of their home countries.

Sándor Rónai "I am convinced that we need a strong and more unified European Union to face the challenges of climate change and the rise of illiberal democracies "

known is that more than half a million people have left Hungary, seeking a better future, since Fidesz got into power in 2010. This number is shocking, even more so if we think about the personal hardships and the families torn apart behind those numbers. Parents who miss a son, a daughter, grandparents who cannot see their grandkids growing up. I am determined to change that and to make Hungary a place where people can once again have a future.

A country with possibilities that provides good education, healthcare and jobs where people can fulfil their dreams.

In the Balkans, Prime Minister Sándor Rónai, 30, is Hungary's youngest Viktor Orbán is expanding his MEP. political and economic influence through business deals in banking and construction. This is a main concern, given that the Balkans is a collision zone of Russian, American n recent years I have been asked and European interests and Orbán a lot why I chose to stay in has proved many times that he is Hungary, why I entered politics ready to go against the EU if he and why I did not pursue a career abroad like many of my compatriots. thinks it helps his own interests at home, or those of Russia. He gave Indeed, I could have a more comfortable life full of opportunities refugee status to the convicted far away from the poisonous political former PM of Macedonia, Nicola Gruevski. The Hungarian climate of Hungary. I chose to stay government refused to extradite because I care about people, I want to help them. Politics requires strong MOL’s CEO despite a European arrest warrant issued by Croatia. convictions; it is not a job you do; it He also ensured commercial is a calling, I answered. access to the Adriatic and Black Hungary has been turned into Sea through Hungary’s investment an illiberal democracy where in a rail line to the port of Koper in there is no independent judiciary; Slovenia. He is seeking to strengthen there are constant attacks on his position here for future fights in the rule of law and corruption is the European Union. “institutionalised”. What is less

I

Orbán has aligned himself with Putin, Salvini and the like. These populists don’t shy away from risking the future of this planet or from weakening the EU, as long as it serves their political interests.

They call climate change fake and according to them the problem is a bagatelle. They do not care about the scientific proof or reality. Iceland lost a 700-year old glacier this summer. There are uncontrollable forest fires in the Canary Islands, in Siberia, in the Amazon right now.

In recent years Greece, Portugal and California were hit. But does Orbán care? No. He vetoed a move to achieve carbon neutrality by 2050.

We may be the last generation who can turn climate change around.

I firmly believe that we must take the responsibility and act while we can and leave a liveable planet to our children.

I am convinced that we need a strong and more unified European Union to face the challenges of climate change and the rise of illiberal democracies. Unfortunately, the Orbán government is not interested in building such a Europe. All his actions are aimed at weakening the union. As the youngest elected Hungarian member of the European Parliament, I think it is my duty to do everything to prevent him from succeeding. He cannot be allowed to undermine the mutual trust between member states of the EU, and the trust in the European Union. That is the mandate my party, the Democratic Coalition, got from Hungary's citizens in the 2019 European parliamentary elections and I intend to keep my promise.

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Sona Ghazaryan

movement, Nikol Pashinyan, to become Armenia’s new prime minister. Within six months, in early winter, snap parliamentary elections were held – the first free and fair elections since independence from the USSR – and the revolutionary My Step coalition led by Pashinyan recieved 70 per cent of the vote. It was undoubtedly a year in which civic consciousness rose to the surface.

I am now the youngest female MP in Armenia, a member of the ruling My Step faction.

Being 26 years old, I have had the opportunity to co-found and Sona Ghazaryan, 26, is the youngest MP participate in two movements that in the Armenian brought change to my country. parliament.

I had always been engaged in various protests against the former regime, never holding back to pring 2018 was a historical express my defiance towards time for the Republic of injustice. Although I am new to Armenia. It was when we institutional politics, I have always brought democracy to our country been engaged in civic activism, following a non-violent, democratic, fighting for the rule of law, fair Velvet Revolution. For over three and transparent elections and weeks in April and May, more human rights. With a background than a million people throughout in civil society development and the country participated in mass work experience at international civil disobedience against a corrupt organisations such as OSCE and illegitimate regime, which ODIHR, I genuinely believe had maintained power for over that there is no alternative to 20 years through falsified elections, democracy in my country. abuses of administrative resources Now in parliament, I am and convenient constitutional a member of the standing amendments. committee on European Thousands of students, integration. Our committee is employees from factories, IT engaged in the implementation of companies, non-governmental the Comprehensive and Enhanced organisations, doctors and teachers Partnership Agreement (CEPA), took part, blocking metro stations, signed in 2017 between Armenia city squares, and major interstate and the EU at the margins of the roads. People on the streets were Eastern Partnership Summit in demanding the resignation of Brussels. CEPA is a framework for Serzh Sargsyan, who after ruling cooperation covering more than for 10 years as president was set 20 spheres to be implemented by to continue ruling as the prime various stakeholders in Armenia minister as new constitutional and the EU. In our committee changes went into effect. we are responsible for legal On April 23, the impossible approximation and oversight of became a reality – Serzh Sargsyan implementation. resigned in the face of a growing As a true believer in gender national strike. On May 8 the equality, I also feel responsible for National Assembly – still occupied greater representation of women

by Sargsyan loyalists – reluctantly in all branches of government, voted for the leader of the protest for women's empowerment and

S

new policies that will create equal possibilities for equal outcomes for both men and women. After the revolution, the total number of female parliamentarians increased; however there is still much to be done, starting from changes in the electoral code to increase women’s quotas, making school books more gender sensitive and in general increasing the discourse on gender equality and its outcomes.

For more than 20 years there was virtually no discourse on gender equality, and textbooks were overwhelmed with outdated gender roles.

To be an MP in these unprecedented post-revolutionary times is very challenging and humbling, yet at the same time it fills me with a great sense of responsibility – a responsibility to make sure the promises of our revolution are achieved. Of course, I have always been interested in institutional politics and in this sense it’s quite natural that I am now a policymaker in parliament, but even in my wildest dreams, I could not have imagined the changes that swept our nation during the revolution. But the hard work is only just beginning.

It is now our responsibility to create the state we have always fought for, the state we have always dreamt of, and the state we have demanded to have for so long. For me, it is the honour of my lifetime to be a part of the political team of reformers that is turning a nation’s dreams into reality – one step at a time. Just as our revolution started with one man taking one step, so too will we seize on our once-in-a-lifetime opportunity to transform Armenia into a strong, just, and democratic country.

As the old saying goes, “You make the road by walking.” •

"Even in my wildest dreams, I could not have imagined the changes that swept our nation during the revolution"

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Romania's far-right goes mainstream Romania has – in appearance at least - lacked a powerful far-right movement for almost two decades. But as Roland Clark, an expert on Romanian fascism, tells Craig Turp, that's because right-wing ideas in the country have to a large extent gone mainstream.

WORDS CRAIG TURP

Viorica Dăncilă

To be Romanian is to be Orthodox Regardless of whether Mr Neamțu's name is on the ballot paper or not, for any political grouping to claim that Romania needs a 'Christian' president when it already has one proves that for some people in the country, the fact that Mr Iohannis is not Orthodox is a serious problem. One deeply conservative and highly controversial commentator, Iulian Capsali, went so far as to suggest that anyone who voted for either Mr Iohannis or Mr Barna could not possibly be a Christian. "Such a vote would be an affront to the Holy omania's presidential Spirit," he said. Other candidates election, the first round - particularly the prime minister, of which will be held Viorica Dăncilă, a member of the in November, is likely to see ruling Social Democrats (PSD) renewed attacks on the ethnicity – will attempt to use this kind of and faith of the country's current president, Klaus Iohannis. An ethnic extremist sentiment to portray Iohannis and Barna as outsiders German from Transylvania, in order to appeal to those voters Mr Iohannis is also a Lutheran for whom to be Romanian is to be in what is an overwhelmingly Orthodox, an idea which forms Orthodox country. the basis of ethno-nationalism, Already, an umbrella group the core doctrine of the fascist calling itself Alternativa Dreaptă (Alternative Right) has announced Romanian legionary movement which was highly influential in its backing for the deeply the late 1930s and briefly ran the conservative Mihail Neamțu, country in 1940. Indeed, Dăncilă openly calling for its supporters launched her presidential campaign to elect a 'Christian' president. on Assumption Day, August 15, The insinuation of course is that with a highly-publicised visit to Mr Iohannis is not a Christian, despite worshipping at the Lutheran Putna Monastery in the far north of the country, where she called church in his home city of Sibiu on Romanians to pray in order to most Sundays. Mr Neamțu later accused another candidate, the Save "end division."

It is in part because of this Romania Union's Dan Barna, who supports same-sex marriage, of not adoption of ethno-nationalism by mainstream politicians that being a proper Christian.

Romania has yet to see a far-right Fortunately, Mr Neamțu has party emerge from the ashes of little chance of being elected Romania's president. At the end of the overtly neo-legionary Greater Romania Party, which last sent August he even suggested that he may pull out of the race altogether, MPs to parliament in 2004.

But according to Roland Clark, to make way for Theodor Paleoglu, author of perhaps the definitive a far less firebrand conservative.

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book about the legion, Holy Legionary Youth, the dangers are the same.

"Romania does not need a neo-legionary movement.

The mainstream political parties are promoting ethno-nationalism to the hilt," he says.

Clark believes that ethnonationalism will persist in Romania until the country's Orthodox church – which revived the memory of the legion as a spiritual inspiration to fight communism – takes a stand.

"The church needs to renounce ethno-nationalism," he tells Emerging Europe. "The problem is not that the church goes around saying the legionaries were a good thing – it doesn't. The problem is that ethno-nationalism has become so entrenched in mainstream politics, and the church is enabling it. Of course, the church is a movement with multiple voices. There are people who do not agree, but the most vocal are those advocating ethnonationalism. The leadership stays silent, and in doing so gives extra room to the exclusionary voices."

Clerical fascists Clark's interest in the Romanian legionary movement began when he was an undergraduate at the University of Sydney in his native Australia.

"I was studying a module on fascism and one of the lecturers briefly mentioned clerical fascists, but said no more. So I did a little research on it and discovered that they had been in Romania. The idea of priests with guns appealed to the 20-year-old me," he says.

Clark spent 18 months in Romania learning the language before heading to Pittsburgh to complete a masters and PhD. It was the PhD which, with much revamping, became Holy Legionary Youth.

"The Romanian edition came out about a month after the English, and sold out fast. It took the English version a lot longer to sell," Clark admits. "I think it's relatively easy to sell books about the legion in Romania, not least as the book was published at a time when there was a public debate going on as to whether or not the legion was fascist, with plenty of politicians

claiming that it wasn't, it was just a national movement."

The argument is important as it has deep implications throughout the European Union, where the law forbids the use and display of fascist symbols.

"To define the legion in court as a non-fascist movement would mean that you could reuse all of its symbols," Clark explains. "So when the book came out there was a lot of positive feedback from people who said, 'look, here is a useful contribution to this debate, as Clark proves convincingly that it the legion was fascist, and was violent.'"

The emphasis that Clark places on the legion's violent day-to-day activities is what makes the book stand out amongst others written about the movement, which focus primarily on the legion's rhetoric, ideology and religion. "It is only when you look at what the legion did day-to-day that you realise just how deeply violence permeated the movement," he says.

There is one passage from Clark's book, describing the Bucharest pogrom of January 1941, which particularly brings home the violence – and youthfulness - of the movement: "Legionaries began arresting Jews on 20 January, and the following afternoon gangs of legionaries invaded Bucharest’s two largest Jewish neighbourhoods. They loaded roughly two thousand Jews – including children and the elderly – onto trucks and transported them to prearranged sites where they beat, raped and tortured them. Of the legionaries involved in torturing Jews at the police station on Matei Basarab Street, most were aged between 15 and 25 years old."

Clark dismisses claims that the legionaries merely used religion to soften their public image, and says that many were very religious.

But while there were priests within their ranks, not all were taken in.

"Quite a few priests hated the legion as they saw it as violent, anti-Semitic and simply not Christian," he says.

While Clark admits that it might just have been possible to be a 'good' legionary, he caveats his statement by saying that such members would have to have been "naïve and cut off from the everyday reality of the movement."

"I do not see how you could be a committed member, particularly at leadership level, and not see what was going on," he says. "You would really have to close your eyes to a lot of what was happening to still see the legion as a good thing."

If Ukraine goes far-right, that puts more pressure on Moldova. If these external pressures continue then that gives impetus to the Romanian far-right. Not to neo-Nazi parties, but to mainstream groups pushing a far-right agenda." •

Not just a poet One name which often gets mentioned by Romanian nationalists in the sense of 'good legionary' is the poet Radu Gyr, who wrote the movement's anthem and would later spend 20 years in Romania's communist prisons.

"He was not just a poet," says Clark firmly. "He was involved in pretty much everything and knew what he was doing."

In 2012, during a speech at the Romanian National Opera, Alternativa Dreapta's preferred presidential candidate Mihail Neamțu recited part of Gyr's bestknown poem, Ridică-te Gheorghe, ridica-te Ioane.

"I am a free man and want to remain that way," Neamțu responded at the time to accusations of anti-Semitism. "I do not want to see the publication of a new Index Librorum Prohibitorum."

Neamțu however, for all his faults, is neither a neo-legionary nor the vanguard of a neo-legionary revival, as his low score in the presidential election – should he end up being a candidate - will testify. The legion of the 1930s was youthful, and Romania's modern young people are far more cosmpolitan, tolerant and progressive.

"There is a clear generational shift in Romania. Young people offer hope for the future."

"The rezist movement – mainly young people – provides real hope for the future. But there are still problems for Romania, and the biggest is not internal: it is the rise of the right globally, particularly in Eastern Europe. Hungary is not far away, and I still haven’t worked out the new president of Ukraine, he is a mystery. It will be key to see in which direction he pushes things.

SHORTS Poland burns a third of all coal in the EU New figures from Eurostat have revealed that Poland accounts for 30 per cent of the European Union’s annual consumption of coal. In 2017, Poland burnt 73.8 million tonnes of coal, 20 million tonnes more than Germany, the EU’s second largest consumer. Overall, consumption of coal in the EU declined four per cent to 226 million tonnes. In Poland, consumption fell by 1.3 per cent.

Poland is also the EU’s largest producer of coal. In 2017 the country dug up 82 per cent of all coal mined in the EU, more than 65.4 million tonnes.

EdTech start-up Brainly raises 30 million US dollars Kraków-based Brainly, the world’s largest peer-to-peer learning community for students, parents and teachers, has announced a new funding round of 30 million US dollars led by Naspers Ventures, with participation from Runa Capital and Manta Ray. Combined with Brainly’s previous funding rounds, the latest investment brings total funding to date up to 68.5 million US dollars.

