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War in Ukraine will deepen poverty in Central Europe

Friday, December 9, 2022

Significance

Central-East European (CEE) economies grow faster than most in good times but are more vulnerable in bad times, lacking the political and financial capital and competences to mitigate the developing multi-crisis. V4 government spending has not been sufficient to counter deteriorating standards of living.

Impacts

  • Late or inadequate government support may provoke social unrest and a further upsurge in support for populism and far-right politics.
  • Competing fiscal priorities will create more compelling arguments for aiding vulnerable individuals selectively.
  • Lack of consensus at EU level on tackling gas prices will leave the crisis to national competencies, reducing the certainty of success.
  • A tougher economic climate may compel the Hungarian and Polish governments to accept EU rule-of-law terms more quickly, to access EU funds.
  • Delayed implementation and inflation will upset national COVID-19 recovery plans, leading to pleas for extra cash to meet rising costs.

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