Eastern EU Member Research Articles

External democracy promotion in times of internal rule-of-law crisis: the EU and its neighbourhood

ABSTRACT This article seeks to unpack the implications of the deteriorating rule of law within the EU’s eastern members for the EU’s external democracy promotion. We examine the legitimacy of the EU’s support for democracy in the European neighbourhood in light of the internal EU rule-of-law crisis. Adopting a sociological perspective, we emphasize local perceptions of the EU by tracing the legitimation dynamics at play in neighbouring societies. We adopt a tripartite conception of external legitimacy based on appropriateness, utilitarian consensus, and empathy. Using representative public opinion surveys, we show that the democratic erosion in the eastern EU members has not (yet) negatively impacted the EU’s credibility in supporting democracy in the neighbourhood. The article contributes to the research on the legitimacy of EU foreign policy and the literature on the legitimacy of international organizations. It also contributes to the broader effort at provincializing International Relations and decentring EU foreign policy studies.

Exploring the Intrinsic Factors Influencing Return on Assets: A Case Study of the Hotel Industry in Selected EU Countries

Purpose: The main aim of this study was to determine the intrinsic factors (total equity, trade receivable turnover, working capital turnover, long term debt, current ratio, debt to total assets ratio, debt to equity ratio, net sales revenue trend, total operating revenue trend, shareholders' equity trend, cash to total assets, current liabilities to total liabilities) that influence the financial performance of the Hotel Industry in select Central and Eastern European Union countries. Return on Assets (ROA) was used in this study as measure of financial performance. Design/methodology/approach: The paper uses panel data fixed effects model to examine dependent variable ROA as measure of the financial performance of select Tourism and Leisure Industry companies from Central and Eastern EU member states. The intrinsic factors were applied as independent variables. The applied panel data fixed effects model in the study was utilised to determine the impact of the intrinsic factors on financial performance. The data were obtained from EMIS data base. Overall data encompassed 614 companies from select eight Central and Eastern EU member states for the period 2015-2022. Findings: The model performed in this study discovered that intrinsic factors including total equity, trade receivable turnover, current ratio, debt to total assets ratio, as well as cash to total assets had a significant impact on the ROA. Total equity, current ratio, cash to total assets have positive impact as opposed to the trade receivable turnover debt to total asset, while years 2020 and 2021 had negative impact on the ROA. Research limitations/implications: This study was limited just on the select eight central and eastern European Union countries; moreover, the database EMIS used for this study lacks certain variables that are frequently used in similar studies. Result confirmed the importance of intrinsic factors and their influence on the financial performance of the leisure industry. Originality/value: This study contributes to the existing body of theory on financial performance through research on the new practitioners’ perception of the intrinsic factors relative to financial performance. There are very few empirical studies which examine financial performance variables in the Central and Eastern European leisure industry. Consequently, this study aims to bridge the gap between the available literature and body of research.

Illiberal Versus Externally Fomented growth model readjustment: post-GFC state aid in the EU’s semi-periphery

Most foreign capital-led, export-oriented Eastern EU member states and the consumption-driven Southern European countries suffered a heavy blow during the Global Financial Crisis (GFC) in 2008–09. The GFC exposed the vulnerability of these economies to external shocks and raised the need for readjustment of their growth models through state intervention. While the rise of illiberal governments drove readjustment in the East, the main driver was externally fomented in the South. This article focuses on state aid, a particular instrument of industrial policy, which has been a main vehicle for growth model readjustment. We seek to explore whether the provision of state aid in the two European semi-peripheries contributes to long-term post-crisis recovery by promoting competitive investments in two Eastern (Hungary and Poland) and two Southern EU members (Portugal and Spain). Relying on the European Commission’s state aid database, we show that after 2013, in the consumption-driven South, governments aimed to strengthen supply through aid, while in the export-oriented East, they were more concerned about promoting exporting firms. The article thus reveals how state aid may preserve and reinforce existing growth models in the semi-periphery even if strategic aims and rhetoric target readjustment.

