How we cee it. – July 2025 Digest
This is the monthly recap.The real action happens weekly — subscribe to How we cee it. Week 27 EU Fights for Tariff Relief Amid Trump’s Trade Clampdown Source:…
This is the monthly recap.
The real action happens weekly — subscribe to How we cee it.
Week 27
EU Fights for Tariff Relief Amid Trump’s Trade Clampdown
The EU is racing to strike a deal with the Trump administration before July 9, when sweeping 50% tariffs could hit nearly all of the bloc’s exports to the US. Brussels is reportedly willing to accept a universal 10% tariff—but only if key sectors like pharmaceuticals, semiconductors, and commercial aircraft are exempted or offered lower rates.
The EU is also pushing back hard on the 25% auto tariffs and 50% metals tariffs already in effect, particularly given that the region exported €52.8B in auto parts and €24B in steel and aluminum to the US last year. CEE countries like the Czech Republic, Slovakia, Hungary, Poland, and Romania are particularly exposed to these tariffs.
The European Commission, led by EU trade chief Maroš Šefčovič of Slovakia, is seeking a compromise that avoids full-scale retaliation while preserving critical export sectors. Meanwhile, the EU has prepared counter-tariffs on $116B worth of US goods should talks collapse, potentially targeting sensitive products like soy, bourbon, and even Boeing aircraft. Investors are cautiously optimistic that an interim deal could be struck to extend talks and avoid a transatlantic trade war.
Orlen Terminates Its Last Contract with Russia
“Today, we have freed Central Europe from Russian oil. Since 2024, we have signed 73 contracts with various suppliers, which enabled the complete cutoff of the last refinery in the Orlen Group, the Czech refinery, dependent on this resource,” the Polish oil giant announced Monday.
The company said its Czech subsidiary, Unipetrol, had formally ended its contract with Russian state-owned Rosneft.
In fact, Unipetrol stopped buying crude from Rosneft in early March.
As Wyborcza.biz reported, Rosneft halted supplies after Unipetrol stopped payments due to new U.S. sanctions. Imposed in Biden’s final days, the sanctions targeting Russia’s oil and banking sectors took effect in late February 2025. Unipetrol then ceased payments, and Rosneft cut deliveries.
Estonian Uber Rival Reports Over €100 Million in Losses
Estonian mobility tech company Bolt Technology posted a loss of €102.6 million in 2023, up 11.6% from the previous year.
Losses deepened despite Bolt’s turnover rising 16.9% to just under €2 billion. Of that, 82% came from ride-hailing services, 9% from deliveries, and 9% from vehicle rentals.
Like Uber, Bolt operates a mobile app offering ride-sharing, electric scooters, bike and car rentals, as well as food and grocery delivery across Europe, the Middle East, and Africa.
Bolt was founded in 2013 by Markus Villig and became profitable five years later.
Week 28
Bulgaria Will Join the Eurozone Next Year
The European Council on Tuesday adopted the final legal acts needed for Bulgaria to join the euro on 1 January 2026.
This clears the way for Bulgaria to become the 21st member of the euro area. The conversion rate has been set at 1.95583 leva per €1, matching the current central rate of the lev in the exchange rate mechanism.
The European Commission had already confirmed in early June that Bulgaria meets the convergence criteria, designed to ensure a country’s economy is sufficiently prepared to adopt the euro.
The single currency is currently used by roughly 347 million Europeans across 20 countries. The most recent to join was Croatia, which adopted the euro in 2023.
Bulgaria, whose currency has long been pegged to the euro, hopes the switch to the common currency will attract more foreign investment. Officials also expect the move to improve Bulgaria’s credit rating, potentially lowering the cost of servicing its sovereign debt.
Still, public opinion is deeply divided. Eurobarometer polling shows Bulgarians split roughly down the middle, with about half of the population sceptical about the transition.
Elsewhere in Central and Eastern Europe, the region’s largest economies — Poland, Romania, Hungary, and the Czech Republic — have all put euro adoption on the back burner. For many CEE nations, their national currencies remain not just a means of payment but also a symbol of sovereignty and economic stability.
