23.03.2026 (Caucasian Journal). The third webinar of our Visegrad Lessons for Georgia series, titled “Business Beyond Politics,” explored the extent to which economic cooperation within the Visegrad Group can endure despite political tensions, and what lessons this may hold for Georgia.
▶ ქართულად: The Georgian version is here.
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Bringing together experts in economics, finance, and regional policy, the discussion examined the structural foundations of economic interdependence in Central Europe—from EU frameworks and cross-border cooperation to the role of multinational companies and financial institutions as stabilising forces.
While highlighting both the strengths and limitations of EU-driven integration, speakers also addressed the growing role of state intervention, the risks posed by weak rule-of-law environments, and the conditions necessary for sustainable investment.
The conversation ultimately turned to the Georgian context, emphasising that durable economic cooperation depends not only on external investment but, fundamentally, on institutional stability, democratic governance, and credible legal frameworks.
The full text version of the webinar is below:
BUSINESS BEYOND POLITICS
Alexander KAFFKA, editor-in-chief of Caucasian Journal: In our first webinar, we have examined how Visegrad Group has preserved practical cooperation despite political disagreements, and in the second session, we explored how academic, scientific, and environmental cooperation can function. Today, we turn to perhaps the most pragmatic dimension of all, business and economic cooperation.
Let me turn to the first question. Is there economic glue in the Visegrad Group? What are the concrete structural factors that protect economic cooperation from political disruption? Does EU single market membership function as an automatic stabilizing framework?
Gábor TÚRY: My name is Gábor Tury, I'm a Senior Research Fellow at the Institute of World Economics from Budapest. First of all, I would like to thank you for your invitation and I'm very glad to be here. Just one remark regarding the first or the second question.
Regarding EU funds, we cannot say that in case of Hungary, common EU market or EU funds and development programs can minimize the political risk, because regarding Hungary, the rule of law is a problem. Studies have shown that EU funded projects in Hungary are frequently overpriced and used to fuel the government and its business relations, which strengthen the ruling party.
If there is “economic glue” in banking, that's certainly Austrian banks. We see Austrian banks present in all four Visegrad countries.
But we have three cross-border cooperations between Hungary and Croatia, between Hungary and Serbia (a candidate country), and between Hungary and Austria. And this cross-border cooperation and cross-financing by EU funds is a very good basis for cooperation between not two countries, but two regions, which have traditional good connections before 1945 and after 1990s. So it's a pros and cons regarding the EU funds.
Dóra PIROSKA: I'm an associate professor at the International Relations Department at the Central European University. Thank you for the invitation. I specialize in banking and finance. I'd like to share a few insights on Visegrad countries in this regard.
You asked about “economic glue”. If there is “economic glue” in banking, that's certainly Austrian banks. We see Austrian banks present in all four Visegrad countries.
And the Austrian regulator is also very active in both gathering information, providing fantastic, very valuable economic research on the Visegrad countries, and providing forum of discussions for Visegrad for banking representatives in the Austrian Central Bank. So that's definitely something to think about when thinking about economic cooperation among the Visegrad countries - that it's not necessarily policymakers or politics-driven, but actually business-driven cooperation. The economic structures of the Visegrad countries, the FDI-led growth model hasn't changed so much in the last years. But what has changed is more active state involvement.
All four countries, Poland, Czechia, Slovakia, and to the most extent actually Hungary, have been creating such policy intervention into banking that primarily helps channeling investment from banks to local businesses. These are sometimes more, sometimes less effective.
The Hungarian case is definitely marked with rule of law violation and outright corruption. But it still puts these countries on a scale of increased state intervention in the economy. The reason for this increased state intervention is another glue that of course connects all these countries – the EU membership, and the Commission's various reform attempts in the capital market integrations, and the Savings and Investments Union - the latest attempt of the Commission to increase investments into European economies. Now what unites V4 with regards to this EU initiative is that it is absolutely misplaced, it's not tailored for Visegrad needs.