Euronews launches Georgian channel Lyon-based news network Euronews has teamed up with Georgian telecommunications provider Silknet to create a Georgian-language version of of the European TV channel. Euronews Georgia will function as a news television and online information platform, with a focus on local and international news in the Georgian language. The channel is expected to be launched within a year.

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The Tesla Model 3 is now available in many of the countries of emerging Europe.

The decision of the American auto manufacturer to begin selling its cars in the region, as well as open service centres in Prague and Warsaw, reflects a growing demand in Central and Eastern Europe for high performance electric vehicles.

The fi rm will also be installing supercharge centres in tens of locations across the region.

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Emerging Europe's search for new narratives It's time for emerging Europe – and those of us who write about the region - to draw a line under communism: the divisions of the past should not define the future.

New narratives must be found, but who will provide them?

WORDS CRAIG TURP

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orrect me if I'm wrong, but as a child growing up in the UK in the 1970s I don’t remember anyone ever referring to what was then West or East Germany through the prism of the Nazi era. Newspaper and magazine articles in 1975 did not begin with the words: "Thirty years since the end of national socialism…" Similarly, pieces about Italy made no mention of fascism and did not reference "the fall of Mussolini" at every opportunity.

Why then, do we persist in doing exactly that with the nations of emerging Europe? Why does our evaluation of these 23 countries – who have now been free of communism for as long as the West Germany of 1975 had been free of the Nazis – begin with 1989 (or 1990, or 1991), as if many decades, centuries and even millennia of history never happened?

"Communism in Eastern Europe lasted much longer than did national socialism in Germany and had a deeper effect on the organisation of society - I mean in terms of education, the economy, political structures and so on," says Mark Baker, an independent journalist and travel writer who's lived in Central Europe for more than two decades, and who has authored the Lonely Planet guides to Bulgaria, the Czech Republic, Poland, Romania and Russia.

"Communism in Eastern Europe poisoned at least two generations and wiped out all kinds of civil society structures that had to be rebuilt from scratch.

The reconstruction has been a lot slower and harder than anyone could have imagined in 1989," he adds.

Changing the narrative The very name of our organisation, Emerging Europe, stems from a desire to move away from Cold War definitions of the European continent, and to avoid use of the term Eastern Europe, which carries negative connotations and does not even accurately describe countries such as the Czech Republic or Slovenia, whose capitals are further west than Vienna.

As such, at Emerging Europe we have long tried to avoid references to communism, but freely admit that we have not always succeeded.

Sometimes (such as this year, when a number of countries across the region celebrate 30 years since the end of totalitarianism) it is impossible not to mention it.

Even then, changing the narrative is not always a positive step. In recent years it has been the illiberalism of certain – but not all – emerging Europe governments that has defined, for many, the entire region. There has been talk of a new Iron Curtain separating

the progressive western part of the continent with a reactionary east that stamps all over the rule of law and vigorously opposes migration, women's rights, gay rights and environmental issues.

"Some of the alternative descriptions which have appeared are not entirely complementary," says Kit Gillet, who covers much of the emerging Europe region for publications including the New York Times and the Guardian. "Hungary right now is not being described as a post-communist country but as an illiberal democracy.

They have at least cast off the old description, but the new one is not exactly positive."

Bite-sized stereotypes Sam Cage, a former Reuters correspondent who now runs a PR company based in Copenhagen, believes that part of the problem is the fact that emerging Europe is too big and too diverse to be branded as a whole.

"There are huge differences between the countries," he tells Emerging Europe. "Prague is probably now as well off as Berlin and much wealthier than large parts of the old EU; Slovakia, the Baltics and Slovenia use the euro; Poland has the most consistent growth in Europe. If you define as one region everything that what was once behind

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the old Iron Curtain, then you will always be reinforcing that they are former communist countries.

So maybe it's time to look at them as smaller regions. The Baltics for example brand themselves around IT, while Central Europe is strong in manufacturing."

Tony Barber of the Financial Times makes a similar point.

"Central and Eastern Europe is not a monolithic region," he wrote in August. "The most extreme version of regional illiberalism, that of Mr Orban’s Hungary, has a stronger grip on power than others precisely because it has gone furthest in dismantling or corroding the institutions of a civic democracy. The Polish variant, that of Mr Kaczynski’s Law and Justice party, appears on course to win re-election in October because its policies appeal to millions of voters and the opposition is disunited."

Understanding emerging Europe "I think the issue comes down to human nature. We need a framework to understand something," says Kit Gillet.

"Many people do not have a clear idea about what the countries in this region represent, or what they can offer. Until there is an alternative or until people make their own associations, these frameworks will remain: postSoviet, former communist, behind the Iron Curtain," he adds.

Alex Webber, the editor of the Warsaw Insider, agrees with him.

"There is a level of ignorance in the ‘west’ about what CEE is and means," he tells Emerging Europe.

"Background is worthwhile and valuable. What isn’t, is simply referring to ‘the former communist nation of Poland’ and leaving it at that. In many instances there is value in referencing history: but it’s all about how it is done."

Webber believes that there is a case to be made for not throwing communism out of the region's descriptive canon entirely.

"Certainly in Poland’s case, design and arts thrived: the graphic art, modernist architecture and design aesthetic of this era (particularly in the 1960s and 1970s) are celebrated to this day and continue to influence the output of contemporary creatives

involved in these fields. The form and function of the PRL (People’s Republic of Poland) style is now a bedrock for many of our established and upcoming designers who have sought to harness and finesse the revolutionary ideas of the time whilst reviving the craftsmanship associated with the period," he says.

"Here at the briefing centre we showcase the brand e-Estonia and the digital transformation the country has achieved," he tells Emerging Europe. "We explain how Estonia has got to where it is today.

The first job is to tell people exactly what e-Estonia is and how it works, and then to turn the interest people have for Estonia into leads Lessons from Estonia for businesses."

Roth hosts hundreds of Kit Gillet points to the Baltics, delegations each year from a wide Estonia especially, as positive range of backgrounds, from both examples of countries which have the public and private sectors, to a certain extent begun to change and from university students to the way that the world views them. world leaders. German Chancellor "When you have companies like Angela Merkel has visited, Skype and Transferwise you can and the day before he spoke to start to change the narrative," he Emerging Europe Mr Roth hosted says. "The Baltics are doing well the vice president of India, at being seen as young dynamic Venkaiah Naidu. countries doing exciting things."

"They want to see what Those things do indeed help, the digital transformation looks but as Mr Gillet adds it is not easy like," he says. "They want to to transform a country's image learn from Estonia. And this is overnight. a great door opener which allows Estonia to tackle the prejudice and stereotypes that have been around "A marketing for far too long. It offers Estonia campaign cannot do the chance to be taken seriously on the international stage." it alone. It needs to

be multiple things, and Estonia is a great example. The change has not been quick, but with the tech hub giants coming through, the media stories we see about the country change.

The majority of the stories which come out of Estonia now tend to be tech-related and positive. It reaches a critical mass of stories and leads journalists to change their framing."

The further east you go, the more difficult it becomes

What all of the journalists I spoke to for this piece are at pains to point out is the need for reporting to be accurate, and to ensure that countries are not whitewashed. This does make avoiding references to communism difficult, as the legacy of communism is still valid to what is happening.

"For some of the countries in the region I cannot remember the last time I used the phrase 'former communist'," says Mr Gillet. "But for a place like Moldova, I have."

"We need to remember that for many people this is still a region that is not that well known," he adds. "You can't really change that level of knowledge. There are 200 plus countries in the world and you can't expect a reader to know something about all of them.

Those which are in the EU or have expressed a desire to join are better One of the people responsible for making that happen is Tobias Roth, known because they are part of the business engagement manager at the European family or are on the path e-Estonia Showroom, which spreads towards becoming so. But when you are based in this region you the word about Estonia's digital success across Europe and the world. often forget how little knowledge

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Part of the old Iron Curtain, on the border between Hungary and Austria

seeps out. I like to think that when there is a story about a huge protest in Bucharest for example, people have noticed. Then you talk to people back home and find out that in fact, they haven't."

The EU: A new point of reference?

It's clear that how to break free of the communist past – and the negative preconceptions it entails - remains one of the key challenges facing emerging Europe as the region looks to move up the value chain and change perceptions about what it can offer visitors, investors and – perhaps most importantly - its own people.

As Mark Baker points out, communism is still the main differentiating point between countries on either side of the former Iron Curtain because "it is such a convenient defining marker."

Knowing how to stop it – and how to stop offering the countries of emerging Europe cover for their failings – is difficult.

"But it's definitely time to toss it out. Otherwise how can we expect these countries to get serious about transforming their societies?," he adds.

The fall of communism will once again take centre stage this autumn and winter as across the region, countries celebrate the 30th anniversary of the various revolutions (peaceful or otherwise) which ended totalitarianism and ushered in the present era of democracy. As we look back

on the events of 1989 however, it might be a good idea to take the opportunity to draw a line – once and for all – under the communist period. In the future, we should all do our best to use different, more relevant defining moments.

For those emerging Europe nations which are members of the EU, the date they joined the bloc could be the new point of reference.

"Yes, I think that '15 years on from EU membership' sends a more positive message that '30 years since the fall of communism'", agrees Mr Baker.

It is clear that the emphasis is on those of us who write about

the region to find new ways to define it.

"As journalists, we can certainly have an effect. It was the media that first branded these places as poverty-stricken, de-humanising cities or countries, and it’s the media that can do much to change that," says the Warsaw Insider's Alex Webber.

However, as Kit Gillet succinctly puts it, it is also up to the countries themselves to define new narratives.

Estonia has managed to do just that. It's time for the rest of the countries of emerging Europe to do likewise. •

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Doing business in Georgia: Is it really that easy?

Georgia is now widely regarded as one of the most businessfriendly countries in the world. Dominik Istrate speaks to investors to find out if we should believe the hype.

WORDS DOMINIK ISTRATE

According to Matthias Müller, the managing director for Eastern Europe at Majorel, an outsourcing company with stakes in Georgia, the country really does offer a businessfriendly investment climate.

“A lot of support is offered to investors by public organisations as well as private companies in the process of setting up a business,” he says, adding that “a company could theoretically be set up in one business day without any extraordinary effort or cost.”

“We have companies in other countries (the EU and Turkey) and I would not even compare the process in Georgia with them.

You can do almost everything in Georgia remotely, and all the procedures are very easy,” Elizbar Lominadze, managing director of MGMtex, a women’s clothing manufacturer, tells Emerging Europe, noting that the company's Georgian branch was registered in 10 minutes.

Favourable conditions

A

fter a sharp decline in 2015, Georgia's economy has since managed to return to a steady level of economic growth, reaching 4.7 per cent over the last two years: the country is now on course to become one of emerging Europe’s best performers when it comes to real economic growth.

For a country like Georgia to maintain its economic expansion, however, foreign direct investment inflows are crucial. From this perspective, the country has seen its ups and downs: after a five per cent increase in 2016 and a 16 per cent rise in 2017, Georgia saw a huge drop in FDI - close to 35 per cent - in 2018. What the future holds heavily relies on how the country aims to attract international investment.

Starting-up is easy According to the World Bank’s latest Doing Business Ranking,

From the business perspective, being ideally located between Europe and Central Asia Georgia is the sixth most business- remains an important factor for companies to choose Georgia friendly economy in the world. as their investment destination, The two other economies of the South Caucasus, Azerbaijan and particularly because the country Armenia were ranked 25th and 41st has a strong orientation not just respectively, while Turkey was 43rd. towards Europe, but to European standards. “It is also helpful that “The country has continued to advance its position in the rankings the rules and processes of doing business are aligned to how things over the past three years,” says Mercy Tambon, the World Bank’s work in the European Union,” Mr Müller says. former regional director for Another important factor those the South Caucasus. having invested in the country The improvement is due to three key reforms. Firstly, Georgia take into account is labour, of which Georgia has great reserves. made it easier to start a business Even though unemployment is at by simplifying administrative procedures such as tax registration a 15-year low, it remains above 10 per cent. or licensing. In addition, the “Georgia is an attractive location Georgian government introduced for us because the workforce legislation that simplified tax is very enthusiastic, wellcompliance procedures and educated and enjoys working decreased the number of tax for international brands. In returns, making payments easier. addition, the labour market for Finally, court automation and service centre employees in the introduction of an e-payment system simplified the enforcement Germany [where the company is also present] is currently very of business contracts. tight, while in Georgia we are

able to recruit a sufficient number of highly qualified employees,” Mr Müller continued, concluding that “there is a good priceperformance ratio in Georgia and we see doing business there as a great opportunity for growth.”

country’ education system would be a good step forward.

He also stressed that the government needed to ensure that institutional and governance standards continue to develop in a way which is “conducive” to the development and growth of A star reformer with challenges the private sector. “This includes ahead further reforming the justice system, continuing to advance “Georgia’s story is one of success. public services and ensuring In spite of numerous challenges, the independence of economic country has managed to do well,” structures and institutions from Jan van Bilsen, the International undue political influences at all Financial Corporation’s regional times,” he added. manager for the South Caucasus According to the IFC's tells Emerging Europe, adding Mr van Bilsen, Georgia has that the deep reforms the country largely been successful in has undertaken in economic attracting FDI in the financial management and governance and infrastructure sectors, while have earned it the reputation of investments in the manufacturing “star reformer.” and agribusiness industries Georgia has built the most were lagging behind. "Refining resilient economy in the region, investment incentives will positioning it well to cope be important to bring more with external challenges,” investment into those exportDimitar Bogov, the European oriented sectors with high added Bank for Reconstruction and value," he says.

Development's (EBRD) associate There are also a number of director and regional lead economist sectors with the potential to says, referring to the Georgian better integrate Georgia with government’s efforts to continuously the regional and global economies, broaden the country’s economic but as van Bilsen puts it, "there is base, diversify its exports, as well as a skills mismatch that needs to to maintain proper macroeconomic be addressed.” and financial policies.