This preference for retaining monetary independence persists even though many B2B transactions are already invoiced in euros, including in non-eurozone countries like Czechia.’
CEE’s Tech and Investment Engines Are Revving Up
Central and Eastern Europe continues its steady rise as a digital and investment hotspot. Tech firms across the region now account for over 8% of Europe’s digital economy, with a combined valuation approaching €3 trillion. Baltic countries punch well above their weight—Estonia, Latvia, and Lithuania together host 30% of the region’s top 100 tech companies, despite representing just 4% of the population.
Meanwhile, investment activity in CEE is outpacing the rest of Europe. Private equity and venture capital volumes are growing nearly twice as fast as the EU average, with Poland leading M&A momentum and helping drive its projected 3.4–3.7% GDP growth this year. Despite challenges around regulation and capital access, the region’s mix of talent, lower costs, and maturing ecosystems continues to attract both startups and institutional investors.
Hungary Makes Crypto Trading Illegal
Hungary has thrown its crypto market into turmoil with a chaotic transposition of the EU’s MiCA regulation. Since July 2, crypto trading is effectively criminalized: under new Criminal Code provisions, buying or selling digital assets is punishable by prison, not just for providers but also for users.
Even Revolut is reported to have temporarily halted all crypto services in the country.
According to reports, neither the central bank nor the Regulated Activities Supervisory Authority seems intent on going after the half a million customers or innovative local firms in Hungary.
Still, no one can provide formal assurance—such as a Ministry of Justice statement—that the law won’t be applied or that enforcement will hold back.
Week 29
Romanian Government Survives No-Confidence Vote, Clears Path for Austerity Plan
The Romanian government has survived a no-confidence vote and can now move ahead with adopting a much-needed austerity package.
The motion to dethrone the current administration was filed by the country’s far-right opposition, but didn’t raise a lot of support. It came as part of a fast-tracked approval process for the fiscal plan, which raises taxes and cuts spending. The measures are set to take effect on August 1.
As we wrote in our special report following Romania’s presidential race in May, with the country having secured its pro-European trajectory by electing Nicușor Dan as president, it now faces the next marathon: delivering credible fiscal consolidation to avoid a credit rating downgrade.
A rating from agencies like Moody’s, S&P, or Fitch serves as a trust score for a country’s ability and willingness to repay its debt. A lower rating forces governments to offer higher interest rates to attract investors, making borrowing more expensive not only for the state but also for companies and, in some cases, households.
“Romania’s current situation is fragile. The country is just one notch above investment grade. A downgrade would push it below that threshold, effectively removing its investment-grade status,” Katarzyna Rzentarzewska, CEE macroeconomic expert at Erste Bank, told How We Cee It.
In addition, Romania risks having its access to European structural funds frozen.
That’s why, on July 2, the prime minister unveiled a package of tax hikes and wage freezes designed to cut the budget deficit to below 6% of GDP by 2026, from more than 9.3% last year, and to avert a downgrade to junk status. Such a downgrade could lead to a debt default and severely limit the country’s access to credit.
From August 1, the government will raise the main VAT rate to 21% from 19%, and the reduced rate for basic food and medicine to 11% from 9%. It will also increase excise duties by 10% on fuel, alcohol, tobacco, and sugary products.
Czech ČEZ Bets Big on Rolls-Royce’s Nuclear Future
In a move that strengthens Czechia’s role in Europe’s energy transition, the state-controlled energy group ČEZ has signed a strategic partnership with the UK to develop small modular nuclear reactors (SMRs). As part of the deal, ČEZ will acquire a 20% stake in Rolls-Royce SMR, the company’s nuclear division, with plans to deploy up to 3 gigawatts of capacity in Czechia and potentially expand elsewhere in the region. The agreement also involves Czech engineering firms and research institutes, positioning the country not only as a customer but also as a key player in SMR supply chains.