The Visegrad countries' capital markets are underdeveloped, small. The local companies in these countries are tiny, small and medium-sized enterprises. The Commission's attempt to increase investments through capital markets into tiny entrepreneurs is not leading anywhere. So the increased state intervention in Visegrad countries in banking and finance is definitely connected to the failing of the “one-size-fits-all” EU policy.
AK: Thank you. Very interesting indeed.
Kakha GOGOLASHVILI: Of course, you should be an expert on Visegrad countries to go deep into this question. But I think that definitely the political relations between V4 countries and also between Visegrad countries and other EU members, they have an impact on single market functioning.
First of all, the disagreements between these countries or with other EU countries on a political level may cause a slowing of EU decision-making. Would it be about adoption regulations? It's not only about the commodity markets, for example, also labor market-related issues, migration-related issues, which also have an impact on the labor market in EU. Many other topics having impact on the EU's internal market functioning.
AK: I know the Georgian banking sector is also represented through one of our participants.
Nikoloz SHURGAIA: Do you mean me or somebody else is here? I'm a former banker for now. For last two years, I've been out of banking, and I focus on resistance to the regime that we have in Georgia.
Often, as I observe, collaborations between neighbors go with difficulties because of, I don't know, prejudices probably and historical matters. So I'm really curious to see how these four countries find positive ways and how they build bridges between each other.
AK: Business as a stabilizing actor. When political rhetoric becomes confrontational, how does the private sector react? Have chambers of commerce, industry associations, or large investors actively worked to preserve regional cooperation? Is business in the V4 merely pragmatic or has it sometimes acted as a moderating force?
Gábor TÚRY: We should highlight that the main players regarding the business or the trade within the V4 are dominated by German companies, which act as a preliminary economic hub and investment source for the region, as Piroska mentioned.
The intra-V4 trade is characterized by a strong interconnected manufacturing base, particularly the automotive and the machinery sectors. As companies in Hungary or other V4 countries, we are part of intra-firm trade between the Volkswagen affiliates or BMW or Mercedes affiliates. But the main relation between these countries regarding automotive industry is the Volkswagen group, which has several affiliates in the countries, and not only the intra-firm trade, but the international supply chains or international value-added chains, which are very important for these countries.
And regarding the Chamber of Commerce, I know that the Polish-Hungarian Chamber of Commerce is very actively involved in relations between Hungarian and foreign companies in the region, or Polish and Hungarian companies, and there are many conferences and think tanks involving not only the business sector, but the academic sector as well.
So as Dr. Piroska mentioned, the multinational companies, not only the banking sector, but the automotive and machinery sector, have a very important role, the connection in an economic term between these V4 countries. I do not know examples that they have influence in a political term.
So I think these are two levels, a political level and an economic level. The economic level functions very well, but we have problems with the political level.
Another issue is that after the 1990s, the main focus the Western focus - trade connections, business connections with EU companies. After the EU accession, the main focus was the Western linkages. We do not care about internal linkages, for example, road and train connections, but I know that this is a further question - which are the main issues that make these connections stronger.
AK: Keeping in mind the Georgian perspective on our discussion, let's say if our region had a strong presence of Austrian banks, or a strong presence of BMW or Mercedes-Benz, do you think it would serve as a stabilizing force during political instability, or might it be seen as a threat to sovereignty?
Kakha GOGOLASHVILI: This is my opinion, that there is no threat to sovereignty, but unfortunately our politicians, actually their rhetoric somehow creates this kind of perception, that Western intervention, would it be economic intervention or political influence, can be somehow damaging to Georgian sovereignty, and in reality it's not like that. But I fear that there is also interest of certain Georgian financial players to support this kind of rhetoric, to make less supported the full opening towards international markets.
Dóra PIROSKA: I can intervene briefly. So you asked about what happens, how companies behave when the rhetoric becomes confrontational.
