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VISEGRAD: Powerless in Poland

Asked On: April 21, 2016

Question: Hello, have you seen recent opinion polls for Poland please? thank you

Answers: Hello. Thank you for your question. The polls are consistent in giving Law and Justice (PiS) a very clear advantage over the opposition parties. Polls about support for political parties in Poland come out quite often, a least few times a month from different polling companies. PiS' average support in five polls conducted in April so far is at 31.5%. That is about the same as the support for two largest opposition parties - Modern (Nowoczesna) and the Civic Platform (PO) - combined. Modern's average for April is 17%, while PO's average is 14.5%. Other parties have not exceeded 10% in April, with anti-establishment movement Kukiz'15 coming in at 9.9%, the centre-left Socialdemocratic Left Alliance (SLD) at 4.3%, right-wing Korwin at 3.4%, Podemos-styled left wing party Together (Razem) at 3.2%, and the Polish Peasants Party (PSL) at 3.1%. In Poland, in order to win seats in the parliament, a party needs to get at least 5% of the votes (or 8% when parties are running as coalition). In other words, despite criticism from liberals and the left art home, as well as quite wide criticism of PiS government in the European Union, the popularity of the party seems as strong as ever.

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Kosovo drops three spots to 90th in media freedom ranking

Asked On: April 21, 2016

Question: Good morning, Could you please direct me to the whole report where the section on the Western Balkans in mentioned? I was only able to find the individual country score. Many thanks in advance!

Answers: Thank you for the question. There are individual pages for each country. They open after clicking on the respective country name in the ranking list available at: They are also available from the “Country” menu at the top of the screen. However, the text on Bulgaria was not up to date and there was a factual mistake in it (or two if we assume that the text was new after all). I hope the situation with the Western Balkans is better.   There is also a regional overview available at:

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Latvian fiscal watchdog warns against allowing cost of reform to provoke deficit

Asked On: April 13, 2016

Question: Hi, thanks for this article. What healthcare reforms are being proposed and how much are they expected to cost?

Answers: Thank you for your question. Since health indicators of Latvian population are below the EU's average, the reform aims to improve access to health care, such as hospital care specialist care, etc. Two key objectives set in the Public Health Guidelines 2014–2020 are to increase by three years the number of healthy lived years (to reach 57 years formen and 60 years for women in 2020) and  to reduce by 11% the PYLL (potential years of life lost) indicator to reach 5,300 per 100,000 inhabitants in 2020. The cost of achieving those goals is estimated at €577mn in 2013-2020.

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Kosovan banks' profits drop 11.3% y/y in January-February

Asked On: March 30, 2016

Question: Good morning, In the news article "Kosovan banks' profits drop 11.3% y/y in January-February" from this morning, you talk about the last bank to enter the Kosovar banking system, Turkey’s Ziraat Bankasi. You say that it is a branch (and not a subsidiary). Under which country is it a branch? Does it report directly under Turkish banking regulation then and not the one valid in Kosovo? Many thanks in advance for your help!

Answers: Thank you for the question.   The Kosovo operation is a branch of the Turkish parent. Please see an Intellinews Turkey article “Turkish state-owned lender Ziraat ‘s Kosovo branch gets licence to operate” dated June 2, 2015. It says, “State-owned lender Ziraat said on June 1 that its branch in Kosovo/Pristina has obtained licence from the local authorities to operate. The lender did not provide other details.” The URL of the article is: The website of the Kosovo branch is:   Kosovo’s legal framework in English is available at this page of the central bank’s website: The link for “Law on Central Bank Of The Republic Of Kosovo” does not work, but the “Law on Banks, Microfinance Institutions and non Bank Financial Institutions” is available.   Its Article 12 stipulates, “1. The CBK may require a foreign bank that is licensed to operate one or more branches in Kosovo to convert the branch to a subsidiary of the foreign bank if:…1.4. the CBK considers the supervision of the home country supervisor to be inadequate.”

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Serbia’s banking assets increase 6.1% y/y at end-Sept 2014

Asked On: February 25, 2016

Question: Sorry this is a bit outdated, but where can I find background documents to Serbia's subsidised loan programmes in the past?

Answers: I believe these links can be usefull for you. Sources are Belgrade's Chamber of Commerce and Official Gazette, primarily.  2010: 2011: 2012: 2013: 2014: I guess this might be usefull, too: More details/reports on loans amounts can be found on the banks's sites and all that participated are listed in the Chamber's pages mentioned above.  

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Hungary's central bank building arsenal to fight terror and migrants

Asked On: February 19, 2016

Question: Hi, thanks for this article.  How big is the central bank's security company?  

