Jungmann sagemann financial crisis in eastern europe; road to recovery (2011)

Jens Jungmann / Bernd Sagemann (Eds.) Financial Crisis in Eastern Europe GABLER RESEARCH Jens Jungmann Bernd Sagemann (Eds.) Financial Crisis in Eastern Europe Road to Recovery With a foreword by Michael Müller-Wünsch and an epilogue by Dirk Schreiber RESEARCH Bibliographic information published by the Deutsche Nationalbibliothek The Deutsche Nationalbibliothek lists this publication in the Deutsche Nationalbibliografie; detailed bibliographic data are available in the Internet at http://dnb.d-nb.de 1st Edition 2011 All rights reserved © Gabler Verlag | Springer Fachmedien Wiesbaden GmbH 2011 Editorial Office: Stefanie Brich | Heiko Ripper Gabler Verlag is a brand of Springer Fachmedien Springer Fachmedien is part of Springer Science+Business Media www.gabler.de No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the copyright holder Registered and/or industrial names, trade names, trade descriptions etc cited in this publication are part of the law for trade-mark protection and may not be used free in any form or by any means even if this is not specifically marked Cover design: KünkelLopka Medienentwicklung, Heidelberg Printed on acid-free paper Printed in Germany ISBN 978-3-8349-2740-8 Foreword At the end of the first decade of our new century the global economic system was buffeted by unexpected events The global economy had not been prepared for such developments At the outset the imminent disruption might have been discussed within the confined circles of political committees and intellectual societies, but never in depth by senior general management in the global business community or the public sector But this global crisis is comprised of many regional jigsaw pieces and the events were triggered and accelerated by the so-called domino effect as a consequence of the interlinking and interlocking worldwide financial and trade systems Nevertheless they need to remain fitted together if our global system is to function in the future too In such circumstances we routinely tend to place our focus on regions like the US, mainland Asia, South America, Middle East or Western Europe This book addresses an area of great economic interest in a manner never seen before Eastern Europe is one of the jigsaw pieces and dominos which fall into the maelstrom of the global developments Yet, this is also a very specific region with various culture differences on one hand and manifold different economic foundations on the other The editors, Dr Bernd Sagemann and Jens Jungmann, took the opportunity to combine their personal knowledge of this region with local knowledge gathered from experts on the ground to bring about a compelling and comprehensive status report with regard to Eastern Europe The thorough analyses and the depth of each country description contained in the book provide an overview of the financial and economic potential and capabilities of the Eastern European region which has never been the case before Therefore, we would like to thank the editors and the individual authors for their efforts and contributions in generating a valuable and enhanced understanding of this region, which along with the BRIC countries, is one of the most fascinating developing regions of our hemisphere This book is a unique conception and should become a standard for the evaluation of the financial and economic status of the region for practitioners and likewise for the scientific community Foreword | With the in-depth knowledge derived from these comprehensive essays, we should hopefully be more prepared for future economic developments, and events such as the global financial meltdown should no longer be such a surprise I expect that many readers will appreciate the straightforward and accessible style with which this publication treats this complex matter Berlin, December 2010 Prof Dr.-Ing Michael Müller-Wünsch | Foreword Preface “The story of the boom and crash of 1929 is worth telling for its own sake Great drama joined in those months with a luminous insanity But there is the more somber purpose As protection against financial illusion or insanity, memory is far better than law When memory of the 1929 disaster failed, law and regulation no longer sufficed For protecting people from the cupidity of others and their own, history is highly utilitarian.” John Kenneth Galbraith (The Great Crash 1929) The end of a journey always comes back to its beginning Why financial crises occur? Do they have the same root causes? Are the solutions the same? Ten years after the Asian financial crisis 1997-98 ended, the US subprime crisis in autumn 2008 had plunged the world into a deep recession The parallels to the previous regional and global crises, especially the great Depression of 1929-33, are obviously The