In Hungary when the Orban government came to power in 2010, the government pursued something which we call “financial nationalism”. It was an active attempt, launched in various policy domains, to regulate foreign-owned banks in a way that would redistribute their profits among larger segments of the population. This was right after the global financial crisis, and the banks have been profiting of the build-up of the crisis, and after the crisis the Hungarian banks, the foreign-owned Hungarian banks were not very badly hit.
So in a way, there was quite a bit of justification and legitimacy in the intervention of the Orban government. However, the banks resisted and turned to the IMF and World Bank against the financial nationalist policies of the Orban government.
This was going on until 2015 roughly, when suddenly Erste Bank agreed with the purchase of the share of the bank by the government. It became 15% state-owned. And after that we've seen an appeasement between foreign-owned banks and the “financial nationalist” Orban government to the extent that, since the COVID crisis we can see the instrumentalization for political purposes of the banking sector, including foreign-owned banks. So what does this instrumentalization mean? Well, it means that the Orban government's policies supporting families or housing market are advancing through bank loans as opposed to direct subsidies to citizens.
Orban government increasingly uses banks and subsidized bank loans to achieve its policy purposes, and the foreign banks benefit from these policies. So they are willingly cooperating with the government in carrying out its policies. So that's kind of a curve, how they went from being confrontational to becoming an instrument of the government.
David DONDUA: Hello, I am a former Georgian diplomat, currently still a diplomat, but on international position in Vienna, Austria. But I am here as the chairman of the EU Awareness Center, a Brussels-based think-tank focused on European integration, democratic resilience, and countering hybrid threats in Eastern Europe and South Caucasus. I would like to briefly respond to your last question, Alexander.
The question that you dropped about whether Austrian or other reputable international European banks' presence in Georgia will be a stabilizing factor for the country. The general answer is definitely yes, and of course, there is no threat to the sovereignty of the country whatsoever.
But first, it does not work this way that if international banks or international investors come to the country, they will ensure stability. It works the other way around. First, we need political stability, institutional stability in the country. That itself invites banks and other investors to the country.
Stable institutions create economies, not the other way around. We need political depolarization to ensure stability.
Banks can tolerate political debate, but what they cannot tolerate is legal uncertainty, and that's the main problem for us. Here, the most important confidence-building measure for Georgia, therefore, will be credible rule-of-law guarantees, particularly regarding independent courts, arbitrage, property rights, and regulatory stability. We have heard many times from leadership, and not only in our country, but in some other countries as well, that in this challenging period, let's focus on economic cooperation, and through economic prosperity to ensure stability within the country.
But stable institutions create economies, not the other way around. We need political depolarization to ensure stability, and then invite Austrian or other banks into the country.
AK: Our next questions are all about the transferability in the Georgian context. First, the preconditions question. What's the minimum institutional or regulatory stability required for “business beyond politics” to function? What is the single and most important confidence-building measure Georgia must secure to prevent capital flight and brain drain?
Gábor TÚRY: Regarding brain drain and how to prevent capital flight, we have good examples. Finland and Estonia, for example, they invest in education and research and development.
The base of their economic development was not extensive, but rather intensive. It's a problem of Hungary and Central European region, the so-called “middle-income trap”. In the last 10 or 15 years, we built our economy extensively, increasing the employment, and the number of foreign companies, especially in the automotive industry.
The battery manufacturing is a bad example of how we should not increase the foreign direct investment. We know that this is just a bad situation in the automotive industry in Europe, so there will be better figures in the future. But we should focus on education, not only at the university level, but at the basic school level as well.
We have very bad PISA results. You should see which are the countries which have the best PISA results. It's an international comparison between the countries.
There are good examples in Finland and Estonia. They are new international brands. We should see in the next 10 or 15 years if any Hungarian start-up can become global.
You should follow us and you should follow Finland and Estonia, which are good examples, and see what the problem is in Hungary. We should think about the brain drain and the high value-added manufacturing activities.
AK: I would like to drop a couple of more questions. Could economic pragmatism in Georgia help rebuild national cohesion? Can cross-border business success gradually reduce polarization?
I would recommend creating democratic channels through which the losers of economic growth can advance their grievances and find democratic solutions for those grievances.
