|H.E. Gordon Bajnai, Prime Minister, Hungary
||H.E. Vaclav Klaus, President of the Czech Republic|
Keynote speakers at the Central & Eastern European Forum 2010 included H.E. Vaclav Klaus, President of the Czech Republic and H.E. Gordon Bajnai, Prime Minister of Hungary.
“I, the President of a newly-found state, will soon become a honary President only.” So began Vaclav Klaus, President of the Czech Republic, when opening Euromoney’s 15th annual Central and Eastern European Forum. Taking place on the 19th and 20th of January in Vienna, the conference attracted over 900 delegates from the region and beyond to discuss recent events and plot future strategies.
Klaus was, of course, referring to his reluctant decision late last year to sign the Lisbon Treaty – a piece of paper that proponents said would make an enlarged European Union workable and that critics said undermined national sovereignty still further.
In typically pugnacious form, Klaus went on to bemoan the way in which his country had decided to follow the statist policies of Western and Northern Europe – “we took the wrong road” – he argued. Referring to policymakers’ attempts to ward off the worst of the crisis through fiscal means, he said: “We will pay very heavily for those interventions.”
Following on immediately from Klaus, Hungarian Prime Minister Gordon Bajnai struck a different note arguing that faced with the scale of the downturn, governments had no option but to act. He outlined what the government had done to put its own house in order, setting public finances on a more sustainable path for the future. As poster boy for the crisis in the region, Hungary had shown the way for others, he argued. “We were told that the IMF was the bench of shame,” said Bajnai. “Today this bench of shame is so crowded that you can hardly find a set on it".
The IMF was among a group of all of the leading multilateral institutions active in the region and represented at the conference. There was widespread agreement that the Vienna Initiative – an agreement between international institutions, banks and governments to coordinate responses and keep capital flowing – had worked, so far. Indeed, most speakers argued that the worst of the crisis was over and that policymakers and private sector participants must now look to the future. Addressing imbalances and reducing past reliance on international capital flows were recurring motifs throughout the one-and-a-half days in Vienna.
Most participants also had their eyes firmly set on key countries entering the Eurozone as soon as possible. “The Euro means a safe haven for a small economy,” said Hungarian PM Bajnai. Petr Jonak, the external affairs coordinator for Skoda Auto, arguably the region’s flagship manufacturer, said that Eurozone membership was crucial in attracting and planning investment.
But others were more sceptical, arguing that the region’s countries needed above all independent policy levers to cope with the challenges they were likely to face over the next years. In the short term, those challenges included deleveraging of the household sector, rising unemployment, swelling levels of bad loans and the need to roll over large amounts of short-term debt. In the longer term, maintaining competitiveness and battling demographic headwinds loomed largest.
Never far from the lips of speakers and delegates was the example of Greece, a country that had used the cocoon of the Eurozone to delay structural reform and was now facing the consequences.
Next year in Vienna, at the 16th Annual Central and Eastern Forum, we shall see who was right and who was wrong.
To see the final agenda, click here
Euromoney would like to thank the event sponsors, without whom none of this would have been possible;
Lead Sponsors: Eurobank EFG, RZB Group, UniCredit
Co-Sponsors: Erste Group Bank, OTP Bank
Roundtable Sponsors: AsiaUniversalBank, Bank of Georgia, Dragon Capital
Associate Sponsors: Alfa-Bank, Nykredit, Zagreb School of Economics and Management