Assessing the effects of hard and soft infrastructure on traditional vs supply-chain trade: the case of Central and Eastern EU member states (CEMS)

ABSTRACT The aim of this paper is to assess the role of hard and soft infrastructure in trade, distinguishing between traditional trade and supply-chain trade. Using factor analysis, we construct four aggregate trade facilitation indicators where we measure hard infrastructure as physical and ICT infrastructure, while soft infrastructure accounts for border efficiency and institutional efficiency. For traditional trade, we use bilateral trade data from UN Comtrade. Supply-chain trade is measured in terms of domestic value-added (DVAFX) embodied in foreign gross exports and foreign value-added (FVA) embodied in domestic gross exports obtained from Eora MRIO database. We use panel data regression analysis with an empirical model specification based on a gravity model and covering the 2000–2019 period. We estimate model with the Poisson Pseudo-Maximum Likelihood Estimator (PPML). To control multilateral trade-resistance terms (MRT), we included reporter and partner fixed effects along with country pair fixed effects. The results confirm a statistically significant relationship between hard and soft infrastructure and trade. ICT and border efficiency have the strongest impact on both types of trade. Supply-chain trade responds most intensely to improvements in institutional efficiency. Results imply that ICT infrastructure and border efficiency might hold even greater importance for CEMS’s traditional and supply-chain trade.

Mainstreaming the Gender: Measuring the Job Attributes and Gender Differences across Selected EU Member States

In our research article, we expect that the job attitudes of men and women should converge, and their declared different preferences for job attributes should decrease. We also expect that the preference for job attributes aimed at comfortable working conditions should be closer between men and women due to the growing balance of men’s and women’s role distribution within the household. Therefore, the main goal of the research, using quantitative research methods and using data from the European Values Study (EVS), is to identify the gender differences, if any, in the preferences for external and internal job attributes across selected EU member states. In particular, we focus on the importance of work for men and women; gender differences in job attributes; the preference for external and internal job attributes; the inclination of gender stereotypes and attitudes toward gender roles division; and the comparison of gender equality and job attribute preference in the selected EU countries. Our conclusions confirmed parallels between gender stereotypes and equality among the Western, Eastern, and Southern EU member states.

An ‘East-West split’ about the posting of workers? Questioning the representation of socio-economic interests in the European Parliament

ABSTRACT Our paper addresses the representation of territorialized and conflicting interests by the Members of the European Parliament (MEPs) through a case study on the posting of workers. Public debates on the reforms to the legal framework for this controversial practice have been steadily increasing since the EU’s eastward enlargement. Focusing on parliamentary questions, our mixed-methods research design analyses why and how MEPs take position on this highly divisive issue, beyond their nationality and a so-called opposition between Eastern and Western EU member states. MEPs’ implication depends both on the impact that the posting of workers has on employment in their home country and on their own political career, including whether they hold national or local electoral mandates. These factors also determine which political roles are performed by MEPs (moral entrepreneur, policy maker, interest groups broker), as the textual analysis of their questions in Parliament highlights. These results emphasize the influence of parliamentary socialization on the positions taken in the debates about social Europe, but also the significance of the territorial dimension of parliamentary representation.

A VaR-Based Methodology for Assessing Carbon Price Risk across European Union Economic Sectors

The latest European Union measures for combating climate adopted in the “Fit for 55 package” envisage the extension of the Emissions Trading System, the first “cap-and-trade” system in the world created for achieving climate targets, which limits the amount of greenhouse gas emissions by imposing a price on carbon. In this context, our study provides an integrated assessment of carbon price risk exposure of all economic sectors in the European Union Member States, thus supporting decision making in determining the energy transition risk. We propose a novel approach in assessing carbon risk exposure using the Value at Risk methodology to compute the carbon price under the EU ETS, based on historical price simulation for January–August 2021 and ARMA-GARCH models for the October 2012–August 2021 period. We further built a value erosion metric, which allowed us to establish each sector’s exposure to risk and to identify differences between Eastern and Western EU countries. We find that the refining sector appears to be highly vulnerable, whereas there is higher potential for large losses in the energy supply and chemical sectors in Eastern EU Member States, given a different pace of industry restructuring.