This is a very important lesson from Hungary, because very rapid economic growth in the 1990s created many losers. And within the liberal political settings, there were very few channels through which these grievances could be channeled, and then they were channeled to the far right. To avoid this populist and far-right party strengthening, I would recommend building out channels of feedback for those who come out as losers of economic growth.
Marta SIMECKOVA: I'm from Bratislava. Slovakia is an example of a former economic tiger in the 90-s after we became members of the EU. Then we witnessed a gradual decline. Today, it's a country suffering from a huge brain drain. Especially the young athletes who leave Slovakia continuously for many years.
The question is, in the moment when you have the dynamic of a government that is more focused on self-immunity, what are the chances that the economy could still go on?
Kakha GOGOLASHVILI: I will try to comment. We've always been sure that democratic governance has much more possibilities for development. It provides ground for faster and better development of society in general, and economy, first of all.
Now we see that many authoritarian systems rise. We've achieved a certain level of equilibrium in this sense. They are able to provide fast economic growth. So there should be some reconsideration in this regard. If authoritarian systems or rulers really think long-term, then they provide a ground for economic expansion as well.
So this is a very debatable question - if democracy is more competitive in economic terms than any other system.
AK: I would like to propose one final question. What is the most important economic lesson Georgia should take from the Visegrad experience?
Gábor TÚRY: I think that you should focus not only on the Western direction, increasing export to developed countries, but more on cross-border relations, and regional trade. If you want competitive companies that can be successful in the Western markets, first you should see how competitive they are in the border countries. I think the economic cooperation level is not always in relation to the political relations between the countries.
Dóra PIROSKA: Thank you. Just very briefly, I would recommend not to focus on economic growth only, but to create the democratic channels through which the losers of economic growth can advance their grievances, and find democratic solutions for those grievances.
I think this is a very important lesson, especially from Hungary, because very rapid economic growth in the 1990s created many losers. And within the liberal political settings, there were very few, not enough certainly, channels through which these grievances could be channeled, and then they were channeled to the far right. So, in order to avoid this kind of populist and far-right party strengthening, I would definitely recommend building out channels of feedback for those who come out as losers of economic growth.
AK: Let me add that I think it was extremely useful. Let me thank everybody for participation and extend my welcome and invitation for you to join our next event. Thank you very much.
About the participants:• Ladislav CABADA, Professor in Political Science and Czech History and Vice-Rector for Research, Quality and Development at Metropolitan University Prague, Czech Republic
• Spasimir DOMARADZKI, Assistant Professor, University of Warsaw
• David DONDUA, Former Georgian Ambassador to NATO, OSCE, Greece, Serbia, Deputy Chief of Mission in Washington, EPLO Permanent Representative to IACA, Chairman of the Board at the EU Awareness Centre
• Vít HLOUŠEK, Professor of Political Science, Metropolitan University, Prague
• Magda JAKUBOWSKA, Vice President and Director of Operations, the Res Publica Foundation
• Lubor LACINA, Jean Monnet Chair in European Economic Studies at the think tank Mendel European Centre, Mendel University Brno
• Murman MARGVELASHVILI, Director, World Experience for Georgia, Professor and Director Energy and Sustainability Institute, Ilia State University
• Juraj MARUSIAK, Institute of Political Science, Slovak Academy of Sciences
• Matúš MIŠÍK, Associate Professor, Department of Political Science, Comenius University
• Dóra PIROSKA, Associate Professor, Department of International Relations, Central European University
• Oszkár ROGINER-HOFMEISTER, Head of the Global Europe Programme, EUROPEUM Institute for European Policy
• Nikoloz SHURGAIA, Management consultant; Chairman, Sadagi; former CEO, PASHA Bank Georgia
• Marta SIMECKOVA, Chairwoman, Project Forum (Občianske združenie Projekt Fórum), founder, Amnesty International Slovakia
• Gábor TÚRY, Senior Researcher, ELTE CERS, Institute of World Economics
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