The IFC regional manager The resilience Mr Bogov refers believes that Georgia’s agriculture is about to be tested. On July 8, in - beyond its flourishing wine reaction to protests in Tbilisi against industry - remains modest, but the ongoing Russian occupation of that the potential to increase Abkhazia and Tskhinvali, Russian agricultural exports to the EU president Vladimir Putin imposed exists. To achieve this, “domestic a ban on all flights to Georgia, in food producers will need to adopt an attempt to block Russian tourists stronger food safety standards and who make up the greatest share of need to link into regional or global Gerogia's international visitors value chains,” he says. from travelling to the country. It is a While the Georgian economy significant challenge for an economy faces other challenges, such as low whose growth is heavily reliant on productivity or weak international tourism and foreign investment. competitiveness, Mr van Bilsen “In order to remain in pole believes that “a liberalised position in attracting FDI Georgia economy, a generally favourable should ensure that the business business environment, a wealth of climate is favourable and that there natural endowments, and a prime are opportunities in the country geographical location, combined worth investing in. It is about with an extensive network of free trade agreements,” remain continuously advancing public key strengths and opportunities infrastructure, including stepping up the development of multimodal the country could benefit from.

“From our perspective, investing infrastructure which would enhance Georgia’s role as a regional in Georgia is good business,” hub,” Mr Bogov suggested, noting he concludes. • that initiating reforms in the

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SHORTS Belarus start-up launches intuitive keyboard Clevetura, a Belarusian start-up, launched the world's first intuitive keyboard system, a technology that combines a keyboard, touchpad and mouse. With sensors embedded into the keys, it ensures automatic and seamless transition between the typing and cursor control modes. The keyboard is currently available in the CIS and Baltic states — Belarus, Russia, Lithuania, Ukraine, Kazakhstan, Estonia and Latvia - under the Prestigio brand.

Emerging Europe faces big job losses in case of no-deal Brexit The Czech Republic, Hungary, Poland and Slovakia will suffer substantial job losses in the case of a no-deal Brexit, claims an impact report from the economics faculty at the University of Leuven in Belgium. The report, prepared in June before Boris Johnson became the UK prime minister and increased the chances of a no-deal Brexit, shows that the Czech Republic could lose as many as 41,000 jobs, or 1.5 per cent of the current workforce.

Poland would lose 122,000 jobs, or 1.26 per cent of the workforce, with Hungary and Slovakia also both losing more than one per cent of all jobs.

Krakow asks EU for help to tackle Airbnb The Polish city of Krakow is one of 10 European cities to have demanded more help from the EU in their battle against Airbnb and other holiday rental websites, which they argue are locking locals out of housing and changing the face of neighbourhoods. In a joint letter, Amsterdam, Barcelona, Berlin, Bordeaux, Brussels, Krakow, Munich, Paris, Valencia and Vienna said the “explosive growth” of global shortstay lettings platforms must be on the agenda of the next set of European commissioners.

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Emerging Europe's quiet energy revolution With the region's north-south gas corridor approaching completion, Central and Eastern Europe is becoming more energy-independent, closer to the European Union and farther from Russia. Indeed, experts have coined the phrase quiet gas revolution to describe the progress the CEE has made.

WORDS CLAUDIA PATRICOLO

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s the Central European Policy Institute (CEPI) explains, compared to a few years ago, the region’s energy security has improved remarkably in recent years, especially when it comes to gas. However, there’s still work to be done. The infrastructure is not in place everywhere; the track record of market liberalisation and compliance with EU regulations is poor; the role of gas in power generation is low; and coal power plants operate in a favourable environment despite the deteriorating air quality in many cities across the region.

“Nevertheless, I think that the sector still has at least two or three decades of robust development as the technologies replacing oil and gas are not still in place and are not economically viable,” says Maciej Jakubik, executive director of the Central Europe Energy

Partners (CEEP), a Brussels-based NGO representing the interests of the energy and energy-intensive companies from Central Europe.

A solid future According to CEE’s Gas Regional Investment Plan (GRIP), a cooperative initiative launched by the European Network of Transmission System Operators for Gas (ENTSOG), there’s a busy programme to be completed by 2025. One such landmark project is the gas interconnector between Poland and Lithuania, which will hook up several CEE countries to gas stored in a floating LNG terminal in Klaipėda on Lithuania’s Baltic coast, putting an end to the energy isolation of the Baltic states.

“The region is in the process of profound changes which are

characterised by the quest for diversification and increasing liberalisation of the markets,” Mr Jakubik tells Emerging Europe.

While the region's energy issues stretch far and wide, it is worthwhile focusing on two countries for a look at both the success emerging Europe has enjoyed until now, and the challenges which remain: Poland and Romania.

“Poland has embarked on an ambitious supply diversification programme which is based on the development of LNG regasification capacities (the expansion of the existing terminal in Swinoujscie and purchase of FSRU) and construction of the Baltic Pipe allowing access to Norwegian gas fields. In practice it would not allow for the extension of the current agreement with Russia which will expire in 2022, thereby

decreasing or even to avoiding altogether gas imports from Russia.

Overall, thanks to new systemic interconnections with Lithuania and Slovakia, Poland plans to emerge as a regional gas trading hub,” Mr Jakubik explains.

Poland’s dominant gas firm PGNiG plans to develop more upstream projects abroad, in order to reduce its reliance on Russian gas and close more profitable deals.

“Our own gas, produced on the basis of our concessions, either at home or abroad, is most profitable for us,” commented PGNiG Chief Executive Piotr Wozniak. “This is why we want to have concessions in different parts of the world and the Norwegian shelf is such a place. In this way we will replace Russian supplies.”

On the other hand, Mr Jakubik believes that Romania aims to unleash the potential of its onshore and offshore gas deposits. While the fields are well documented, and their extraction would be commercially viable the problem is the regulatory and tax regime.

A second intertwined project, allowing the export of gas, would be construction of the BRU(SK) A pipeline which would integrate the transmission systems of Romania, Bulgaria, Slovakia, Hungary and Austria, supporting the diversification of gas supplies to Central Europe.

a 78 per cent market share in the national electricity market and the largest gas importing company operates with a comfortable margin of 82.3 per cent. PGNiG in Poland remains the dominant buyer on both the wholesale and retail market, and also owns and operates all of the country's natural gas production and distribution networks.

Russian concerns

Early in April, several EU member states, including the Czech Republic and Poland, suspended imports of Russian oil through the Druzhba pipeline due to contamination. The quality problem arose when high levels of organic chloride were found in crude pumped via the Druzhba pipeline to the Baltic port of UstLuga. According to Transneft, the Russian state-owned transport monopoly, organic chloride, which is used in high viscosity oil extraction, could only appear in pipelines where oil was provided by oil companies, as Transneft does not inject it into the system.

For companies like Poland's PKN Orlen, it didn’t represent a problem.

“Another quarter of solid results demonstrates that PKN Orlen is well positioned to operate in a more challenging macro environment,” commented Incomplete pieces Daniel Obajtek, president of the PKN Orlen management board.

Although the European “Notably, despite the disruption Commission’s Directoratein the supply of Russian oil, our General for Energy believes plants were running smoothly. We that EU infrastructure is ready even managed to increase refinery to receive more LNG, the runs, achieve further growth in south of the continent needs sales volumes, and expand market extra infrastructure to reduce shares of our retail network bottlenecks and boost flows. across all markets where we are There’s still no reverse flow present. This was accomplished capacity on the Hungary-Croatia thanks to our consistent policy interconnector into Hungary of diversifying oil supply sources, due to missing developments which allows us to flexibly on the Croatian side, and the respond to market challenges, LNG terminal proposed for while ensuring the security of the Croatian island of Krk is at supplies for the Orlen Group and an early stage of development. the country.”

Some resistance is also found “Russia is in the process of among governments, as they don’t diversifying its gas pipeline want to undermine the long-held capacities to Europe in order to monopolies of the regional energy decrease its dependency on transit companies. In the Czech Republic, through Ukraine,” comments the largest power company has Mr Jakubik. “The main project

allowing this is the Nord Stream 2 pipeline. For central European states it means that the direction of gas supply would change from east to west. The most likely result would be blocking western interconnections thereby limiting access to western gas hubs. In order to avoid such a scenario, further development of the North-South gas corridor is crucial, and advantage needs to be taken of the emerging global LNG market. Concerning the oil sector, the recent supply crisis with the import of contaminated Russian oil highlighted the importance of the diversification of oil supplies to Europe as well as the role of storage.”

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Climate before cash Major oil players are investing in various alternative energy solutions in response to increased investor pressure to start thinking about reducing emissions instead of just growing profits.

“The oil and gas sectors are among the leaders in emission reductions and environmentally friendly technologies. In the last few years companies – triggered also by the EU regulatory regime – have invested billions of euros in new installations aiming at increasing efficiency and lowering emissions. In order to decrease their carbon footprint, they also invest in the new sectors such as large scale RES, energy storage and charging stations for electric vehicles,” explains Mr Jakubik.

Geofizyka Toruń, part of the PGNiG Group, is the first company in Europe to employ new seismic data acquisition technologies in searching for hydrocarbon deposits. Thanks to their small size and low weight, the technology allows the company to conduct exploration with no harm to the natural environment and local communities.

“Geophysical surveys are always adapted to local environmental conditions, road infrastructure and agricultural activity. It is important that our seismic surveys do not disrupt the everyday lives of local residents,” says Piotr Woźniak. •

"Further development of the NorthSouth gas corridor is crucial"

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Made in emerging Europe Our quarterly look at some of the region’s most innovative companies. Compiled by Shakhil Shah.

Quadrofoil Jet-skis are so last century, at least that is the image perceived when you take a look at Slovenian outfit Quadrofoil’s Q2S electric beast.

The future of cruising and having fun on a lake or beach or anywhere with sufficient space and water is here.

The company's entry level model Q2A offers power and speeds up to 40 km/h (21 knots). Powered by a 5.5 kW state-of-the art engine paired with two 5.2 kWh batteries, it will give you a range of about 80 kilometres.

“With water covering 71 per cent of earth's surface, it is vital to keep our waters clean and free from any pollution. Quadrofoil does not produce CO2 and can be driven on lakes, rivers, seas and eco-zones where most motor-boats and PWCs are not allowed. quadrofoil.com

8loading Two Polish miners have designed a smart bench that not only allows you to charge your phone and provide access to WiFi, but will inform you of the air quality around you – and then clean it.

The innovative LED-backlit bench is equipped with a PM 10 suspended particulate matter sensor. It changes colour - from green to yellow to red - depending on the degree of air pollution.

A purifying system installed in the bench cleans 860 cubic metres of air per hour, which is the same as cleaning all the air in an 80 square metre room.

The 8loading bench not only looks like something from the future but it fits perfectly into the architecture of public space, with a wide range of

functions. Could this be the bench of the future in a world where smog and air pollution are increasing on a daily basis?

8loading.com/en

ExRey Changing the way you watch TV: Croatia's ExRey is the Shazam of the video world.

The digital platform allows viewers to effortlessly get elements related to the video content they are watching.

There is no longer a need to manually search for the information. Buying products seen in the video becomes a simple process. All that needs to be done is open the ExRey app on your mobile device and use it to scan the video you are watching.

The ExRey platform recognises the video and provides you with the elements you are looking for.

While the fact that people are constantly using their phones to search for things is nothing new, the ExRey app will help reduce the amount of time searching by scanning clips of video content where you see something you want and would like more information on it.

The additional content that the user receives depends solely on the creativity and marketing goals of the content creator. This interaction will seamlessly guide the user to an online marketplace, streamlining the viewing to purchase experience. exrey.tv

Nasekomo Nasekomo is a Bulgarian agrobiotech start-up from Sofia, whose innovative technology allows the conversion of organic waste into an alternative protein source, which is then used to feed fish and livestock.

It aims to make our world more efficient and sustainable by harnessing insects to close the human food chain cycle.

With our current consumption and food wastage increasing globally, the company is trying to repurpose organic waste by cultivating Black Soldier Flies, that are to be transformed into animal protein, oil and fertiliser.

The company aims at tackling the issue of food waste by harnessing the power of insects, creating a sustainable source of protein for feed. Nasekomo has developed

an efficient and sustainable system that converts organic food waste into insect biomass, which is in turn made into a protein feed alternative for aquaculture and livestock. nasekomo.life

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Outlook on the Macedonian Economy

Now that a 30-year dispute with Greece over the name Macedonia has been resolved, North Macedonia is ready to reap what has become known as the Prespa Dividend. Investors are increasingly interested in the country, which has a number of sectors – automotive, IT and tourism especially ripe for fresh input.

We speak to some of the key players looking to make North Macedonia a hub of innovation in the Western Balkans.

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OUTLOOK ON THE MACEDONIAN ECONOMY

Investing in North Macedonia World Bank Country Manager Marco Mantovanelli and Vice President of the International Finance Corporation (IFC) Georgina Baker speak to Emerging Europe's Andrew Wrobel about the investment outlook for the Macedonian economy as the country seeks to reap what has become known as the Prespa Dividend.

WORDS ANDREW WROBEL

T

he Prespa Agreement, which ended a three decades-long dispute with Greece over the use of the name Macedonia, has propelled North Macedonia into the international limelight, with investors eager to make the most of the political and economic stability the agreement brings. NATO membership – no longer blocked by a Greek veto - is likely by the end of 2019, and while EU accession remains a longer-term project, it is nevertheless a key target for the country's government. Investors already appear to like what they see.

"The country is well-positioned to seize the opportunities that EU accession can bring," says Marco Mantovanelli, country manager North Macedonia for the World Bank. "Its early marketoriented reforms, openness to trade, and prudent macroeconomic management have created an environment of economic stability that has attracted private investment and boosted exports, particularly in manufacturing.

In the last two decades, its economic growth was among the most stable in the Western Balkans, income per capita doubled, and the country moved from low-middle- to uppermiddle-income status. Its strategic geographical location on two panEuropean corridors, Corridor VIII and X is also a major asset."

The World Bank's vice president, Georgina Baker, visited North Macedonia earlier this year and has been keen reiterate the bank's support for the country, which it views as holding key importance in the Western Balkans region.

"Our goal in North Macedonia is to create economic opportunities, support European integration and facilitate development by strengthening the private sector’s role in the economy," she tells Emerging Europe. "Since 2001, we have invested about

400 million US dollars in North Macedonia, supporting private companies in the energy, telecoms, and pharmaceuticals sectors, among others. In addition to our direct investments, we have also implemented a number of advisory programmes to facilitate development of the country's private sector potential."

implementing efficient and transparent state aid programmes for export competitiveness and innovation, unlocking product and network market regulation, easing labour market restrictions, and ensuring efficient delivery of public services is critical. Building on past success, the country must continue attracting FDI, but it also needs to ensure that new FDI nurtures Integrating global supply chains exports with more local content.

