CEC REGIONAL UPDATE CEE COVID-19 OVERVIEW 30 APRIL 2020
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CEC REGIONAL UPDATE
CEE COVID-19 OVERVIEW
30 APRIL 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:
• 1,447 confirmed cases, 64 deceased (as of April 29)
Key economic indicators:
• Since the beginning of the crisis, nearly 88,000 unemployed have been registered with the
labour offices. The total number of registered unemployed is 291,000. About 12,000 people,
who previously worked in the informal economy without proper employment agreements,
were left without assistance.
• The Bulgarian National Bank reports that the gross external debt of the State Governance
sector at the end of February 2020 amounted to EUR 5 423.3 million or 8.3 % of the country's
GDP and decreased by EUR 4.3 million compared to the end of 2019. At the end of February
2020, Bulgaria's gross external debt amounted to EUR 33 826.7 million, or 52% of the
country's GDP, and decreased by EUR 191.5 million (0.6%) on an annual basis.
Key issues:
• The European Commission approved a €150 million (approx. BGN 294 million) Bulgarian
scheme to support SMEs affected by the coronavirus outbreak. The scheme was approved
under the State Aid Temporary Framework. Under the scheme, the public support will take
the form of equity and quasi-equity investments. The scheme will be open to SMEs active in
all sectors with certain exceptions defined by Bulgaria.
• The measure 60/40, introduced by the government to support employment in SMEs, will
continue to work after the end of the current state of emergency. The measure was proposed
during the state of emergency which ends on 13 May but will reportedly remain in force
until mid-June.
• Bulgaria’s Prime Minister Boyko Borisov said on 26 April that it was unlikely that the State of
Emergency would be lifted before May. He stated that even if the State of Emergency is not
prolonged after 13 May, all restrictive and social-distancing measures will remain in place for
an undefined period. The Bulgarian government is working on a separate law on measures
against the spread of COVID-19, which will allow authorities to take the restrictive measures
legitimately without the state of emergency.
• The temporary ban on entry into the territory of Bulgaria of persons and road vehicles through
border points with Turkey was lifted on 27 April at midnight. The ban was imposed on 24
April, the first day of the Muslim holy month of Ramadan.CROATIA
(prepared by CEC's Croatian partner - Vlahovic Group)
Status of epidemic:
• 2,062 confirmed cases, 67 deceased (as of 29 April)
Key economic indicators:
• At the end of April, 158,795 unemployed were registered in Croatia, 15,300 more than in
March; Unemployment increased by 27,700 compared to April last year and this is the first
April in recent history with monthly unemployment growth and the first since 2013 with annual
growth.
Key issues:
• The first phase of the deconfinement measures has been in force from Monday; all retail
stores and services without close contact have been opened. If the epidemiological situation
does not get worse, close contact services and a full-scale healthcare system will be opened
from 4 May.
• The Croatian tourism Minister Cappelli presided over the EU tourism ministers’ informal
videoconference. Nine countries signed the Declaration on the Common Position of EU
Tourism Ministers, calling to include strong support for tourism in the EU Recovery Plan and
highlighting the importance of establishing homogeneous rules for both air, sea or land
mobility during the summer season.
• Moreover, the Tourism Minister announced that the border with Slovenia would be opened
first and that should be agreed in the next two weeks; he added that Croatia has been
bilaterally discussing the same with Hungary, Czechia and Austria. Tourist traffic should be
carried out through special corridors and the facilities should minimize social contacts.CZECHIA
(prepared by the CEC Government Relations office in Prague)
Status of epidemic:
• 7,581 confirmed cases, 227 deceased (as of April 29)
Key economic indicators:
• Members of the Board of the Czech National Bank consider the further decrease of interest
rates to support fiscal easing. Last time, the Bank Board lowered the interest rate by 75 basis
points to 1 per cent on March 31.
Key issues:
• On 23 April, the Government, thanks to favourable developments, updated its plan of easing
restrictions on free movement and retail. As of 24 April, citizens are allowed to move in public
or to play sports in groups of up to 10 people, as long as they are maintaining a 2-metre
distance from one another. The Government has also presented an updated plan of
reopening the sections of the economy.
