Panel 3 „Economic integration and regional development of Central European countries”

Panel 3 „Economic integration and regional development of Central European countries”

so thank you so much for for having me here um didn’t really prepare super formal remarks because i was looking at the time it seemed like we were going to be very tight on time here but we’re going to hear a great panel from on economic integration and the regional development of central and eastern europe uh coincidentally i wrote my column on this exact topic today actually i would encourage you to go to if i can do a little self promotion can would encourage you to go to newsweek.com uh you can look at the home page the opinion section you’ll see my piece on this uh my basic argument um is that this region which too often gets neglected i think by western liberals both uh on both sides of the transatlantic alliance really can and ought to serve as uh as an inspiration uh you know as speaking as someone i’m a research fellow at the edmund burke foundation i’m very active in kind of uh trying to resuscitate a more traditionalist notion of conservatism uh in america and as a lot of like my fellow american conservative colleagues try to basically philosophically and intellectually find themselves find who we are and who we actually are especially in the tumultuous aftermath of uh the of the trump presidency and obviously from an american perspective president trump kind of shattered a lot of uh the old sclerotic orthodoxies we might say um within the american political establishment this region really serves as a place of inspiration i think there are a lot of things uh that the bishogra countries uh austria perhaps uh to a maybe a very slightly lesser extent are are really doing right and i think that they are doing these things right as a direct result obviously of um the at times painful history of the region i think out of the the fires of uh obviously of the nazi and soviet occupation were forged a a a love of of a more traditionalist strand of freedom a freedom based around national identity uh based around uh love of one’s own culture ones of trying to preserve one’s own heritage um you know and again like as an american who’s thinking primarily not exclusively but primarily about trying to kind of align the future of american conservatives and with them with this more traditional strand of thought this really actually is in our tradition itself you know in the federalist papers which were kind of instrumental to the founding of the united states you can look at a no less a founding father than john jay in the federalist number two which is a profoundly nationalist essay that john jay wrote he talks in like the fifth or sixth paragraph about uh the uh the ties of commonality commonality and the mutually interdependent bonds of citizenship that were forged out of the fires of the revolutionary war against king george iii of britain very similar actually i think to kind of the ties of of citizenship that have been forged here in a lot of these central and eastern european countries in the aftermath of course of the fall of the berlin wall and trying to recover and preserve a sense of national heritage so really just delighted to be here um on a personal note i’m a quarter polish it’s my first time being in poland so just really happy to be here for that reason on a personal heritage note as well um probably should try to get this panel started though start okay great okay um so okay i see us up there then um okay so uh we’re gonna hear today from um six speakers uh first we will uh have notes of introduction from apologies if i mispronounce anyone’s name i’m really i’m trying my best here um first from um tadios koscinski who’s a minister of finance development funds and regional policy here in poland and we will also hear introductory notes from gurgley eckler secretary of state at the ministry of family in hungary so um oh and uh one video will be at the end so uh let’s start with those introductory notes then if we can can everyone hear me actually i can hear you but i’m not sure if if i i should start is it my turn yes it is okay thank you so much so dear ladies and gentlemen uh thank you for the opportunity to be here and have some introductory remarks uh for this panel uh i’m pretty sure that if we if the collective unconscious exists uh the thousand-year-old connection between our countries or our nations must have an imprint in our collective unconscious we live together in various political conglomerates we lived next to each other we have had our good times we also had some really troublesome days together together and against each other as well but if we put aside and i think that we need to put aside the historical wounds or conflicts and take a look at the second millennium of our region from an economic point of view i’m quite convinced that our ebitda that is the earnings before interest taxes deprecation and market amortization uh is negative uh it is evident again that in the inter marion region v4 countries have strong economic ties to each other if we take v4 as a whole that on the average the three of four v4 countries are the second most important trade partner of the remaining state it is accounted for almost one-fifth it’s around 17 or 18 percent of each member states export or imports the growth in trade has increased by 60 to 85 percent in the past decade depending on the country in recent years v4 countries with their two to five percent annual gdp growth growth exceeding the level of the eu 27 average have become the economic powerhouse of the european union last year even with the economic hardships of the kovit-19 the economies of the v4 countries have shrunk less than the eu counterparts and after the pandemic they are expected to rebound faster just to bring a hungarian example [Music] in q1 the hungarian gdp grew by 1.9 percent and if we take into consideration that the german one uh has decreased by 1.8 then we are in a 3.7 plus when compared to germany so uh this informal internal structure of the eu has strong economic foundation the volume of trade between the v4 and germany is double the volume of the trade between germany and france and the triple the volume of