In “The Buzz” we interview experts on the legal industry living and working in Central and Eastern Europe to find out what’s happening in the region and what legislative/professional/cultural trends and developments they’re following closely. Because the interviews are carried out and published on the CEE Legal Matters website on a rolling basis, we’ve marked the dates on which the interviews were originally published.
Albania (October 20)
Judicial reform remains on top of the agenda
“The big news in Albania,” says Besnik Duraj, Partner at Drakopoulos, “not just in the legal market, but in the social and economic areas as well, is the ongoing struggle with judicial reform.”
“The country,” Duraj reports, “has been dealing with these problems almost since the beginning of Democracy.” Even this current push towards reform is sliding towards failure, and Duraj’s frustration with the inevitable delays, finger-pointing, and politicizing of the process is palpable. “This is not a really a new thing,” he says with a sigh. “We’ve been struggling with this current process for at least two years now.” According to Duraj, the country’s reputation for judicial corruption, lack of transparency, and lack of predictability is the biggest obstacle to moving talks about potential EU membership forward, and the market risks and inconsistent (and unreliable) law enforcement is the reason foreign investment in the country continues to lag. “So this is our country’s number one priority,” he says.
Still, and despite its importance, the actual process of addressing the necessary reform remains, unfortunately, highly politicized, which Duraj describes as “the no. 1 problem.” Indeed, he notes that the Constitutional amendments alone took 18 months to pass – and even that only came after substantial international pressure. In addition, he reports, “what started as a technical matter, day by day turned into a political matter.” The result, he said, is unsurprisingly muddy. “We know it’s not very clear when lawyers draft – you can imagine how bad it gets when politicians do it!”
Staying on the topic, Duraj also pointed to a shocking lack of transparency in the process, with the actual draft laws being debated very difficult to find. “Lawyers should be part of the solution,” he says, unhappily, “but we are often seen by society as part of the problem. We have a passive role in the process, and it’s a pity.”
“If even the constitutional process took 18 months …” he says, trailing off, before picking up with a combination of black humor and frustration: “And we still have 40 laws to debate! And we’re still discussing only the first seven!”
All of this, he says, delays the foreign investments the country so desperately needs. “And this is what bothers me,” he says, “because this country has a lot to offer, and we are waiting for serious Western investors. And they are waiting for the country to be able to provide a secure market, financially and legally.”
Otherwise, he says, there’s nothing really new to report. He’s not seeing so much M&A in the country, but he describes the energy sector as extremely busy, as the country’s Central Bank has reported that about 60% of all foreign investments in Q2 2016 were concentrated in major energy projects – 24% more than the same period a year ago. Mainly concession projects, Duraj reports, but also some privatizations and capital injection in building up hydro-power plants and putting the necessary infrastructure into place, as “the country is not yet at the stage where it’s all built up and energy can be sold.”
There are some other industries going well too, he says, pointing towards exports in the garment and footwear industry, compared to the extracting industry, which has had a drastic decrease in investment recently. Client service, call centers, joint centers for data processing, technology information services are all strong as well, he reports, and “all seem not to be too affected by the crisis or the other political issues we’re facing.”
“But also litigation,” he says with a laugh. “I don’t think there’s ever a period where litigators aren’t busy.”
Bulgaria (September 23)
A lack of leadership in Bulgaria
“The overall situation in the country – political, financial, social, and so on, which largely determines business (and thus our business),” says Sergey Penev, the Managing Partner of Penev LLP, “may be considered ‘terrible’ for much of Europe, but in Bulgaria it’s pretty stable.” The country is in the top three or four in terms of GDP to debt radio, he says, so in fact things are not as bad as some claim.
The biggest problem, he says, is that wages are still low, and people are not happy. Penev notes that “the cost of living is not too far from Prague or Germany, for example, but wages are not catching up.”
