Money is high on the agenda in all of the V4 countries, whether it concerns future EU spending, anti-money laundering rules or a mayoral appeal for direct support. However, the region should not forget about longterm investment in vocational training and a skilled workforce.
An appeal for funds
A recent story about a “Free Cities Pact” between the mayors of the Visegrad Group countries has led to the first initiative in Brussels. Earlier this week, the mayors of Warsaw, Bratislava, Prague and Budapest presented in the EU capital their ambitious agenda.
Dziś rozmawialiśmy z @TimmermansEU o bezpośrednim finansowaniu z unijnych funduszy projektów związanych z walką z ociepleniem klimatycznym. Dla @warszawa najważniejsze są dodatkowe fundusze na bezemisyjny transport publiczny, termomodernizację, likwidację kopciuchów oraz OZE. pic.twitter.com/2UtR5flz6v
— Rafał Trzaskowski (@trzaskowski_) February 12, 2020
In practice, this appeal builds on an initial agreement to support grassroots democracy in the region and ask the EU institutions for direct financial support to local authorities – skipping the national governments. According to the mayors of the V4, the capital cities can play an important role in fighting climate change and populism.
Their success will depend on persuading member states to change funding rules but also on the amount that will be available for issues related to the climate transition. The Commission has stressed the need for increased funds from member states to support Green Deal – amounting to at least 25 per cent of the budget.
Anything but reform
In the latest news regarding the rule of law in Poland, European Commissioner for Values and Transparency Věra Jourová has spoken firmly about the most recent judiciary changes. According to Reuters, Jourová compared the Polish government’s actions to “a case of carpet bombing”. While the governing coalition in Warsaw has always claimed it is pursuing reforms, the Czech Commissioner expresses thinks that the new disciplinary rules for judges are an attempt at the destruction of the judicial branch.
Our story on the rule of law in Poland published this week, written by a former judge, suggests as much: “The Disciplinary Chamber of Supreme Court, which is to remove “black sheep” and corrupt judges, in accordance with the January resolution of three full chambers of the Supreme Court, can no longer be considered a court.”
The ongoing dispute has repercussions for Poland’s image abroad. This week’s visit of the Austrian EU Minister across the region included discussions about the rule of law and the possible connection with the negotiations about the next Multiannual Financial Framework.
— Wojciech Przybylski (@wprzybylski) February 13, 2020
Going after dirty money
The European Union plan to tackle money laundering in member states is starting to show its teeth. This week, the EU Commission announced it would take legal action against eight member states, including Hungary and Slovakia.
👇 Read more on this month’s infringements @EU_Commission, including letters of formal notice sent to 8 Member States for failing to notify implementation of the #AMLD5. As @VDombrovskis said last week, our anti-money laundering rules “must be enforced properly.” 🇪🇺 https://t.co/bVJ67Eug0U
— Daniel Ferrie (@DanielFerrie) February 12, 2020
The 5th Money Laundering Directive, which came into force in early 2020, is meant to stop dirty money from circulating by means of the implementation of public registers. However, some member states already face a delay in the application of the new directive.
The idea of tighter anti-money laundering rules came in 2016, after the Paris terrorist attacks. The directive explicitly links the issues of money laundering and terrorist financing.
The V4 countries are increasingly aware of labour shortages and the strains it puts on the economy. Yesterday, Czech Radio reported about the lack of skilled young graduates that passed through vocational training to gradually replace older workers.
While part of the problem has to do with demographic shifts, notably due to a large old generation retiring and a smaller group of students graduating, this is not the only problem. Investment in vocational training and promotion of trade schools has been plummeting in recent years.
Similar trends are visible across the region. Last year, the plunging Polish unemployment rate encouraged employers to look beyond Eastern Europe for labourers. A week ago, the Polish government indicated its plans to reopen an embassy in Dhaka to encourage both investments in Bangladesh but also to facilitate skilled and semi-skilled workers moving to Poland.
If the possibility of increased labour immigration does not materialise, businesses in the region may look for alternative solutions. Recently, our #DemocraCE Fellow Bence Bámer looked at how the effects of robotisation and automation will have an impact on the Hungarian labour market. In Poland, firms are also investing in technology to offset, for now mostly because of the lack of low-skilled labour.