Banking Battlegrounds

The developments on the world’s financial markets and Russia’s strategic need to change the tool of gas and pipelines result in new acquisitions on the Central European market.

The growing reach of Russia’s financial arm in Central Europe is only the latest in the cycles of Central European history – cycles marked by outside powers’ influence in the region.

The rotation of influential foreign players in Central Europe is triggered by discrete events that severely debilitate one party or strengthen another. The trigger for the current decline of Western European influence in the region, and the rise of Russian influence, is the financial crisis that began in 2007.

The European Union’s influence in Central Europe was founded on its promises of prosperity and on the creation of liberalized markets in the region. This foundation has been weakened by the global economic downturn, and compounded by the escalating eurozone existential crisis. At the same time, Russia, resurging under the leadership of President Vladimir Putin, has found itself in a position to capitalize on Western Europe’s losses, acquiring assets that will allow it to yield a measure of influence in its former Central European periphery.