Penev, who’s also the Counsel of Monaco to Bulgaria, does not mince his words describing Bulgaria’s leadership, asserting that “the governments since 2000 could not have done a worse job in terms of capturing business,” and claiming that “the governments owe a big debt to the Bulgarian people.” The economy “does not function well,” he said, “and the only work involves utilization of EU money. Infrastructure, roads, etc. The Bulgarian economy runs more than 80% of EU money,” he says, “and when that is gone, it will struggle.” He sighs. “No effort is being made to make the lives of businesses – SMEs in particular – easier.”
In addition, Penev says, Bulgaria has also suffered as a result of the sanctions imposed on Russia – traditionally one of Bulgaria’s largest trading partners. Finally, he sighs, there’s still a large level of corruption – though he reports that “Bulgaria is not as corrupt as is often said,” and insisting that “I don’t think that we are any more corrupt than any other regional country. Of course there is corruption, but the image far outweighs the reality.” Still, he concedes, “the judicial system, they still need to prove to people, to investors, that their money is safe, and that the rule of law controls.”
The legal market depends heavily on direct foreign investment for business, Penev reports, with the top tier of law firms finding almost all of their work coming from foreign investors. The first problem facing firms in the market, Penev reports, “is that because the economy runs around the EU funds and government-related businesses, the established firms struggle to get that business, because they’re not close to the government. “It’s very difficult for firms like ours to get public procurement work from municipalities,” he explains, “because we’ve always been on the other side – and we’re still at the stage where you have to work very closely with the ministries to get that business.” When asked which firms do get that business, Penev rolls his eyes, explaining that it’s difficult even to name them, not because of any sensitivity, but “because they’re often fly-by-night firms that appear quickly just to get that work, based on previous connections.”
“The other element is simply that the way we do business is hostile to the environment we work in,” as “if you’re not part of the establishment you’re outside the circle.” He elaborates. “Contrary to what the government says, the amount of FDI coming to Bulgaria is low compared to neighboring countries. The strong industries that do exist – automotive, IP/IT, outsourcing, etc. – come from the companies themselves, not because of government assistance or support. So outside FDI is still low.”
As a result, perhaps, Penev reports that the number of companies needing “high end legal services” is decreasing. He explains that Bulgaria in particular attracts companies because it’s “so cheap,” and those same companies therefore are taken aback when the legal fees proposed to them are similar to those in other countries. “They even balk at fees 20% less than elsewhere in CEE,” Penev sighs, “so it’s hard for bigger firms to survive. They still think they’re being taken for a ride.”
Despite all this, Penev describes himself as “an optimist,” nothing that “more and more we’re called the Silicon Valley of the Balkans because of the rapid growth of the IT industry,” which he reports has created more than 30,000 jobs in the country in recent years. “We’ve also become a European leader in the outsourcing industry, and as a host for shared services. Also as a model site for start-ups, in large part because of the highly entrepreneurial spirit of the Bulgarian people.”
Indeed, he sees a pick-up in some other areas of the economy as well, saying, “we’ve started witnessing in Bulgaria some consolidation of businesses, and some picking up, particularly in Real Estate. More and more we see work on various Real Estate projects, and banks extending mortgage loans and business start-up loans.”
He reiterates his optimism. “I really think that EU money should not be so important, and more and more efforts are being put towards increasing competencies.”
Czech Republic (October 21)
Entrepreneurs in the Czech Republic face an increasingly burdensome environment
Jiri Buchvaldek, Partner at Hruby & Buchvaldek in the Czech Republic, is flabbergasted at the amount of new regulations being thrown at small businesses and entrepreneurs in the country. “It’s just freakish what’s going on,” he says, shaking his head.