This requires both adjusting As Mrs Baker explains, North the FDI attraction strategy Macedonia has made good and building the capabilities of progress in attracting foreign direct domestic firms." investment, especially into its Mr Mantovanelli agrees with manufacturing sector. "However, Mrs Baker about the importance many local firms are struggling of exports. to integrate themselves into "It is beyond doubt that a small, the global supply chains of large land-locked economy such foreign companies," she says. "We as North Macedonia cannot think overcoming this challenge sustainably grow without relying will provide North Macedonia on exports," he says. "Local firms with great opportunities for will need help to build up their growth, job creation and further capabilities for innovation and foreign investment." adoption of technology to be The World Bank's better integrated in the region and Mr Mantovanelli believes the beyond, and to build local links to Macedonian government's policies FDI. Finally, agriculture, a lagging should be directed to facilitating sector but a major employer, horizontal measures which will has considerable potential for benefit all companies and provide an productivity growth and exports equal playing field for development once current subsidy mismatches of a vibrant private sector. Selecting and an underdeveloped land particular sectors for growth is market are corrected." always difficult and risky, he says, To help with this, in June as the ongoing technological the World Bank entered into a new revolution is changing the business partnership with the government landscape fast. to support development of "Selecting the winners of today the country’s industrial/ as the sectors of tomorrow might manufacturing sectors, by advising lead to a gross misallocation local private companies on ways of public resources," he tells to improve their operations Emerging Europe. "Economies and better meet international that have successfully remained standards – this will allow them to competitive for long periods integrate into the regional supply have built their capabilities chains and provide better value and provided a sound business added services. enabling environment that allowed the private sector to Success stories adjust to market competition and opportunities over time. Creating The IFC is already excited a business friendly environment, about the impact of its work

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OUTLOOK ON THE MACEDONIAN ECONOMY

Q&A: KOCHO ANGJUSHEV DEPUTY PM OF NORTH MACEDONIA How big an impact will the Prespa Agreement have on investment?

in North Macedonia. A 10 millionUS dollar loan it provided to Tutunska Banka is helping the lender provide long-term funding to small and medium enterprises, which are vital to the Macedonian economy.

"We also made an investment of eight million euros in Key Safety Systems, which helped finance the construction of a factory that produces airbags in Kičevo," says Mr Mantovanelli. "This is a relatively underdeveloped part of North Macedonia with an unemployment rate of about 30 per cent at the time of IFC’s investment. Not only did our contribution support foreign direct investment, it has created about 1,300 jobs. And we are very pleased to see that more than 70 per cent of these new jobs were provided to women."

In addition to direct investments, IFC’s advisory work has supported key reforms in energy, trade, and corporate governance.

"One example is IFC’s Renewable Energy Macedonia Advisory Project, which facilitated 245 million euros in private sector financing for small hydro-power plants and renewable energy technologies," Mr Mantovelli adds.

More innovation needed While in recent years there have been promising examples of growth and innovation among firms in North Macedonia, the innovation ecosystem and firms’ capabilities to innovate need to improve if the country is to increase productivity and generate sustainable economic growth.

"Available measures of management and innovation

capabilities rank firms substantially below the country’s aspirational peers," says Mrs Baker. "These measures include managers’ skills and willingness to delegate authority, firm-level technology absorption, the capacity to embrace disruptive ideas, the sophistication of production processes, the proportion of people engaged in research and development and the overall propensity to innovate. Business entry density (the number of newly registered companies per 1,000 working-age people) fell from 6.6 in 2008 to 3.9 in 2016, the latest data available.

Business reviews of domestic firms in North Macedonia have concluded that firms need to improve in the areas of business strategy, marketing and promotion strategy, technical and safety standards, lean manufacturing and continuous improvement, corporate governance, and developing long-term visions with concrete improvement plans to increase their competitiveness."

Better access to finance will also be crucial.

"It could become a binding constraint," says Mrs Baker.

"Micro and small firms encounter greater difficulties in accessing suitable financing compared with medium-size firms. Recently, commercial banks have increased their focus on lending to small and medium enterprises (SMEs), striving to manage concentration risk by diversifying their loan books away from large corporates.

However, relatively high collateral requirements and weak financial accounts worsen firms’ ability to access financing from banks, and available financing for micro firms, small firms, and start-ups remains limited." •

The Prespa Agreement has significantly changed the situation of the state on both international and domestic levels.

Internationally, it has brought changes to the image, and to the reputation of the country. In the period of 2015-17 this country was called a “captured state” and faced long-term problems with its neighbours. By resolving these problems, North Macedonia has become a country that has clear future, and a country that investors see as a safer investment destination, no matter whether these are domestic or foreign investors.

What challenges remain?

The greatest challenge the country faces at the moment is to stabilise itself with regards to the possible political crisis that might follow strong pressure from powers who do not want to see North Macedonia become part of NATO and the EU. Furthermore, we must resolve some issues in order to start negotiations – these include the issue of the Special Public Prosecution. Afterwards, I am sure, the country will sail into calmer waters. At that point, we will be able to focus on the economy, fully. One of the challenges for the country will be to secure higher growth and increase salaries, as well as to encourage investors, both domestic and foreign, to invest in the country. We have a clear plan how to help companies increase their capacity, and this year we decided that we will allocate 40 per cent more funds in support of the economy.

What sectors are ripe for investment?

We can develop tourism more, but our country is not Croatia or Greece, it cannot live on tourism alone. That is why the areas which need to be developed are clear: industrialisation, construction (in infrastructure), trade and agriculture and agricultural products processing. I also see the possibility for development of the IT industry because it is already producing good numbers, and we have smart, welleducated people.

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OUTLOOK ON THE MACEDONIAN ECONOMY

ICT in North Macedonia: Never more important The information and communication technology (ICT) industry is the fastest growing sector of the economy of North Macedonia, and it plays an important role in the economy as a provider of jobs and generator of exports.

WORDS SHAKHIL SHAH AND CLAUDIA PATRICOLO

“I

n 2017, the information and communication technology sector was worth around 800 million euros, which accounted for 7.8 per cent of the country’s GDP,” explains Anita Nikova, executive director of the Macedonian Chamber of Information and Communication Technologies (MASIT).

Several years ago the sector only counted for two-to-three per cent of GDP, which at the time was a modest 40 million euros or so in revenue.

The two figures demonstrate that no other industry in North Macedonia has seen such rapid growth as ICT. “While agriculture is a positive sector, it is completely dependent

on government subsidies,” Mrs Nikova tells Emerging Europe.

“When it comes to ICT, there are no subsidies for the sector or tax incentives for the industry. Which means that the growth you are seeing is completely organic and natural, enabled by the real growth of companies.”

The government’s other priorities It is precisely the fact that the sector has received very little support from the government that has led many companies to call for more recognition from the authorities.

“The general impression is that the North Macedonia government is preoccupied with other priorities and is not paying attention to how it can proactively help the IT sector,” Vladimir Robevski, managing director of the IT company iSource, tells Emerging Europe.

“We need a national framework for coordination between state institutions, the education system and the private sector, where these growth opportunities would be strategically evaluated and acted upon, agrees Ilija Gospodinov, CEO of software developer Endava.

“Looking long-term at our national economic growth, we

feel that we can create much more awareness about the professional opportunities that the ICT sector provides for young professionals and their future.”

According to a country report prepared by the European Commission, there is a need for North Macedonia to develop a long-term digital strategy. Too many barriers remain in place, and these have to be removed.

However, North Macedonia's minister of information society and administration, Damjan Manchevski, has repeatedly stressed the importance of technology which can lead to a true digital evolution in the country and boost the economy, especially after the adoption of the National Operational Broadband Plan, aligned with the EU's strategic goals.

Aneta Antova Peseva, CEO of ULTRA Computing, a company focused on system integration and design, agrees that the government has introduced measures toward fostering ICT growth, while addressing two major challenges: innovation and human capital.

“The first challenge is addressed by the innovative fund, tech parks and incubators and the second challenge is mainly addressed by projects which set out to retrain human resources,” she tells Emerging Europe.

“Although direct measures for ICT have not yet been implemented by the institutions, still the industry is rapidly growing. One very important issue that can be improved at this stage is stronger cooperation between the government and ICT for introducing new taxes and regulations. For example, measures to introduce tax relief on exported services would make Macedonian ICT companies more competitive in the global market,” she admits.

When taxes reduce growth Until January 2019, Macedonia had one tax rate: 10 per cent, which some people claim was stifling human development.

“It was the lowest rate in Europe,” says Mrs Nikova. “Therefore, budget revenues are among the lowest in Europe, leaving

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OUTLOOK ON THE MACEDONIAN ECONOMY

"Measures to introduce tax relief on exported services would make Macedonian ICT companies more competitive in the global market"

the country without sufficient funds for quality health, education and social protection. In addition, North Macedonia has the highest social inequality in Europe, hence the re-introduction of a progressive income tax of up to 18 per cent.”

The change means that employees who earn more than 1,500 euros per months will pay more tax. Mrs Nikova believes that many ICT companies will meet the difference themselves in order to avoid creating a situation where employees see a reduction in their take-home pay.

“We have yet to see if the changes will have a positive affect on the national budget, or if it has created even bigger resistance amongst companies, something which may lead to the total tax take for 2019 being lower than in the past,” she says.

Finding the right talent Although there are many opportunities for the development of ICT in North Macedonia, a lot still needs to be done to bring

the country to the same level as others in the emerging Europe region. Many large ICT companies, such as Microsoft, Cisco, Oracle, Dell, IBM and Apple, are present in North Macedonia via branch offices, distributors, dealers, resellers, solution providers, and business partners. But with an unemployment rate at 17.8 per cent, finding the right talent can be a tough challenge.

“There is quite a lot of demand for such services on a global level, and the real opportunity for our ICT sector is to match the demand with skilled professionals,” says Endava’s Mr Gospodinov.

“The vision is to have a suitable work position for every young professional entering the labour market, while also being able to easily match skilled professionals with the current demand on the market. A lot has been done to encourage cooperation between companies and universities, and we hope for even better results by supporting partnership projects for the re-qualification of workers with IT-related skill profiles.” •

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OUTLOOK ON THE MACEDONIAN ECONOMY

EU accession, not Prespa, will make or break Macedonian PM Having concluded an agreement with Greece over the use of the name Macedonia, ending an almost 30-year-long and often bitter dispute, North Macedonia is likely to be made a full member of NATO by the end of the year. Membership of the European Union however is much further away – at least a decade – and failure to begin accession talks by the time of next year's general election could spell the end of prime minister Zoran Zaev's ruling coalition.

WORDS CRAIG TURP

S

pring 2019 was the best of times for North Macedonia's prime minister, Zoran Zaev.

Having worked tirelessly, and successfully, to conclude the socalled Prespa Agreement and bring an end to the almost 30-year long dispute with Greece regarding the use of the name Macedonia, Mr Zaev could have been forgiven for thinking that his political legacy was assured. NATO membership looked imminent, as did the beginning of accession talks with the European Union.

Along with his Greek counterpart Alexis Tsipras, Mr Zaev was even awarded the Emerging Europe Outstanding Achievement Award for concluding the Prespa deal.

Since then, there have been complications.

While NATO membership remains a nailed-on certainty (and in all likeliness will happen before the end of 2019; NATO Secretary-General Jens Stoltenberg said during a visit to Skopje in July that the military alliance was "ready to welcome" the country as its 30th member), the EU has not been so forthcoming.

Its prevarication could well spell the end of Mr Zaev's time in office.

He spent a great deal of political capital getting the name deal through various administrative, legislative and constitutional hoops, with the promise that formally bringing the conflict with Greece to an end would firmly put the country on the path towards EU membership. So far, it hasn't worked out that way.

In June, the European Council failed to give North Macedonia

(as well as Albania) the green light to start accession talks, delaying a decision on the matter until October.

This despite the EU's executive, the European Commission, declaring in May that both countries had made the necessary progress on democratic standards and the rule of law to begin accession talks. France and the Netherlands, increasingly keen on reforming the existing European Union before admitting any new members, were reportedly the leading voices of opposition.

European Commissioner for Enlargement and Neighbourhood Policy Johannes Hahn said that he was “extremely confident” the two countries would get the green light in October, and warned that the credibility of the EU’s ambitions in the Western Balkans would be jeopardised if it failed to reward the two countries for meeting goals set by Brussels.

“Unfortunately a minority of member states were not able to support the commission’s proposal to open accession negotiations with Albania and North Macedonia already today,” he said, adding, “our collective credibility is at stake and our incentives and leverage for tough reforms across the region are equally at stake.”

While North Macedonia may now ask the EU to consider its application separately from Albania, one of the problems is that the political bargaining involved in passing the constitutional amendments to change Macedonia's name included granting amnesty to opposition MPs facing trial, which critics

say undermined the rule of law and judicial independence, key requirements for EU membership.

Regardless, Richard Grieveson, an economist at the Vienna Institute for International Economic Studies (wiiw) warns that any delay in the opening of accession negotiations sends a terrible signal to the rest of the Western Balkans.

“The leaders of North Macedonia have spent a lot of political capital to secure a deal on the country’s name with Greece," he tells Emerging Europe. "A weakening of enlargement momentum could cause setbacks to the reform agenda in the region, and create openings for China and Russia to exert greater influence, something that is not in the EU’s interests. Only

Zoran Zaev (left) and Alexis Tsipras

with serious EU support, and the (still very strong) carrot of eventual membership, can the Western Balkans forge a stronger development path and start to catch up with CESEE peers.”

However, as Marko Čeperković of SciencesPo Paris points out, the citizens of North Macedonia cannot count on being in the EU before the end of the next decade, even if everything goes well. He believes that Western Balkans leaders such as Mr Zaev should come clean and tell their electorates exactly that.

"They must be told that they cannot expect the EU to come and resolve systemic problems for them, as it will not and should not do so," he says, adding: "but they do need awareness and capacities

of how to do it, and this is where the EU can and should help. Civil society needs allies, not enablers."

Mr Zaev's left-leaning government took power in 2017 after credible allegations of a massive, government-sponsored wiretapping and surveillance programme emerged in 2015, prompting a crisis that paralysed normal political activity.

In May 2018, former prime minister Nikola Gruevski was sentenced to two years in prison following a corruption conviction stemming from the purchase of a 700,000-euro Mercedes in 2012. Mr Gruevski then f led to Hungary, apparently with the assistance of Hungarian diplomats, and claimed political asylum, granted by the Hungarian

government which continues to refuse to extradite him.

According to Freedom House, an independent watchdog dedicated to the expansion of freedom and democracy around the world, North Macedonia continues to struggle with corruption, and while the media and civil society are active, journalists and activists face pressure and intimidation.

North Macedonia will hold a parliamentary election next year that offers Mr Zaev's opponents an opportunity to call his bluff.