Answers: The MNB does not declare this info. However, it's  apparently big enough to need 112 handguns. While the Hungarian central bank is not the only one in the world to have its own forces - the US Fed, for example, also employs muscle - it is, as far as we know, the only one to cite migrants as a specific risk. Hungarian rates are at historic lows, but the MNB is not out of ammunition.

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Bosnia’s M1 money supply growth boosts to 11.9% y/y at end-December

Asked On: February 11, 2016

Question: Thank you for this article, and the other one about the FX reserves. I was wondering if you could clarify for me how the monetary expansion works in BiH. My understanding from the other article is that the BAM in circulation are fully backed by FX reserves, due to the currency board. How does it happen then, that money growth increases, while it slows down for FX reserves? Doesn't an increase in money supply have to be backed by an increase in FX reserves?

Answers: We have noticed the same controversy and asked Bosnia & Herzegovina’s central bank for clarification. We will let you know as soon as we get a reply.

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Slovenia’s PM rejects finance minister’s resignation

Asked On: February 5, 2016

Question: Were any of the coalition partners or MPs in the coalition advocating for Mramor's resignation?  If so, were there any doing so openly, or were they just encouraging their allies in the unions?  

Answers: Coalition partners were backing Mramor's work as well as saying that PM had to make final decision. Ex: for Slovenian vice president and minister of agriculture, forestry and food as well as high level official of Social Democrat political party (SD), Dejan Zidan, Mramor’s case is a business and responsibility of the PM.     Democratic Party of Pensioners of Slovenia (DeSUS), a junior coalition partner to Cerar’s and Mramor’s Modern Center Party, in the Slovenian government said that Mramor’s resignation proposal was a good step even though they do think that he works good.

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Deputy proposed as new head of Latvia's financial watchdog

Asked On: February 2, 2016

Question: What you think - at the end will Regulator to contain all this laundering schemes or too much influence/lobby from banking groups? And if contain main scenario will be: 1.) Banks quietly will shut down such operations or 2.) There will be big scandals ahead ?  

Answers: Thank you for your question. One issue offering hope is that there is now reported to be mounting pressure coming from US. Washington officials have apparently told Riga in no vague terms the Latvian banks must clean up their act or be forced to do so.  The current political situation in Latvia could be favourable as well to push the regulator FKTK into becoming more effective in tackling money laundering and corruption. There is going to be a new government within days and 2016 is the year in which Latvia is hoping to join the OECD. It could be a feasible political goal for the new government to make FKTK finally tackle the dubious schemes in Latvian banks to make the OECD membership reality.  The question is, however, who at FKTK will do it? The current deputy head of the regulator Peter Putnins, who also is the candidate to become the new head, has been described by the likely Finance Minister Dana Reizniece-Ozola, as unable to make the necessary changes at the watchdog. As deputy, Putnins determination to push past the powerful business lobbies that appear to have successfully leashed the regulator over recent years is presumably a question. That could yet convince the new government to replace entire FKTK management with new people, more determined to carry out changes and consequently contain the laundering schemes. These have thrown up numerous international and domestic scandals in recent years, and unless the regulators clamp down there seems little reason to believe that will stop going forwards. On the negative side, however, Latvia has a history of not bothering with international criticism of what's going on with its banking system. It may have to do with the links its political elites have had with the banks over the years. Most recent example is the establishment of Certus, a think tank, which is trying to lobby for changes in the banking regulatory framework that, according to critics, will lead to "off-shorization" of the Latvian banks. Certus' board includes the former ambassador and Minister of Foreign Affairs Aivis Ronis, who has worked as a non-resident bank representative, Deputy Chairman of the Board at ABLV Vadims Reinfelds, as well as the head of the Association of Latvian Commercial Banks Mārtiņš Bičevskis, according to RE:Baltica. The Stockholm School of Economics in Riga terminated cooperation with people linked to Certus saying it would not like to work with "organisations nor with people who are financed and are representing the interests of non-resident banks, since there is a high risk that we might be associated with money laundering – an activity that we do not consider commendable." 

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Kosovo sells out €20mn in three-year T-bonds, yields down

Asked On: February 1, 2016

Question: Would you mind sending me the link to the ministry of finance's press release (since I am also looking for the issuance for the past two years of government bonds)?

Answers: Here it is

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Kosovo to focus on fight against grey economy in 2016

Asked On: January 13, 2016

Question: Would you have the press release/report behind this information?

Answers: Here is the link of the statement -

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Turkish President Erdogan slams local and international academics over peace petition

Asked On: January 12, 2016

Question: Is there any sign of people actually trying to move from the affected areas in the southeast regions? Do you have any correspondents in the area that cand describe a real situation in the affected cities? How do they get food and water? Who had this initiative for the petition in the academic environment?