trade between germany and italy in terms of the eu dossiers in recent years this tripolarity has been clearly detectable in debates about high-profile cases like migration or the budget so we tend to share the same ideas and interests and it seems that nowadays we are capable of articulating them jointly but what do we use economic success for if we take a look at hungary prior to the current crisis the economy was booming it was like four to five percent unearly growth wages were rising and unemployment rate rate fell to historic loads it was like 3.4 and at the same time families enjoyed and unprecedented a wide range of benefits and advantages and what is the reason behind this in 2010 we made full employment and work and work fast workfare society top priority and since then we have clear results since 2010 employment rate has increased by 15 percent which is which is um the second highest in the eu and uh among men we have the highest in the eu it was like 17.6 percent uh at the same time this economic prosperity uh and the growth of employment have paved the way for launching a family-friendly family-friendly decision-making in the past ten years and now we also have a successful family policy this duality of a successful economic policy and the targeted measures of family policy at the core of the way we are making uh what we used to call or how we how we used to call the hungarian model since 2010 uh we have managed to raise total fertility rate by 24 the number of marriages by we have almost doubled by 84 the number of uh divorces dropped by 26 percent and the number of abortions dropped by 36 first discussion on strengthening families has been put on the agenda 10 years ago today in hungary there’s a broad consensus that on the need of helping families and promoting the traditional family at the same time hungarian family policy has become an international reference point more or less these trends apply for the whole region and to sum up what we used to say or what we usually say families first and that’s our message from honduras to you thank you very much for your attention thank you so much secretary eckler um minister koshinsky if you would be so kind just to give your remarks whenever you’re ready thank you very much josh so i just so uh ladies and gentlemen it’s my great prayer to a deliberate introductory speech of parliament’s forward-looking engagement with central and eastern european countries which is aimed at to foster better economic integration and more heartworm development across the whole region uh as this conference is marking the establishment establishment of the collective minted mario i’d like to congratulate the organizers and wish them every success in forming the future intellectual leaders of integration processes in that part of europe the successful economic integration of the central and eastern region is an important foreign policy objective for for poland uh i’d like to refer to two key cooperation formats uh driving this process of enhanced economic and regional cooperation forward firstly they’re of course the vindigrant group the v4 and secondly the three c’s initiative the tsi initiative i’d also like to know the model of the strategy for the carpathian region uh at the end so the invisible this grant group the experience of successful economic transformation and close cooperation of positions on major items of the equal policy agenda are a key factor supporting the close cooperation in the framework of the visigrat group the growing economic clout of the v4 countries can for example be reflected by the fact that in the first two decades of the 21st century the v4 countries roughly doubled their gdp per capita whereas for all the other 27 eu member states there was an increase of only about 20 percent recorded in the same period but the v4 economies are swiftly recovering from the koken 19 crisis and are projected to return to a stable growth path already this year in 2021 uh the european commission spring economic forecasts forecasts growth of four percent for five percent for hungary 3.4 for the czech republic 4.8 for slovakia the current polish presidency presidency of the v4 which coincides with the third and the virtue of this cooperation format is providing the necessary political momentum for a strengthened collaboration and the anniversary is marked by joint declaration of the v4 prime ministers signed on the 17th of february this year in kirkhof which highlights specific fields of cooperation within the group covering amongst others further extension and deepening of the eu single market development and enhanced cross-border cooperation under the interreg programmes it’s also important to stress the role of the international visa grad visa grant fund which has so far funded nearly 2400 scholarships and supported the implementation of nearly six dozen projects by ngos local governments scientists and artists let me also refer to the three seed initiative the tsi uh initiative launched in 2016 as an important instrument of cooperation shaping strong economic and infrastructure links across the central eastern europe uh region there is a huge economic potential of the tsi region but the combined of the twelve participation participating countries amounts to over 1.7 trillion euro and the infrastructure investment needs will turn to 1.1 trillion euro by the year 2030. tackling the serious bottlenecks in existing transport corridors gas supply and digital infrastructure networks is a critical factor for the successful economic development of the region poland is prioritizing investments for improving connectivity and security of energy supplies along the north-south axis we also welcomed the outcomes of the written tsi summit in thailand which resulted in additional commitment from programs to increase the capital of the tsi fund from 500 million dollars to 750 million dollars providing additional financing for relevant infrastructure projects in the region in the region sorry as for the car path and strategy the police government is also promoting large regional cooperation of the carpathian countries this largely merciless region which still lags behind in terms of social economic development and the truly unique and untapped