• Minister of Health Adam Vojtech announced the cabinet has lifted the travel ban with effect
starting on 24 April. However, the options for travelling remain very limited as many countries
still keep their borders closed. Czechs travelling to other countries will have to enter a 14-
day quarantine or provide a negative test upon arrival back to Czechia. Same rules apply to
foreigners with permanent residence. However, the Ministry of Foreign Affairs urges citizens
to travel abroad only if necessary. Finally, additional groups of foreigners are now allowed to
enter the country - either as a university student from an EU country or an EU citizen
conducting economic activity.
• The Chamber of Deputies has voted to extend the state of emergency in the country until
May 17. The coalition of PM Babis’ ANO movement and the Social Democrats argued that if
the state of emergency was not extended, it would mean that the whole package of
preventive measures that have enabled the country to bring the epidemic under control would
end, seriously increasing the risk of a fresh outbreak. The government’s original proposal for
an extension until May 25 did not win approval, however, due to lack of support in the lower
house.HUNGARY
(prepared by the CEC Government Relations office in Budapest)
Status of epidemic:
• 2,649 confirmed cases, 291 deceased (as of April 29)
Key economic indicators:
• According to the Labour Force Survey of the Central Statistical Office, in March, the
number of employed persons decreased by 56 thousand compared to the previous month.
• The transportation sector is experiencing a 10-30% decline this year compared to last
year’s data. The Association of Hungarian Freight Forwarders estimates that the period
after which previous freight volumes can be reached is estimated to be between 6 and 14
months
Key issues:
• The number of infected persons is steadily growing. A significant number of infected persons
are in hospitals and social care facilities. The capital and the Pest region remain the primary
centres of infection.
• Prime Minister Viktor Orbán stated that a turning point has come and the first phase is over.
Gradually and with a strict schedule, the country can restart. The government decided on
easing restrictions on movement in the countryside but is maintaining restrictions in Budapest
and surrounding areas.
• Government officials stated it may be possible to gradually ease restrictions and begin the
restart of the economy as of next week. However, it may become a requirement to cover the
mouth and nose when entering all commercial entities. Some anticipated measures which
could be eased include:
o Re-opening of smaller shops;
o Changes to shopping hours for senior citizens;
o Gradual re-opening of hotels.
• From Wednesday, the MFB economic rescue and economic recovery package is available.
There are HUF 400 billion in credit lines, HUF 700 billion in guarantee lines and HUF 321
billion in equity financing. The new programs include:
o an SME rescue capital program;
o a start-up rescue program;
o a crisis capital fund.
• From 4 May 2020, the Hungarian National Bank will launch its government securities and
mortgage bond purchase programmes in order to strengthen monetary transmission. The
first review will be at HUF 1,000 billion for government securities and HUF 300 billion for
mortgage bonds.
• The European Commission has approved three Hungarian support measures with a total
budget of nearly 900 million euros (approximately HUF 320 billion), which are intended to
support the Hungarian economy in the midst of the coronavirus epidemic and can provide
assistance to up to 5,000 companies. Under the three programs, state aid takes the form of
direct grants, loan guarantees and soft loan interest rates.
• The Commission also approved the HUF 550 billion Hungarian state aid program, which
concerned the working capital and investment needs of companies.POLAND
(prepared by the CEC Government Relations office in Warsaw)
Status of epidemic:
• 12,640 confirmed cases, 624 deceased (as of 29 April)
Key economic indicators:
• The European Commission approved financial support measures introduced by the Polish
government as part of the Anti-Crisis Shield and its alterations. Over PLN 100 billion from
different programmes will now begin flowin to entrpreneurs in form of direct payments,
subsidies, and benefits. There are still some programmes which are pending at the EC.
Key issues:
• The government is under increasing pressure from cross-border workers who are affected
by the COVID-19 restrictions imposed in Poland. Notably, the 14-day compulsory
quarantine is preventing numerous persons from performing work in neighbouring states -
mostly Germany and Czechia. The government is expected to present a proposal next week.
• The second stage of easing restrictions in Poland is scheduled for 4 May. It foresees:
o Re-opening of shops in shopping centres – under strict sanitary rules and with food
courts still closed. This will be done similarly to other larger stores, with one client per
15m2 allowed in the store;
o Re-opening of hotels and other accommodation – with access to common areas still
limited;
o Re-opening of nurseries and kindergartens - restricted operation, only providing care
services and with sanitary obligations;
o Re-opening of certain cultural facilities – libraries, museums, and galleries;
o A restart of medical rehabilitation services.
