CEE Perspective Weekly Digest - Issue 11

Eurosystem brings market participants into the development of tokenised wholesale finance

The Eurosystem selected 61 financial-market stakeholders and public-sector institutions for its new Appia contact group, which will begin work in September. The group will support the Eurosystem's longer-term work on an integrated European ecosystem for transactions involving assets issued using distributed ledger technology (DLT). Its members will contribute expertise on areas including user requirements, risk management and technical and operational implementation. The group replaces two earlier market-contact groups dealing with wholesale settlement and new settlement technologies. 

Appia forms part of a broader European push to integrate tokenisation more closely into mainstream financial-market infrastructure. The Commission has argued that DLT could reduce settlement frictions, improve liquidity management and reconciliation and enable greater programmability in financial transactions. Appia is therefore exploring how tokenised assets and central-bank-money settlement could eventually operate within an integrated European financial ecosystem. 

What this means for CEE markets:Participation by institutions including the Slovenian Ministry of Finance gives the initiative a direct CEE connection, but the wider significance is regional. If tokenised markets become more integrated into Europe's mainstream financial infrastructure, smaller CEE capital markets could potentially benefit from lower cross-border settlement frictions and easier access to a larger European investor base. 

ECB seeks industry input on standards for an offline digital euro

The ECB opened a call for expressions of interest on the technical standards needed to support offline digital euro functionality, as preparations continue for the digital euro pilot planned for the second half of 2027. The exercise focuses specifically on secure hardware embedded in smartphones, including embedded Secure Elements (eSEs) and eSIMs. The ECB is seeking feedback from mobile network operators, secure-element and eSIM manufacturers and issuers, and standards-development organisations on the relevance, maturity and industry support for the standards identified so far. Interested organisations have until 25 September 2026 to provide feedback. 

The initiative illustrates how the digital euro project is increasingly moving from high-level design questions towards the practical infrastructure required for deployment. Offline functionality is intended to allow payments without an internet connection while maintaining appropriate security and privacy safeguards. Ensuring compatibility with existing mobile technologies and industry standards will therefore be important if an eventual digital euro is to operate at scale without requiring an entirely separate technological ecosystem. 

What this means for CEE: While parts of the region have highly digitalised payment markets, significant differences remain in banking penetration, cash usage and digital infrastructure. Offline functionality could therefore be particularly important in ensuring that a future digital euro remains accessible across different national and demographic contexts. For banks, payment providers and technology firms, the consultation is another sign that the project is moving from conceptual design towards practical implementation. 

Commission rejects standalone EBA change and points towards broader regulatory simplification

The European Commission decided not to endorse an EBA proposal to amend technical standards governing reductions in own funds and eligible liabilities. The EBA had proposed reducing from four to three months the period available to competent and resolution authorities to process institutions' applications to reduce certain capital and eligible-liability instruments. Rather than making an isolated amendment, however, the Commission indicated that the issue should be considered as part of the EBA's broader work on regulatory simplification. 

Although technically narrow, the decision is interesting in the context of the EU's wider simplification agenda. It suggests that policymakers are increasingly looking beyond individual adjustments towards a more comprehensive review of how prudential requirements and supervisory processes interact. The EBA has until 25 August to issue an opinion on the Commission's rejection; absent such an opinion, the rejection becomes final. 

What this means for CEE: Banking sectors across much of CEE are dominated by subsidiaries of cross-border European groups, making the design of capital, resolution and supervisory requirements particularly relevant. If the EU's simplification agenda develops into a more systematic examination of prudential processes, the implications could ultimately extend beyond administrative deadlines to questions around how capital and liquidity are managed within cross-border banking groups.

Romania balances tighter fiscal constraints with €1 billion push for advanced technologies

Romania is facing tighter fiscal constraints after government debt rose above the 60% of GDP threshold, adding to pressure on the country to consolidate its public finances. Eurostat data show that Romania’s general government debt reached 60.1% of GDP at the end of the first quarter of 2026. Under Romania’s Fiscal Responsibility Law, crossing the statutory debt thresholds triggers measures aimed at containing public spending and putting debt back on a sustainable trajectory; with debt above 60%, restrictions applicable at the preceding thresholds remain relevant, including limits on increases in overall public-sector personnel and social-assistance expenditure. The development comes as Romania is already working to reduce its elevated budget deficit, making fiscal discipline an increasingly important constraint on government policy.

Source: Eurostat, “General government gross debt to GDP ratio, 2026Q1”.

While Romania’s debt ratio remains well below the EU average, Eurostat data show that it increased by 4.3 percentage points year-on-year in Q1 2026. 