There does at least appear to be little danger of a new, more nationalist government reneging on the Prespa deal. The Macedonian president, Stevo Pendarovski, elected earlier this year, is a Zaev ally and a supporter of the deal. •

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OUTLOOK ON THE MACEDONIAN ECONOMY

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OUTLOOK ON THE MACEDONIAN ECONOMY

Automotive components: the rising star of the Macedonian economy North Macedonia is experiencing a surge in its automotive component sector, aided by generous government policy, location and a cost competitive market environment.

WORDS PORTIA KENTISH

Turkey, and two days maximum to Western Europe. With vehicle components currently making up 3.8 per cent of all exports, current trends project for this to increase.

However, other analysts are projecting a market saturation point, depending on how the sector adapts to cope with ever-changing market forces.

Competitive tax rates

N

orth Macedonia has a long history in the automotive sector, dating back to the Yugoslav period when the region’s factories supplied the Serbian automotive producer Zastava.

From there, the manufacturing sector slowly became specialised, as several producers of automotive components began sprouting up around the country. Despite suffering from slow economic growth in the immediate postcommunist period, privatisation led to many companies being bought by foreign investors which aided the economy’s growth.

According to the World Bank, the Macedonian outlook is now increasingly positive as GDP per

The recipe for the industry’s current success is a result of various ingredients that encourage foreign investment while focusing on establishing development for the long term. Nevertheless, under close analysis this recipe can be improved in order to ensure future growth.

One of the main factors leading to growth within the sector is the government’s attitude towards the industry. Positive economic policies have dramatically encouraged foreign investment and aided the country in getting ahead in a cost competitive market. One of the first foreign companies to invest in North capita rose by 2.43 per cent in 2018, Macedonia, Johnston Matthey with overall economic growth has benefitted greatly from these expected to rise by 3.2 per cent by curated government policies.

2020. This fast-paced economic The company’s managing success partly has the booming director Olivier Krotozyner told automotive component industry to Emerging Europe that “investment thank. was made in cooperation with Recently, a wave of foreign the government authorities” adding investors has come to North that "we have always had a positive Macedonia, where 50 automotive and professional relationship.” component companies currently One of the main reasons for operate. These companies have strong government-company a large global reach, exporting to relations is the low tax rate for doing Europe, Russia, Turkey, Africa and business. North Macedonia’s low around the globe, encompassing income tax is complemented by a market of over 650 million people. a corporate tax rate of 10 per cent, North Macedonia’s location allows which compared to other countries it to deliver to many of these regions in the region is relatively low. quickly, taking less than a day to For example, Romania’s sits at Central and Eastern Europe and 16 per cent while Poland’s is

19 per cent. Moreover, value added tax (VAT) nominally 18 per cent, can drop to five per cent in some circumstances. To further encourage business and investment opportunities, the Macedonian Bank for Development Promotion lowered the export factoring interest rate from six per cent to five per cent per annum in 2016, in order to benefit the country’s exporters.

North Macedonia’s business conditions also gain from various taxation and investment treaties with the majority of European countries, as well as duty free access to the European market.

As much as 96 per cent of foreign trade is currently unrestricted.

However, Jatin Thakrar, who has been involved in the automotive sector for many years, and is currently the retiring CEO of DURA Auto, believes that there are some limits to this. He suggests that the rates on import duties on raw materials are a major issue which governments have failed to overcome, despite their objective to protect local industry. This, Mr Thakrar suggests, “needs to be aligned with EU duty rates urgently to provide a competitive advantage for the sector and local industry."

Apart from the government's economic policies, other factors also play a large role. “While the government’s policies played a part, there are many other benefits for selecting Macedonia; it is a very secure country, with a good infrastructure and general transport links,” adds Mr Krotozyner.

of automotive component makers and overall economic growth, this was a staggering 18 per cent higher.

The Macedonian government has also launched Technological Industrial Development Zones which are aimed at providing favourable investment conditions for businesses. This includes offering pre-built industrial sites, factories and support services as well as tax and customs incentives.

The government has also decreased the steps for business registration from 12 steps to four. Combined, this vastly speeds up the process for companies looking to enter the market.

Education is also a primary tool in generating further industrial development. Some 165 university students are currently undergoing training in preparation for the future workforce of Johnson Controls which is currently constructing a 40 million-US dollar facility outside the capital Skopje. Ensuring a skilled and accessible workforce is key for North Macedonia’s industrial development, as well as keeping labour and wages domestic. This has a particular impact on North Macedonia’s young population, with nearly half being aged under 30.

Nevertheless, many suggest that the education system could be further improved to help business development. “Education needs to change in a major way,” says Mr Thakrar. “North Macedonia needs to move towards a high value-added, export-driven economy if there is to be a longSkilled workers, in limited term improvement in the per capita numbers income of people.” He stresses that more long-term thinking A major factor influencing is required, and Singapore is the profitability of businesses an example that could be more in the automative sector is closely followed. "Too many people the available workforce. Labour believe that joining NATO and within the region is very costthe EU will bring in money," he competitive, lowering a firm’s says. “That may be short lived, and overall costs. In 2018 the average then what? Where do you want gross salary was 580 euros Macedonian graduates to be in say, across all sectors, while the 20 years?” manufacturing sector was at Furthermore, Mr Krotoszyner 490 euros. This is amongst points out that there are limitations the lowest gross monthly salary to North Macedonia’s skilled in the region, where unemployment workforce, purely because of size is forecast by the World Bank to constraints, which is always a remain at around 20.5 per cent. consideration in terms of company Fifteen years ago, before the influx expansion.

Moving forward Despite the hurdles, North Macedonia continues to move forward. In 2006, North Macedonia’s ease of doing business rating sat at 94th out of 175 according to the World Bank.

Last year the country’s ranking rose to 10th place, just one place below the United Kingdom.

However, this low tax and lack of regulation brought about by strong government focus on encouraging the automotive component sector has had some adverse effects. Stringent environmental regulations on pollution and carbon emissions are limiting large investments and running contradictory to government policy focus on industry. Nevertheless, the country’s carbon emissions per capita is on the general decline, and the industry has shown a willingness to adapt.

The challenge for North Macedonia now is to keep up with ever-changing market pressures.

The low labour costs are set to erode in the future as the country’s GDP continues to grow, diminishing investor advantages. The public sector will need to rearrange efforts in order to improve standards of living while fostering private sector growth. Another future challenge for the sector will be new technology and changing consumer preferences. For example, the rise of Tesla and other electric vehicle companies will require an acclimatisation of the industry if it is expected to keep up with the fast-paced market. Mr Thakrar suggests that the “auto sector will change over a period of time”, pointing to the businesses and people who will have the biggest influence, rather than the government itself.

The automotive component sector of North Macedonia is an interesting case in what government policy, environmental factors and luck can do for fostering business development. What makes it more interesting is how it will cope with current and future challenges, as these changing markets can provide a wealth of new opportunities if North Macedonia plays its cards right, otherwise it could well be left behind in the turbulence. •

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"Almost half of North Macedonia's population is aged under 30"

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OUTLOOK ON THE MACEDONIAN ECONOMY

Gearing up for investment: Doing business in the Macedonian economy North Macedonia is the only country from the Western Balkans to make the top 10 of the World Bank’s Doing Business Index. The country, which continues to aspire to Euro-Atlantic integration, is heavily dependent on foreign investors, and how it presents itself on the international stage is crucial.

WORDS DOMINIK ISTRATE

N

orth Macedonia has been at the centre of European and even world attention since the signing of the so-called Prespa Agreement last June, ending a nearly threedecades-long cultural dispute with Greece over the official name of the country. The deal allowed the country to proceed with its NATO integration, something which is expected to have a positive effect on the Macedonian economy.

“The experience of other countries shows that when a country becomes a member of NATO, the inflow of FDI doubles as a percentage of GDP,” North Macedonian finance minister Dragan Tevdovski said earlier this year, adding that the government

expects greater FDI inflows “now that the political situation has stabilised.”

After economic stagnation in 2017 caused by a decline in both private and public investment, the country’s economy expanded by 2.7 per cent in 2018 and it is now on course for a growth rate above three per cent for this year, while a four per cent growth projection for 2020 might need revising upwards, since the effects of the country’s future accession to NATO has not been taken into consideration, Mr Tevdovski added.

“Security is the foundation of prosperity,” NATO secretary general Jens Stoltenberg told the press in June, pointing to the rise of foreign investments in North

Macedonia since the Prespa Agreement was signed.

"Big companies with billions in annual revenues are coming," North Macedonia’s prime minister Zoran Zaev stated confidentally. According to the PM, the agreement will open up not just political, but economic benefits since Greek companies have promised to invest more than 500 million euros in the country’s energy and agriculture sectors.

Attracting a high level of foreign direct investment is a crucial task for the country: FDI remains one of the main pillars of the Macedonian economy and the government’s efforts to create jobs. FDI totalled 624 million euros in 2018, close to six per cent

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of the country’s GDP. The FDI inflow is more remarkable in the sense that it is more than triple what North Macedonia received in 2017. Austrian, British, Greek, Dutch and Slovenian companies remain the country's largest investors.

OUTLOOK ON THE MACEDONIAN ECONOMY

Why North Macedonia?

“Foreign investors find North Macedonia attractive due to several factors. It is located on a major transport corridor, leading from the Greek ports receiving goods from Asia to major export markets in Western Europe,” Peter Tabak, an economist at the European Bank for Reconstruction and Development (EBRD) told Emerging Europe, adding that the country “also has an industrial heritage from the former Yugoslavia and relatively skilled labour, although these skills have to be adjusted to modern business needs.”

In its latest Investment Climate Report the US Department of State said: “North Macedonia’s legal framework for foreign investors is largely in line with international standards, and foreign investors are generally treated the same as domestic investors in similar circumstances.

The country has simplified regulations and procedures for large foreign investors operating in its technological-industrial development zones.”

When it comes to the Western Balkans, anyone wishing to invest has to consider the political climate.

Although EU leaders postponed the start of accession talks with the country in June, North Macedonia remains on course to eventually join the European bloc.

“North Macedonia has continued to maintain a steady pace of implementation of EU reforms throughout the reporting period.

The government has taken steps to restore checks and balances, and to strengthen democracy and the rule of law. The country has continued to undergo fundamental changes in an inclusive and open political atmosphere,” the European Commission wrote in its latest country-specific report.

“The government pursues market-based economic policies,

economic zones or technological industrial development zones, local SMEs often face a much more difficult business environment,” he continued.

“The country’s overall regulatory environment is complex, and frequent regulatory and legislative changes, coupled with inconsistent interpretations of the rules, create an unpredictable business environment that allows for corruption,” the US government report claims. While the current government pledged Obstacles remain to fight against corruption, some NGOs assess that “the government’s While the small Balkans state dominant role in the economy of just over two million people is created opportunities for one of the leading 10 countries corruption.” in the World Bank’s latest Doing According to Mr Tabak, Business Ranking, said to have the EBRD’s transition gap analysis a better investment climate than shows that there is a great deal of Sweden or Canada, it ranks way room for improvement. A transition lower on the World Economic to a green economy by increasing the Forum’s Global Competitiveness share of renewables, to an inclusive Index (GCI), coming in 84th place. economy by lowering youth Asked about what can explain unemployment and increasing this huge difference between the labour market participation the two ratings, Mr Tabak told us of women, as well as to a resilient that the country had advanced economy by decreasing dependence a lot in its business legislation and on electricity imports would all many business processes during help the country in attracting the 2000s, with the World Bank’s ranking acknowledging it. “The GCI, investment. “Also, competition however, covers a broader scope and from the informal sector and access to finance (more than in other includes many other institutional Western Balkans economies) is a elements where North Macedonia significant obstacle to doing business still has a lot of gaps to cover, according to the EBRD-World including in improving the quality Bank Business Environment and of the transport infrastructure and education, levelling the playing field Enterprise Performance Survey,” he continued, stressing that political for businesses, removing distortive taxes and subsidies or strengthening connections also have a high impact when it comes to doing business innovation,” he said. “While foreign businesses receive special in the country. • treatment and large subsidies in free with an increased focus on social cohesion, while also enhancing state aid. In collaboration with the IMF, the World Bank and the European Commission, the government implemented reforms to improve public finance management,” the report continues. However, it adds that “the policy stance needs further adjustment to address economic and fiscal challenges.”

"North Macedonia's workforce needs to adjust its skills to modern business needs"

Lifestyle

Held each year at the beginning of September, the Batumi Black Sea Music and Art Festival brings together the finest young Georgian and international artists and offers them a chance to shine.

The festival was created by Georgia’s most talented pianist, Elisso Bolkvadze, both as a showcase for young musicians and as a way of bringing classical music to an audience that may not otherwise have the opportunity to discover the fine arts.

You can find out more at batumifest.ge.

ARTS

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LIFESTYLE

Book

we were English. Once I had confi rmed that indeed we were, his fi rst words were: “I was there you When Hungary taught the world know, when we beat you.” to play football I knew immediately what he was talking about. He was referring to WORDS CRAIG TURP a match played in Budapest between Hungary and England in May ungary is country which 1954, shortly before the World suffered far more than Cup – held that year in Switzerland its fair share of tragedy – began. Hungary infl icted what in the 20th century. The 1956 is still England’s heaviest defeat Revolution and subsequent Soviet in an international: 7-1. invasion which quashed that Ironically, the game had been liberal, democratic uprising is organised to offer England the foremost of those tragedies the chance for revenge following in most people’s memories, and Hungary’s equally impressive in the context of the more than 6-3 victory at Wembley the 3,000 lives lost in the uprising previous November, England’s – not to mention many more fi rst home defeat to a team from thousands injured or arrested – it continental Europe. England feels somewhat frivolous to suggest approached the game in the hope that a sporting defeat could ever be that the 6–3 result had been considered a tragedy. an aberration; instead, Hungary That said, Hungarians themselves provided a masterclass of football, – at least those of a certain age – will and thrashed England once more. still refer to Hungary’s defeat to West The results were not, for anyone Germany in the 1954 World Cup with a broad knowledge of football Final as a national tragedy. (a group which did not at the Some years ago, while playing time include English football’s with my then young son at hierarchy), remotely surprising.

Budapest’s elegant Széchenyi Hungary, centered on the potent thermal baths, an elderly gentleman attacking quartet of Ferenc Puskás, swam towards us to enquire if Sándor Kocsis, József Bozsik and

Ferenc Puskás

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Nándor Hidegkuti (above left), were the best team in the world. Olympic Champions in 1952 they lost just a single game in the six-year period from 1950-56. That game was the 1954 World Cup Final. Hence the feeling of national tragedy.