The project is seen as both a geopolitical and climate-driven move. With mounting concerns over energy security and the EU’s decarbonization goals, SMRs are gaining traction across CEE as flexible, lower-risk alternatives to traditional reactors. CEZ has said the first Czech SMR could be online by the early 2030s.
Ukraine Recovery Conference Brings Billions, But Risks Loom
The fourth edition of the Ukraine Recovery Conference, held in Rome last week, secured over $4 billion in pledges from governments, banks, and businesses for Ukraine’s reconstruction.
Several large programs were announced. The EU unveiled a plan to mobilize €10 billion in investments, with €2.3 billion in agreements already secured.
Yet Ukraine remains in the highest OECD risk category—alongside Afghanistan, Russia, and South Sudan. Concerns over corruption and the rule of law continue to hinder the influx of capital.
Week 30
Zelenskyy Guts Anticorruption Agencies Threatening EU Integration, Triggers Protests
Volodymyr Zelenskyy on Wednesday signed a controversial law, code-named 12414, which had been fast-tracked through Ukraine’s parliament the day before. The legislation dramatically weakens the independence of two key anti-corruption institutions — the National Anti-Corruption Bureau of Ukraine (NABU) and the Specialized Anti-Corruption Prosecutor’s Office (SAPO).
The adoption of the new legislation triggered the largest wave of protests since the start of Russia’s full-scale invasion in 2022, with thousands taking to the streets already on Tuesday and even bigger crowds on Wednesday. How We Cee it was on the ground to cover them.
Many Ukrainians see the signing of the law as a step backward from the reforms that have been underway since 2014, and fear it could jeopardize Ukraine’s prospects for joining the European Union.
President Zelenskyy and his allies justify the move by claiming that investigators with ties to Russia have infiltrated NABU and SAPO.
Anti-corruption activists, however, argue this is merely a pretext, and say the presidential office is actually seeking to consolidate its power. Under the new law, corruption investigations will fall under the authority of Prosecutor General Ruslan Kravchenko, a close ally of Zelenskyy.
In response to mounting public pressure, Zelenskyy pledged to submit a new bill to parliament that would “strengthen the law enforcement system” and preserve “all provisions necessary to maintain the independence of anti-corruption institutions.”
On Thursday, NABU stated that it participated in drafting bill No. 13533, submitted to the Ukrainian Parliament by President Volodymyr Zelenskyy.
The agency noted that the bill will reinstate all powers and guarantees of independence for NABU and the Specialised Anti-Corruption Prosecutor’s Office, SAPO.
If and when the bill will pass remains to be seen.
Ukraine Bets on Startups to Outthink Russian Drones and Cyberattacks
Ukraine is looking for four startups to split $1 million in funding and tackle four pressing challenges critical to the country’s defense.
The K4 startup studio, launched by Ukraine’s Ministry of Defense last week, and supported by U.S. venture firm Plug and Play, Germany’s Ministry of Defense, and the Better Regulation Delivery Office, is aimed at developing AI-driven defense technologies.
The government is seeking startups that will:
- Accelerate combat data analysis to help the military make faster, better operational and strategic decisions.
- Instantly detect and neutralize cyberattacks.
- Develop a solution to deceive enemy neural networks hunting for Ukrainian radio frequency signals by generating false targets for Russian systems.
- Create a cost-effective system to detect and intercept Shahed-type kamikaze drones.
Each startup will take on one of these challenges and receive a $250,000 grant. In addition, innovators will gain access to Ukrainian military experts, investors, and mentors.
Among the challenges Ukraine is seeking to solve, countering Shahed drones has become increasingly urgent. Kyiv and other cities have come under massive attacks by Russian drones—clones of Iranian Shaheds.
Hungary, Serbia have found a New Way To Undermine the De-Russification of European Oil
Hungary, Serbia, and Russia seem to have agreed to build a new pipeline that will carry Russian oil to Hungary via Serbia, with completion expected in 2027. Much suggests that, like the expansion of Hungary’s nuclear power plant, the pipeline will also be effectively donated to Hungary by the Russian dictator.
