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Central and Eastern European Update Summary (October 12, 2007)

Core Content

This summary provides an overview of recent political, economic, and social developments in several Central and Eastern European countries, focusing on their interactions with the EU, internal policy changes, and regional cooperation efforts.

Key Developments

Czech Republic

• EU Visit by PM Mirek Topolanek: On 7-9 October, Czech Prime Minister Mirek Topolanek visited France, discussing EU issues and Turkey's accession. They agreed to address the U.S. missile defense shield at the NATO summit in April 2008.
• Czech House in Brussels: A new center opened in Brussels on 11 October, aimed at promoting the Czech Republic before it assumes the EU presidency in 2009. It will house Czech institutions and companies.

Hungary

• Train Production Plant: The Swiss Stadler Rail Group plans to build a EUR 40 million train carriage plant in Szolnok, creating 400 jobs and expected to be operational in 2009.
• HIPA and VAT Dispute: The European Court of Justice ruled that Hungary's local business law (HIPA) is compatible with EU law, as it differs from the VAT system. This decision followed claims by Hungarian companies that HIPA violated the Sixth VAT Directive.
• EU Cooperation with Bulgaria: Hungarian Foreign Minister Kinga Goncz visited Bulgaria, discussing bilateral relations, EU issues, and signing a cooperation protocol within the EU.

Poland

• Political Debate and Elections: On 12 October, Donald Tusk and Prime Minister Jaroslaw Kaczynski held a televised debate ahead of the 21 October parliamentary elections.
• Reform Treaty and Ioannina Mechanism: The Reform Treaty will be discussed at the Lisbon EU summit on 18-19 October. Poland has threatened to block the treaty unless the Ioannina mechanism, allowing member states to delay legislation with a minority bloc, is included.
• Security Concerns: A car bomb exploded near the Polish embassy in Baghdad, killing two Iraqis and injuring five. This follows an attack on a Polish ambassador's convoy, which left the ambassador in a coma.

Slovakia

• Ukraine Visit and Schengen Integration: Ukrainian President Viktor Yushchenko visited Slovakia on 11 October, discussing visa policy and energy cooperation. Slovakia's closure of its nuclear power plant in 2008 will impact Ukrainian electricity needs.
• Schengen Transit Line: A bus line connecting Bratislava with Austrian border villages is expected to operate after Slovakia joins the Schengen zone on 21 December.
• Roma Education Initiatives: Deputy Prime Minister Dusan Caplovic proposed mandatory kindergarten attendance for five-year-olds and boarding schools for Roma children to improve their social status.

Slovenia

• Hungary-Slovenia Joint Session: Officials from Hungary and Slovenia will meet in Szentgotthard on 17 October to discuss regional development and EU integration for Serbia and Kosovo.
• Maritime Dispute with Croatia: Slovenian PM Janez Jansa believes an agreement on the maritime dispute with Croatia can be reached before the enforcement of the EU maritime regime on 1 January 2008.

Baltic States

Estonia

• Criticism of PACE President: Estonian politicians have criticized Rene van der Linden, the PACE President, for alleged investments in Russia and failure to disclose conflicts of interest.
• EU Reform Treaty: Prime Minister Andrus Ansip emphasized the importance of adopting the EU reform treaty, hoping for agreement at the next European Council summit.

Latvia

• Inflation Forecast: The Latvian government revised its inflation forecast to 9.5% for 2007, up from 8.8%, due to rising food prices. The implementation of the inflation control plan has been too slow.

Lithuania

• Odessa-Brody-Plock-Gdansk Project: President Valdas Adamkus secured the signing of the Odessa-Brody-Plock-Gdansk Project with Azerbaijan, Georgia, Poland, and Ukraine, aiming to enhance energy cooperation.
• Euro Adoption Opposition: A public opinion poll shows growing opposition to the euro, with only 23% supporting its adoption. The target date for euro introduction has been postponed to 2010-2011 due to inflation concerns.

Southeast Europe

Bulgaria

• Education Reforms: Prime Minister Sergei Stanishev emphasized education reforms as key to improving Bulgaria's economic competitiveness and transitioning to a knowledge-based economy.
• Prostitution Legalization Reversal: The Bulgarian government reversed its plan to legalize prostitution, citing the need to combat human trafficking. The U.S. Ambassador and President Georgi Parvanov opposed the move.

Croatia

• EU Membership Talks Resumed: Despite the maritime dispute with Slovenia, the EU agreed to resume membership talks with Croatia. Croatia has opened 14 of 35 negotiation chapters.
• Fisheries Protection Zone: EU Commissioner Olli Rehn urged Croatia not to unilaterally activate the fisheries protection zone, as it could negatively impact negotiations.

Romania

• Second Nuclear Power Plant: Romanian PM Calin Popescu-Tariceanu announced plans to build a second nuclear reactor at Cernavoda, increasing the plant's electricity output to nearly 18%.
• Energy Independence and Privatization: Romania aims to secure energy independence and has stated it will not privatize the power sector until a national company representing strategic interests is established.
• EU Investigation on Ford Deal: The EU is investigating whether Romania unfairly incentivized Ford to keep its plant operational by offering debt write-offs. Payments to farmers may be withheld if the issue is not resolved.

Conclusion

The update highlights a range of political, economic, and social developments across Central, Eastern, and Southeast European countries, reflecting their ongoing integration into the EU, domestic policy challenges, and regional cooperation efforts.