The Names Heard Long Ago: How the Golden Age of Hungarian Soccer Shaped the Modern Game, a new book by Jonathon Wilson, traces the roots of Hungary’s 1950s success and discovers that this celebrated era was in fact the fi nal act of the true golden age of Hungarian soccer.

Wilson, who has written a number of scholarly football books, including one dedicated to football in Eastern Europe, Behind the Curtain, reveals that it was in the Budapest of the 1920s and 1930s in fact that a new school of soccer emerged that became one of the most influential in the game’s history, shaped by brilliant players and coaches who brought mathematical rigour and imagination to the style of play.

But with the onset of World War II, many were forced into exile, fleeing anti-Semitism and the rise of fascism. The stars of the 1950s would themselves be forced into exile, most famously Puskás, one of the game’s fi rst global superstars who would win innumerable titles with Real Madrid.

Wilson’s book is a fitt ing testament to how their legacy has endured. It is the story of football flourishing in Hungary, when professional leagues were established and the game became universally loved across social classes and backgrounds. It is the story of the modern game establishing itself in the heart of a society blighted by tragedy and famine, a culture that flourished in the shadow of rising fascism and

the march towards war. It is the story of how against the backdrop of economic and political turmoil, and in spite of extraordinary odds, Hungary taught the world to play.

England – as Hungarians never hesitate to remind us – were no exception.

Hatidze Muratova lives with her ailing mother in a village without roads, electricity or running water.

Hatidze’s peaceful existence is thrown into upheaval by the arrival of an itinerant family, with their roaring engines, seven children and herd of cattle.

Hussein, the family’s patriarch, senses opportunity and develops an interest in selling his own honey.

This causes a breach in the natural order that provokes a conflict with Hatidze that exposes the fundamental tension between nature Honeyland: The Macedonian film and humanity, harmony and discord, making a sweet impact exploitation and sustainability.

“Hatidze’s story is a microcosm WORDS CLAUDIA PATRICOLO for a wider idea of how closely intertwined nature and humanity are, and how much we stand to he Macedonian movie lose if we ignore this fundamental Honeyland was one of the connection,” according to comost remarkable films of directors Ljubo Stefanov and the 2019 Sundance Film Festival, Tamara Kotevska. winner of the Grand Jury Prize Every frame of Honeyland pulses for the best documentary film, the with the cycles of life and glows Best Cinematography Award for with Hatidze’s magical vitality cameramen Fajmi Daut and Samir and optimism. It is a tribute to two Ljuma and the Special Jury Award endangered and priceless treasures: for Impact for Change.

The story takes place in an isolated human decency and the delicate balance of nature. mountain region deep within the Balkans where wild beekeeper

Film

Photos: Honeyland.earth

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Exhibition Dóra Maurer at the Modern WORDS CRAIG TURP

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major new exhibition featuring the work of Hungarian artist Dóra Maurer can now be seen at the Tate Modern in London.

It brings together some 35 works, revealing the diversity of her output, including graphic works, photographs, films and paintings.

Spanning more than five decades, the show highlights the playful conceptual approach that she brings to her experiments across all media.

Maurer was at the centre of an independent community of artists, poets and musicians that championed their own culture outside of the official Hungarian system during the socialist period.

They organised exhibitions in apartments and published underground journals.

Trained as a graphic artist in the 1950s, Maurer pushed the medium to its limit in her experimental works of the following two decades. In the 1970s she started to work in photography and moving image, often collaborating with musicians, as well as teaching creative performative workshops.

She developed increasingly geometric and abstract drawings and paintings in the 1970s and beyond.

The exhibition culminates in a room of her recent paintings, in which overlapping colours create a sense of shapes floating in space.

Movement, displacement, perception and transformation have remained consistent threads in her work. Never tied down to one medium, Maurer remains a unique voice, constantly in motion.

The Guardian's art critic Jonathon Jones called Maurer 'the dissident who rebelled in colour.'

"In today’s anxious world, it’s a joy to see this optimistic art. You could almost come away with the idea that the world has got better, not worse, in recent decades," he wrote.

Dóra Maurer at the Tate Modern (tate.org.uk) runs until July 5, 2020.

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Warsaw: A very contemporary capital of fashion

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When people hear the words fashion capital their minds are often drawn only to the traditional centres of world fashion such as London, New York, Paris and Milan. To do so is a mistake however, for there is a new, booming fashion capital very much on the up, one that appeals to those who are looking to step outside the borders of the institutionalised fashion industry and into the contemporary.

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he Polish capital of Warsaw is currently making the transition from fashion underdog to industry hotspot. It’s a city that has climbed the economic and cultural ladder of late. In Emerging Europe’s Business-Friendly City Perception Survey, the capital claimed first place overall, as well as picking up prizes in a number of individual categories, including Brand and Pool of Talent. It is this enormously positive economic environment that has greatly helped encourage fashion and design startups, as well as bring in domestic and international talent to the city.

Historically, Warsaw has never been considered a major fashion destination, often existing in the shadow of its Western European neighbours, but factories across

Poland have consistently produced for the top fashion houses. Luxury brands like Louis Vuitton and Hugo Boss have a history of using Poland for cheap labour, but with the economy growing and wages increasing, the sector has taken an independent turn.

Now, a new generation of homegrown creative entrepreneurs are benefitting from this skilled craftsmanship. Warsaw’s school of fashion is producing top tier graduates, while many who have studied at top schools in London, Rome and Paris are returning to the city, where their talent is flourishing.

One of those up and coming designers is Ania Kuczyńska, who after graduating from schools in both Rome and Paris, came back to Warsaw to launch her own brand.

Her designs present a nexus of minimalism and modernism, and have been noted by Wallpaper Magazine as “the brightest beacon in the Polish design firmament”.

Ms Kuczyńska describes the fashion scene in Warsaw as “vivid and very lively.” She

told Emerging Europe that “its eclectic character, architecture and understated atmosphere is a big source of my inspirations.”

Another Warsaw-based designer, Magda Butrym, told the New York Times that “it is a really exciting time to be working here and I wouldn’t want to be anywhere else. There is energy and optimism around young designers in Warsaw.

People are paying attention to this region in a way they haven’t before.”

Academy of talent Another noteworthy designer coming out of the Polish capital is Kasia Skórzyńska, a recent graduate of Warsaw's Academy of Fine Arts, who with her sister Julia, started the label KAASKAS in 2014.

The designers have curated a contemporary aesthetic that is both bold and intricate.

When asked about her time at the academy, Ms Skórzyńska told Emerging Europe: “I think what the academy taught me really well is how to explore your imagination to the most and not be afraid to

Photo: KAASKAS

Photo: Ania Kuczynska

WORDS PORTIA KENTISH

Photo: KAASKAS

No limits Arguably, part of the reason Warsaw’s creative industry has been able to develop so uniquely is down to the fact that creatives are not limited by old fashion houses and brands with heritage.

Cities like Paris and Milan can become stifled by domineering fashion houses, leaving no room for the unconventional and eclectic. “Eastern Europe doesn’t have brands with heritage, and not everyone will be successful,” suggests Ms Butrym, “but there is a sense that something is really beginning in this region.”

According to Ms Kuczyńska the fashion world is becoming more globalised and borderless, allowing cities like Warsaw to experiment. Also, to stay true to burst through into the spotlight. what’s inside of you, creatively.

Similarly, Ms Skórzyńska suggests That your own personal aesthetic that “the old system and the 'fashion is what distinguishes you from bubble' is becoming more and more others and so how can you translate irrelevant to the world we live in that into a well-designed product and so smaller brands have a chance in all aspects - design, textile, to grow and appear with their ideas quality. What I think is specific worldwide.”

Photo: MISBHV is the interconnection between different art disciplines - drawing, painting, sculpture, textile design – the academy's programme is not just about garment design.

It's incredibly creative and specific to fashion faculties in fine arts academies like Warsaw or Antwerp.”

While Warsaw has been for too long been overlooked as a fashion capital by the industry, this is finally changing. “There is lots going on. Big chains are growing and competing with the international fashion scene," says Ms Kuczyńska.

"Also, there are more and more independent designers successfully presenting their work to the international audience. I think it is a very positive sign.”

However, there is still much for brands to overcome in order to get noticed outside of Poland.

“This part of Europe is still a little bit underestimated,” says Ms Skórzyńska. But things are One success story of how a changing, demonstrated by Polish brand reached international Vogue magazine’s Polish debut acclaim is MISBHV. Designer in 2018, making it the 23rd local Natalia Maczek launched the label print edition of the iconic fashion in 2013 and six years on it is being magazine. This is a good sign worn by the likes of Rihanna, A$AP for the industry in Warsaw and Rocky and Kylie Jenner. Drawing shows the increasing importance inspiration from street style and that is being placed on local pop culture, it crosses the line creative talent. between avantgarde and luxury,

with futuristic details and inventive timelessness. One notable design featured a black vinyl trench coat with the word WARSZAWA printed in white bold motif. MISBHV emanates all that is unique about the city with a sense of rebellious minimalism.

The future of Warsaw’s fashion industry is unpredictable in such an ever-changing climate, but things are heading in a positive trajectory.

The scene is developing organically, with a focus on product rather than celebrity name, according to Ms Skórzyńska. “I think it’s very smart and allows the business to grow in a more thought-through and authentic way.”

Staying different However, Ms Skórzyńska does note that much of the industry is becoming indistinguishable as “there is less and less creative experiment in fashion in general and lots of brands are creating a very similar offer.” She suggests that “the social media that help with promotion and recognition on the one hand "also in my opinion make a lot of brands look kind of the same. It’s very difficult to stay unique. I feel like Warsaw has that fresh potential but we really have to be careful not to fall for the current 'instamood'".

Her argument that cities from Warsaw to New York have to stay ahead of the pitfalls of technology and social media in order to stay unique is well founded.

Globalisation in creativity can arguably lead to a blending of ideas, but history tells us that Warsaw’s potential to stay eclectic and unorthodox must not be underestimated. As Ms Kuczyńska says, "the fashion scene has become very mainstream, but there is still space for independent and avantgarde brands like mine.”

In the face of a changing industry, it is undeniable that Warsaw has something unique to offer both to designers and consumers. It is slowly presenting itself as the creative voice of the region, becoming home to small, creative boutiques to high-end celebrity couture. But if there is one thing the city can hold onto in the globalised merge, it is authenticity. As Ms Skórzyńska puts it: “I think it is very down to earth in a good way.” •

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"More and more independent designers are successfully presenting their work to the international audience. It's a very positive sign "

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Transforming Tirana’s iconic pyramid For many years a symbol of the Albanian communist regime, Tirana’s iconic pyramid is stepping into the future. Having served as a museum, a temporary NATO base and a nightclub it is now being transformed into a modern multifunctional centre for technology, culture and art.

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he large pyramid which dominates the centre of the Albanian capital Tirana first opened in 1988 as the Enver Hoxha Museum, a place celebrating the former Albanian communist leader Enver Hoxha, who ruled the country from 1944 until his death in 1985. Mr Hoxha’s own daughter, Pranvera Hoxha, and her husband, Klement Kolaneci, were among its architects. And they took liberties which, during the strict communist regime, would have otherwise been unheard of. One of these was the use of what were defined as capitalist materials, imported from the United States to attach marble tiles to the façade. Those tiles were unfortunately removed during the tumultuous period of 1996-97.

Originally, the pyramid was topped by a red star, which has also now been removed.

The museum didn’t last long.

In 1991, after the fall of the communists, the pyramid became a cultural centre, named after Pjeter Arbnori, an Albanian gulag survivor and a victim of the regime.

And for a decade, it was Tirana’s most famous nightspot.

During the 1999 conflict in Kosovo, NATO set up a humanitarian headquarters inside the building and in 2001, Albanian television station Top Channel moved in.

Civil society opposed the move fiercely. While other countries tore down former communist monuments, the fact that the pyramid had been built relatively recently meant that the majority of people associated the building with Tirana as a city rather than with the communist regime or with Enver Hoxha.

“For many years, the pyramid was a symbol of the city and during the 1990s people used to spend summer in its gardens,” says Klejd Këlliçi, professor at the Bone of contention University of Tirana. “Furthermore, Berisha’s decision to demolish the In 2011 the monument became building seemed authoritarian, which a bone of contention between the two led to reactions and demonstrations main parties of Albania (the Socialists to protect the monument.” and the Democrats). Former prime “Albania is different from other minister Sali Berisha wanted to former communist countries. demolish the building, in order to Those were the years of nostalgia, make way for a new parliament. a wave that current prime minister Edi Rama caught, creating other buildings like the Bunkart, Shtepia and Gjetheve museums. Also, many restaurants and pubs recall the communist period,” he tells Emerging Europe.

Photos: MVRDV

Back to the public The project to restore the pyramid belongs to the Dutch design company MVRDV, which expects to finish the building’s transformation by the end of this year.

According to MVRDV, the project aims to give the building back to the public. The ground floor will be open up on all sides, inviting the public to participate in its diverse educational programmes.

By making the façade and roof accessible, the building will also be integrated into the urban fabric affording the public a new perspective of the city. The same logic is applied to the interior, which, through the artful introduction of landscape elements and greenery,

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will interact seamlessly with the surrounding square.

“I am not sure there will be any protest against this new project,” Mr Këlliçi adds. “Many of the people that demonstrated to protect the pyramid eight years ago are now working for the government.

A government that is affecting a lot the cultural heritage of Tirana.

Dozens of villas from 1930-40 are disappearing and the city centre has been completely distorted, with modern tall buildings. Mr Rama, a former mayor of Tirana, even planned to build a skyscraper within the National Museum’s courtyard.

I am sure people are susceptible when it comes to the pyramid. They want to preserve it, but also change it, even if many anti-communist intellectuals would still like to see it demolished.” •

Young classical musicians head for Zagreb WORDS CRAIG TURP

The 20th edition of Eurovision Young Musicians will be hosted by Croatia’s public broadcaster HRT on June 21, 2020 in Zagreb. Young musicians from around Europe will perform on an open-air stage in King Tomislav Square in the Croatian capital.

Eurovision Young Musicians is the continent’s leading event for talented young classical musicians aged between

12 and 21. The grand final is scheduled to coincide with Fête de la Musique, or World Music Day, which celebrates music of all genres being performed outdoors.

“We are delighted to bring the 20th Eurovision Young Musicians competition to Croatia in 2020,” said the EBU’s Executive Supervisor of Eurovision Live Events, Jon Ola Sand. “HRT have been closely involved with this format

for over 20 years and are very much a part of its heritage.

