Business in Central and Eastern Europe in times of the Covid-19 pandemic, 25.9.2020
Business in Central and Eastern Europe in times of the Covid-19 pandemic
25th September 2020
This online panel discussion centered on the effects of the Covid-19 pandemic on businesses in CEE, mainly the EU-CEE11, measures taken by the management in response and the outlook on future developments.
Yulia Teneva, HR Director and Head of the Covid-19 Coordination Committee, EVN Bulgaria, Plovdiv
Krzysztof Soszynski, VP of the Board, Chief Operating & Procurement Officer, Inter Cars, Warsaw
Markus Kriegler, Managing Director, Head of Group Corporates, Erste Group Bank, Vienna
Moderator: Arnold Schuh, Competence Center for Emerging Markets & CEE, WU Vienna
The outbreak of the pandemic ended a short boom period in CEE that started around 2015. CEE governments were quick in their response and introduced strict containment measures. They succeeded in keeping the number of infections and deaths low when compared to Western Europe. According to IMF estimates, CEE economies will contract between 3% and 9% this year –a hard hit but still a lower decline than the Euro area average of 10%.
For 2021 an average growth of +6% is expected for the region. The economic recovery for many small, export-oriented CEE economies highly depends on the developments in Western Europe - foreign trade and investment, industrial supply chains, tourism and labor markets link emerging Europe with the rest of the continent. Increasing unemployment and greater uncertainty about the future will keep private consumption low. Businesses have been hurt by lockdowns, the interruption of international supply chains and a collapse in demand. Weaker firms will fight for survival. Governments will very likely introduce higher and new taxes to offset the huge increase in public debt and try to protect local firms. Foreign firms will face a stronger and more demanding state as well as intensified competition within the region and from overseas. The labor and skills shortage is just postponed.
The panel started with brief introductions of the businesses/organizations of the panelists and a statement on their view on the topic – these presentations are available below. The impact on industries, successful management of crisis and learnings from crisis were then discussed with the audience
The main conclusions are summed up here:
There are more firms critical for keeping the infrastructure running than we thought:
EVN in power distribution,
Inter Cars’ auto parts keep the ambulance cars, transport vehicles etc. running,
Erste Bank provides liquidity to businesses and households.
Keep all channels open for customers.
Fast growth of e-commerce.
Creativity, initiative and dedication by employees are key to manage the crisis.
Keep your people motivated for a long-time.
Top-management has to be fully engaged and visible in crisis.
Closer relationship and intensive communication with employees and customers is needed.
Crisis highlighted the weaknesses in business processes.
We will do more remotely in the future.
The hybrid mode is the future.