“I recently found out about an ‘improvement’ to the Czech Republic’s AML [anti-money laundering] law,” he says of a law currently passed by the Senate. The new law, which should become effective on January 1, 2017, would require lawyers and everyone who provides escrow services (“it applies to all real estate agents as well,” Buchvaldek notes, “though not everyone knows about it”) to perform even more thorough checks of the sources of the funds being placed in escrow. The law also establishes a new register of real or ultimate owners/beneficiaries of businesses, which is to be kept by the Courts. Although not completely public, the registry will be open to all major authorities incuding the newly Financial Analytical Bureau, newly separated from the Ministry. All legal entities will be required to keep record of their ultimate owners / beneficiaries and record them in this register.
Even the current AML law, according to Buchvaldek, is “burdensome and complicated,” and this new obligation goes even further. Buchvaldek suggests that many clients have legitimate reasons for keeping a low profile and for staying out of the public eye, “but this makes it easier for everybody to know everybody’s business.” In his opinion, the over-riding principle is that “nothing is private anymore.”
Buchvaldek then turns to the new law on consumer loans scheduled to come into effect on December 1, which will require the 50,000 entities currently providing consumer loans in the country to obtain licenses from the Central Bank. The licensing requirement and the minimum capital requirements of the law aim to scale down the numbers of providers and increase consumer protection, shifting the risks and burdens to the providers. Despite the laudable goals of the regulation, Buchvaldek calls it “another new market regulation – another piece of the puzzle.”
At this point he’s on a roll. Buchvaldek points to the new amendment to the country’s Capital Gains/Income Tax, empowering the Czech tax authorities to investigate the sources of income when they encounter discrepancies between income and expenditures of anything beyond “quite a low” 5 million Czech crowns. The law, which was in the works in one form or another for about 10 years before finally passing, “increases their ability to levy massive taxes on those who can’t account for the discrepancy to their satisfaction.”
Buchvaldek is wide-eyed. “Sometimes I think this is incredible. What will happen next??”
Finally, he turns to the new Czech law on Public Tenders which came into effect on October 1st and which allows public authorities to exclude Joint Stock Companies with shares in paper rather than electronic form from participation in public tenders. Buchvaldek calls it “gross discrimination,” and says that “it solves absolutely nothing, and again burdens the entrepreneurs with another costly burden.” Buchvaldek sighs, explaining that converting from paper to electronic shares just to satisfy this law will cost “a minimum of EUR 2000 plus annual costs, because shareholders will have to have electronic accounts, pay fees, etc.” For Buchvaldek, the obvious question “Why?” has a similarly obvious answer: “I think this is yet another attempt to eliminate “anonymous“ joint stock companies.”
Again, as before, Buchvaldek explains, “they use the word ‘transparency,’ but from my perspective as a lawyer they may be damaging to individuals who may have legitimate reasons for wanting to stay private.” Ultimately, he says, “it’s all about taxes, and an effort to keep everyone under their thumb.”
Hungary (September 19)
Long-awaited licensing scheme for renewables on the way in Hungary
When asked what news he is paying the most attention to, Zoltan Faludi, the Managing Partner of Wolf Theiss’s Budapest office and Chairman of the Energy Arbitration Court in Hungary, says, “I would have to point to my original profession: Energy.”
Faludi reports that the Hungarian government is finally putting together a new licensing scheme for solar and wind projects, for which the industry has been waiting for many years. The last tender was cancelled suddenly in 2010, and since then nothing has happened.
Faludi describes the draft legislation – which is expected to be passed and come into force in the next few weeks – as operating on a “First Come/First Served” basis, with subsidies given to those companies that apply first “from the basket ... until the basket is empty.” He describes the process as “strange stuff,” and worries that it is designed to provide access to the subsidies to a favored group of individuals while excluding those foreign investors that need more time to review and familiarize themselves with the new regulatory environment. “That’s just a guess,” he admits, conceding that “at this point you can’t say it’s all about politics.” But when it’s suggested that he doesn’t sound impressed, Faludi laughs. “I’m not impressed, and I’m not surprised.”
