In the Romanian city of Oradea, the most modern car tire plant in the world - of the Finnish concern Nokian - was recently opened. However, this would not have happened if Russia had not invaded Ukraine, which forced the Finns to look for a new production site, notes “Frankfurter Allgemeine Zeitung" (FAC). 650 million euros have been invested in the new plant, it is the first of its kind in the world without any harmful emissions - exclusively energy from renewable sources is used for production.
The German publication points out that production structures such as those in Romania, which are close to major EU markets, currently represent safe harbors in the context of supply chain problems, concerns about the future of globalization and growing uncertainty in relations with China . “Geoeconomic Fragmentation" of trade and investment is already a fact, as noted by the representative of the IMF, Gita Gopinath, quoted by the FAC.
Southeastern Europe is becoming interesting for investors
Supply chains are getting longer, trade barriers are rising and foreign direct investment, especially from the EU, is “increasingly determined by geopolitical proximity". Turkey mainly benefits from this, but also the countries of the eastern and south-eastern part of the EU. Banking analyst Valentin Tataru, quoted by FAC, says that these countries have a strategic location, costs are lower, workers are skilled and their governments support the opening of new enterprises.
Along with EU member states from Eastern and South-Eastern Europe, the six countries of the Western Balkans - Serbia, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia and Albania - have also recently attracted promising foreign investment, FAC notes. The main branches are the automotive, electronics, textile and furniture industries. But they are not only investments from the EU - Chinese companies are also active in Hungary and the Balkans, which want to guarantee their access to the EU.
Is Eastern Europe becoming more interesting for investors?
In the end, it doesn't matter to the countries where new enterprises are opened, what motives drive the investors - the important thing is that they come, FAC points out. Recently, however, they are less - because of the problems of the world economy. “In general, the development of foreign direct investment in the EU, as well as in the countries of Eastern and South-Eastern Europe, was rather disappointing last year, and the countries of the Visegrad Four - Poland, the Czech Republic, Slovakia and Hungary plus Romania saw a particularly large decline. reads the assessment of the Vienna Institute for International Economic Comparisons.
The 11 countries in the eastern part of the EU registered an inflow of foreign direct investment of 59 billion euros in 2023, which is about a fifth less than in the previous year. I.e. it seems that Germany and China have lost their interest in the region, believes economist Olga Pidniuk, quoted by FAC. But Geeta Gopinath of the IMF is convinced that the EU is in a good position. The combination of developed and developing countries offers many opportunities to support European supply chains. Therefore, the Community should take care, in addition to strengthening the rules of free world trade, to deepen the internal market, she recommends. Because, along with the Nokian factory in Romania, there is also room for other investors, the FAC publication also says.