Answers: 22% of the population (93,000 people) in the towns of Cizre, Silopi, Nusaybin and Diyarbakir’s Sur district that have been under curfew have left their homes because of the clashes, Al Jazeera reported on January 11, citing a report by the interior minister Efkan Ala. We don’t have a correspondent there. We, however, recently spoke with a person who travelled to Diyarbakir as part of a delegation of NGOs and HDP deputies. He said people there live under very difficult conditions; not all but most of the shops are closed, some neighbourhoods have no electricity, water or electricity. That is the reason some people have left their towns. Some NGOs try to supply people with food and other basic needs. This article published this week also describes the security situation in the southeast:   The petition initiative has been taken by a group called “Academicians for Peace”. This group includes liberal and left-leaning scholars. You can see the petition in English here:

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Turkish Gersan Elektrik’s Russia unit resumes production following favourable court order

Asked On: January 12, 2016

Question: So it seems that some realations are getting back to normal.  What about the Akkuyu nuclear plant project? Is it stopped due to Russian attitude? Are there any rumours regarding the completement of the plant and put into use by 2019 as scheduled? 

Answers: Relations between Ankara and Moscow have remained tense. We don’t think a Russian court ruling in favour of the Turkish company Gersan signals an improvement in relations. The bans on food import and charter flights remain in place. The company that builds the Akkuyu power plant already dismissed media reports suggesting that it halted construction work. Putin said in December: “Continuation of Russia's involvement in construction of Akkuyu nuclear plant in Turkey should be decided on a corporate level.” Ankara and Moscow inked an agreement for the construction the Akkuyu plant in May 2010. The first reactor of Akkuyu is expected to come online by 2022.  

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Azerbaijani central bank restricts foreign exchange operations

Asked On: January 11, 2016

Question: Could you please provide the source of "observers fear that it could lose another 39% of its value against the dollar by the end of January", regarding another expected manat devaluation?

Answers: The source we are quoting is familiar with the Azerbaijani banking sector and made their observation based on the demand for foreign currency since January 4. However, since we published that article on Jan 8, the central bank has moved to significantly limit currency exchanges. On Jan 9, the government closed down all exchange offices operating outside of banks. And, as of January 11, banks were reportedly no longer selling foreign currency. Trying to take out currency using debit or credit cards carries a 4% to 10% fee, but ATMs are also not dispensing foreign currency anymore. After allowing markets to do what they wanted for a week, the regulator has moved to tightly control currency exchange in order to prevent the further devaluation of the recently floated manat, which may help stabilise it in the short term.     According to economist Oqtay Ahverdiyev, the manat's real value is closer to $0.2 to $0.33, and it will continue to devalue in the long term until it reaches that level. I hope this answers your question. 

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Kurdish party HDP plans mass rallies as clashes continue in Turkey’s southeast

Asked On: January 11, 2016

Question: Where (which cities) does the HDP plan the rallies and workshops regarding autonomy? Do they/HDP benefit on kurdish people support all over the country or just in South Eastern parts (where the conflicts are more severe)? Can this be a trading coin in AKP-HDP negociations for the new constitution, as the actual rulling party refused to have a dialogue with HDP before and acused their leaders of treason?  

Answers: The HDP has not yet made its plans public. We still don’t know when and where these events will take place. We don’t think the HDP’s “self-governance rallies”, if held, will be well received by the AKP government. As you pointed out, the government rejects dialogue with the Kurdish party on any issue. The AKP has held talks with two opposition groups (centre-left CHP and nationalist MHP) in parliament on the re-writing of the constitution but it excluded the HDP from the process. The military’s large scale operations in the southeastern provinces suggest that the government is not willing to return to the negotiating table any time soon. 

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World Bank keeps Kosovo GDP forecast for 2016 unchanged at 3.5%

Asked On: January 8, 2016

Question: Do yu also have the link to the full publication?

Answers: Here is the link to the publication:

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Romania’s lawmakers pass controversial bills on special pensions for elected public servants

Asked On: December 22, 2015

Question: Hi, thanks for this article.  So the bill on MP special pensions has become law?  Or are there other opportunities for defeating it?  

Answers: No chance/opportunities for defeating the bill on MP pensions. President has to promulgate the bill before it is turned into a law -- but he can not return it again [since it has returned it once]. Only the other bill, on mayors' [and other] special pensions, can be returned to lawmakers.

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Turkish military steps up operations in southeastern towns

Asked On: December 17, 2015

Question: The battle against the PKK is a continuous aspect of the presidents policy as far as i can see. Which scenario is most real at the moment? The PKK militants leave the country/lay down the arms or the HDP party will interfear and try to put an end to the situation? Will AKP accept to cease the curfews and sit at a table talk with HDP to solve the kurdish crisis in the near future (also as a part of a new constitution)?