• The government is aiming to implement further stages every two weeks (3rd stage on 18.05
and 4th stage on 01.06). Entire stages, however, might be delayed depending on infection
rates. The PM underlined that the opening of specific types of services and businesses might
come earlier at an ad hoc basis. This will likely depend on talks with business organizations,
the state of preparations of specific regulations, and infection rates.
• The fate of the upcoming presidential election scheduled for 10 May, is still undetermined.
The ruling PiS party is hoping to conduct them through a postal ballot. Legislation, which
would allow for this is still being processed by the Senate.ROMANIA
(prepared by CEC's Romanian partner - Serban & Musneci Associates)
Status of epidemic:
• 11,978 confirmed cases; 685 deceased (as of 29 April)
Key economic indicators:
• Number of jobs suspended: 1,027,117 (327,181 manufacturing industry; 185,335 retail,
repair shops; 114,792 hospitality);
• Number of jobs terminated: 270,819 (50,390 retail, repair shops; 47,781 manufacturing
industry; 37,750 constructions).
• Romania’s public deficit triples in Q1 to 1.67% of GDP: Romania’s public deficit in the first
quarter (Q1) more than tripled compared to the same period last year, reaching RON 18
billion (EUR 3.7 bln) or 1.67% of the projected GDP for this year. The deficit increased by
0.94% of GDP in March alone, according to data published on Monday, April 27, by the
Finance Ministry.
Key issues:
• In a statement, Romania's President argued that it may be possible to relax certain
restrictions after 15 May. Albeit, social distancing rules will largely remain in place
- gatherings will still be limited to three persons, restaurants and malls are likely to remain
closed.
• Romania's Government is preparing an economic recovery plan, but its financing is still
uncertain. Romania's funds are scarce and already mostly allocated. Romania expects the
European Union to go ahead with the issuing of joint Eurobonds. This scenario would allow
the country to borrow money at a lower cost compared to the that of sovereign borrowing,
particularly after the outlook downgrade issued by the rating agencies.
• Romania’s support program for SMEs successfully launched on second attempt - over 2,800
firms submitted applications in the first hour. Romania’s Government successfully relaunched
the IMM Invest platform on Tuesday morning, after a failed attempt on 17 April, when the
platform crashed.SLOVAKIA
(prepared by the CEC Government Relations office in Bratislava)
Status of epidemic:
• 1,391 confirmed cases, 22 deceased (as of 29 April)
Key economic indicators:
• According to the Institute for Financial Policy estimates, tax and levy revenues will be lower
by €3.1 billion this year
• National Bank of Slovakia estimates that the Slovak economy could plummet by 5.8% up to
13.5% this year. Average estimates suggest a 9.3% drop with renewed growth of 8% in 2021
and 4.3% in 2022.
Key issues:
• The plan for a gradual opening of shop and service operations in Slovakia could be
implemented on county-basis, depending on how the number of people infected with
coronavirus is developing in individual counties of Slovakia. Prime Minister Igor Matovic
mentioned this option after a meeting with members of the economic crisis staff. Criterion of
the number of new cases per individual county could be used and if the county fared well,
then it would move on to the next stage of opening. However, this plan is still being developed
• Slovakia will be able to use further €1.2 billion for the fight against the coronavirus crisis by
re-allocating uncontracted and unspent EU funds from operational programs of various
ministries. €249 million will go to the support of the healthcare system, €507 million for
maintaining employment, €330 million for support of SMEs, €51 million to integrated
emergency system units and €115 million for other measures. Calls will be announced soon
and their efficiency assessed ex-post to determine the need for their adaptation.
• The Minister of Economy hopes that next week the government will close the issue of
compensation of retail operations and restaurants/pubs in terms of rent. He has also
confirmed that he would push for further re-opening of the economy.
• The National Bank of Slovakia scrapped the planned increase of countercyclical capital buffer
to 2% as of August. It will thus remain on the level of 1.5% - the banking sector in Slovakia
did not suffer more significant losses. However, the National Bank could further lower the
buffer in the case the banking sector would need to absorb losses or would need capital for
the provision of loans.You can also read