growth potential especially tourism eco-farming and sustainable industry related to their sectors therefore bernard is consistently seeking the support of the chiropractic countries for the adoption of the eu macro regional strategy the carpathian region ladies and gentlemen i am delighted to be able to share my perspectives on economical regional cooperation in central eastern europe and very much hope that later on this panel will elaborate in more detail on some of these perspectives thank you very much good luck thank you thank you very much minister kweshinsky so we’ll proceed with then with the panel i think we’ll uh go from right to left and then we’ll end back on video so uh presenting first will be uh dr karzina schmidt of the national institute of rural culture and heritage [Music] dear ladies [Music] and we would wish luck to this initiative as is collegum i would like to draw your attention when it comes to regional development the tradition is an important factor of integration and regional development i will use the example of traditional culture which is best discussed in terms of intangible cultural heritage it consists as i shall briefly remind you practices ideas messages knowledge skills as well as their material correlates tools handicrafts and cultural space the members of this community consider them part of their heritage they’re alive now contemporarily and there’s a and is constantly reproduced transmitted in direct transmission it exists in the form of a living social circulation of cultural content the common knowledge and social practices of the inhabitants it is compatible with human rights and the principles of sustainable development intangible cultural heritage is manifested among other things in traditions trans oral transmissions performing arts social cultural practices knowledge and practices about nature and the universe in knowledge and skills related to traditional crafts this heritage is valued internationally as evidenced by the convention under the protection of this heritage adopted by unesco in 2013 and ratified by central european countries what aspects of integration and developments does this act of international law and the phenomena of intangible heritage point to what does it imply for regional development issues well first of all intangible heritage like heritage in general is defined in terms of a good a common and this implies a positive valorisation of any pro integration activities formed and realized around heritage building relationships therefore regardless of the level international regional municipal is also based on values and on positive resources on positive emotions in an idealistic dimension it will be building as i call it communities of good around the element of tradition second let us turn our attention to the heritage depositories that is people who recognize a particular heritage as the source and expression of their recognized values beliefs social practices here i will quote specific for on the national institutes specific elements of heritage represent for them an important factor in the formation and identity transnational national local family or individual heritage elements can therefore be differentiated according to how broadly the public accepts them it is possible for example to distinguish between uh heritage elements that have such universally recognized values that they will count as internet as heritage national heritage while others of local significance only recognized owned by a particular local community the aforementioned communities of good formed around folk traditions will thus be the that strengthen the sense of values and the system of values and at the same time shape identity as a differentiating factor of my community it is a factor differentiating my community local regional national supernational but also as a factor uniting my community on every level with other communities with which i share the same traditions songs fairy tales dances elements of dress ways of celebrating holidays traditional ways of farming or breeding thus this inherits intangible heritage integrally related to people and communities is an excellent tool for cooperation across differences while preserving the integrity of the local identity of the community thirdly the protection of intangible heritage is not about freezing it in some unchangeable once defined canonical form but about taking care of the continuity of intergenerational transmission of knowledge skills and meanings thus the integration around the heritage serves both the present and the development modernity and the future this is because the creative expression of the young generation is inscribed in it the young people bring in elements of innovative thinking like modernize modernizing patterns techniques applications they introduced them and the figure of the fall card is on the internet on social media etc the older generation on the other hand makes sure that the emerging works of art carvings paintings easter eggs krakowia nativity scenes etc or crystal or festivities christmas caroling the polish uh dinner on christmas eve as faithful as possible to the cultural patterns that the older generation inherited from their ancestors most importantly the generations cooperate because it is a condition of survival of intangible cultural heritage and the cooperating multi-generational local orphan family community may become a nucleus of supra local supra regional international integration therefore fourthly at least it can be observed in the course of depository’s work on the preservation of their intangible cultural heritage phenomena that we move from thinking in terms of environment and community to thinking in terms of community this happens when members of one group perceive that they share a common characteristic with other groups such as having one skill experience or knowledge in the practice and transmission of intangible culture heritage for example craftsmen from different regions using similar smithing or pottery techniques women crafts women from different regions find common patterns on their embroidery and gingerbread storytellers see that the same motif for example of the so-called living water reviving or healing guarded