Answers: In the run-up to the November elections, the ruling party AKP realised that its anti-PKK, anti-HDP rhetoric was very effective, appealing to the Turkish nationalists. It’s likely that the AKP may maintain its tough position until a referendum on the presidential system could be held. However, as we noted in our response to your previous question regarding the Russian crisis-presidential system, it is far from certain at the moment if the AKP could get enough support from the other political parties in parliament to put the constitutional amendment to a referendum. The HDP that has been calling for a truce has been ineffective. Senior PKK commanders say the HDP cannot decide what the PKK should do. They have vowed to continue their armed struggle. The government, on the other hands, insists that it will not return to the table for discussions until the PKK lays down its arms and leaves Turkey. We don’t know if the government and the PKK’s jailed leader Abdullah Ocalan are still holding talking behind the closed doors. We have not heard any statement from Ocalan for months and we don’t know if he has any proposal to break the deadlock. The situation is a complete impasse for the time being, no sign of reconciliation any time soon. The violence in the country’s southeast will likely to continue in the weeks to come, but it may ease later because it would be difficult for the PKK to carry out attacks due to severe winter in the region.

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Turkey should pay compensation for downed Russian plane, says Russian deputy foreign minister

Asked On: December 16, 2015

Question: Will the Turkish president use the de facto crisis with Russia to increase his popularity among turkish voters in perspective of a refferendum for turning into a presidential system? How do the people (masses) sympathize with the actual situation? Not the ones directly involved in trading with Russia of course.

Answers: No doubt, the plane incident has some implications for domestic politics. President Recep Tayyip Erdogan, whose popularity has been on the rise, now looks like a powerful leader who can dare to challenge Russia’s strongman Putin. A survey by polling company Gezici found that more than 90% think Turkey did the right thing by downing the Russian bomber. Ankara claims the Russian plane violated Turkey’s airspace. And another polling company Metropoll reported that Erdogan’s job approval rose to 47.7% in November, the highest since December 2013. And this increase in Erdogan’s approval was even before the plane incident. However, we have not seen new public opinion surveys showing how Erdogan’s approval rating has changed since the downing of the Russian bomber. As for the impact of the plane incident on a potential referendum on the presidential system: Erdogan’s Justice and Development Party (AKP) managed to steal votes from the nationalist party MHP in November’s snap poll. The MHP’s votes fell to 11.9% from 16.3% in the June election. We think nationalist voters must be very impressed by Ankara’s bold move against Moscow, which Turkish nationalist see as Turkey’s historical enemy. And in a possible referendum the nationalist may vote in favour of switching to an executive presidential system. But, the problem is the AKP that regained the majority in the November poll failed to secure a super-majority that would have allowed the party to rewrite the constitution alone in parliament. The AKP is 13 seats short of the 330 required to call a referendum on any constitutional change. The AKP needs to seek support from the opposition parties. But, all the opposition parties represented in parliament have clearly said they are against the presidential system. It is possible that some MPs from the MHP could support the AKP’s bid to change the constitution to give Erdogan more powers.

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Turkish business takes steps to mitigate Russian sanctions

Asked On: December 4, 2015

Question: Will Turkey just stand and accept all of those sanctions approved by Russia regarding the foods imports?  Will it counterback with some equivalent sanctions regarding russian businesses in Turkey? For the moment it only seems like an ego problem between the two presidents.  Do you have any political point of view/reference from the Economy Ministry regarding the solving of the crisis soon?

Answers: Ankara has not taken any counter measures to retaliate, probably fearing that such a move may prompt even harsher sanctions in the form of Russia cutting gas supplies. Actually, Russia’ cutting supplies to Turkey seems unlikely considering the fact that Turkey is second biggest consumer of Russian gas after Germany. Turkey is not looking for alternatives to Russian gas. Tsis week, State-run pipeline company Botas signed an agreement with Qatar to buy LNG. The government has suggested that it plans gas deals with Azerbaijan and Turkmenistan. The Turkish government has not indicated that it is planning sanctions against Russia. But, on the contrary, it calls for reducing tensions even though it refuses to apologise for the downing of the Russian bomber near the Syrian border. Food ban will cost Turkey $754mn, Turkey’s ministry of agriculture said earlier this week. This is not large given Turkey’s $800bn economy. But, a ban on charter flights will hurt Turkey’s tourism industry. Last year more than 4mn Russian tourists visited Turkey, accounting for 12% of total foreign visits. The foreign ministers of Russia and Turkey met on December 3 in Belgrade. This was the first high-level contact between the two counties since the plane incident. Following the meeting Russian minister Lavrov said: “I did not hear anything new. Turkish minister Cavusoglu reaffirmed the Turkish position. We reaffirmed our assessment”. No sign of compromise yet. It is difficult to predict how the current crisis would play out. You may also take a look at our piece on the effects of the Russian sanctions on the Turkish economy here:

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