EU integration and structural gravity: A comprehensive quantification of the border effect on trade

AbstractThis study delivers a comprehensive picture of EU trade integration in manufactured goods using a structural gravity framework together with a flexible two‐step estimation approach. With panel data, time‐invariant effects on trade are typically absorbed by fixed effects. This paper shows how to include both time‐variant and time‐invariant effects on trade into general equilibrium counterfactual experiments. Results show that the time‐invariant effects or, in other words, the initial integration degree of the incumbent EU‐15 members should not be neglected as it already increased intra‐EU trade shares by 70% until 1995. Since then, trade integration has not deepened for the EU‐15, while trade shares among the newly joined central and eastern EU members doubled. A further deepening of the Single Market could potentially unlock another 50% increase in trade and around 3% in welfare (real income).

Accession impact and outlook for Croatian and EU crop and livestock markets

Aim of study: To investigate the impact of Croatia’s accession to the EU on its agricultural sector, its market outlook and the EU’s key agricultural products up to 2030.Area of study: Croatia and European Union member statesMaterial and methods: Comparative approach was used in order to identify similarities of the changes that took place when other Central and Eastern European Countries (CEEC) acceded to the EU (results of previously conducted research) with the changes that happened in Croatia (historical data between 2010 and 2016). The second approach involved the AGMEMOD partial equilibrium model, which has been used as a comprehensive tool to model the complex outlook of Croatian agricultural markets. The results of the Croatian outlook were compared to the EU’s AGMEMOD outlook results in order to identify future trends in key agricultural market development (production, yield and net trade) and whether these newly established trends were comparable with EU trends.Main results: The changes that took place in the Croatian agricultural sector during and after the EU accession period are not significantly different from the trends and changes observed in other Central and Eastern EU member states. Similarities can especially be found in neighbouring CEEC countries (Hungary and Slovenia), which kept their producer prices close to EU levels prior to accession. Furthermore, the results indicate a similarity with CEEC trends in terms of the strengthening of crop production compared to livestock.Research highlights: Positive effects of EU integration on the Croatian agricultural sector took place after a few years of adjustment. Simulations of future market developments indicate many similarities between Croatia and EU 13 member states.

The African Swine Fever Epidemic in Wild Boar (Sus scrofa) in Lithuania (2014-2018).

In January 2014 the first case of African swine fever (ASF) in wild boar of the Baltic States was reported from Lithuania. It has been the first occurrence of the disease in Eastern EU member states. Since then, the disease spread further affecting not only the Baltic States and Poland but also south-eastern Europe, the Czech Republic and Belgium. The spreading pattern of ASF with its long-distance spread of several hundreds of kilometers on the one hand and the endemic situation in wild boar on the other is far from being understood. By analyzing data of ASF cases in wild boar along with implemented control measures in Lithuania from 2014–2018 this study aims to contribute to a better understanding of the disease. In brief, despite huge efforts to eradicate ASF, the disease is now endemic in the Lithuanian wild boar population. About 86% of Lithuanian’s territory is affected and over 3225 ASF cases in wild boar have been notified since 2014. The ASF epidemic led to a considerable decline in wild boar hunting bags. Intensified hunting might have reduced the wild boar population but this effect cannot be differentiated from the population decline caused by the disease itself. However, for ASF detection sampling of wild boar found dead supported by financial incentives turned out to be one of the most effective tools.

One Belt, One Road between Three Seas: China’s soft-power policy towards ‘new’ EU members

