CEC REGIONAL UPDATE CEE COVID-19 OVERVIEW 26 JUNE 2020
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CEC REGIONAL UPDATE
CEE COVID-19 OVERVIEW
26 JUNE 2020Table of Contents BULGARIA .......................................................................................................................... 3 CROATIA ............................................................................................................................. 4 CZECHIA ............................................................................................................................. 5 HUNGARY ........................................................................................................................... 6 POLAND .............................................................................................................................. 7 ROMANIA............................................................................................................................ 8 SLOVAKIA ........................................................................................................................... 9
BULGARIA
(prepared by the CEC Government Relations office in Sofia)
Status of epidemic:
• 4, 242 confirmed cases, 209 deceased (as of June 25)
Key economic indicators:
• The rate of employment (new employees finding jobs) has returned to the pre-pandemic
levels. The demand for workers in the construction sector has remained at high levels. The
same applies to other skilled workers in production, including agriculture. Unskilled workers,
who make up 1/3 of the vacancies, are still being sought.
• About 65.6% of accommodation establishments in Bulgaria intend cutting prices of packages
and close to 50% the prices of overnight stays, according to a poll done by the National
Statistical Institute (NSI) in June 2020. According to the poll, close to 30 per cent of managers
responded to the situation by sending employees on unpaid leave. About 20.4 per cent sent
employees on paid leave. About 22.4 per cent dismissed or reduced staff, the NSI said.
Key issues:
• The emergency epidemic situation is now extended until July 15. The epidemic state initially
had been set to expire on June 14, but then was extended to June 30, and at the June 24
Cabinet meeting, was extended again, to July 15. The decision came against a background
of several days of significant increases in newly-confirmed cases of new coronavirus.CROATIA
(prepared by CEC's Croatian partner - Vlahovic Group)
Status of epidemic:
• 2483 confirmed cases, 107 deceased (as of 25 June
Key economic indicators:
• At the end of May, there were 1,506 million employees in Croatia, which is 1.4% less on a
monthly and 3.3% on an annual basis, according to the data from the Croatian Bureau of
Statistics
Key issues:
• Due to the outbreak of COVID-19 cases related to the migration from SEE countries, a 14-
days self-isolation is reinstated for citizens entering Croatia from Serbia, Bosnia and
Herzegovina, Kosovo and North Macedonia and wearing of protection masks became
obligatory in public transport. The Minister of Economy underscored that state budget could
not withstand the total lockdown as was in the past three months.
• In June the state subsidy in the amount of HRK 4,000 (EUR 533) per employee is approved
according to stricter criteria: only companies from the most vulnerable industries (transport,
tourism, services and part of the food industry) with a drop in revenues of more than 50% are
eligible, and until yesterday, about 8,000 companies with approximately 37,000 employees
applied for June subsidies.
• There are currently 246,000 tourists in Croatia, and their number is growing by 20-30
thousand per day, according to the Minister of Tourism, this is a sign that Croatia is a safe
and recognizable tourist country. Tourist traffic is currently at the level of 26-27% of the last
year’s.CZECHIA
(prepared by the CEC Government Relations office in Prague)
Status of epidemic:
• 10 780 confirmed cases, 344 deceased (as of June 25)
Key economic indicators:
• Trust in the Czech economy slightly rose in June, as the overall trust remains low. Especially
the entrepreneurs have shown a modest optimism which is a first positive hint in months.
Nevertheless, the numbers show that the recovery is going to be rather slow.
• An influential Czech economist Jan Svejnar estimates that the Czech economy will decrease
by 7.8-8%. Which is slightly more positive than the last week’s OECD estimate.
• The board of the Czech National Bank (CNB) kept interest rates unchanged after its meeting
on June 24. The two-week repo rate thus remains at 0.25%, the discount rate at 0.05% and
the Lombard rate at 1%. This was an expected decision, as the members of the Board
previously commented on the issue saying that they do not intend to bring any uncertainty to
the market.
Key issues:
• The government amendment to the 2020 State Budget, which would increase the deficit to a
record CZK 500 billion (EUR 18.5 billion) has been approved by the Lower Chamber in the
first reading. After initial concerns, that the minority cabinet would not be able to pass the
amendment through, the Communist party, which tolerates the government, voted in favour,
same as other parties such as Pirates or populist-extreme right SPD.
• Belgium has been marked a safe country on the so-called “Traffic light” map. This means
that as of June 22, there is no need to provide a negative COVID-19 test. On the other hand,
the UK remains a medium risk country, therefore its citizens have to possess a negative
COVID-19 test while entering Czechia. High-risk countries now include Sweden and
Portugal, and the Silesia Region in Poland.
• As of June 22, a new easement of restrictions is effective. Especially public pools, theatres,
or museums are running in pre-COVID-19 mode, which means that no visitor limits or social
distancing are required. Sports events or cultural festivals can now have up to 5000 visitors,
but those have to be separated into isolated groups of 1000. Those measures are not
effective in the Czech Silesia Region, where case numbers have been rising, or in Prague.