by monsters appear in it appears in many fairy tales from different parts of europe genki naviance by establishing supra regional relationships between communicators cultivating a given tradition it becomes possible to build a supra-regional community of people who cultivate and recognize as their own the same element of this heritage and who share a sense of connection and unity and common identity practicing and transmitting this culture across the boundaries let us recall a fresh example this march the minister of culture national inheritor and sports submitted an application for the inclusion of rafting timber rafting in the representative intangible cultural heritage of humanity poland is the coordinator of this application which is the culmination of several works of effort in six countries austria the czech republic spain latvia and germany to enter the tradition which is the traditional skill of making rafts and floating them it began with the inscription of the tradition of the polish rafting center ulla novo in the pod carpathia region on the national list of intangible cultural heritage in 2014 and the ulan rafters were making efforts to get on the representative list on their own when the work was undertaken it turned out that they have to undertake cooperation discussions arrangements with other few groups in rafters in poland in the course of these public consultations the communities of rafters from other european countries revealed themselves also willing and ready for for an international entry so the work was prolaunched new communities were added social consultation expanded and the land of raptors had said to goodbye to the belief that they are unique in the world that is they had to define their uniqueness in a new way we are unique not because our intangible heritage is inemitable and the only on on one on earth our uniqueness lies in the fact that while preserving the integrity of our community and our tradition we can cooperate on the international scale thus the raptors of ulaan of admission have moved from thinking in terms of competition to acting in terms of cooperation and it is in such multi-dimensional emotionally involving processes that integration and regional development based on intangible cultural heritage is forged thank you okay next we will hear from dora shoots who’s the international director at mcc in budapest distinguished guests dear ladies and gentlemen good afternoon thank you very much for the invitation it is a real honor to be here as outlined in josh excellent op-ed as well central europe is a fascinating and rapidly growing region figures show that the visual grad grant trees are the engine of economy growth in europe their growth rate is well above the eu average their gdp is growing almost twice as fast as most members of the eurozone and seven out of the eu’s top test fastest growing economies are in our region but in the next few minutes i would like to discuss a different aspect of regional development i would like to focus on one of the most vital conditions for growth which is and should be education eastward was also mentioned today by director santo we still know too many as the greatest hungarian was a hungarian politician a great statesman a political theorist and a prolific writer in 1830 state cnn wrote that the strength of a nation depends primarily on the quality of its intellectual elite i think this is particularly true in our region but when it comes to our elite we have a huge challenge to overcome which is the brain drain phenomenon our brightest talents are threatening to leave attracted by professional opportunities abroad we will not be able to preserve our strength and our ability to grow without finding a way to keep our talents in the region but how can we do this it is of course somehow related to economy we have to be able to offer a good quality of life adequate wages interesting opportunities potentially even tax cuts for young people but there is another side to this our young people need to want to stay they have to know that they have a duty to fulfill and feel the pride in doing so and this is the point where education comes into the picture because during those formative years it is crucially important which values and larger vision we convey to our youth if you allow me i would like to share a bit of a more personal experience i was born after the regime change in the 1990s my parents and most of my teachers were raised and gained work experiences during communism we were often told in school that we should feel very lucky for all the amazing opportunities that we have even if it’s just having the option to learn a foreign language that was not russian or go and study abroad my peers and i were constantly encouraged to grasp these opportunities but we have never really been told what for we never really talked about our civic responsibilities the future of our nation region and our role in all of this were never discussed in school i do think that it’s time to change this we need to have an education system which enables our country’s youth to know both the past and present of central europe we need to provide sufficient information ask the right questions and have thought-provoking conversations with them this is the only way they can be proud of their roots know what great opportunities the region has to offer want it to prosper and most importantly feel that they are willing to work and fight for it this is why institutions like the colleegum intermarium or mathias corvinus collegium mcc the institution that i represent here today are great initiatives the idea of mcc came from the realization that the mass education system simply fails to fulfill a number of essential educational roles when attending a lecture in hungary a university student often goes into a hall with 200 other students listening to a one and a half a half hour long pre-written presentation without much interaction at mcc on the other hand we provide personalized small group trainings and then like it was during communism we encourage our students to take responsibility and action for the benefit of not only their immediate environment but also their nation and more broadly speaking the region i’m very happy to say