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July 5, 2019 5:13 pm | FILED UNDER: europe

Visegrad Groups Economic Clout

By William Malcolm visegrad four

After German Chancellor Angela Merkel’s recent meeting with the heads of government of the Visegrad Group, DW asks if Central Europe has the economic clout to push its own agenda in a changing Europe.

 

Asked if she thought the Central European quartet that makes up the Visegrad Group (V4) could soon rival other EU regional blocs for supremacy within the corridors of Brussels, one EU diplomat offered a curt reply: “No,” she said, smiled and departed.

 

The V4 (Poland, the Czech Republic, Slovakia and Hungary) wants to change that.

 

Only recently, three of the V4 demanded compensation for making green changes to their economies in the EU’s next seven-year budget, known as the multiannual financial framework (MFF).

 

Observers often refer to the V4 as “two plus two” because of their different attitudes toward European integration. Slovakia and the Czech Republic are relatively EU-friendly, while Hungary and Poland are much more euroskeptic. Slovakia is the only country to belong to the eurozone.

 

How economically powerful is the V4?

 

If counted as a single nation state, the V4 would be the fifth largest-economy in Europe and 12th globally. Its population of 64 million would rank it 22nd-largest in the world and 4th in Europe. Most live in Poland (38 million), followed by the Czech Republic (nearly 11 million), Hungary (nearly 10 million) and Slovakia (5.5 million).

 

The EU 27’s economy is expected to grow by a lackluster 1.4% in 2019 and 1.2% in the 19-member eurozone. While Germany’s slowdown remains the main cause for concern, only up 0.5% this year, other European economies are also lowering prospects.

 

Central European economies, meanwhile, rank among the fastest-growing in the bloc.

 

Czech Republic

 

The country of 10.6 million people’s results are the most disappointing among the Visegrad economies, with 2.6% growth in 2019 and 2.4% in 2020.

 

The Czech Republic has been an EU member since May 1, 2004, is a part of the Schengen free travel area, but has resisted adopting the euro, favoring its own koruna.

 

Heavily dependent on car production and exports to the eurozone, the Czech economy recovered from a long crisis in 2013 and now boasts the lowest unemployment rate in the EU, at 2.2%.

 

Risks

Outgoing IMF Managing Director Christine Lagarde cited the Czech Republic as an example when warning against the dangers of US tariffs on European products.

 

She said that while the direct export of car components from the Czech Republic to the US is very low, this does not mean the Czech Republic will be immune to the effects of such an event.

 

Via DW

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