At the same time, the government is seeking to preserve room for investment in higher-value economic activity. On 20 August, it approved TechUp Romania, a new financing programme worth RON 5.313 billion - more than €1 billion - designed to connect research and development with industrial production and support investment in advanced technologies. The programme is intended to help companies move from research and innovation towards commercially viable products and production capacity, strengthening Romania’s technological and industrial base. These two developments illustrate the challenge facing economic policy:, namely containing recurrent public expenditure as fiscal pressures intensify, while continuing to channel resources towards investment that could strengthen productivity and competitiveness over the longer term. 

Bulgaria expands access to capital as investment in innovation gathers pace

Bulgaria took a further step towards integrating its capital market with European investors this week, as Starcom Holding’s €200 million bond became the first bond issue admitted to trading through the Bulgarian Stock Exchange’s EuroBridge Market. Trading began on 17 August, with the bonds available simultaneously in Bulgaria and Frankfurt. EuroBridge is designed to facilitate access by Bulgarian companies to international capital markets through dual listings, making the Starcom issue an important first test of the mechanism. The development comes alongside further efforts to expand financing for Bulgarian businesses: following the approval of amendments to the country’s arrangements with the European Investment Fund, up to €180 million is set to be reinvested in innovative companies and SMEs through JEREMIE Bulgaria. The wider renewed JEREMIE strategy targets areas including deep tech, scale-up financing, dual-use technologies and strategic infrastructure. 

Bulgaria’s startup ecosystem is also attracting new private investment. DiscreteStack, a Bulgarian AI infrastructure startup founded in 2025, announced a €800,000 seed round to support its expansion, including into regulated sectors such as finance, insurance and the public sector. Taken together, these developments point to a broadening of Bulgaria’s financing ecosystem - from international capital markets and EU-backed SME financing to early-stage private capital for domestic technology companies. 

Slovenia’s growth accelerates as investment surges

Slovenia recorded one of the strongest growth performances in the region in the second quarter of 2026, with GDP expanding by 5.0% year-on-year and by 4.1% across the first half of the year. The composition of growth is particularly notable from an investment perspective: gross fixed capital formation increased by 13.2% year-on-year, with investment in buildings and structures rising 19.0% and investment in machinery and equipment increasing 10.1%. Household consumption also strengthened, rising 3.4%, while construction value added expanded by 15.9%.

Source: Statistical Office of the Republic of Slovenia (SURS), “Gross domestic product, 2nd quarter 2026”.

The figures suggest that Slovenia's current expansion is being supported by a relatively broad combination of investment, consumption and external demand rather than a single growth driver. Exports increased 6.4% and imports 7.6%, representing the strongest expansion in external trade in two years. For the wider CEE investment picture, Slovenia therefore provides an interesting contrast with economies where growth remains much more dependent on consumption or where fiscal and inflation pressures are constraining investment. The key question will be whether the current acceleration in capital formation can translate into sustained improvements in productive capacity rather than primarily reflecting a temporary construction cycle.

Poland’s growth remains resilient, but July data reveal an increasingly uneven recovery

Poland continues to rank among the stronger-growing EU economies, but the latest activity indicators point to a more differentiated picture beneath the headline growth figures. GDP expanded by 3.8% year-on-year in Q2 2026, accelerating from 3.3% in the same quarter of 2025. Fresh data from Statistics Poland now show that industrial activity remained an important source of momentum in July: sold industrial production increased by 5.1% year-on-year, while output over January–July was 3.6% higher than a year earlier. The industrial expansion was accompanied by renewed price pressures, however, with producer prices increasing by 2.8% year-on-year and 0.6% month-on-month in July. 

The picture is weaker in construction and employment. Construction and assembly production fell by 2.4% year-on-year and 7.6% from June, even as construction prices increased by 6.2% compared with July 2025. Enterprise-sector employment was also 0.8% lower year-on-year, although it edged up 0.1% from June. There are nevertheless more positive forward-looking signals from residential investment: during January–July, completed dwellings increased by 3.2%, construction starts by 3.3%, and the number of dwellings receiving permits or registered with a construction project rose by a much stronger 15.7%. 

The data point to an increasingly uneven Polish expansion, with industrial activity and parts of residential investment remaining relatively resilient while construction and employment show greater weakness. The key question for the second half of 2026 will be whether stronger investment and domestic demand can broaden the recovery without generating renewed inflationary pressures.

• 25 August – Magyar Nemzeti Bank monetary policy meeting: Hungary’s central bank will hold its next scheduled policy meeting, making it one of the key CEE market events of the week.