We know that HRT will produce a fantastic event for the best young classical musicians to shine. This competition has launched some of the biggest stars of the classical world and we’re looking forward to giving the big names of the future an international stage next summer.”

Kazimir Bačić, director general of HRT, added: “We are exceptionally honoured to host Eurovision Young Musicians in 2020 in Zagreb. We will stage the competition for the very first time and this being the 20th edition makes us even more proud. We are pleased to partner with the Croatian Ministry of Culture and the City of Zagreb for the event. As a country that is known around the world for its hard-working musical talent as well as its great cultural heritage, Croatia, Zagreb and HRT are ready for this wonderful experience. We’d like to thank the EBU for giving HRT this opportunity.”

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Nagorno Karabakh: An ongoing humanitarian crisis The armed conflict between Armenia and Azerbaijan over the disputed territory of Nagorno Karabakh (Artsakh) is now in its 31st year, with no solution in sight. Those who live in the conflict zone, as well as those who flee it, are faced with a reality unlikely to change.

WORDS DOMINIK ISTRATE

“I

haven’t even thought about what my life would be like without the conflict,” an anonymous interviewee recently told International Alert (IA), an NGO focusing on the disputed region of Nagorno Karabakh. The statement describes a lack of willingness to believe that the frozen territorial contest might one day be over.

Since the conflict broke out in 1988, more than 3,000 Armenians and Azerbaijanis have died while over 1.2 million internationally displaced people (IDPs) have been accommodated in Azerbaijan, with many others having taken refuge in Armenia.

The latest IA survey, the largest of its kind since the so-called April War of 2016, the worst escalation of the conflict in recent years, shows “the widespread assumption” that despite the conflict being seen as frozen, “soldiers are regularly killed along the line of contact and the international border.”

'You get used to being shot at'

same dreams and fears,” Narine, a student who has been to the war told “People in disputed and border the Armenian press. areas must unfortunately get used “We used to live with Armenians to being shot at. In fact, I think very well. So why not live together they’re already used to it,” one other again? There were a lot of Armenian respondent told IA. “I was born workers, who used to build our during the war and consider myself roofs and houses,” an Azerbaijani to be part of the ‘independence’ interviewee of IA recalled on life generation. I cannot imagine a life in Karabakh. without conflict,” another local from Finding a lasting, peaceful Karabakh claimed. solution in the long term is just The war has left its mark on as much a challenge as managing the identity of the Karabakhi, the crisis itself. Hundreds of Armenian and Azeri people, and has local, European and international changed how the various nations NGOs are still involved in easing perceive each other. However, this the burden of those living has not always been the case: people in Karabakh, as well as those who were once able to peacefully coexist. have left. One of them is HALO “What we know about the people Trust, a UK-based organisation that on the other side of the border we fights for a “landmine-free Artsakh.” learn from books alone. I remember With thousands of landmines still that, as a child, I used to think that left in Nagorno Karabakh, the life Turks were something wild and of local families is still shrouded terrifying, not real people. Then by the shadow of death. While we realise that people over there working to achieve a noble cause, are just like us, that they have the the British NGO, along with other organisations, faces serious funding challenges as Nagorno Karabakh is an unrecognised territory that prevents many countries from funding humanitarian activities, with the US government remaining the only major donor, the NGO claims.

Different areas of focus With a political solution to settling the status of the region not expected anytime soon, the most pressing concern is to address the human side of the conflict.

Even here though, there are several obstacles to be overcome.

“The most important problem is the complete lack of trust and spread of hatred. Tracing my personal experience, it is getting more and more complicated to launch even a dialogue among Armenians and Azerbaijanis, even

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1.2 million people have been displaced by the conflict

at an academic or civil society level,” Ruben Elamiryan, a political scientist and a Fulbright visiting fellow at Princeton University told Emerging Europe. “This kind of environment is not good for solving any humanitarian or other conflictrelated issue. More importantly, the development of trust should take place simultaneously in Azerbaijan, Artsakh, and Armenia on governmental, societal, and human levels,” he added.

“There are over 300,000 women and children suffering from depression and other psychological distress caused by war, the Armenian occupation and violent ethnic cleansing in NagornoKarabakh. Armenia’s refusal to respect human rights and violate international humanitarian law is a critical component that has not received international attention,” Peter M. Tase, a scholar on Azerbaijani studies and international advisor to governments and international organisations told Emerging Europe, adding that “the destruction of cultural heritage sites and demolition of the world’s premiere religious sites in Nagorno Karabakh by the Armenian armed forces are actions that must be denounced

by UNESCO and other relevant global institutions. Moreover, the establishment of synthetic drug labs in the occupied territories of Azerbaijan is a serious threat to European societies and weakens

international efforts in the war against drugs,” he continued, highlighting another angle of the conflict that remains largely undiscussed.

“The humanitarian situation remains a fundamental obstacle, especially given the isolation of the Karabakh population, the continued violation of an inherently fragile ceasefire, and most distressing, the reality that this conflict is no longer ‘frozen,’ but very ‘hot’ indeed, with a loss of life on all sides,” Richard Giragosian, director of the Regional Studies

Centre, an independent Armenian think tank said. He noted that there were additional problems regarding promises for strengthening confidence-building measures (CBMs). “More specifically, the record of Azerbaijan’s promises is matched by its history of failing to meet its obligations. Promises have not been kept before and Baku has failed to fulfill its promises in recent years. This means that the international community needs to demand that Baku meet its expectations for CBMs.” •

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Looking for Montenegro's finest restaurant? Forget Podgorica

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Craig Turp speaks to Lazar Ćatović, who has made a centuries-old mill in the Boka Kotorska one of the most talked-about restaurants on the Adriatic.

Ćatovića Mlini

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isitors to the Montenegrin capital Podgorica searching for the country's best restaurant might want to be advised that they are looking in the wrong place. While the wonderful city is certainly not short of fine places to eat – in fact, it has some amazing restaurants - it is perhaps on the splendid and increasingly popular Montenegrin coast that the finest food in the country is currently being prepared, in the small town of Morinj, halfway between the fortified town of Kotor – so popular with cruise ships that the number of visitors is becoming an ecological issue - and Herceg Novi, in the Bay of Kotor, known to locals as Boka Kotorska.

The region was for centuries known for its mills, used to grind the olives that produce Montenegro's outstanding olive oil. Indeed, oil has been made in the area for more than 2,000 years using olives from some

of the world’s oldest olive trees, known as the žutica, which are indigenous to southern Montenegro and produce a golden-coloured oil full of bounce and fruitiness. Today, around 10,000 ancient žutica olive trees are believed to have survived.

Great survivors Konoba Ćatovića Mlini, or Ćatovića Mlini Tavern, is another of the region's great survivors.

Originally a mill, the building has been in the family of its current owner, Lazar Ćatović, for more than 200 years. Its setting, amidst lush mountains with streams, waterfalls and creeks, is reminiscent of a Monet painting, a timeless reminder of a bygone era. It is a breathtaking mix of beautifully-restored traditional architecture and unique natural beauty.

And that's just how Ćatović planned it.

"When I decided to create a restaurant here, I had one idea in mind: to keep the environment exactly as it was," he tells Emerging Europe. "I wanted to interpret the traditions of the bay through the history of my family, our mills, and the Mediterranean lifestyle. One of the main goals was authenticity, something which we stick to today."

Not that Ćatovića Mlini has been shy to make itself as accessible as possible to its visitors, the majority of whom (around 80 per cent) are foreigners: as well as driving to the restaurant, diners can make their way by boat, and there's even a heliport on the estate for those who really want to arrive in style.

Seafood treats The food at Ćatovića Mlini is prepared by Dejan Detki, one of the best chefs in the Balkans and part of the team for more than

All photos courtesy Ćatovića Mlini

20 years. The cuisine is strictly Mediterranean with a strong Boka Bay accent reflected in the many old, traditional recipes.

As you would expect for a restaurant located so close to the sea, fish and seafood dominate the menu, all bought from local fishermen. The use of local ingredients is important to the Ćatovića Mlini team.

"Fresh and local produce is key to our success," says Ćatović. "All of the cheese for example comes from the area around the restaurant, and both the fruit and vegetables are locally grown. The menu adapts to the ingredients that are available from season to season."

Highlights of the menu include a fabulous shrimp cream soup made with fish stock cooked from various kinds of fish, and shrimps caught in nets, sprinkled with mint leaves and parsley.

Corn-crusted octopus rolled in polenta, fried and served on rucola leaves with salsa made with tomatoes, onions, garlic, Mediterranean spices and parmesan cheese is another favourite, while the restaurant's signature dish is a huge, whole seabass – often weighing more than a kilo baked in salt.

For dessert, you shouldn't leave without tasting Chef Detki's Boka cake: pastry filled with almonds, eggs, flour and maraschino cherry liqueur, topped with caramelised orange juice. It's every bit as delicious as it sounds.

For olive oil and wines, Ćatovića Mlini stays local, but to make sure

Lazar Ćatović

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that diners have the widest choice, the restaurant widens its reach throughout the Balkan region, with many of the wines and oils it offers coming from Greece, Croatia and Slovenia, as well as Italy across the Adriatic.

An inspired decision Originally founded by the Benedictines in the 16th century, the decision to transform the Ćatovića Mlini estate into a restaurant in 1994 increasingly looks to have been an inspired one.

For as gorgeous as Ćatovića Mlini is, were it not for the vision of Lazar Ćatović, it might well be just another of the many old mills that dot the landscape around Kotor Bay. Instead, he has created a world class restaurant

whose fame has won praise across the world.

"When I see the approval in the eyes of our guests, I am happy," says Ćatović "I know that we did the right thing." •

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Lublin city guide: 48 hours in Poland’s best little secret WORDS ALEX WEBBER

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hough off the regular tourist radar, the south-eastern Polish city of Lublin is increasingly raising eyebrows on account of its beguiling Old Town and magical spirit. But hackneyed clichés aside, it’s also a city with a blossoming arts scene and alternative swagger.

with journey time by taxi weighted at under 20 minutes. With no taxi rank inside the building, arrivals are encouraged to arrange a cab via the desk inside the terminal. Expect to pay around 50 zloty. However, with only six or so international connections, most visitors use Warsaw as their landing point and arrive in Lublin on the train. The Old Town Why visit now? lies three kilometres north of the station, with taxi fares costing Even at the height of summer, between 15-20 zloty depending on foreign accents are a rare sound to the honesty of the driver. behold – and they diminish further On the hotel front, the Alter as you exit the Old Town. Visit now, (Grodzka 30, hotelalter.pl) is and you’ll find yourself exploring the biggest splurge in town with Poland’s best kept secret… and it’s a world class design that bridges all yours to share. the past and the present – the medieval cellars are home to Absolute beginners a holistic wellness centre that woos all who visit. For more Lublin airport sits approximately uniform comfort, the Hampton 13 kilometres east of the Old Town

By Hilton (Kompozytorów

Polskich1, hamptonlublin.pl) doesn’t disappoint, while the Grand Lublinianka (Krakowskie Przedmieście 56, lublinianka.com) has an almost Viennese character with its bombastic exterior and generous rooms. The city also scores well on the ‘aparthotel’ front: Boutique Residence Rynek 16 (Rynek 16) provides swish, elegant lodgings inside an atmospheric townhouse, while Apartamenty Browar Perła (Bernardyńska 15, apartamentybrowarperla.pl) have a design-led approach that tastes all the better for its connections with the local brewery.

The Old Town Lublin’s historic centre escaped the devastation faced by many of Poland’s old towns, lending it an authenticity that amplifies its quite

copious charms. Usually entered by Brama Krakowska – a squat brick tower capped by a Baroque dome – ambling its warren of alleyways is a simple, honest pleasure that never loses its thrill. Heavily loaded with shaded courtyards, extravagant churches and small little nooks, all explorations invariably rejoin Grodzka, the main thoroughfare that cuts through the district.

Followed to its conclusion, the route leads to the castle (Zamkowa 9), a sparkling white affair that’s Neo Gothic in style. Here, essential viewing is provided by a paw print reputably left by the devil.

cobbled streets flanked by foggy bars and pavement cafes. Trybunalska (Rynek 4, trybunalska.pl) is a late night solution for all, with its series of floors dealing out a range of cocktails and frontierpushing beers. Where the latter is concerned, Św. Michał (Grodzk 16, fb.com/pubregionalny) is no second fiddle, proferring an exhaustive selection of brews from its 30-something taps.

The darkness

Formerly a renowned seat of Jewish learning, Lublin was once known by a variety monikers, Going underground among them the Polish Jerusalem and the Jewish Oxford. This Below ground level, Lublin’s Old changed under the German Town is connected up by a series occupation, with the city of tunnels, corridors and chambers playing a brief but prominent that hark back to medieval times. role in the Holocaust – serving Dark and labyrinthine, a 280-metre as the command centre for section of these have been opened Aktion Reinhard, it was here to the public to offer a quirky insight that the genocide of the Jews into the gloomy guts of the city. under the jurisdiction of the soScale models of Lublin ‘through the called General Government was ages’ are the highlight and include planned. But it was more than just one interactive model detailing The a logistical and administrative Great Fire of 1719. Just beyond the centre, a point underlined by the Old Town, make time for the Perła proximity of Majdanek (majdanek.

Brewery – engaging and smartly eu). Lacking the throngs of designed, over 20 cellars have been Auschwitz, this concentration joined to tell the remarkable story camp feels all the more haunting of this local powerhouse – and for its near absence of visitors. yes, tours culminate with a wellA morning spent walking the warranted beer. barracks and killing facilities is a stark glimpse into the region’s When dinner calls brutal past, and the contemplative nature of the morning well The Old Town is honeycombed twinned by a visit to the eerie and with eateries and restaurants, ethereal Old Jewish Cemetery on many of which are of a high, almost your way back to town. unexpected calibre. Usually open only at weekends, Chapter One by Be inspired Piotr Kwiatosz (Rynek 14, fb.com/ chapteronebypiotrkwiatosz) offers As the numerous outbreaks fancy fine dining with a local spin of out-sized street art suggest, inside an intimate, vaulted chamber Lublin is a city in the throes – less formal, find the same chef of an artistic revolution. It’s executing regional slow food inside a point further manifested by 16 Stołow (Rynek 16, 16stolow. the prevalence of independent pl), or else sit shoulder-to-shoulder galleries and alternative art spaces with other diners in Mandragora that are sprinkled about the town.

