Page 67 - Ekonomija i Biznis_noemvri 2015.indd

WORLD
At the margins of the first in the se-
ries of mega corporate scandals
in “Volkswagen”, the Hungarian
Minister of Economy Mihály Varga
made almost a revolutionary state- in “Volkswagen” which now includes the pet-
ment His Government intends to reduce the
dependence of the Hungarian economy from
the automotive industry and to dedicate itself
to the promotion of growth of other sectors –
medicine, medical equipment and manufactur-
ing of parts for the industry. The moment for
such a thing is exceptionally favorable, because
according to the estimations of many analysts,
the countries of Central and Eastern Europe
(CEE) are ahead of a new wave of investments,
this time from sources of domestic savings and
EU transfers. According to the assessments of
the analysts of “Erste Bank”, approximately
40-60 billion Euros from Juncker’s investment
package might end in CEE, in projects related
to a high-priority energy infrastructure and to
digital economy. If the CEE countries manage
to absorb all investments that are available to
them (and Juncker’s fund is not the only one),
soon they would be able to return to the tra-
jectory of economic growth prior to the crisis.
For comparison, according to the data from
UNCTAD, all Western Balkan countries in 2014
managed to attract slightly more than 4.8 bil-
lion dollars. In the case of the Western Balkan
it is a matter of a foreign direct investment,
which according to the analysts of “Erste Bank”
in the following period will be a relatively mi-
nor source of investments for the CEE countries
compared to domestic and EU funds.
Reasons for concern
All CEE countries have specific reasons for
concern due to the scandal with “Volkswagen”.
According to the data collected by Financial
Times, every third engine manufactured in the
Czech Republic and in Hungary is for “Volkswa-
gen”. Out of 11 or even 13 million diesel vehi-
cles that “Volkswagen” would have to withdraw,
approximately between 2 and 2.5 million came
out of Audi’s plant in Gyor (Hungary), while
in the Czech Republic this software was in 1.2
million models of Skoda. The plant in Gyor is
one of the most recent plants of “Volkswagen”
and one of the biggest car engine plants in the
world founded in 1993, 900 million Euros were
invested from 2010 until 2013 and 1,800 new job
positions were opened) and the management of
the plant expects that the consequences from
the scandal for their manufacturing will be
relatively small because the factory shifted to
euro 6 engines last year. With the new scandal
rol engines, and which according to the initial
reactions of the stock market, primarily pulls
downwards the German, and then also the oth-
er European automobile manufacturers, the
situation becomes additionally complicated. It
is difficult to assess the number of vehicles that
“Volkswagen” would have to withdraw.
The whole CEE region is exceptionally sen-
sitive to the inconsistency in this sector. The
automotive sector, which in all European coun-
tries participates with about 23% to 25% in the
industrial manufacturing, which is a substan-
tial rise compared to 19% in 2002, is an impor-
tant factor in the import structure, from 20% in
Hungary to somewhat less than a third from the
import in the other counties. The automotive
sector engages a workforce whose share in the
total corpus of employees exceeds 2%, which is
more than the one in Germany, which also has
an exceptionally strong automotive industry.
According to the preliminary analysis of “City
Research”, published before the new problem
with petrol engines, if the “Volkswagen” scan-
dal does not affect the overall demand for diesel
automobiles, the direct impact on the economy
of the region might be limited. It would be most
severe in Slovakia, Czech Republic and Hungary
considering the openness of their economies.
The Polish economy would be slightly less af-
fected, unless the overall demand for diesel en-
gines is reduced, because the automobiles with
such a drive participate with 2.5% in the total
Polish export.
Although the added value created by the au-
tomotive industry in CEE is twice lower than
the one in Germany (because the earnings from
parts’ manufacturing are significantly lower
than the earnings from final products, design
etc.), still 3% of the workforce in this sector in
CEE participated with 6-8% in the creation of
added value because these are industries with
quite a sophisticated manufacturing.
The sector also contributes greatly to the GDP
growth. According to the analysis of the “Bank
of America”, in the worst scenario for “Volkswa-
gen”, Hungary and the Czech Republic might
face a decline in their GDP by 1.5 percentage
points, and Poland and Romania by 0.5 percent-
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