Hungarian Foreign Minister Péter Szijjártó, quoted by the Infostart portal, said the talks included Russian Deputy Energy Minister Pavel Sorokin and Serbian Energy Minister Dubravka Djedović-Handanović.
Week 31
What the US-EU Tariff Deal Means for the CEE
The United States and the European Union have reached a deal to avoid a full-blown trade war between the two trading partners.
The U.S. will impose a 15% import levy on European goods, down from the previously announced 30%. Import tariffs on U.S. goods entering the EU will largely remain unchanged.
The administration of Donald Trump is touting the agreement as a victory, although in practice, it will ultimately make products more expensive for American consumers. The EU—represented by chief negotiator Maroš Šefčovič of Slovakia—is also framing the deal as the best outcome possible, given the circumstances.
But how will the new levies affect Central and Eastern European economies?
Slovakia, whose industry is perhaps the most export-driven in the EU bloc, is unsurprisingly concerned about the tariffs—though representatives acknowledge the outcome could have been worse. Coupled with ongoing government budget consolidation, the U.S. levies may slow Slovakia’s economic growth by 1.5 to 2 percentage points, potentially bringing it to a standstill, according to analysts at Slovenská Sporiteľňa bank.
The tariffs leave the country’s automotive sector—long the backbone of the Slovak economy—especially vulnerable, as a significant share of its output consists of luxury SUVs destined for the U.S. market. Still, some analysts argue that U.S. consumers may be relatively reluctant to cut back on car spending.
Poland’s economy could take an 8 billion zloty (€1.87 billion) hit from the tariffs, according to Prime Minister Donald Tusk. “American tariffs on European products have become a reality. They are half the rate originally proposed by President Trump in April, but there is little to celebrate,” he wrote on X.
The Czech Republic’s automotive sector appears less exposed, with only around 1% of its car exports headed for the U.S. However, the industry may feel secondary effects, as its main autoparts import partner is Germany, which subsequently exports vehicles to the U.S.
Some industry representatives also point out that the weak dollar is adding insult to injury when it comes to U.S. earnings for European companies.
As for broader industry impacts, the 15% tariffs are likely not a strong enough incentive to justify relocating production to the U.S., though analyses are still ongoing.
Romania’s largest employers’ association, Concordia—which represents 20 sectors accounting for 30% of national output—told Reuters that the tariffs could shave up to 0.2% off Romania’s growth. In other words, the impact is likely to be limited.
Ambitious Slovak Battery Maker InoBat Admits Problems
InoBat was one of Slovakia’s most ambitious startups, aiming to supply prototype and small-batch batteries to luxury carmakers and aircraft manufacturers. But after years of splashy announcements, the company now admits it must overhaul its business model and streamline operations.
Backed by investment group IPM and led by Marián Boček, InoBat drew big-name investors like ČEZ and Rio Tinto, touted major breakthroughs, and launched its first production line in Voderady in late 2022.
Journalists long questioned whether it could turn bold promises into a viable business. Now, financial statements and insider sources reviewed by Denník E suggest the company is facing serious, even existential, challenges.
Despite starting production, InoBat posted a massive loss last year. Half of the 100 employees at its Voderady plant have been laid off, and the rest are experiencing delayed pay.
The company also holds a minority stake in a separate project to build a battery gigafactory near Šurany, which has secured a €210 million pledge from the current Fico government. The construction of the plant is not likely to be threatened by InoBat’s future, though.
Hungary Slashes Growth Forecast, Tries to Stimulate Economy
Hungary has revised its 2025 growth outlook downward, from 2.5% to just 1%, as stagnation hits both its industrial output and agriculture. In response, Viktor Orbán’s government is rolling out a cocktail of economic stimulants, including targeted tax cuts, subsidized housing loans, and pension hikes. While inflation has cooled compared to the previous year, it remains high at around 4.7%. These moves are aimed at cushioning households and reviving domestic demand, but they also reflect deep structural concerns as Hungary grapples with fiscal strain and waning investor confidence.
This is the monthly recap.
The real action happens weekly — subscribe to How we cee it.