China’s soft-power practice in its international activity boils down to four areas: culture, education, diplomacy, and economy. The most important element of China’s soft-power policy seems to be the Belt and Road Initiative (BRI). Announced in 2013, the BRI is a complex, long-term and large-scale strategic political and economic project by the Chinese government with an infrastructure character. In this way, China is seeking to invest its capital surpluses in resurrecting the ancient Silk Road to create railroad and maritime networks with its most important trading partner – the European Union. In these circumstances, in September 2015, the presidents of Central and Eastern EU member states announced the establishment of the separate Three Seas Initiative (TSI), a political and economic project bringing together 12 EU states, including 11 ‘new’ members and Austria. These entities constitute an informal bloc of states between the Adriatic, Baltic and Black seas, though without a permanent secretariat but with rotating leadership. In addition to the lack of a formal structure, the TSI region, located mainly in the EU’s eastern part, is characterized by a weaker infrastructure network than Western Europe, lower GDP (except Austria), and high dependence on gas supplies from Russia (except Croatia). To overcome these disparities, the TSI has developed a catalogue of 48 investment priorities in three economic areas: energy, transport, and digitalisation. China’s soft-power policy towards the ‘new’ EU members may be decided by the American patronage of the TSI and the fact that one of the flagship projects is the North-South Gas Corridor, which will enable the sale of American LNG in Central Europe, which has been dependent on gas supplies from Russia, China’s partner in the BRI. In the context of the US-China trade war, White House planners recognise Central Europe as both a peripheral and key area for their policy and seek to strengthen the Three Seas project, which may lead to limiting areas of cooperation under the ‘17+1’ format, involving CEE countries and China. On the other hand, the development of better energy, transport and digital connections in the EU’s east clearly intersects with China’s idea of building a New Eurasian Land Bridge under the BRI to connect the most economically developed edges of Eurasia. The new US strategy towards the countries of the CEE seems to boil down to involvement in specific energy-related projects. Instead of blocking or diminishing BRI-related infrastructure projects in China, they seem in fact to complement the Chinese activity in the CEE. Increased investment by American enterprises in the region may allow the administration in Washington to maintain control of Chinese infrastructure investments, and the US involvement may even lead to the participation of American companies in projects originally started by Beijing.

Differences in Inward FDI Performance Between the Southern Eurozone and Eastern EU Members: A Panel-Data Analysis Over 2004-2016

Abstract The aim of this paper is to examine the factors that explain the observed differences in inward foreign direct investment (FDI) performance between the peripheral southern eurozone countries (namely Greece and Portugal) and the eight Eastern EU members (Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, and Slovenia) that joined in 2004. The empirical analysis, which is based on the estimation of a panel-econometric model during the 2004-2016 period, provides for Greece and Portugal policy relevant insights with respect to improving the international competitiveness and attracting more FDI inflows vis-a-vis Eastern EU countries, which have outperformed the two southern eurozone members. The results indicate that, among other factors, positive differences in labour costs and corporate tax rates between southern eurozone members and Eastern EU member states largely explain the observed differences in inward FDI performance among those two country groups. The higher labour costs and corporate taxation in Greece and Portugal exhibit a strong negative impact on their relative inward FDI performance vis-avis Eastern EU members. Furthermore, differences in economic openness and integration into vertical production networks also have a significant effect on inward FDI performance.

Partnership with Civil Society and the Legitimacy of EU Policymaking: Exploring Actors’ Normative Arguments in Four Member States

Existing research on how the involvement of civil society actors improves EU democratic legitimacy produces controversial results. This is the outcome of a top-down analytical strategy. Scholars regularly gauge partnership practices against different concepts of legitimacy, but rarely ask how actors themselves perceive and construct partnership, let alone how these understandings relate to existing concepts of legitimacy. Utilising a bottom-up sociological perspective, this article examines how actors in four central and eastern EU member states understand the partnership principle for European Structural and Investment Funds and how these understandings relate to different conceptualisations of legitimacy. A reconstruction of actors’ normative arguments shows that representatives of three groups (state officials, civil society organisations and social partners) prioritise different legitimacy effects which trigger contestation about the proper formats of partnership. While state officials focus on input legitimacy, civil society organisations insist on throughput and social partners emphasise output legitimacy. Variation across countries and within groups of actors further complicates this picture. This has implications for our understanding of Europeanization and the role of European civil society.

Time to look for evidence: Results-based approach to biodiversity conservation on farmland in Europe