that there it seems that there is a demand for this we currently have more than eighteen hundred students and after five years we will have close to ten thousand participants enrolled in our 35 centers across central europe we also aim to establish further partnerships with the best institutions in the region with partners from poland czechia slovakia austria and slovenia among others in order to make sure that the idea of central europe is not only some dry distance historical fact but a reality and an environment that our young citizens know and appreciate i firmly believe that creating patriotic elite is a fundamental condition for the growth of our region and i’m very happy to see that more and more institutions are joining forces in this great endeavour i wish you best of luck with this for the next years thank you very much [Applause] thank you dora we’ll hear next from uh svatoslavurash who’s a member of the national parliament of ukraine thank you very much turned on so first thank you very much uh for this honor uh first let’s introduce myself briefly if i can uh i have the dubious honor of being the youngest ever member of ukraine parliament as well as the reason why i’m here is because i lead uh two biggest caucuses in ukrainian parliament first the conservative caucus in our parliament and the second the caucus on inter mario but uh of course for me this event represents something very deep and profound about the reality of the central european spirit the fact that this is initiated here is a very important symbol of the role that poland has clearly captured in its achievements since the independence from communism is 91. poland’s clearly shown the way in terms of how to reform yourself how to achieve success and how to enjoin european the authentic institutions of respect and dignity for us in ukraine for us the ukrainian conservatives it is a very important lesson that we are learning actively and we are studying for and i hope that in this collective intermario many more ukrainians have a chance to learn this and to become these agents of all the great news and achievement that poland has managed to have in the past but to get to the meat of the matter that is the topic of our conversation today and the economic possibilities i must say that our government is uh trying to basically revitalize various areas which haven’t been touched for the entirety of our independence we have opened up the land market of course everybody knows ukraine as the grand basket the bread basket of europe and we opened the land market finally for possibility of investment and privatization so that many more countries can join in in building up the economic potential that ukraine could provide for the world and for europe we are launching the biggest privatizations in 91. we are also knowing the big issues with rule of law we are we have launched and we are relaunching many of the institutions that are supposed to keep uh and inform and support investors in ukraine because we are very keen on telling the message to the world that ukraine is open for business and of course the kovit had hit us all hit us particularly and we are basically relying on cooperation with the world right now to truly uh launch with all these reforms that we have voted and started in our country into the years that will come years of hopefully success and rebounding that come after covet but first of course subject to my country is a big one both in terms of problems and in terms of possibilities and but nothing unites when speaking with ukrainians our country more than the realization of the success that our western neighbors have had and in that we are planning and building the vision uh to try and bring our countries closer in terms of institutions in terms of uh reforms that we can learn from and replicate in our country and in terms of cooperation with institutions such as this one and i’m very clearly wanted to indicate that as our parliamentary caucus the intermanium caucus has been launched with one clear objective in mind that objective is to show that as far as the primary institutions of ukrainian government ukraine parliament is very willing and well very able having more than a majority of mps in this caucus from all the factions and all the parties except for the russian party who of course wants integration but different integration uh and that that we are willing and able to support any steps that our government are announcing in terms of bringing countries closer of course you’re familiar with lublin trinity with the document that was signed by five nations here in warsaw barely a week ago as clear steps in that direction and as far as as far as ukraine’s parliament that this idea of bringing together members of parliament to support such legislation is extraordinarily popular and despite from the occasion of political games that some actors play it is that is not able to try and distract us from the grand possibilities that exist in cooperation building up or understand and join institutions and i hope with the great work that you are doing here we can build up many more of them and we can learn these lessons again with joining your land execution institutions with self-respect and dignity uh in that pursuit we can learn from your story from your example and achieve that not withdrawing from the basic values that made us who we are and that again together as we’ve done in the past we can build the future of europe thank you very much [Applause] up next we have uh matthew tiermont who this program described as an economist and publicist but uh i think of more as a personal friend and general right-wing provocateur but matthew would you like to enthrall us thank you josh you’re uh you’re a mensch we uh we’re both uh claremont institute uh fellows which is uh a preeminent think tank in the united states focused on western civilizational values and the founding and i think there’s a lot of corollaries with claremont which also teaches in addition to pontificates with what you guys are doing here in this very very important initiative uh so i have a little bit of a different background than than most here who have presented because in addition to doing some public policy activism and culture war