Visegrad economies’ active implication in a “new” EU: A new regional economic approach

• Date: 01 October 2019
• Author: Monica Laura Zlati,Romeo Victor Ionescu,Valentin Marian Antohi
• DOI: http://doi.org/10.1111/twec.12823
• Published date: 01 October 2019

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wileyonlinelibrary.com/journal/twec World Econ. 2019;42:2924–2974.

© 2019 John Wiley & Sons Ltd

Received: 11 November 2018

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Revised: 15 April 2019

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Accepted: 8 May 2019

DOI: 10.1111/twec.12823

ORIGINAL ARTICLE

Visegrad economies’ active implication in a “new”

EU: A new regional economic approach

Valentin MarianAntohi1

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Monica LauraZlati2

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Romeo VictorIonescu3

1Department of Business Administration,Dunarea de Jos University/Faculty of Economics and Business Administration,

Galati, Romania

2Department of Accounting, Audit and Finance,Stefan cel Mare University, Suceava, Romania

3Department of Administrative Sciences and Regional Studies,Dunarea de Jos University/Faculty of Social, Political and

Legal Sciences, Galati, Romania

KEYWORDS

economic dependency and optimal economic development, regional economic and financial development schemes, regional

economic indicators

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INTRODUCTION

Nowadays, the idea of European construction entered under discussion. The Cohesion Policy's goals

become far away. This is why the national and regional socioeconomic disparities increased especially

during the last 5years.

For the first time in its history, EU faced the situation in which a Member State (Greece) refused,

after a national referendum to apply the European Commission's decisions regarding the economic

austerity. On the other hand, Brexit became reality and the negotiations for the UK's exit from the EU

started.

Last but not least, some Member States, known as the Visegrad Group(V4), have opposite posi-

tions to many of the European Commission's decisions. Even though these Member States are little

economies, excepting Poland, their voices became more powerful.

In order to “save” the EU and to face better the new challenges, a hard core focused on Germany

and France is trying to become absolute leader. The hard core is based on the support of Belgium, the

Netherlands and Luxembourg. These last three economies are very well developed, integrated in the

Euro area and with not great socioeconomic problems at the moment.

The future exit of the UK will induce some changes across the EU. One of them is that Poland has

and will have more influence on EU decision process. Even the importance of the Visegrad Group will

increase under the idea that new EU enlargement is not possible at least on short term. Under these

new developments, is the Visegrad Group an important pole of decision in the EU? This paper tries

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to answer to this question by analysing the latest socioeconomic data and processes. Moreover, the

analysis points out whether a neutral position (as Romania has) is better than an active one.

Using the main idea of the above literature review, the authors propose a main scope of an evalua-

tion of theVisegrad (V4) position as decision and development regional pole inside the EU.

This paper analyses the regional development indicators across the V4 in connection with the

global competitiveness index as under the World Economic Forum's approach. According to the pres-

ent EU policy, there are five key areas of the regional policy: investing in people by supporting ac-

cess to employment, education and social inclusion opportunities; supporting the development of

small and medium‐size businesses; strengthening research and innovation through investment and

research‐related jobs; improving the environment through major investment projects; and modernising

transport and energy production to fight against climate change, with a focus on renewable energy and

innovative transport infrastructure (European Union, 2019).

These five key areas are correlated with the 12 global competitiveness pillars, which are focused

on the following:

1. institutions: which cover major domains as Security; Social capital; Checks and balances; Public‐

sector performance; Transparency; Property rights; and Corporate governance;

2. infrastructure: Transport infrastructure; and Utility infrastructure;

3. ICT adoption;

4. macroeconomic stability;

5. health;

6. skills: Current workforce; and Future workforce;

7. product market: Domestic market competition; and Trade openness;

8. labour market: Flexibility; and Meritocracy and incentivisation;

9. financial system: Depth; and Stability;

10. market size;

11. business dynamism: Administrative requirements; and Entrepreneurial culture;and

12. innovation capability: Interaction and diversity; Research and development; and Commercialisation.

In order to use the above key areas and pillars, two models of modelling regional disparities across the

V4 in relation to the European economic policies and regional development are proposed. Both the mod-

els analyse different aspects of the regional disparities, but lead to a global radiography of the V4 inside

EU‐27. Moreover, the proposed models point out the main differences in the position towards the trend of

European policy implementation and regional development as a whole.

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LITERATURE REVIEW

The economy of the Visegrad Group (the Czech Republic, Slovakia, Poland and Hungary) represents

an attractive research theme for many specialists.

The first research project taken into consideration covered the Visegrad economies during 2013–

14 and consisted of a well‐defined regional analysis. The project has been based mainly on research

activities and scientific exchange between the international partners. The analysis in the project used

data from a survey which was conducted among a random sample consisting of 1,149 firms from

Visegrad countries. The main goal of the project was to point out the paths and patterns of the interna-

tionalisation process of businesses from four Visegrad countries. The project supported the writing of

a book which covered 10 chapters. At the beginning, the book presents theoretical approach for paths,

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patterns or pathways of internationalisation of businesses. The next step is the presentation of the

objectives, hypotheses and the applied research model. The most important part of the book is that re-

lated to the survey results in Visegrad countries, and it puts into discussion qualitative and quantitative

issues by exploring and explaining selected issues of international business in these four countries.

Finally, the book presents the macro‐conditions for firms operating in Visegrad countries, especially

those planning internationalisation or the internationalised ones. The whole approach is dedicated to

individual socioeconomic actors (SMEs and NGOs) and to the central and local public administration

decision‐makers as well (Durendez & Wach, 2014).

The connection between the Visegrad countries and the EU is analysed under a historical approach,

starting from the accession procedure in the mid‐1990s, adhering to the EU in May 2004 and after

this. Basically, the paper quantifies the economic, social and political impact of European Union

membership on Visegrad countries. As a result, the advantages from adhering to the EU (financial

support from EU budget, financial support from the common policies) were put into balance to popu-

lation trends, situation on the labour market and net migration across the Visegrad economies (Pawlas,

2015).

The regional analysis can be realised in direct connection with a specific policy. Such an exam-

ple is the public health capacity development focused on the V4. This approach covers exchange of

training materials, teachers and students. This cooperation is able to share information and to translate

public health knowledge on both regional and local levels.

A regional comparative analysis puts together NUTS 2 regions in Slovakia with other regions in

the V4 countries, in order to quantify the regional innovation potential. Some specific quantitative

indicators were selected for the analysis. According to the “classical” approach, the regional socio-

economic actors create a network which defines the innovation determinants. The main result of the

analysis was the quantification of the index of innovation potential at the NUTS 2 level in the V4

countries.

Some of the researches were focused on the economic cooperation across Visegrad countries. In

order to do this, they analysed the investment in each country and in the region and pointed out the dis-

parities in sharing this investment. Another important economic indicator taken into consideration is the

mutual trade between these four countries and the changes in the trade flows (Hunya & Richter, 2011).

FIGURE 1 V4’s GDP trend (mill. euros constant prices). Source: Authors’ contribution [Colour figure can be

viewed at wileyonlinelibrary.com]

349,546 367,054 372,786377,501390,087404,275418,711

156,380 159,455 156,437157,185160,294 167,051171,302

71,354 72,791 71,562 72,914 75,592 77,81379,603

67,387 69,302 70,358 71,363 73,162 75,79378,329

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

2010 2011 20122013 2014 2015 2016

Poland Czech Rep. HungarySlovakia