Increased use of annual payments to land managers for ecological outcomes indicates a growing interest in exploring the potential of this approach. In this viewpoint, we drew on the experiences of all schemes paying for biodiversity outcomes/results on agricultural land operating in the EU and EFTA countries with the aim of reviewing the decisive elements of the schemes’ design and implementation as well as the challenges and opportunities of adopting a results-based approach. We analysed the characteristics of results-based schemes using evidence from peer-reviewed literature, technical reports, scheme practitioners and experts in agri-environment-climate policy. We developed a typology of the schemes and explored critical issues influencing the feasibility and performance of results-based schemes. The evidence to date shows that there are at least 11 advantages to the results-based approach not found in management-based schemes with similar objectives, dealing with environmental efficiency, farmers’ participation and development of local biodiversity-based projects. Although results-based approaches have specific challenges at every stage of design and implementation, for many of these the existing schemes provide potential solutions. There is also some apprehension about trying a results-based approach in Mediterranean, central and eastern EU Member States. We conclude that there is clear potential to expand the approach in the European Union for the Rural Development programming period for 2021–2028. Nevertheless, evidence is needed about the approach’s efficiency in delivering conservation outcomes in the long term, its additionality, impact on the knowledge and attitudes of land managers and society at large, development of ways of rewarding the achievement of actual results, as well as its potential for stimulating innovative grassroots solutions.

A Financial Conditions Index for the CEE Economies

Financial Conditions Indexes (FCIs) are analytical tools devised to synthesize the information contained in a set of financial variables in order to identify how financial conditions affect economic activity. In this paper, for each of the three main Central and Eastern EU member states outside the euro area (Hungary, Poland and the Czech Republic) an FCI is constructed as an unobserved factor estimated using the EM algorithm. After having assessed their performance in providing information about future economic activity (both in-sample and out-of-sample), these FCIs are used to describe the evolution of financial conditions in the three economies between 2001 and 2016. The overall findings of this study support a narrative whereby all three economies, after their integration into the EU, enjoyed very accommodative financial conditions until 2008; the Czech Republic and Hungary subsequently turned out to have been more exposed than Poland to the spillover effects from both the global financial crisis and euro sovereign debt crisis.

Income Inequality in Latin America and Eastern EU through the Great Recession: An Ordered Probit Analysis

Income distribution directly affects economic growth and the spending patterns in an economy. This paper employs an ordered probit panel to measure the effect of the Great Recession on income inequality in Latin American and Eastern EU members. The results suggest the crisis increased inequality in studied countries overall. However, those countries with low levels of inequality saw their Gini coefficients decrease further, while the crisis increased inequality in countries with already high inequality. Additionally, the results show that European Union membership on average contributed to lower likelihood of high Gini coefficients. Furthermore, marginal effects lend additional evidence of lower income gap for the Eastern EU members as they generally show negative marginal effects for countries with initially high inequality and positive for those with low Gini coefficients. Finally, we find no evidence that FDI and capital incentives have any direct impact on inequality, while GDP growth, poverty, and export incentives are associated with higher and tax revenues and export growth with lower income inequality.

Policy and Decision to Retire in Central and Eastern European Countries

The exit from the labor market in old age is a process determined by different institutional factors of the labor market. Working conditions, employment protection regulation, organizational policies and employers' attitude can either make people stop working or motivate them to work longer. The decision to stay or withdraw from the labor market in old age with regard to the employment policies in the Central and Eastern EU member states is analyzed in the paper. Central and Eastern European countries have been selected due to their similar historical development, as well as due to the advantages of comparative analysis providing more robust results based on the data from several national cases. For the literature analysis, the document meta‐analysis and the analysis of data from the European Social Survey (ESS5, 2010) and Eurobarometer 76.2 (September–October 2011), including methods such as descriptive statistics, binary logistic regression was applied. The willingness to continue in paid work after retirement is influenced by the complexity of the institutional factors related to the working time, autonomy at work, work and family balance, training opportunities, adjustment of the work place, the view of the employers and antidiscrimination actions. The analysis revealed the demand for effective policies in the fields of promoting productivity and fighting discrimination in Central and Eastern European countries.