• By 1 July, the face masks will not be compulsory indoor and in public transport, nevertheless,
it will remain mandatory in the most affected regions as mentioned above.HUNGARY
(prepared by the CEC Government Relations office in Budapest)
Coronavirus updates
• 906 confirmed cases, 575 deceased (as of 25 June)
Key economic factors
• 2021 budget Parliamentary debate is ongoing, the final vote will be on 3 July.
• After a two-month series of negotiations, the European Commission has approved the
possibility for Hungarian companies to receive the aid of more than EUR 800,000 in order to
increase their competitiveness.
• The unemployment rate in Hungary has improved. The improvement is due to businesses
that have started recruiting workers again, a process that the government is helping through
job-creating wage subsidies. Most of the new jobs are created in tourism, hospitality, retail
and manufacturing.
Key issues
• With the promulgation of the Epidemiological Preparedness Act, the government will have
the opportunity to declare a health emergency on the request of the National Chief Medical
Officer and the Health Minister. A health emergency may be in force for up to six months.
• About three thousand artists, who were left without income due to the coronavirus epidemic,
received an advance payment from the government.
• In order to mitigate or eliminate the adverse effects of the coronavirus pandemic on the
national economy, the Hungarian Government set up an Economic Protection Operational
Tribunal, the main task of which is to protect the Hungarian economy and jobs.
• From July, international rail transport will resume with many neighbouring countries, and the
number of trains currently running to Austria and Germany will increase. Traffic between the
Hungarian and Croatian capitals started with two trains per day, Agram and Gradec
InterCities will run to Zagreb from the beginning of July, and regional rail traffic will start in
the Pécs and Pélmonostor areas, but the Adriatic pair will not run this summer season. From
July, Rákóczi and Hernád InterCity will be able to cross the full route between Košice and
Budapest again across the Hidasnémeti border, but a modified schedule will come into force
due to track construction works.POLAND
(prepared by the CEC Government Relations office in Warsaw)
Status of epidemic:
• 33,119 confirmed cases, 1,412 deceased (as of 25 June)
Key issues:
• This Sunday Poland will vote in the first round of the Presidential Election. Voting will open
at 7 AM and close at 9 PM. The exit poll will be published just after all electoral committees
close – most likely on 9 PM. The exit poll will be conducted, for the eighth time, by Ipsos.
Pollsters will be asking voters outside 500 randomly selected electoral committees across
Poland. A few hours after the exit poll, late poll results will provide a refined look at the likely
results. The State Electoral Committee (PKW) informed that final results will be published on
Wednesday, July 1st, at the latest. This is likely to happen earlier, but commentators point
out that sanitary procedures will be a new challenge for election officials. All major polls still
give President Andrzej Duda a comfortable lead over the PO’s Rafał Trzaskowski in the first
round. There is no indication, however, that Duda will receive over 50% of the vote; the
second round of voting will most likely take place on July 12th between Duda and
Trzaskowski. Experts are expecting that Sunday’s election will also have the highest turnout
in a presidential vote since 1995.
• The Minister of Finance Tadeusz Kościński informed that within a week or two, the
government is prepared to present its updated proposal of the state budget. The government
aims to pass the amended budget bill before the parliamentary recess at the beginning of
August. However, experts believe that the public consultation of this budget proposal is
unlikely to start before the second round of the presidential election. The update is necessary
to reflect the negative economic effects of the COVID-19 pandemic, as well as the Anti-Crisis
Shield measures implemented to mitigate the slowdown. According to Finance Minister
Kościński, at this stage, the government would not be introducing new taxes. Though, it will
continue some of its tax sealing efforts, e.g. through extending the catalogue of entrepreneurs
obliged to use online cash registers. The new budget will show a deficit, however, its level is
still unclear. Also, some public expenditure cuts should be expected.
• The Sejm adopted the Anti-Crisis Shield 4.0 after considering over 100 Senate amendments.
Notably, the law further eases tax regulations, simplifies company restructuring, and
makes takeovers more difficult. According to previous statements, this is the last iteration of
the Shield and the government will not introduce other package bills in the coming time. Still,
tweaks and minor changes are likely. Today PM Morawiecki is going to sum-up the effects
of the government’s Shields as over PLN 100 billion has been paid out to employers and
employees using the new anti-crisis mechanisms. Announcements of further steps are
possible but it is unlikely that another comprehensive bill will be published before the
Presidential election.ROMANIA
(prepared by CEC's Romanian partner - Serban & Musneci Associates)
Status of epidemic
• 25,286 confirmed cases (as of June 25)
Key issues:
• The state of alert will be maintained for "as long as necessary" in Romania, namely as long
as the country registers high rates of coronavirus infections, prime minister Ludovic Orban
said on Sunday evening, June 21.
• The epidemiological situation might force the Romanian authorities to defer the next
relaxation stage, scheduled for July 1, the head of the Department for Emergency Situations
(DSU) Raed Arafat said.