activism i’m also a practical economist not really an academic one i spent a lot of years on wall street and i’m still currently an investment banker uh actively doing capital raising and working in corporate finance strategy with a lot of companies uh so you know that background gives me a little different perspective on the central and eastern european uh project with three c’s the intramarium and where culture and economics meet for a moment we should look at what economics is in the academic sense it is usually defined as a science of allocation of resources but in a practical sense and this is the way i i look at it it’s a study of human activity in real time and a measure of productivity and output uh the economics of the three c’s and central europe is very interesting on wall street we refer to this region as an emerging market and an emerging market is defined by generally higher growth but also more volatility in that growth the the level of secure probabilistic judgment you make as an investor when looking at an emerging market is very very different than a developed and more stable market because of that volatility you have to apply probability that your expectation of what growth rates will be will actually be actualized and you handicap and price and value uh assets cash flows sovereign debt uh with that in mind uh the interesting thing and i am a dual citizen i i live in poland as well as the u.s and i invest here uh and the interesting thing to me about this region is that the valuations are competitive because of this dynamic but they’re also highly attractive and what the three c’s does in central europe is it starts to create a more secure stable economic base for some reasons i will get into and that actually makes it much more attractive than most emerging markets there’s a little higher margin of safety to uh to paraphrase a great hedge fund manager seth clarman who judges the valuation of assets based on that metric of safety uh and in the three c’s i think we’re going to see play out because of what has developed over the last three or four years in political integration and a political integration that’s based somewhat on called shared cultural values which is important but what i think we’re going to see play out uh with what what has been created with what poland has anchor-led uh with with president duda having trump here when he addressed warsaw and they trump actually engaged the idea of the three cs uh what i what i perceive is going to happen is that the world and the economic world is going to recognize that there’s a big convergence going on in valuation and you’re going to be able to buy assets at a huge discount despite the high level of quality especially vis-a-vis or juxtaposed with other emerging markets the quality of assets here is very high and when you look at security securities are just the paper-ization the representation of things like a cash flow or a fixed asset and the quality of these assets is higher here because of the people because of the culture because of the education i like to use poland which is really the anchor of three cs with six largest economy and nation by by most metrics in the eu 40 million people also has the highest literacy rate in the eu it also has the highest level of college education in the eu so when you see how the cultural impact of of of the society impacts the economy it creates a another reason why international investors can feel safe investing in a place like this the fact that poland can marry with another 11 nations and aggregate to 112 million people uh my my good friend uh the the minister of finance studies kashinsky used 2018 numbers for for aggregate gdp which is 1.7 trillion well each year there’s been growth in this and it’s now over 2 trillion on a per capita basis though it is lagging greatly with the western uh european union and european uh monetary union countries the per capita gdp in in the three c’s is 17 000 i’m using us dollars i’m going to use 2019 numbers it’s 17 000 versus the eu average which is 35 000. so it’s about half that creates for for especially mid and long term investors an incredible opportunity for ketchup if they feel that security uh is going to be more and more stable and for an economist an investor security means many things it means for instance border security which obviously has been uh at risk in multiple arenas coming from the third world with migration crisis coming from uh you know our foreboding neighbor to the east uh which has also become a security threat and that reduces conviction in that security that safety uh obviously our friend in ukraine can speak about that and what that has done if if we recall the khrivna when russians invaded plummeted against every every major and developed currency i mean i remember being in ukraine around the time and i think it was 35 to 1 against the dollar which was down down 70 percent roughly uh but with security there’s especially in this part of europe there’s another very very important consideration and that’s energy and what i think will be telegraphed the world with the three c’s is that a shared energy policy and a working together to achieve raw energy source diversity will also help stabilize these economies and give investors a lot of of positive expectation for economic growth the stability that allows them to also feel confident that valuations are going to rise that currencies will strengthen there are economies obviously poland with this lotte has a flexible currency that is allowed to float against those that sometimes see perverted externalities applied to them like the euro which had with the troika we saw what happened in 2012 13 with trying to keep greece in uh they printed a lot of money they engaged in the same sort of quantitative easing that the u.s did they called it ltro long-term refinancing option it was printing money to try and create a pseudo safety feeling of safety and stability instead it’s just going to lead to inflation we’re already starting to see that in all the developed economies that’s actually going to be another example where in this part of the world especially with coordinated policy in the three c’s that is also going to be more stable that’s going to telegraph