(Rynek 9, mandragoralublin.pl), Home to a printing museum, a spirited Jewish-themed restaurant Dom Słow (Żmigród 1, teatrnn. festooned with wobbly antiques. pl/domslow) is one such place, with its chambers often given For afters over to quirky exhibitions based around graphic and illustrative art.

Lublin’s Old Town at night is an Galeria Labirynt (Popiełuszki 5, atmospheric proposition, its tight, labirynt.com), meanwhile, has

earned a name for its contemporary, experimental exhibitions, whilst no visit is truly complete with a full exploration of the CSK (Pl. Teatralny 1, spotkaniakultur. com). Seen from the outside as a monolithic glass cube, highlights include a rooftop ‘sky garden’ with a stunning glass walkway and the leading-edge Brain Damage Gallery (bd.pl). Specialising in graffiti, past exhibitions have included works by the likes of Banksy and Shephard Fairey.

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Wide, open spaces Having smashed through the doors of perception inside the CSK, Saski Park opposite is a genteel and elegant antidote whose curling pathways and English-style gardens resound to the calls of the peacocks that prowl the pristine lawns. After, walk back towards Old Town to stop at Pl. Litewski. Seen by many as the city’s principal gravitational point, its crowning glory is a multimedia fountain park whose shimmering colours are particularly striking come nightfall.

The final curtain More than just culture, CSK contains what many would argue to be one the finest multi-tap bars in the nation. Sleek and trendy, Browar Zakładowy (Pl. Teatralny 1, zakladowywielokran.pl) has a hefty choice of domestically brewed beers with adventurous flavours the norm.

Similar craft experiences await at the nearby Just Crafted (Cicha 2) and Dziki Wschód (Jasna 7), though to really tap into the local vibe look no further than Perłowa Pijalnia Piwa (Bernardyńska 15A, perla.pl/pijalnia-piwa). Owned by the local Perła brewery, enjoy the full range of their portfolio inside a slick interior dominated by a long, gleaming bar that’s elliptical in shape. Featuring a slow-food menu with ingredients sourced from local farmsteads, meals are a convivial affair that reimagine rustic Poland through a sharp, modern prism. •

"The Old Town is honeycombed with eateries and restaurants, many of which are of a high, almost unexpected calibre. "

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Batumi city guide: 48 hours in Georgia’s Black Sea paradise Georgia's leading seaside resort offers far more than summer ice creams on the beach. Not easy to get to, a host of cultural events, sensational food, cracking nightlife and Europe's largest botanical garden make it a year-round destination that's worth the effort.

WORDS CRAIG TURP

popular with foreigners looking to become Georgian tax residents: no tax is paid in the country on foreign income. In the shadow of the towers are Soviet-era apartment blocks, and beyond those the older part of town, laid out following a grid system. Taxis are cheap and drivers generally honest (just make sure you agree on any price before setting off) but both the seafront and the city centre are pedestrianfriendly and the city in general is surprisingly walkable.

Hotels

Why visit now?

"Why visit Georgia?

Because Vladimir Putin doesn't want you to"

Because Vladimir Putin doesn’t want you to. Do you need another reason? In July, the Russian dictator launched a new offensive against Georgia, banning all Russian airlines from flying to the country.

The ban, which also forbids Georgian airlines from flying to Russia, was implemented in the wake of protests in Georgia's capital Tbilisi against Russia's continued occupation of the Georgian regions of Abkhazia and Tskhinvali.

The flight ban is designed to undermine Georgia's fast-growing tourism industry. Don't let Putin win: visit Georgia.

Getting there It has to be said that getting to Batumi is not easy if you are flying in from Western Europe. The city's

tiny (but hugely efficient) airport is linked to Istanbul, Kyiv, Tel Aviv, Amman, Baku and Minsk (as well as Tbilisi). Kutaisi airport however is just over two hours away, and is served by flights from tens of cities across Europe. Minibuses depart for Batumi night and day and cost around 15 lari (that's less than five euros). The adventurous might also like to try the 50-hour ferry ride from Burgas in Bulgaria on the other side of the Black Sea. Batumi beginnings Whether you approach Batumi by land, sea or air, its many iconic skyscrapers will be the first things you pick out in the distance. They give the seafront an air of Las Vegas kitsch but also attest to Georgia's confidence as a country very much on the up. Many are five-star hotels, others are apartment complexes

Just about every global fivestar hotel brand has a presence in Batumi and prices, by western European standards, are low.

The Radisson Blu (Ninoshvili 1) is the most pleasing on the eye, all glass and steel and from some angles wafer thin. Its spa complex is fabulous, and as most guests appear to be in the casino the chances are you will have the pool to yourself. Somewhat more garish are the Hilton (Rustaveli 40) and the Wyndham (Memed Abashidze 33), but taking the prize for the most brilliantly bonkers hotel in town (at least until the Le Meridien, with a miniature London Eye-type ride embedded in its upper floors, opens) is the Sheraton (Rustaveli 28), an enormous wedding cake that combines Moscow with Dubai and should look awful. Anywhere else it would. In Batumi it looks just right.

The Boulevard Sandwiched between coastal Rustaveli Avenue and the sea is what locals call the Boulevard, a mix of pleasure beach and botanical garden which stretches south towards the Turkish border: there are plans to extend it all the way to Turkey, some seven kilometres.

The original boulevard dates back to the 19th century and many of its features, not least the mightily impressive bamboo forest, are primarily the work of a French gardener, Mikheil d’Alphonse.

Batumi’s sub-tropical weather means that there is very little that will not grow here, and d’Alphonse made use of the climate to stunning effect. Recent beautification of the Boulevard may have taken away some of its original charm (it can feel a little too clinical) but a couple of the funkier beach bars are doing their best to preserve the bohemian spirit of the past. Laid back Daiquri, which serves cocktails, light meals and salads, is the perfect place to watch the sun go down.

Up the Alphabet Tower

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The Old Town

Beyond their shiny seafronts all ports have a seedy side which are Georgia is quite rightly proud of its often much more fun to explore. beautiful alphabet, so much so that Batumi is no exception. Shops in since 2011 a 130-metre tower has selling all sorts of moody goods dominated the seafront at Batumi (perfect for picking up a fake iPhone) as a testament to the uniqueness stand next to Thai massage parlours, of the alphabet. The structure, where – allegedly – far more than known as the Alphabet Tower, massage is usually on offer. Much combines the design of DNA, in its of Batumi’s Old Town has survived familiar double helix pattern, with the rebuilding and renovations two bands rising up the tower each of elsewhere, and the two-storey holding the 33 letters of the modern buildings which predominate, Georgian alphabet. The letters are many complete with loggia, evoke each four metres tall. There’s a lift to an elegance lacking in the newer part the top if you’re after some decent of town. Europa Square, at the heart views of the city and the mountains of the Old Town, hosts concerts and beyond, as well as a restaurant festivals and, since 2007, a statue which, this being Batumi, revolves. of Medea, daughter of King Aeëtes A far more poignant structure is the of Colchis (who once ruled these moving (in every sense of the word) parts). Medea is best known for statue of Ali and Nino. He was Azeri, aiding and abetting Jason in his quest and Muslim, she was Georgian, and for the golden fleece. The fleece she Christian. Nobody approved. They holds atop the statue is not, we are loved each other anyway. reliably informed, made of gold.

The Botanical Gardens If you see one thing in Batumi, make it the botanical gardens (bbg. ge). Set in the hills above the city the gardens were opened in 1912 and are the largest anywhere in the world outside of the United States. They are split into 21 distinct sections and there is a choice of 12 marked routes to choose from, each taking in different parks of the park. Don’t miss the bananas, which grow here but are alas never ripe enough to eat, the enormous evergreen sequoias or the exquisite rose garden. Prepare to spend at least half a day here.

Food and Drink Given that Georgian food is invariably fabulous and that Ajara offers the finest food in the country, foodies are in for a treat in Batumi.

Khachapuri is made across Georgia but only in Ajara is it made so well: crisp, freshly-made bread filled with cheese and topped with an uncooked egg you need to stir with butter to create a rather special kind of scrambled egg on toast.

Old Batumi on Pushkin Street is probably the pick of the town’s khachapuri joints, but Old Boulevard (opposite the Sheraton; facebook. com/oldboulevardrestaurant), does a decent job too, and also serves traditional coffee made on sand (one of only a handful of places still doing so). There’s also decent fare at Bern (Rustaveli 17, facebook. com/Bern.Batumi/) including amazing khinkali, savoury Georgian dumplings, which in the evenings is accompanied by equally impressive traditional dancing. •

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The Floating Voter

LIFESTYLE

This story is from Mike Ormsby's collection Never Mind the Vampires, Here’s Transylvania. In 2008, Romania’s literati dubbed Ormsby ‘The British Caragiale’, in a nod to the country's fin-de-siècle satirist.

“G Mike Ormsby is the author of three collections of short stories about life in Romania, including Palincashire - Tales of Transylvania, and Never Mind the Balkans, Here’s Romania.

oing to vote, Domnul Vasile?” I lean from my bedroom window, looking down towards our elderly neighbour. Vasile pauses in the lane below me, glancing about. He’s wondering where the voice came from. He’s dressed dapper today dark suit, shirt and tie, shiny shoes despite the wintry weather. His feet must be cold in all that snow and slush but he seems in good spirits, which is unusual, considering he probably hasn’t got any spirits inside him just yet.

Most days, Vasile wobbles along in an old tweed jacket, corduroys, and wellies caked in mud. Sometimes, he’ll stop to pee in the middle of our lane, talking to himself. Or perhaps to his Litt le Richard. But not today.

I wave a hand. “Up here.”

Vasile looks towards my window. “Oh, it’s you. Bună ziua, Domnul Mike. Nine o’clock and still in your pyjamas?”

“Late night, late start.”

“Not me. I have to rise early.

Sheep, see.”

“And the cows, I suppose.”

“Them, too.” Vasile leans against the fence and points a stubby fi nger into our yard. “You should get a couple of goats. Place is big enough. Decent grass, come summer.”

“Goats? No chance, we’ve got three dogs. And fi ve cats, one of which is yours, by the way.

The white one. She adopted us.”

“Keep the damned cat. I never see her, these days. Anyway, I must be off .”

“To vote, by any chance?”

“Yes. Long walk but I feel I should. And you?”

“I can’t vote. I’m from England, remember. It’s a litt le country near Europe.”

“So I hear.” Vasile winks at me, sharp as ever.

I gesture towards foggy hills.

“Important day for Romania, though. So, I hope you’ll vote for the right people.”

“And who might they be, Domnul Mike?”

“The ones who’ll make things bett er.”

“Bett er what?”

“Bett er roads, schools, hospitals.

And less corruption.”

“In Romania? You must be dreaming, go back to bed.”

“Need to feed the pets. So, who will you vote for, if I may ask?”

“Not the usual lot, anyway.

What do they do for our village?

We’ve got no bus, no gas, dodgy water, and the snow plough never comes. And what about jobs, real jobs? My wife works in Germany ten months a year, just so I can renovate the house. Get my vote?

They’ll get my boot.”

“Exactly, we need a change. So, who will you vote for?”

“No idea. I’ll wait until I get there.”

“Then what?”

“Check the list, fi nd someone I never heard of, and vote for them.

Done!” Vasile raises a thumb.

“Fair enough, Domnul Vasile.

But how come you’re not wearing gloves, on such a cold day?”

“Who needs gloves?”

“It’s minus fi ve Celsius, according to my thermometer. I’m freezing up here.”

“Bett er get dressed then, hadn’t you? Good day, Domnul Mike, and think about a goat.” Vasile moves up the rutt ed lane, stepping around a gloopy puddle, adjusting his black astrakhan hat.

I watch him go, and hope for warmer days. The sun is trying to break through the thick, grey fog that clings to our hills and fi lls our valleys. But the fog won’t budge. It wants to stick around, engulf us, stop us seeing. Perfect weather for an election in Romania. •

Adjara Group Adjara Group is a leading Georgian company in hospitality and lifestyle development.

The company entered the Georgian hospitality sector by bringing the first international hotel franchise Holiday InnÂŽ to the local market. It soon gained worldwide recognition for its trend-setting establishments and entrepreneurial projects by founding the independent lifestyle hotel brand Rooms Hotels, which quickly emerged as the premier leader of distinctive hospitality experiences in Tbilisi and Kazbegi. The hip Fabrika, also created by Adjara Group, is a youth-oriented, communal-vibe, design hostel bringing new energy to the capital of Tbilisi. The company is soon opening a local luxury hotel Stamba which has already become an esteemed member of Design Hotels and presents many unique features including an exceptional style casino Aviator

www.adjaragroup.com

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You what?

Emerging Europe launches a mini cultural revolution.

WORDS CRAIG TURP

W

hen to use the polite or familiar forms of you and the corresponding verb endings is not a problem the English have to worry about all that often.

For a start, the English language has for many centuries had, in the vernacular at least, just one form of you. (Although it is worth noting that it was not the polite you which was dropped from everyday English: it was the informal/ familiar thou which went).

Other languages retain their polite and informal variations, however.

While there are national and regional differences, in most cases the polite form is used with people you do not know, or those whose age or position demands it. In some parts of emerging Europe, such social norms are preserved with a fanaticism that can often be quasi-religious. Making incorrect use of the familiar form of you can be viewed as a deliberate sign of disrespect and met with stern disapproval and often outright hostility.

Personally, I long ago declared war on formality, and never, ever use the polite form when speaking Romanian. (Not least because the formal version of the Romanian word for you, dumneavoastră, is particularly awful). Like its counterparts in other languages I see it as a relic of a bygone age for which there is no place in an egalitarian, modern world where we should no longer be obliged to show deference as a matter of course.

My reasoning is simple: it is a case of placing the cart before horse. Why show respect for someone you are meeting for the first time (and, in the case of a functionary behind a desk in a government office, may never meet again)? Surely it makes more sense to use the familiar at first, moving on to the respectful form only when you are certain that the person you are addressing is worthy of respect?

Here at Emerging Europe we therefore want to launch a mini

cultural revolution, in keeping with our goal of making the region a better place for all, regardless of background or status.

While all of our events are generally conducted in English (rendering the argument null and void) we are aware that plenty of networking and chat takes place on the margins of our events and that often, those who speak a common language may revert to type and address each other with the familiar forms of you. We'd (politely, of course) ask you to stop. Whether you are a global business leader, a student, a politician, a minister, an ambassador, a member of a royal family or an entrepreneur (or all of the above), we want everyone who attends our events to know that they are all an equally important member of the Emerging Europe family. That we all respect each other is a given.

Let’s stick to the familiar. •