Croatia: time to tighten the belt
Croatia’s government on Thursday announced plans for sweeping spending cuts aimed at curbing deficit growth and strengthening weakened credit ratings.
Zoran Milanovic, the new prime minister whose centre-left majority coalition took power last month, proposed cuts of 4.6bn kuna (€630m /$795m) in the 2012 budget, with the austerity spread around evenly to minimise the pain. Continue reading »
Serbia: keep the steel fires burning
Photo: US Steel
Serbia’s government is ready to buy back US Steel’s Serbian operations if the Pittsburgh-based company cannot find another buyer and opts to shut them down, say political and business sources in the Balkan country.
The question is whether in the current climate, and with IMF reduction targets to meet, the government can afford to take the steel plant on. Continue reading »
Tobacco: lighting up in the Balkans
The eurozone crisis might have left south-eastern Europe in an economic doldrums since 2009 but that has not stopped one company from seeking its fortunes in the region.
Tobacco AD, a fast-growing Macedonian convenience store chain, is betting that even in these times of financial austerity, people will continue to drink, smoke and pay their utility bills.
The Skopje-based company, with 55 stores open already in the former Yugoslav republic, is planning to raise €2m via an initial public offering to fund its expansion around the western Balkans. Continue reading »
Sitel’s Belgrade call centre
The room full of cubicles at Sitel’s new call centre may look sterile at first glance. Yet it buzzes with conversations conducted in five languages as around 20 newly-hired customer care agents handle calls from seven European countries. Continue reading »
Serbia and Russia: cosying up
Serbia is set to sign a 10-year deal with Gazprom on Thursday that will cement its growing dependence on Russian gas, but also position the country favourably as an energy-supply hub for south-eastern Europe.
The new contract covers prices for natural gas and the contruction of gas-fired power plants and additional gas storage sites, said Dusan Bajatovic, head of Srbijagas, the state-run gas distributor.
Just as economic gloom is gathering and prospects of further European Union enlargment look shaky, state-run Russian companies are making their presence felt in Serbia more than ever. Continue reading »
Croatia’s wake up call
Croatia’s centre-left Kukuriku coalition has won a convincing victory in elections held on Sunday, obtaining 80 out of 151 seats in parliament, according to unofficial estimates with the votes nearly counted.
By forming a pact to run together first, and then capturing a majority in parliament, the four parties that make up the coalition have hopefully avoided the need for long negotiations over cabinet posts before forming a government. But the truly difficult job – turning the sluggish economy around – has yet to start. Kukuriki – the word means “Cock-a-doodle-doo” or “Wake up!” – chose its name well. Continue reading »
Croatia: election blues
As Croatians head to the polls on Sunday, they will do so under a cloud of gloom about what lies ahead for their country’s economy, regardless of the near-certainty of rotation of power.
The centre-right Croatian Democratic Union (HDZ), headed by the prime minister, Jadranka Kosor, appears all set to crash and burn in the parliamentary elections as voters punish it for the weak economy and spiralling corruption scandals. Continue reading »
Croatian banking: blame the parents
Not long ago, high EU-ownership in Croatia’s banking sector was cited as a big plus for the country’s macro-economic stability.
But with the eurozone shaken increasingly by sovereign-debt crises, the presence of foreign-direct investment – and the bankruptcy of a small bank this week – has taken on a distinctly blackish lining. Continue reading »
Western Balkans: pain but no gain
With the eurozone in crisis, the small states of the Western Balkans are bracing themselves for another round of pain without gain. For the immediate future, their economic destiny of will be almost totally out of their own hands.
So warns the World Bank in a report released on Tuesday. Albania, Bosnia-Herzegovina, Kosovo, Macedonia, Montenegro and Serbia – dubbed “SEE6” in Bank terminology – can expect to be bruised by every financial tremor in the eurozone and European Union. Continue reading »
Serbian banks: the end is not near
Serbia’s banking sector could face plenty of hardships in the coming year, from rising loan defaults to Greek and Italian trade fallout. Yet severe deleveraging by mother banks in the eurozone – the grim scenario contemplated repeatedly in the Balkans since 2009 – is unlikely to come to pass, local bankers say.
“The banking sector here is very sound, very liquid,” said Aleksandra Vukosavljevic, head of research at Raiffeisen, an Austrian bank in Serbia. “All banks, locally, are very sound and well capitalised.” Continue reading »
US Steel mulls closing Serbian plant
Bloomberg
Grey November skies have brought especially gloomy economic tidings for Serbia, with the largest exporter, US Steel, considering closing down because of the poor regional economic outlook.
John P Surma, chairman and CEO of the steel multinational , attributed the bulk of the losses in US Steel’s bad third-quarter earnings to its Serbian steel mills, acquired by privatisation for $33m in 2003. Continue reading »
Croatia: corruption trial overshadows EU accession
Croatia’s former prime minister, Ivo Sanader, goes on trial for corruption on Friday, bringing a new spotlight to bear on potentially unsolved transparency problems in the next European Union member state.
Sanader stands accused of accepting bribes from Austria’s Hypo Alpe Adria bank in 1995, when he was deputy foreign minister and Croats were fighting a war for independence from the former Yugoslavia. In a separate case, he is charged with taking bribes from MOL, the Hungarian oil company, in 2008, in his second term as prime minister. Sanader denies any wrongdoing in cases that will be widely watched by investors in Croatia and abroad. Continue reading »
Montenegro: knocking on the EU’s door
With Croatia’s accession treaty ready for approval, the European Union is turning its attention to the next batch of aspiring member states, the Western Balkans.
The simplest to absorb should be the smallest: Montenegro. But it will be no shoo-in. The EU’s experience with Croatia will make it less forgiving on issues of governance. Montenegro’s record on corruption and cronyism will make accession a particularly difficult and drawn-out process in spite of recent efforts to clean up politics and business. Continue reading »
Macedonia-Greece: sharing borders, names and problems
While Greece agonises over slashing wages, its neighbour to the north has suffered a large share of the resulting pain.
Macedonia – the former Yugoslav republic, that is – has this week closed border crossings with Greece after repeated disruptions and re-routed all traffic through other countries instead. Before the Macedonian government took the decision, strikes by Greek customs officers left cross-border travellers and numerous cars and trucks stranded on one of the main Balkan access routes to the sea. Continue reading »
Solving Croatia’s foreign debt woes
With election season heating up, Croatia’s exporters are anxious to make their voices heard. Nine successful manufacturers and exporters formed a club last month calling for tax incentives to boost competitiveness and draw more hard currency into the debt-laden country.
“Our debts are in euros, dollars or whatever,” explained Drazen Matiegka, president of Eurocable Group, a high-tech cable manufacturer, and a founder of Lider Exporters Club. “Exporting is the only way to solve the problem. Or else we could sell islands, sell power utilities. But you can’t sell those again.” Continue reading »
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