Despite growing political interference and a substantial presence of money from questionable sources, some investors see Serbia – and especially its capital, Belgrade – as an exciting opportunity to create value. Combined with the fact that political interference and opaque transactions are distorting the real-estate market and creating further problems with the rule of law, a key obstacle to Serbia’s path towards EU membership, the country’s real estate market ostensibly offers a golden cage to foreign investors. In other words, opportunities about, but there is a risk associated with any change in political elite personality or priorities.
Bulgaria’s Prime Minister, Boyko Borissov, has spearheaded recent legal reforms aimed at fighting public and private sector corruption. These reforms include the creation of a new anti-corruption unit with the remit to wiretap senior state officials. Although these efforts appear positive in their aims; given the trajectory of Borisov’s own political influence, there are concerns that a new anti-corruption unit with significant powers could be utilised against opposition groups, whilst further placing the private sector and judiciary under his influence.
Liviu Dragnea has started a public campaign of defamation against anti-corruption institutions that have accused him of leading a criminal organisation. To legitimise his position, Dragnea is using autocratic methods, whereas he is the protector of the national interests empowering him to manipulate the judiciary and security systems.
There are concerns that a series of reforms that reduce the independence of the Romanian judiciary will impact how international and non-politically exposed commercial players are able to compete in the market. If these reforms are passed, they have the ability to set the stage for the implementation of a de facto system of crony capitalism; a system that would ultimately serve the interests of the political and economic interests of Liviu Dragnea.
Last month, the Serbian Government and France’s Vinci finalised the agreement that will put Belgrade airport in the hands of one of the world’s largest construction and concessions companies. It is reported that Vinci will pay €500 million in concession fees, and invest another €732 million over the next 25 years.
Recent proposals to reform the legal framework governing Serbia’s defence sector are most likely to empower the Military Police, whilst adding layers of opacity to the country’s weapons production and acquisition plans. Shrouded in high doses of nationalism, these reforms – like many initiated by President Vucic – are yet another example of how the ruling elite are further empowering themselves, largely to the detriment of democratic accountability and an open market.
Turkey’s banking sector is crucial to the success of the AKP and President Erdogan. Although the sector itself primarily functions independently of government interference; there are growing concerns that it is becoming increasingly exposed to informal mechanisms of political influence. This is a summary of a report available in the Shadow Governance Intel Store, that looks at how political exposure plays out in Turkey’s banks, and assesses the repercussions this can have on the future viability and reputation of the sector going forward.
A series of anti-terrorist laws proposed by Romania’s President Iohannis appear to be empowering the already controversial and powerful SRI, in part by making it even less accountable to the judiciary. While terrorism has been a national security concern since the 1990s, these reforms are officially being driven by concerns about ISIS and an emerging refugee phenomena.
There are indications that Turkey’s AKP is utilising the private security sector to reinforce their influence over state security institutions. The desire to exert influence throughout Turkey’s security apparatus is ostensibly driven by the emerging paranoia that the AKP is being faced with internal challengers. Manipulating private security to monitor and/or control state security structures will erode democratic accountability.
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Authoritarianism, corruption, human rights violations, and political repression are elements that characterise political trends in Emerging Europe over the next year. Indeed, countries in the region will continue to move away from democratic reforms, while their ruling elite continue to secure their political power by leveraging informal mechanisms of influence.
Although the current economic standing of Belgrade’s Airport is good, the Vučić government is - yet again - close to endangering one of the most important state assets. Previous regional examples reveal how governments, for political purposes, have privatised state assets to the detriment of public coffers, and the case of Belgrade Airport could easily follow this path.
The Bulgarian media sector appears to be controlled by individuals with strong links to political parties and the ruling elite, as is the case with Delyan Peevski. Central to influencing political and public opinion, the media sector has become an important tool through which elements of the status quo have sought to hide corruption, and other questionable practices that continue to undermine Bulgaria.
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