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Agrokor-Mercator deal creates food and retail combine with €7bn sales
Ivica Todoric, the bullish owner of Agrokor, Croatia’s largest company, has, after many years of wooing, secured a majority stake in Mercator, Slovenia’s biggest retailer and largest employer.
Agrokor has announced that it has agreed with Mercator shareholders to take a 53.1 per cent stake in the company for €240m. The deal values Mercator at €120 per share, substantially below the €221 Agrokor reportedly offered last year. Continue reading »
CEE floods: economic impact ‘limited’
Central Europe’s recent floods looked dreadful on television. And they will have scarred the memories of the people who were hit the hardest. But the economic effects will be limited thanks to the solid defences put in place since the last flood a decade ago.
So says Erste Bank, which argues that while the floods were similar in scale to those of 2002, the costs for Austria, the Czech Republic, Slovakia and Hungary, will be a small fraction of 2002′s €6bn. Continue reading »
CEE: out of the woods? Not really
A note from Capital Economics on Friday suggests the economies of central and eastern Europe may finally be emerging into the light.
Or at least its title does (Emerging Europe: Slump in regional growth may be bottoming out). Its message, though, is that while recent GDP figures may have given grounds for that kind of hope, growth is extremely weak and any recovery is likely to be sluggish and uneven. Continue reading »
Hungary’s GDP: welcome surprise
Bad GDP figures from the eurozone on Wednesday but there’s a pleasant surprise from an unexpected quarter: Hungary’s economy contracted by only 0.9 percent in annual terms in the first three months.
Doesn’t sound like good news. But investors had been expecting a drop of as much as 1.4 per cent. With hopes of further improvement in the rest of 2013 buoying the Budapest market, the forint gained 1 per cent against the euro. Continue reading »
Austerity losing ground in CEE
The global battle between Austerians and Spendanigans has opened a front in central Europe and the Spendanigans appear to be gaining ground.
In an interview with the FT, Robert Fico, the centre-left prime minister of Slovakia, came down firmly on the side of encouraging growth and concentrating less on belt-tightening. Continue reading »
Poland: Warsaw region GDP per capita beats EU average
Poland’s long scramble to catch up to western Europe has hit a new milestone – for the first time a Polish region has a higher per capita GDP than the EU average.
Mazowsze, the central Polish region which, crucially, contains Warsaw, the country’s largest and wealthiest city, hit 102 per cent of EU per capita GDP in 2010, reports Eurostat, the EU data service. Continue reading »
The numbers are in and they’re not pretty.
Growth in central Europe is only at a sluggish 0.8 per cent – lower than any time since the depths of the economic crisis in 2009. Continue reading »
Czechs in €2.6bn Slovak gas deal
Germany’s Eon and France’s GDF Suez have struck a deal to sell their joint venture in a Slovak natural gas company to the Czech Republic’s Energeticky a Prumyslovy Holding (EPH) for about €2.6bn ($3.5bn), the companies announced on Tuesday.
The transaction, which has been approved by the Slovak government, will see EPH take a 49 per cent stake and operational control of Slovensky Plynarensky Priemysel (SPP), the local gas utility. The remaining 51 per cent share in SPP is held by the Slovak government. Continue reading »
CEE: eurozone recession bites
The eurozone recession is biting hard in central Europe. According to flash data published on Thursday, third-quarter GDP fell in Hungary, Romania and the Czech Republic compared with the previous three months, and rose marginally in Bulgaria.
The only country of the five reporting figures to do reasonably well is – ironically – eurozone member Slovakia, which posted quarter-on-quarter growth of 2.2 per cent. With Poland, which publishes its numbers on a different cycle, also slowing, the next few months look difficult for the region. Continue reading »
Eastern Europe: fiscal policy lessons
Western Europe tends not to look to eastern Europe for lessons in economic management, but in these straitened times it makes sense to consider the big differences in the impact of the global crisis on four countries that are often lumped together – Poland, the Czech Republic, Slovakia and Hungary. Continue reading »
CEE carmakers: Poland slips back, as Slovakia and the Czech Republic roar ahead
The production line at Opel’s factory in Gliwice in southern Poland is humming, with a steady stream of new Astra models rolling out of the factory – but a chat with factory executives reveals a much grimmer picture.
Output hit 174,000 units last year, its best since the pre-crisis year of 2007. But this year is likely to see a fall below 140,000 cars, says Jacek Zarnowiecki, personnel director for GM Poland. “2012 will be a down year as we face a second wave of the crisis. Our portfolio seems to be quite good, but we have to improve our marketing and the company image.” Continue reading »
Slovakia gains as manufacturers transfer jobs from western to central Europe
The economic gloom seeping out of western Europe is creating increasing difficulties for the small and open economies of central Europe – with both Hungary and the Czech Republic now in recession.
However, Slovakia, the smallest and most open of the three countries, is powering ahead, notching up 2.7 per cent annual GDP growth in the second quarter, thanks largely to the European motor industry. Continue reading »
CEE GDP data: austerity bites
The European Union’s new member states in eastern Europe are mostly out of the eurozone. But they aren’t free of its economic troubles.
Hungary has joined the Czech Republic in recession, according to the latest quarterly gross domestic products numbers. And with Romania and Bulgaria struggling to achieve growth, only Slovakia of the five countries in the region reporting second quarter GDP data on Tuesday posted a decent increase – 2.7 per cent year-on-year.
Domestic consumption was weak almost everywhere. As in western Europe, austerity is biting hard. Continue reading »
Guest post: Slovakia’s time warp is a step to the left
By Otilia Simkova of Eurasia Group
The first 100 days in power for Slovakia’s Direction–Social Democracy (SMER-SD) government saw a sharp turn to the left that foreshadows an uncomfortable future for investors during Prime Minister Robert Fico’s second four-year term in power.
So what does the vision Fico sold to voters – a strong state imposing order onto unruly private markets and companies – mean in reality? Continue reading »
Peugeot: France’s loss is CEE’s gain
A day of gloom for the French car industry is simply another working day for the central European car sector, where factories are churning out ever-greater numbers of vehicles and increasing their hiring – a sign of how the industry is shifting to the cheaper eastern half of the continent.
While PSA Peugeot Citroën announced on Thursday that is laying off 6,500 workers in France, the company earlier this year pumped €120m into its Slovak factory – PSA’s youngest and technologically most modern production centre – and increased hiring by 900. The company added a third shift as part of its plans to boost annual production to 300,000 vehicles, up from 186,000 last year.
It’s a similar story across central and eastern Europe (CEE). Continue reading »
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