Faludi refers to the current EU talks about penalizing Hungary for its treatment of immigrants in conceding that the proposed energy licensing scheme is, by comparison, “a much smaller scale issue.” Nonetheless, he says, “for the energy sector this is something new, because in the renewable sector in the past seven years nothing has happened – no new licenses, no new regulatory regime, and no new feed-in tariffs. So now, it’s a big step.” He says, “I just hope that it’s done on an equal treatment basis and on a transparent basis. I hope that the process will be transparent and fair.”
Otherwise, Faludi reports, business is good, and getting better. He reports a “positive trend” in M&A in Hungary, describing the deals coming in the door almost every day as “more and more and bigger and bigger.” He also reports a real uptick in disputes and arbitrations handled by his team, though he says that’s probably a function of their own increased specialization and capacity rather than reflecting an increase in disputes across the market.
Macedonia (September 26)
Ongoing political crisis in Macedonia
The strike of Skopje court administration employees that began in May ended in mid-August, according to Biljana Joanidis, the Managing Partner of Law Firm Joanidis – but only, perhaps, temporarily. Joanidis reports that the employees have agreed to return to work until the December 11 national elections – after which they’ll consider and, potentially, walk out once again.
The elections reflect a significant political crisis in the country, Joanidis says. “I want to be realistic,” she sighs. “In general, in Macedonia, the main problem is the political crisis, which is present in every core of society, including the judiciary, as the governing political party elects and dismisses judges.” The country’s court system struggles through other unique challenges as well, according to Joanidis, including the recent attempts to introduce Common Law elements into the traditionally Continental system. “A little bit of confusion” exists as a result, she says, noting that there have also been 26 changes to the Panel (Criminal) Court in the last eight years, and that, at the moment, there are two different laws of criminal procedure.
“The situation is confusing here,” Joanidis repeats, “but we’re optimistic. We hope that after the elections it will get better.” Still, she says, “for the time being, it is what it is.”
Joanidis reports that the attorneys in the country feel somewhat under attack as well. “A lot of work has been taken away from attorneys and given to notaries, to executors, etc.,” causing attorneys to “feel marginalized.” Unfortunately, she says, “the political parties in Macedonia see attorneys as being on the opposite side, as attorneys are for protection of rights, so they don’t want to empower us or give us full rights.”
She returns to the guiding theme of the conversation, noting that “political influence is everywhere. It’s in the courts, attorneys, government, everywhere.” As a result, she says, “everyone’s interested in the elections.”
Finally, she’s asked how business is. “Our law firm business is ok,” she reports, “but we’re not a good indicator, as we’ve been around for 30 years. We have work – I’m not complaining. But in general work is down. There’s a lot of uncertainty. It’s only the top 10-15 firms or so in the country that are thriving, “and everybody else is on the edge, struggling to stay alive.”
Poland (September 19)
Business is good and optimism is high in Poland
“My impression,” says Marcin Aslanowicz, Partner at Wolf Theiss in Warsaw, “is that the Polish market is changing rapidly.”
Several of the largest law firms in the market, including Dentons, SK&S, Wardynski & Partners, and DZP – all of which boast well over 100 lawyers – seem to be pursuing an aggressive growth strategy, while firms in the 50-70 lawyer range, like Wolf Theiss, seem to be comfortable at that level. Regardless, Aslanowicz reports that business is good across the board, and he reports a number of significant M&As and disputes ongoing in his own office as evidence.
Turning to the subject of legislation, Aslanowicz refers first and foremost to the changes to the Code of Civil Procedure that went into effect on August 1, 2016, including the introduction of electronic filings, among other things. Aslanowicz describes these changes as “quite significant, but it’s not something that’s overwhelming in its scope.” He also referred to the potential modifications to the Code of Commercial Companies, which are expected to include a simplified form of Joint Stock Companies – which should enable shareholders to establish and operate a JSC with limited obligations and at a cheaper cost. As discussions regarding these modifications are ongoing, it’s not clear yet, Aslanowicz says, when they’ll be implemented in full.
