Most countries in Central and Eastern Europe (CEE) are beginning to ease the Covid-19-related restrictions on economic and public activities cautiously. However, Russia is still focusing on containment and economic support measures amid the continuing surge of new cases. Meanwhile, Ukraine’s parliament is seeking to expedite the parliamentary approval of the crucial banking bill to unlock IMF support, while the presidential elections scheduled for 10 May are raising political tensions in Poland. This week, Slovakia’s parliament is expected to give final approval of the four-party coalition government in a vote of confidence, while the Czech Republic will reassess its plan to reopen the economy.
Czech Republic
The government has started the implementation of its five-stage plan to phase out Covid-19-related restrictions. Outdoor markets, small craft stores, car dealerships, and some other establishments were reopened yesterday, 20 April, with strict hygienic measures in place. Moreover, the government has allowed border crossings for work purposes while keeping the 14-day self-isolation requirement upon return. Other restrictions should be uplifted gradually in the coming weeks, with the final stage – including the reopening of indoor restaurants and bars, large shopping centers, hotels, and entertainment venues – provisionally scheduled for 8 June. However, this plan may be reviewed (and accelerated) later this week if there is no surge in new cases following the Easter weekend.
Poland
Yesterday, 20 April, the government started easing the limits on the number of people in shops and churches and reopened parks as well as forests. This is the first step of the government’s four-stage plan to “unfreeze” the economy, with the following stages expected in May. Later this week, the government is expected to present some additional economic support measures in response to Covid-19, including higher financial allocations to regional governments and restrictions on foreign investors to acquire shares in struggling domestic companies in strategic sectors. In the meantime, the opposition is trying to muster support in parliament to block a bill introducing postal voting in the 10 May presidential elections. The vote on the bill will likely take place in early May. In the meantime, a key signpost to watch is the unity of the ruling United Right coalition government amid rising pressure to postpone the presidential poll.
Russia
Covid-19 is spreading rapidly, and any easing of restrictions is not being considered yet. Most municipal and regional authorities will likely extend the lockdown measures into early May. However, yesterday’s public demonstration in the city of Vladikavkaz over job losses and lack of information about Covid-19 suggests that public discontent may be rising in some regions. Amid rapidly deteriorating economic and labor market projections, Russia’s central bank will consider cutting the key interest rate in its board meeting on 24 April. Meanwhile, the government is expected to focus on additional economic support measures for businesses and vulnerable groups.
Slovakia
This week the parliament is expected to adopt the governing program of the four-party coalition government led by Prime Minister Igor Matovic (Ordinary People). This will be the last step in approving the new cabinet after the February parliamentary elections. The ambitious program prioritizes restarting the economy after the Covid-19 crisis, reforming the judiciary, reviewing social policies, ensuring self-sufficiency in food production, and keeping fiscal discipline. Earlier this week, the government announced a four-stage plan to gradually ease Covid-19 restrictions, with certain small businesses, outdoor markets, car dealerships, and some accommodation services reopening from tomorrow, 22 April. The debate around the exit strategy has already exposed some divisions among the different ruling coalition parties.
Ukraine
The parliament is expected to start debating amendments to the banking bill, which prevents former owners of insolvent banks (most notably PrivatBank) from regaining their assets. The adoption of this legislation is the main pre-requisite for Ukraine to finalize a much-needed USD 8bn program with the IMF. Parliament already passed the bill in the first reading on 30 March and, despite divisions in the ruling Servant of the People party, is likely to adopt it in the final reading as well. However, the date of the final vote remains unclear as some MPs are actively seeking to derail the adoption of this bill. In the meantime, the Denys Shmygal (independent) cabinet will likely extend the quarantine until 12 May during the government meeting on Wednesday, 22 April. However, some restrictions may be relaxed in the coming days.
