Monthly Report No. 02/2026

Editorial insight Why CESEE’s changing growth model matters for Europe by Richard Grieveson Chart of the month Gradual EU integration is a must, and not only for Ukraine by Richard Grieveson Macro snapshot EU-CEE’s industrial resilience vis-à-vis Germany continues by Alexandra Bykova Focus of the month Using Russian foreign reserves for Ukraine the likely consequences by Vasily Astrov Hungary’s recent veto has cast doubt on the future of the EUR 90bn loan to Ukraine agreed by the EU last December. This new development potentially paves the way for alternative sources to be used to provide financing for Ukraine, including the use of frozen Russian reserves. Although such a step would obviously reduce the EU’s borrowing needs now, it would also expose it to legal risks and a potential nationalisation of the assets of EU investors in Russia. Ukraine, in turn, would receive funds to continue defending itself now, but in the longer run would likely be deprived of an important financial source for post-war reconstruction. Research in brief Rising geopolitical rivalries and global economic shifts threaten the EU’s influence in its backyard Client Bertelsmann Stiftung by Olga Pindyuk How close are the Western Balkans to EU living standards, and where is convergence stalling? Client Open Society Foundations – Western Balkans by Branimir Jovanović EU enlargement and market stability The economic must-haves for a credible expansion Client European Commission, DG ECFIN by Richard Grieveson Country in focus Will a new player break the deadlock in Bulgarian politics? by Rumen Dobrinsky For the first time in 15 years, there has been a major political upheaval in Bulgaria. This has been brought about by the resignation of Rumen Radev from the presidential post that he had held for nine years and his declared intention of entering the race in the upcoming early parliamentary elections. The expected entry of a strong new political player is likely to lead to a shake-up in the fragmented political spectrum and could bring about important change in policy.