Current status of bluetongue in Europe

The article reviews the present epidemiological situation of bluetongue (BT) in Europe. After a four year break, disease caused by BTV serotype 8 reappeared in west Europe. On 11 September 2015, an outbreak of BTV8 was confirmed in central France (Allier department), and four weeks later, on 6 October, 45 outbreaks of 118 cases were confirmed in Allier, Puy-de-Dome, Creuse, Nicvre and Cher departments. Besides, BT caused by BTV1 and BTV4 is still circulating in some regions of southern and south-eastern Europe. Since 2013 disease caused by BTV1 was spreading extensively over the central and south Italy and in the south of French Corsica island. BTV1 cases were also confirmed in the southwest Spain (Cáceres and Toledo provinces) and at the end of 2014 BTV1 outbreak has been reported in a single (sentinel) holding in the region of Cadiz. More recently, BTV1 has been detected in Croatia (Sibenik area, Central Dalmatia). Furthermore, multiple outbreaks of BTV4 in cattle and sheep were reported across many regions of southern Europe. In the period from May to July 2014, 125 outbreaks of BTV4 have been confirmed in Greece (Peloponnese and Evros regions). The first suspicion of BTV4 in Spain was reported in September 2014 and at the beginning of December, 351 outbreaks were confirmed in the southern part of country. On 4 July 2014 the first outbreak of BTV4 was reported at the southeastern Bulgaria (Burgas Region), near the border with Turkey and by the end of 2014 disease was confirmed in all 28 administrative districts of Bulgaria. Moreover, on 23 August 2014 the first outbreak of BTV4 was confirmed in south-east of Romania (Buzau county) and as for 3 December 2014 disease was confirmed in 34 from 42 counties of this country, totally 1128 outbreaks and 4075 affected animals. After a few months break, in September BTV4 reappeared in Botosani county in northern Moldavia and on 6 October 14 outbreaks of 26 cases in cattle were confirmed. BTV4 outbreaks have also been reported in many other regions of Balkans countries: Albania, Serbia, Croatia, Montenegro, Macedonia and Bosnia and Herzegovina. BTV4 infected animals were also detected in Hungary; the first outbreak was reported on 14 October 2014 in Csongrád county. Up to 5 December, 77 outbreaks (30 primary and 47 secondary) in 5 counties were confirmed. In September 2015, BTV4 reappeared and on 6 October, 12 outbreaks of 33 cases in cattle in Tolna, Baranya and Somogy county were reported. In total, in the whole Balkan/Peloponnese/Central Europe region, over 5500 outbreaks have been confirmed. Disease control measures, such as movement restrictions are in place although vaccination is not being used at present in the Eastern EU Member States for BTV4 because of a combination of vaccine availability, cost and farmer acceptance. BT restriction zones have been regularly updated and as of 6 October 2015, 12 zones were defined.

Long-term Sustainability Of Public Finance In The Central And Eastern EU Member States

The main goal of this article is to investigate the level of long-term sustainability of public finance in the Central and Eastern EU Member States. This aim is accompanied by the following hypothesis: an inability to generate primary surpluses and significantly growing public debt volumes prevent the attainment of sustainability in the area of public finance. The research method is based on GDP and public debt growth rates, as well as on the values of discounted primary fiscal balances at the actual and structural level. The research period covers the years 2000-2014. Data were taken from Eurostat, the European Commission's Directorate General for Economic and Financial Affairs and the European Central Bank.

New issues in the labour relationships in professional football: social dialogue, implementation of the first autonomous agreement in Croatia and Serbia and the new sports labour law cases

A Social dialogue committee for European professional football was established in 2008 and concluded its first agreement in 2012—the Autonomous Agreement on minimum requirements for standard player contracts in the EU and UEFA territory. The Autonomous Agreement is significant as it stands as the first formal European wide agreement between organised employer and employee interests in European professional sports in general and football in particular. This paper explores the origins and significance of the Autonomous Agreement and it argues that the scope of the agreement can be widened considerably to include some key contentious issues facing European football such as the reformation of the FIFA Regulations on the Status and Transfer of Players. However, drawing on research from Croatia and Serbia, the paper also highlights many problems connected to labour relations in professional football including: a lack of organised employer associations, weak trade unions, non-independent national football federations’ arbitration, problems connected with employment status definition and poor employment practices. Since the transitional period of 2 and 3 years from the date of the entry into force of the Autonomous Agreement is coming to the end, in the paper the author presents what has been achieved and highlights some core problems with the Autonomous Agreement’s implementation, especially in the eastern EU member countries and UEFA members. The importance of social dialogue in the professional football sector is even more important with the new national case law decisions in Belgium (Dahmane) and Germany (Muller) which demonstrate that sport should be given a more specific framework to be in line with the EU law, and social partners are key actors.