Otherwise the biggest change, Aslanowicz reports, is the “total change of structure of the Polish Civil Courts” being seriously discussed by the government. Aslanowicz explains that, as proposed, the district courts will probably be wholly eliminated, with the Regional Courts taking over their competencies. Nobody knows yet for sure when this will happen, or even if, but Aslanowicz says that if it does happen this will constitute “the most significant change in the last decade.” Reports suggest the Minister of Justice is hoping to implement the plan in the next 12 months, but Aslanowicz suggests that, as the formal plan hasn’t even been published yet, and in light of the dramatic change this would entail, he thinks it will “probably be a bit later.” The plan is expected to increase the efficiency of the court, though Aslanowicz himself is slightly skeptical.
Business is good, Aslanowicz reiterates, noting that he himself never really share the fears expressed by many others about investors fleeing Poland in response to the elections in 2015, and indeed, he says, now almost 12 months on, “it looks like it’s not going to happen.” Similarly, while many were anxious about the possible consequences of the Brexit, no real negative consequences have been seen so far – and, if anything, Aslanowicz believes, the country could stand to gain by picking up some of the large financial institutions that may leave London, should the Brexit actually come to pass.
Ultimately, optimism is high – and increasing. The unemployment level – already among the lowest in Europe at between 6.5% and 7% – continues to drop, and many experts expect it to level out at about 5.5%, which would put the country in rarefied air.
Russia (August 30)
A resilient market in sanction-laden Russia
According to Leonid Zubarev, Senior Partner at CMS, Russia, the economy in Russia continues to suffer from the wave of sanctions imposed on the country by the West in 2014 – an effect only exacerbated by the simultaneously plummeting price of oil and depreciation of the ruble. As a result, he reports, “clients are thinking twice,” and international law firms in Moscow are “fiercely competing” for work. The problem is especially potent, he believes, for firms without diverse practices, while those with the capacity to refocus on bankruptcy, restructuring, and other contentious practices are in a bit better position.
Indeed, Zubarev maintains, the crisis has affected ILFs more than locals, who are less focused on foreign clients and able to work with Russian clients who may be on sanction lists. The international law firms, at the very least, are required to do more due diligence before taking on a client matter. Although Zubarev is unaware of any international law firms closing aside from K&L Gates (which closed its smaller Moscow office back in December 2015 (as reported by CEE Legal Matters on January 7, 2016), he reports that most firms have sent most of their expatriate lawyers back to their home countries.
Nonetheless, Zubarev insists, the situation is hardly bleak. Some transactions are continuing to take place, and disputes and other matters continue to generate revenue. As the leader of CMS’s Insurance Group in CEE, Zubarev reports that his own practice remains fairly active, with various claims and disputes between and among insureds, insurers and reinsurers, regulatory issues, and so on. Ultimately, 2015 was “not as bad as expected,” Zubarev says: “Not good – but not disastrous.” General corporate and competition work, disputes, etc., remain active, though he concedes that some are fairly dormant – the infrastructure practice in particular. In 2015 - 2016, according to Zubarev, CMS’s M&A practice has been picking up as well, primarily as a result of new Russian clients
Turning to the subject of legislation, Zubarev notes that the most significant recent development is a set of the anti-terrorism laws enacted at the end of July that, among other things, requires all Internet and telecom providers to keep records of all correspondence and Internet traffic. This “very controversial law,” which will come into full force in July 2018, is contested by Rostelecom and other providers who face what Zubarev describes as “the incredible costs” of installing the necessary technologies required for compliance.