•        25 August – National Bank of Poland Monetary Policy Council meeting: Poland’s Monetary Policy Council (RPP) will hold a one-day meeting. This will be worth monitoring against the backdrop of Poland’s evolving inflation and interest-rate outlook and expectations around the future pace of monetary easing.

•    25 August – EU Working Party of Financial Counsellors: EU member-state financial counsellors will meet on Tuesday. The group prepares and discusses a range of economic and financial files ahead of negotiations at higher Council level, making the meeting one to watch as EU financial-services work resumes following the summer break.

•      24–28 August – Montenegro economic and financial data releases: Montenegro has a particularly active statistical calendar this week. The Central Bank is due to publish July interest-rate statistics on 24 August, followed on 25 August by Q2 data on factoring, receivables-purchase and leasing companies. MONSTAT will publish import and export unit-value indices on 26 August, tourism and building-permit data on 27 August, and July international trade in goods figures on 28 August.

•        28 August – European Commission business and consumer surveys: The European Commission will publish its August business and consumer survey results, including the Economic Sentiment Indicator (ESI), Employment Expectations Indicator and sector-level confidence indicators.

•       28 August – Hungarian Central Statistical Office price indicators: Hungary’s statistical office is scheduled to update its monthly price-indicator datasets. Coming only three days after the MNB’s monetary-policy meeting, the releases will provide additional information on domestic price developments and will be relevant to the debate over the scope for further monetary easing in Hungary.

CEE Perspective Launches a New Monthly Markets and Investment Review 

CEE Perspective has launched the CEE Markets & Investment Review, a new monthly flagship publication dedicated to financial developments across Central and Eastern Europe. Important changes in the region are often covered as separate national stories. The Review brings them together to provide a clearer picture of how CEE’s financial landscape is evolving. 

Each edition examines developments in capital markets, banking and monetary policy, strategic investment, pensions and long-term savings. Its focus is on identifying regional trends and explaining their implications for investment, financing capacity and long-term competitiveness. The publication is intended for investors, financial institutions, policymakers, regulators, companies, advisers and researchers following the region. 

The inaugural July 2026 edition covers Romania’s growing capital-market relevance, Hungary’s renewed monetary easing, new strategic investment vehicles in Poland and Bulgaria, and the relationship between pension policy and domestic capital formation. 

Read the first edition and explore all CEE Perspective publications at https://ceeperspective.eu/publications/cee-markets-investment-review-july-2026

• CBAM moves further into practical implementation: The European Commission publishedten new guidance documents to support implementation of the Carbon Border Adjustment Mechanism (CBAM) during its definitive phase. The package covers emissions calculations, default and actual values, adjustments for EU ETS free allocation and sector-specific requirements. With the first declarations covering 2026 imports due by 30 September 2027, attention is increasingly shifting from regulatory design to companies’ operational readiness and access to reliable emissions data across international supply chains. 

• EIB and UniCredit Bank Romania expand financing for Romanian SMEs: The European Investment Bank (EIB) and UniCredit Bank Romania signed a €100 million financing agreement to support investments by SMEs and mid-cap companies in Romania. The facility is intended to improve companies’ access to longer-term financing, including for innovative and technology-related projects, supporting investment and competitiveness in the Romanian economy. The operation forms part of the EIB’s broader use of financial intermediaries to channel EU-backed financing to smaller businesses that may otherwise face greater constraints in accessing suitable investment funding. 

• Croatia - KONČAR outperforms the broader market: Croatia’s CROBEX index remained broadly stable over the past month, gaining just 0.34%, while industrial group KONČAR significantly outperformed the wider market, rising 5.56%. The divergence highlights continued investor interest in selected industrial names even as overall market momentum remains subdued. 

• Serbia - Banks advance AI adoption as equity market edges higher: Serbian banks are gradually advancing their use of artificial intelligence, although adoption remains uneven across the sector, according to a recent assessment of banks’ AI maturity. Meanwhile, the BELEX15 index recorded a modest increase, pointing to relatively stable domestic equity-market conditions. Together, the developments highlight the ongoing digital transformation of Serbia’s financial sector against a broadly steady market backdrop. 

• Montenegro secures €15 million in EU funding for environmental research centre: Montenegro signed a €30 million agreement to establish CENNA, a new Centre of Excellence for environmental monitoring and nature-based solutions, backed by a €15 million Horizon Europe grant and €15 million in national co-financing. The project will strengthen domestic research infrastructure and Montenegro’s integration into the wider European research ecosystem.