• PM Ludovic Orban announced that the economic recovery plan will be launched within a
maximum of 10 days. "We are preparing a very large programme to support the economy,
besides all the other measures that we have already taken. (...) In short, the plan that we are
preparing and we are going to launch within maximum 10 days includes the state aid scheme
for guaranteeing loans to be granted to large companies, which are not SMEs and do not
range within in the SME category, in order to inject financial resources in these companies
and support their investments so that they can support the working capital," Ludovic Orban
said on Sunday evening.
• The Ministry of Labour and Social Protection organized, on Monday, the public debate
“Romania returns to work! Flexicurity and digitalization in the context of new trends in the
Romanian labour market!”, An event in which the government informed the social partners
about the intention to implement in Romania a flexible work program (Kurzarbeit model) and
asked them to come up with proposals on the application the new measure.
• Romania's Ministry of Education must provide a computer or tablet and internet access to all
school teachers and pupils who request this, under a draft law passed by the Parliament,
Agerpres reported. The Senate passed the legislation with 103 votes for and 26 abstentions.
The bill was initiated and promoted by the Social Democratic Party (PSD).
• Romania's Health Ministry announced that it purchased 115 million face masks to be
distributed to low-income households, for a price or just over EUR 15 mln. The ministry will
distribute the masks to about 2.3 million low-income persons, 50 pieces for each. Naguma
Medical Supply, a company recently founded by Canadian real estate investor Michael
Topolinski and his family, won the Health Ministry's tender, the G4media.ro reported.
• Romania will use EUR 2.5 billion out of the EUR 33 billion expected from the EU’s Recovery
and Resilience Facility to rehabilitate its entire irrigation infrastructure, agriculture minister
Adrian Oros announced on Wednesday, June 24, Agerpres reported. Another EUR 2.1 bln
will be used to combat soil erosion, and EUR 1.1 bln will go into drainage infrastructure.
These are the first concrete projects outlined by the Government officials for using the EUR
33 bln the country expects to receive under the European Union’s EUR 750 bln facility.
• Some of the natural gas suppliers use their dominant market position and refuse to reduce
the end-user prices despite the lower prices paid for gas, Romania's economy minister Virgil
Popescu said.SLOVAKIA
(prepared by the CEC Government Relations office in Bratislava)
Status of epidemic:
• 1,630 confirmed cases, 28 deceased (as of 24 June)
Key economic indicators:
• Ministry of Finance expects the economy to drop by 9.8% this year, with loss of 76,000 jobs
(unemployment up to 8.2%)
• Economic growth should return in 2021 at a rate of 7.6%
Key issues:
• Mandatory disinfection on Sunday was scrapped and first shops could thus reopen on
Sunday as well. Employees in physical contact with their customers will not be obliged to
wear a protective shield. In addition, as of 1 July, events with less than 1 000 visitors are
allowed; events with more than 1 000 visitors will be permitted with the condition of
“chessboard” seating (organisers required to prove the number of participants). Rules on
wearing face masks in interior (incl. shops, public transport) remain in force.
• As of 20 June, EU citizens are able to transit through Slovakia without Interior Ministry
approval. Moreover, free travel list of 19 countries was extended with Poland, Monaco,
Montenegro and Faroe Islands.
• On 22 June, representatives of Slovak Government signed a Memorandum of Understanding
with Slovak Bank Association (SBA) agreeing on ending the increased rate of bank levy and
introducing Slovak Development Fund program. Government and SBA will take €1 billion
raised from bank levies in order to finance state's development projects. Banks will
furthermore use this scrapped bank levy worth €150 million annually to increase their own
capital and provide every year €500 million in loans for state projects and €1 billion in loans
for individuals and businesses. It is expected that this measure would bring 1-1.5% of annual
GDP growth and €300-400 million annually into the state budget.
• Slovak Government adopted a law full of pro-business anti-bureaucracy measures to help
businesses after COVID crisis. Changes to tax and levy laws should enter into force only on
1 January of the following year. Law is also scrapping the increased bank levy for Q3 and Q4
2020. Lex corona should be passed in Parliament in coming days and the Ministry of
Economy will immediately start collecting input for second lex corona to be presented in
autumn.
• Ministry of Transport wants to reimburse the employer’s contribution to tourism vouchers. It
can cost the state more than €100 million. The aim of the new project is to relieve employers
and help tourism recover. Every employee who is not in trial period should be entitled to the
voucher (currently mandatory only for companies with 49 and more employees). The ministry
assumes that up to 450,000 Slovaks could use the benefit.
• Companies in Slovakia should have easier access to new financing thanks to bank loans with
a state guarantee. Large guarantee scheme with a monthly capacity of €500 million was
approved by the European Commission. Small to large companies can be financed through
individual banking houses. The state will take over guarantees for loans to companies of up
to 80 to 90% of their volume. The rest of the risks will be borne by commercial banks.You can also read