Zubarev also refers to the trend for “import substitution” or “localization” – pushing investors to open plants and factories rather than importing goods into Russia.He says the project has had mixed success, but it’s growing, especially in the “core industries” of Pharma, Agriculture, and Automotive sectors (not only in terms of car manufacturing plants, but also in manufacturing of components). As a result of the State initiative, there are a number of transactions in these areas, relating – as examples – not only in terms of opening new plants, but also in joint ventures, the construction of new factories, repackaging, and so on. The end result allows the application of “Made in Russia” tags, which helps in public procurement processes. Zubarev reports that “this is quite interesting for us, and also where we’re quite busy.”
Zubarev refers to ongoing changes to the Russian Civil Code last year and this, which he describes as “a continuous reform of the Russian Civil Law.” He says that “was, and still is, a challenge every day, because the Court practice hasn’t caught up.” Another factor continuing to affect Court practice, Zubarev says, is that the August 2014 contraction of the Russian Supreme Court from two separate supreme courts (one dealing with simple civil law disputes and criminal law matters, and another dealing with commercial disputes between companies) into one has resulted in a Court practice “getting more and more difficult”, as the Court is less concerned with freedom of contract, and more interested in exploring the actual intent of the parties, and protecting the weaker party. Courts are getting more and more eager to get involved and inject themselves into the relationship between the parties.
Talks are also ongoing to formalize a regulation of the legal profession in Russia, which to this point has been haphazard, at best. The Government, primarily acting through the Ministry of Justice, has been working to introduce such regulations, especially on non-criminal law attorneys (i.e., the commercial lawyers), but Zubarev describes the process as a “bumpy road,” as many lawyers in the country resist it. He doesn’t expect it to happen soon – at least before the 2018 elections. Afterwards, however, Zubarev says, “anything can happen.”
Slovakia (October 20)
Slovakia modernizes on lawyers and law
One of the four announced priorities of the Slovakian presidency is the “modern single market,” according to Squire Patton Boggs Partner Jana Pagacova. Part of this, she explains, is the aim to develop unifying projects such as an energy union and the digital single market. And a “big rush in the legal environment” that makes up a significant part of the digital single market process, she explains, is to create an “electronic mailbox” system for all individuals and legal entities in the country through which they will receive all statutory communications from the court.
This “electronic mailbox” takes the form of a central government portal which all businesses, and therefore also lawyers, will need to access. Unfortunately, Pagacova says, not everyone activated their mailboxes by the original July 1st deadline, so a new deadline has been set for December 31st, 2016. The new system should, Pagacova believes, make things easier if it works as intended – but she see that’s a fairly big “if”, as technical problems and some uncertainties about how the system would work for non-Slovak internationals who don’t have the state-provided identification required to obtain the chips necessary to activate their mailboxes remain.
Turning to other matters, Pagacova says the biggest news is the July 1st entry into effect of three new Civil Procedure Codes to replace the one Communist-era Code that existed previously. These codes – the Civil Dispute Procedure Code, the Civil Non-Dispute Procedure Code and the Administrative Procedure Code – are currently the primary subject of conversation in the legal community, especially as neither judges nor practitioners have much experience with them yet. Both attorneys and judges are going through lots of intense internal and external trainings, Pagacova reports, to come up to speed, but she thinks it may be another two years before the market has fully adapted to all significant changes, which are perhaps most notable in the changing responsibility for judges (who are now much more limited to ruling based on the submissions of the parties) and in the various preliminary proceedings judges are empowered to encourage the parties to pursue to find possible solutions to disputes before trial.
The new electronic mailbox system, Pagacova points out, is among the many new procedures set out.
Ultimately Pagacova believes the new Codes are a “good idea,” but “all new laws require a working out of kinks in practice, so we’ll have to see how it plays out.” She points to some uncertainty in the market about the new Codes, and repeats that it will take a few years to really begin working as planned.
Another newly-enacted law of significance is the Act on Criminal Liability of Legal Persons, Pagacova says, which also came into effect on July 1st. This law calls for the imposition of criminal liability on corporations and other legal entities, and Pagacova claims it’s extremely significant “on the corporate governance rules for Boards of Directors to avoid company’s criminal actions and liability imposed as a result of actions of employees.” She reports that she and her colleagues are kept busy at the moment by preparing presentations and trainings to various boards, so they can “see when potential risks may arise.” She has no doubt of the importance of the issue, noting, “I think that all boards should deal with this.”