a a good investment opportunity and a higher probability of convergence for international investors which is a virtuous cycle that will lead to higher foreign direct investment that will lead to higher ppe property plant equipment projects and capital expenditure that will lead to more job growth and so all of these things are virtuous cycles that the three sees by getting these nations together allows to happen it allows these dynamics to take hold and hopefully accelerate there are risks to this though and the risks to economies that are competing at higher and higher levels is usually in the public policy realm it’s in government it’s in uh the intervention into the marketplace it’s among the political class when they believe that jobs are created by the public sector as opposed to private sector and in the short term public sector job growth can create gdp in the long term it’s usually a drag and the investment the return on invested capital you get from public sector job creation versus private sector job creation is highly lagging and in the intermediate there’s usually the old pay the piper and there will be either recession budget deficits you want private sector job growth me as a private equity investor investment banker who’s done business in poland who’s closed private equity deals who owns uh tradable investable assets here both fixed and floating my own experience is one where poland is competitive as it is the high gdp growth the incredible workforce and cultural dynamics there’s still a byzantine structure to do business the regulations are very high the paperwork burden is very high and the reporting burden is very high in fact grant thornton did study a few years ago that poland of the larger eu economies is the most overburdened with paperwork reporting and that’s a drag i when i do deals in the u.s these days we can now get a from soup to nuts a large capital uh deal done just using docusign and that is absolutely permittable in a in a rule of law court setting here you need a lot of notaries which are a guild that you pay to meet you large sums to sign off on contracts that two counterparties are signing of their own volition those kind of dynamics do persist it does seem like that’s going to take some time to work its way out hopefully the three c’s knowing that you have an incredible economic opportunity uh you know i quoted the per capita gdp out of the 12 nations 11 out of the 12 are under the average the midpoint being of of the eu the midpoint being 17 000 that’s dragged up by austria which is the only one of the 12 nations that’s in the top quartile of eu nations and gdp uh with a 35 000 dollar average gdp per capita in the eu austria’s at 50 000. even higher than germany which is because of the weighting of 80 million people is a also a higher drag up on the average eu but that opportunity that exists to see convergence and to see per capita gdp rise with so much upside there’s an old joke on wall street that you don’t invest in high margin companies you invest in low margin companies profit margins because high margin companies are at risk of losing those margins and seeing earnings degraded low margin companies there are opportunities for that margin to expand and profitability to rise and that’s what i perceive to be here as well and i think most of the developed world investors are going to start seeing that as well hopefully it’s more western investors and less china that’s been a risk china has been deploying capital here and engaging in a sort of economic imperialism in their long-term hegemonic ambitions but i do think we’re going to see a lot more western investment here and i do hope that some of these byzantine bureaucratic structures from most of these nations 11 of 12 coming out of the iron curtain with the post-communist structures that they will start to move up the evolutionary cycle one more point i will make in line with that is that state-owned enterprises do have a tendency as again a post-communist vestigial to crowd out a lot of upstarts and the competitive free enterprise sector and i’d love to see in many of these nations if not full privatizations more flotation of share of these companies when you look at the wig which is the largest index in central and eastern europe it’s the sort of the the dow jones industrial ins index for poland the majority of companies in that index are state-owned and those are political appointments and they’re not the most competitive entities they can be good companies who do good work and i understand the need for having created that system coming out of communism nobody wanted a russian oligarchical free-for-all spoil system but it’s time 25 30 35 years in to start seeing more privatizations and more competition with that said i think the future is very bright for this economic region i think it’s going to be a dominant player for emerging market portfolio managers in the west where the deepest pools of capital are like new york like london and i think that the future is very very bright i think the next two to three generations will be uh economically led in part by the growth in these 12 nations of the three seas initiative and the the role this university will have and helping the economics helping the education system cannot be uh cannot be overstated so thank you for having me and hopefully i didn’t defend too many people a few people’s okay [Applause] okay thank you so much matthew so next we will hear um uh from video from uh pyoter pakovsky who is under secretary of state at the polish ministry of finance so the floor is yours thank you so much for joining us um in the beginning of my speech i would like to recall the story from a few years ago when i worked in chancellor of the prime minister of poland when i was asked to reform the institute of central eastern europe to change the name to central european institutions going through the older parliamentary process we started about the geopolitical definition what is the central europe uh sometimes associated with uh with the intermarium region we can see today that central europe and intermarium are above all else 11 countries of the european union starting from poland down to croatia but also we can see we have this conscience