WIIW The Vienna Institute for International Economic Studies - Wiener Institut für Internationale Wirtschaftsvergleiche

Editorial insight: From crisis spillover to energy resilience: CESEE’s hydrocarbon vulnerabilities and policy pathways
by Mario Holzner
Persistent hydrocarbon-import dependence exposes CESEE to external shocks. Despite recent progress on diversification, resilience remains uneven. To achieve strategic autonomy, governments and businesses must prioritise energy efficiency, regional integration and supply diversification.

Chart of the month: Withdrawal of foreign capital from Russia losing pace
by Vasily Astrov
The active withdrawal of foreign capital from Russia, which started with the war and sanctions, has more recently lost momentum. This should come as no surprise, because in the current circumstances withdrawal effectively entails writing off the bulk of the investment.

Macro snapshot: How does the current inflationary shock in CESEE compare so far with that of 2022?
by Branimir Jovanović
The main reason why inflationary pressures in CESEE driven by the war in the Middle East have been weaker than in March 2022, following Russia’s invasion of Ukraine, is that food price increases have remained muted, whereas back in 2022 they were immediate and sharp.

Focus of the month: Sanctions, energy and geopolitical balancing: Serbia between Russia and the West
by Bernd Christoph Ströhm
Since 2008, following the acquisition by Russia’s Gazprom Neft of a majority stake in NIS, the Serbian business has evolved from being just the national oil company into a strategically significant asset. The US sanctions imposed in 2025 against the company, however, forced a realignment of Serbia’s energy policy, with NIS ownership being transferred to Hungary’s MOL. Although the loss of a strategic energy asset reduces Russia’s leverage over Serbia, the cooperative manner of Russia’s approach in handling the takeover suggests that close political relations between Moscow and Belgrade are here to stay.

Research in brief:

• Scaling up CESEE innovation: ecosystem dynamics and strategic relocation opportunities
  Client: Vienna Business Agency/Wirtschaftsagentur Wien
  by Ioannis Gutzianas
  Despite strong growth in startup activity across Central, East and Southeast Europe (CESEE), many promising firms struggle to scale into globally competitive companies, often relocating abroad in search of deeper capital markets and more developed innovation ecosystems.
• Minimum-wage increases do not harm firms: evidence from North Macedonia
  Client: Austrian Agency for International Cooperation in Education and Research
  by Branimir Jovanović
  The 27% hike in the statutory minimum wage in North Macedonia in 2017 had no adverse effect on businesses. Those companies that were more exposed did not experience lower profitability than those that were less exposed, and nor is there any evidence of a decline in employment. Meanwhile, productivity rose more in firms that were more strongly affected by the reform.

Country in focus: Slovenia - A subtle shift to the right
by Marko Hočevar and Sabina Lange
Following the parliamentary election on 22 March, which resulted in a hung parliament, a populist right-wing party has emerged as kingmaker. The three-time prime minister Janez Janša of the centre-right Slovenian Democratic Party, trying to keep his balance while gingerly stretching further to the right, is poised to return for a fourth term in office, this time with a minority government, an unreliable ally in parliament and a strong opposition.