In part because of the increasing number of regulatory and legislative changes, including also for example the risk of criminal liability, Pagacova says more General Counsels are on Boards of Directors than ever before, and “the trend is for them to develop strong in-house legal departments.” As a result, she says, the market is becoming ever-more competitive, and private practitioners have to specialize more to ensure they’re providing valuable expertise, insight, and advice. In addition, making sure they are and stay familiar with the industry and the sector, so they don’t have to bill for the process of educating themselves before advising the client, is also a requirement of the modern legal market.
Ukraine (October 18)
Delayed privatizations and long-awaited judicial reform in Ukraine
Things are “fairly busy” in Kyiv these days, according to Avellum Managing Partner Mykola Stetsenko, but he concedes that “we expected it to be busier.”
The chief culprit, he reports, is the various big-ticket privatizations promised by the government for 2016 that have been put on hold. The major energy privatization – that of CenterEnergo – has been postponed so the government can complete the necessary pre-privatization processes, which can take some time.
Also delayed is the “famous privatization” of the PSC Odessa Port Plant chemical company, which was initially set for summer 2016, but the initial asking price was too high, and a new initial tender has been pushed back until December. “But I wouldn’t count on it,” he says.
Turning to happier subjects, Stetsenko refers to the long-awaited kick-off of the country’s judicial reform, which took effect on September 30th and resulted in the dismissal of some 500 judges by Parliament and the initiation of the process for replacing them. The new system is expected to limit at least petty corruption at the judicial level by providing for significant salary increases – for some positions as much as 10 times – and creating more independence (including lifetime appointments) for judges. Although its success in achieving its goals remains to be seen, Mykola admits that, “yes, we’re hopeful.”
When asked whether the dismissal of so many judges would be a problem, Stetsenko says no, pointing out that the nation as a whole has some 10,000 judges, and while there might be a slight and temporary effect, “we’re not known for having the fastest system anyway, so it shouldn’t be that noticeable.” Stetsenko is quick to point out to his American interviewer that the country’s judicial system is, regardless, faster than that of the United States.
Stetsenko reports that the Ukrainian Parliament has also created more legislation for the country’s energy regulatory authority – a major requirement of the IMF and other Western investors – while the Pension and land market reforms are actively discussed in the Parliament. In addition, Stetsenko reports, the National Bank is continuing to decrease the discount rate – the benchmark rate at which the National Bank lends to commercial banks in the country. It’s now down to 15% – still high, Stetsenko concedes, but a marked improvement from the 30% it was at several years ago. It’s still continuing to drop, he says, which is a very good sign, and the National Bank is slowly opening the market and increasing capital flows. He expects to see more commercial acquisitions as a result sometime in the spring of next year.
The legal market is fairly stable, Stetsenko reports, and he points to AstapovLawyers’ transformation into Eterna Law and the recent defection from CMS to DLA of dispute resolution Partner Olga Vorozhbyt as the only recent developments of note.
We thank the following for sharing their opinions and analysis on the news:
- Besnik Duraj, Partner at Drakopoulos
- Sergey Penev, Managing Partner at Penev LLP
- Jiri Buchvaldek, Partner at Hruby & Buchvaldek
- Zoltan Faludi, Managing Partner at Wolf Theiss
- Biljana Joanidis, Managing Partner of Law Firm Joanidis
- Marcin Aslanowicz, Partner of Wolf Theiss
- Leonid Zubarev, Senior Partner of CMS
- Jana Pagacova, Partner of Squire Patton Boggs
- Mykola Stetsenko, Managing Partner of Avellum
This Article was originally published in Issue 3.5 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.