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Published: March 23rd, 2016

On the theme:

Participants will discuss the results of transformational reforms in Central and Eastern Europe. As CEE countries have become "pioneers" of transformation of post-socialist transformations in Europe? How did they managed to implement the model of transformation through borrowing institutions of a market economy and Western-style democracy? Why the reforms in CEE region ceased to be homogeneous. What can explain the differences in the results of the transformation? Specialists wil analyze real achievements, challenges and the objective constraints of the transition to the market and democracy through borrowing institutions.


Among participants :

Valjevo T., Vardomsky L., Volotov O. Volotov S., Vorotnikov V, Gabarti A., Zagorski A., Knyazev J., Kuznetsov Z., Kulikov N., Lobanov M., Malgin A., Sviridov M., Faith N., Shkareda A., Kolodko G.


Moderators :

Artyom Malgin, pro-rector of the MGIMO, executive director of the Russian International Studies Association (RISA)

Svetlana Glinkina, scientific head of "International Economic and Political Studies" IE RAS

The fourth Moscow Economic Forum, which took place 23 and 24 March 2016, in Moscow State University named after Lomonosov became a platform for discussion of economic policy and the results of market-oriented reforms, not only in Russia, but also in Central and Eastern Europe. The conference "25 years of reform in Central and Eastern Europe: the expectations, results, projections" was devoted to the transformational changes through which European countries have been among the first. The moderators of the debate, Vice-Rector of MGIMO MFA of Russia, executive director of the Russian Association of International Studies Artem Malygin and Head of the Department of Central and East European Institute for International Economic and Political Studies, Russian Academy of Sciences Natalya Kulikova.

Opening the discussion, Artem Malygin described features of the development of the Central Eastern European region, which is defined on the one hand, by the movement towards European integration, on the other hand, by the Russian reforms, largely overtaken all other post-Soviet countries. At the moment, there is a very strong slowdown in the dynamics of development, said conference moderator. "Integration formed two blocks, between which there is a link: European integration and a block integration unit of the Customs Union of the Eurasian Economic Union.

Plans related to building bridges between the two units, were largely destroyed in the 2014 - 2015 years. Unfortunately, we do not see any way out of this state of mutual ruination", - concluded the pro-rector of MGIMO.

In her speech Natalya Kulikova touched the economic aspects of transformation in Central and Eastern Europe . According to her, the experience of countries in Central and Eastern Europe is in many respects instructive: they once dreamed of becoming members of the EU and copied the European norms, rules and institutions, as well as some post-Soviet countries are now seeking for the European integration. In order to assess the attractiveness of the reforms that the EU offers to countries wishing to join it, the evaluation of the experience of the CEE countries is critical , the speaker said.

Kulikova reminded that the full liberalization of the economy has led to a catastrophic increase of competition in the domestic markets of Central-Eastern Europe, which in the absence of state support for domestic producers excluded by EU rules, has led to the loss of producers share in the domestic markets and the closure of many of them. liberalization has been carried out by the countries in the investment sphere, which provided abundant inflow of foreign direct investment. On the other hand, said the moderator of the discussion, it had at least two negative consequences: first, there was no economic modernization, and secondly, the bulk of investment came in the financial services sector, trade, real estate turnover. Such reforms, according to the MEF speaker, led to chronic budget deficits in many countries, reduced public spending, not only on social needs, but also to the article, which directly affect the economic growth. Moderator of the discussion made out another negative aspect of the market reforms in CEE - the liberalization of the financial sector and credit expansion of foreign banks in the pursuit of higher interest rates in Central and Eastern Europe has led to an increase in the current account deficit, and consequently, to an increase in external debt.

Professor of the Kozminski University, former Deputy Prime Minister and Finance Minister of Poland Grzegorz Kolodko talked about the economic and political transformation of the countries of Central and Eastern Europe, especially Poland. He noted that even today debate about the cultural and political reform issues are ongoing , but the most important is the concept of "social cohesion". According to Kolodko, Russia's biggest problem is not the lack of financial or physical capital, but lack the social capital. In the process of transformation the questions raises of the raise or lower interest rates, increase or decrease taxes, but that, according to the professor, not the most important. Now, after 25 years of market reforms questions arise again, how to use social cohesion, how to build relations between the democratic, political and market system of the State, concluded Kolodko.

Situations in Ukraine touched the head of the Center for Post-Soviet Studies of Institute of Economics Leonid Vardomsky. He explained that the country was at the crossroads of civilization between Russia and Europe that strongly influenced its development: it was necessary to understand in which economic system to develope, otherwise there are risks for investors. Business, according Vadomskogo, tried not to invest in Ukraine, but to exploit the Soviet legacy. Also Russia as a major market in 2005 started the import substitution deployment, and use economic levers to influence the policy of Ukraine, which affected negatively the economic development of the country. "And of course, the low quality of governance. We all are witnesses of endless quarrels and deep conflicts that hampered the development, made it difficult to make decisions, carry out reforms. Ukraine joined the association in a bad condition ", - concluded the scientist. Today, as explained by the speaker of the MEF, the line traced on the scrapping of the Soviet economic legacy of Ukraine, against the background of a agroisation new deindustrialization. There is a situation in which Ukraine is taking the EU institutions, but the cost will be to focus primarily on India, China, Egypt, Iran, the professor said.

The pareticipants agreed that the complete openness of the economy of the Central-Eastern Europe has led to the formation of large imbalances and instability of economic development. Before the crisis, in most countries, growth rates were quite high, but at the same time formed a high dependence on financing long-term investment growth, so the region was very sensitive to changes in the situation, to the instability in the global European market. During the economic crisis, the region has experienced a deep repression, and many countries still has not restored pre-crisis level.

Speakers concluded that the change of the social system did not provide the Central-Eastern Europe to overcome the historical economic backwardness, and the potential of trade and financial links with the Western European countries in terms of supporting economic growth has been very limited. The participants came to the conclusion that European integration is not without risks for the weaker participants.

Source: PR department of MEF