EU enlargement has stalled, with challenges arising both in candidate countries & in the union. Brussels should revive the process by promoting gradual integration as a structured path to full membership, write @StefanLehne, @ZoranNechev, & @RicGri. https://t.co/6410Vz2a1e

Donald #Trump ist für Osteuropa weder Grund zur Panik noch für Selbstgefälligkeit, meint @RicGri in seinem #Gastkommentar für @derStandardat. https://t.co/ISM3X9ChMF

Out now: Our new Winter Forecast for Eastern Europe. The region is set to grow faster in 2025 despite #Trump. Private consumption driving growth, export-oriented industry struggling; 🇺🇦’s economic prospects uncertain; growth in 🇷🇺 will halve to 1.8%. ⬇️ https://t.co/M4jCK03Q5D

New policy note with my colleague Meryem Gökten on Turkey's ever-fascinating geoeconomic options and strategy. There is an opportunity here for the EU if it wants to take it:

A few thoughts on what Trump 2.0 will mean for CESEE, based on discussions in the region since the US election. Trade + investment could suffer and inflation could be higher, but CESEE's resilience to external shocks should never be underestimated:

🔔BiEPAG 10th Anniversary A decade of dedicated policy work for strengthening the #democracy in our societies, with expertise from both the region and #EU. We will keep on promoting diverse opinions and meaningful debates as in the video👇 #biepag10 🎦 https://t.co/9W6kk2BvJB

Ich habe mit der @faznet über die möglichen wirtschaftlichen Auswirkungen des Schengen-Zugangs für Rumänien und Bulgarien gesprochen. Die Auswirkungen könnten ziemlich groß sein, und das zu einer Zeit, in der beide Länder die Hilfe brauchen.

Important new paper by @wiiw_ac_at colleagues and others on how Western Balkan migration to the EU increases regional labour shortages. WB + EU policymakers can at least partly alleviate this with targeted industrial and migration policies. Full report:

Our full FDI report is available here:

This increases the need to transition to a more innovation-based growth model as we argued for here for the EU-CEE countries:

Bottom line for CESEE: Although the region should benefit from some near-shoring, amid greater security risks and amid increased geo-economic competition, FDI will probably not play the same role as a growth driver as it has in the past.

By contrast, new capital pledged by German firms fell sharply in several CESEE countries in January-September of this year, including in traditional favourites like Poland and Romania. If this continues, it is a concern for the region.

We also continue to see that China’s investment is concentrated in just a few countries (Serbia, Hungary, Kazakhstan, Turkey and now also Slovakia), in most cases overlapping with China’s political interests in the region.

As we have already seen in previous reports, Chinese capital is increasingly important in the region, and in greenfield investment has now outpaced that of Germany for three years in a row (at least based on January-September data – see right-hand chart below).

Looking at capital pledged rather than total projects does show a slightly brighter picture for some countries. Yet here as well, and especially for the bigger economies of the region, there has been a substantial fall so far this year compared to the previous two.

Most concerning indicator for the whole region is announced greenfield projects in first nine months of 2024. Down sharply compared previous years pretty much everywhere. Russian invasion of Ukraine and geo-economic competition seem to be making investors more cautious.

However, while the Western Balkan countries perform well in terms of FDI attraction relative to their (unfortunately quite still low) GDP, when measured against population size EU member states of the region are still the clear frontrunners.

And in the last few years, some countries of the region have still attracted a lot of FDI inflows relative to their GDP, above all some of the Western Balkan countries: Montenegro, Albania, Kosovo and Serbia lead the region on this measure.

First, the long-term story is still looks ok. The FDI stock as a % of GDP has risen strongly in the last 15 years. Especially in Albania, Serbia, Latvia, Poland, Kosovo, Estonia and Slovenia.

Increasingly worrying signs that foreign investor confidence in CESEE being impacted by uncertainty. New greenfield investment down sharply in the region so far this year. Highlights from our latest FDI report 🧵 @OlgaPindyuk @alexbykova @wiiw_ac_at