that we would like to include in this group the countries which do not yet belong to the european union but in a great extent form part of our community in terms of culture and economy historically speaking we have seen two great intents to integrate the nations and states of this uh of this region the first one was the the commonwealth of two nations which was a hugely courageous and visionary project of its times unfortunately there was not enough determination to to expand this project and to and to to um to advance it in a few ways and another one probably well-known and most declared in the world was the habsburg empire and then hungarian empire at the country which winston churchill said if it didn’t exist we’d have to invent it from the british perspective or the austrians themselves it can be easily seen as a totally positive the poles and then many other slavic countries consider it a prison of nations we often say it about russia but the habsburg empire also performed this role to a certain extent today seeing how some conservatives perceive that part of our history not only in poland but in in this area very very often uh seeing the portraits of uh france joseph and that model of economic development was very uh very destructive for the provinces for example the lesser poland which for centuries had been one of the richest parts of poland of the republic of poland created the city as one of the best cities best developed cities but all the the other parts of the region became extremely poor and similar stories could be said of other provinces speaking about the integration between the inter marion region countries we should never follow the habsburg way and never compare never try to uh reestablish reenact the same model the hubs were proposed because it was the system in which the center became rich at the cost of the provinces if we want to compare ourselves to the western countries we have to make sure that the center of this uh central europe didn’t follow the way of vienna in the 19th century this is the key point today speaking of sovereignty would not speak of any kind of a federation of very strong relations of power but rather of a strong collaboration between sovereign independent countries which collaborate closely in the most important areas today’s sovereignty i think we should be grateful uh sovereignty depends mostly on the economy not by the military and i think we should be happy because of that and i believe that for many countries of the central europe this the last years have been a symbol of a great economic success and also catching up slowly but steadily with the western europe we call it the process of convergency before the same name was used to to to compare the development of the soviet union regarding the united states but of course we need something we mean it in different terms we want to strengthen the collaboration between the countries of the region everywhere where we can find an agreement where we can strengthen our shared interests so just to mention a few economic data that uh show the growing sovereignty of the countries of the region it’s good to show that between 2004 and 2020 the share of these countries these 11 countries in the eu in the total gdp has grown by 6.6 from 6.6 to 9.9 so we can see how much we have uh to to to keep up with the gdp growth in most of these countries has been more than one hundred percent gdp per capita in 2012 it was 50.6 of the eu in 2019 it was already 70 percent the gdp accumulation by the countries of the region in these years was much higher than the eu average average salary per hour in these in the countries of the region grew much stronger than the average of the eu the average uh salary in this region was 4.6 per hour and in 2019 it was already 11.1 euro so the economic data in this in this area there could be much more of it that’s why i think it’s necessary to show a few more areas where this collaboration is based on the best conditions the first of these is the economic collaboration integration of our energetic systems how important it is is what happened in poland last monday because of the um problem in the heart of um power plant we could import energy from other countries but there have been cases where some cases could not import energy so that’s why we need it poland is no exception that’s why this kind of collaboration makes us independent both from the west as from the east but i think we’re both more concerned with the east one more systems the diversification of the um raw materials like gas and petrol and our disagreement with the north stream too though poland or ukraine this this opinion is cream nordstrom 2 is is against the idea of diversification so we absolutely agree with ukraine all the countries that would like to achieve full independence from russia and create their own energy market according to themselves another area is infrastructure for example the via carpathia motorway from saloniki to kuala peda through the numerous countries of the region but also some other railway projects river projects these are all the projects that we want to develop and the last topic that i think we should mention is our shared voice in the eu as we can see in numerous initiatives that we take up and very positive approach to the european commission is there in the european uh in the european um commission we still receive more money uh than we than we pay in although we open our markets to the western countries but very often we are still uh we’re still earning thanks to it it’s worth to pay attention to it it’s worth realizing that the um initiative is an initiative of equal independent countries that do not work for any central but it can help grow all of us thank you [Applause] thank you so much and to conclude this panel i believe we have pre-recorded video remarks from pavel yablonsky under secretary of state at the ministry of foreign affairs so whenever that video is ready [Music] [Music] [Music] foreign [Music] m [Music] is [Music] foreign foreign [Music] foreign [Applause] you
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Panel 3 „Economic integration and regional development of Central European countries”

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