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Central and Southeast European Update Summary

Core Content Overview

This summary provides a compilation of key political, economic, and military developments across Central and Southeast European countries in early 2006. It highlights defense upgrades, international relations, economic forecasts, and policy decisions relevant to the region's integration into the European Union and global affairs.

Central Europe

Czech Republic

• Defense Upgrade: Acquired a new anti-aircraft missile system (RBS-70) from Sweden, worth USD 42.5 million, with delivery expected by 2007.
• Unique Use: The Czech Republic is the only country to use night vision equipment with the RBS-70 system.
• Energy Sector: CEZ, the country's leading electric company, announced its bid for a 90% stake in Macedonia's AD ESM electricity distribution company, aiming to become a major electricity provider in Central and Eastern Europe.

Hungary

• EU Discussions: President Laszlo Solyom met with French President Jacques Chirac to discuss EU issues and bilateral relations, calling for the removal of labor movement restrictions among older member states and revising the Schengen visa fee proposal.
• Environmental Initiative: Chirac welcomed the idea of a "green" presidents network, an informal environmental protection group.
• Diplomatic Visit: Foreign Minister Ferenc Somogyi visited Serbia, Montenegro, and Kosovo, emphasizing Hungary's support for a peaceful and democratic resolution of Kosovo's status and seeking Hungarian investment in the region.

Poland

• Energy Security: President Lech Kaczynski visited Lithuania, stressing the importance of reducing energy dependence on Russia and strengthening bilateral ties.
• Military Contribution: Poland offered to send 32 military police personnel to support the EU force in Congo during the June elections.
• Economic Outlook: The UNICE Economic Outlook Spring 2006 predicted accelerated economic growth due to EU membership, driven by increased exports and investment, with the National Reform Program as a key factor.

Slovakia

• U.S. Relations: Prime Minister Mikulas Dzurinda met with U.S. President George W. Bush, calling for visa requirement cancellation for Slovak citizens. No clear timetable was given.

• Defense Modernization: President Ivan Gasparovic and Defense Minister Martin Fedor discussed extending Slovakia's engineering unit mandate in Iraq and modernizing the military.

• Unemployment Drop: The National Labor Bureau reported a 1.42% decrease in unemployment in February 2006 compared to February 2005, with the current rate at 11.6%.

Baltic States

Estonia

• Former President's Death: Lennart Meri, former president and key figure in Estonia's independence, died at 76 in Tallinn after battling brain cancer.
• UN Contribution: Estonia increased its contribution to the UN Central Emergency Relief Fund (CERF), supporting humanitarian crises as a matter of conscience and international solidarity.

Lithuania

• Defense Reform: The government proposed a defense reform plan for 2014, focusing on military restructuring, training for international operations, and strengthening NATO role.

Latvia

• Historical Controversy: Banned street marches honoring the Latvian Legionnaires who fought with Nazi Germany during WWII, following a request from radicals to hold such events on 16 March.

Southeast Europe

Bulgaria

• Flood Recovery: The European Commission allocated 91.6 million euros for flood recovery in Bulgaria and Romania, with 20 million euros going to Sofia and 71.2 million to Bucharest.
• Nuclear Fuel Deal: CEO of Kozloduy nuclear power plant, Ivan Ivanov, secured a contract with Russia for nuclear fuel supplies until 2020, with TVEL handling transport, processing, and storage under European standards.
• EU Accession Support: Leftist European party leaders supported Bulgaria's EU accession in January 2007, with discussions on economic growth, energy security, and investments.

Croatia

• Bilateral Cooperation: Parliament Speaker Vladimir Seks met with German officials to discuss enhancing bilateral cooperation and urged more German investments, particularly "green field" investments.
• Regional Issues: Discussed West Balkan matters, including Montenegro's independence referendum, Kosovo's status, and changes to the Dayton peace agreement in Bosnia-Herzegovina.

Romania

• Privatization Dispute: A Bucharest court voided the privatization contract of Biofarm, a U.S.-owned drug maker, due to non-compliance with investment commitments, causing market shock.
• NATO Support: Military attaché Ion Popa signed a bilateral military cooperation plan with Bosnia's Deputy Defense Minister to boost Bosnia's NATO membership bid.
• Fiscal Policy: Vice-Premier Gheorghe Pogea stated the government would not raise taxes in 2006, focusing on increasing revenues from non-fiscal sources. The flat tax introduced in 2005 contributed to a 17% rise in public revenues.

Slovenia

• EU Integration: Prime Minister Janez Jansa met with German Chancellor Angela Merkel to discuss the Lisbon Strategy and a European future for the Balkans.
• Eurozone Readiness: The European Commission announced it would publish a convergence report on Slovenia's readiness to join the eurozone in May, alongside the European Central Bank.
• Economic Growth: Preliminary results showed Slovenia's GDP growth at 3.9% in 2005, slightly lower than 2004's 4.2%, with export growth outpacing import growth but affected by rising oil prices.

Key Information

• Defense: Multiple countries upgraded their military capabilities, including the Czech Republic's new missile system and Slovakia's plans to modernize its army.
• Economic Development: Economic growth in the region is linked to EU membership, with Poland and Slovenia as notable examples.
• International Relations: Diplomatic engagement with the EU and the U.S. is emphasized, including support for NATO and participation in international missions.
• Historical and Political Issues: Estonia's former president, Latvia's ban on WWII-related marches, and discussions on Kosovo's status and the legacy of Slobodan Milosevic are highlighted.

Sources and Credits

• Select Briefing is produced by the New European Democracies Project at the Center for Strategic and International Studies (CSIS).
• The research is nonpartisan and nonproprietary, with no specific policy positions taken.
• The team includes Janusz Bugajski (Director), Ilona Teleki (Deputy Director and Fellow), Milena Staneva (Research Associate and Editor), and Research Interns Besian Bocka, Julie Jaffarian, Natalia Soczo, and Maria Toshkova.
• © 2006 by the Center for Strategic and International Studies.