world financial crisis 2008-2010 has hit Central and Eastern Europe harder than the rest of the world – the Eastern Europe financial crisis resembles the Asian financial crisis of 1997-98 within the same fundamental problems of excessive inflows of short-term bank credits, enticed by pegged exchange rates, leading to large private foreign debt This publication firstly gives a general overview about the great subprime credit crisis and its spill-over to Eastern Europe Subsequently the countries Bulgaria, Czech Republic, Hungary, Lithuania, Poland, Romania, the Russian Federation, Serbia, Slovakia and Ukraine are analyzed with regard to their individual situation before this era, the impacts being faced, their attitudes and forces against the effects and their position afterwards, giving an outlook for the upcoming years Special thanks are given to the authors of the country profiles and their lasting spur during editing Particularly many thanks to Ms Agnieszka Ogórkiewicz and Mr Richard Scalé, Rödl & Partner, who both rendered the timely publication possible with their great commitment Hamburg, December 2010 Bernd Sagemann Jens Jungmann Preface | Overview Foreword _ Preface _ Overview _ List of Abbreviations _ 11 The World Financial Crisis 19 The Great Subprime Credit Crisis and its Impact on Eastern Europe 21 Bernd Sagemann & Peter Reese SpeciƂc Areas of Crisis in Eastern Europe _63 Bulgaria: The Deferred Crisis 65 Minko Karatchomakov Czech Republic: Crisis Postponed – Navigation to Recovery 109 Rene Vazac Hungary: A Country Hit Hard 177 Roland Felkai Lithuania: The Return of Opportunities 257 Tobias Kohler Poland: (Po)Land of Opportunity 315 Jens Jungmann Romania: Politics matter 377 Joerg Gulden Overview | Financial Crisis in Eastern Europe: Road to Recovery »The only surprise about the economic crisis of 2008 was that it came as a surprise to so many.«1 Joseph Stiglitz It would be easy to attribute a common thread to the experiences of the former Soviet bloc countries in the past two decades; post break-up euphoria, severe downturns in economic output as uncompetitive former state enterprises are faced with the realities of the market economy, a distinct improvement in the economic climate from the mid-nineties onwards, followed by overheated property markets and profligate consumer spending allied with easy credit as the Eastern European economies expanded robustly and rather carelessly after the turn of the new century and then subsequently an abrupt and rather severe slump precipitated by the banking crisis of 2008 However, such a swathing brush stroke would ignore the very different geographical, social, economic and traditional differences between the various countries at the time of the disintegration of the Soviet bloc and its former satellites and the period thereafter Each nation had and has differing regional characteristics, shaped by the nations surrounding it and historical trading patterns which remained partly intact despite the abrupt circumstances after the division of Europe after the end of World War II Hungary for example, was seen by the Western nations, as a somewhat more pro-market Soviet bloc country prior to the fall of the iron curtain, as the communist state apparatchik had already introduced some free market and economic reforms in the seventies and eighties prior to the fall of the iron curtain Typical examples were the implementation of a number of joint ventures with western private industrial companies, and forms of private ownership and small scale enterprise were introduced This was no doubt influenced by good and rather amicable relationships with Austria (and the city of Vienna) throughout the so-called ‘Cold War Joseph Stiglitz, Freefall, 2010, p Financial Crisis in Eastern Europe: Road to Recovery | J Jungmann, B Sagemann (Eds.), Financial Crisis in Eastern Europe, DOI 10.1007/978-3-8349-6553-0, © Gabler Verlag | Springer Fachmedien Wiesbaden GmbH 623 period’ and Austria acted as a good conduit for private enterprise and business interests However subsequent to the radical changes in the political landscape Hungary fell somewhat by the wayside as the country was racked by political wrangling and a reluctance to face the fiscal challenges brought about by the introduction of the market economy The recent decade has also seen an increase in political radicalism and stirrings of nationalistic reaction to outside influences (in particular the so called global organisations such as the IMF and discontent with what is seen as outside interests against which the Hungarian people are somewhat helpless) Nevertheless, the Hungarian people have historically always faced up to such challenges, and being a landlocked country surrounded by ever changing boundaries and political upheaval the people are nothing if not adaptable and the problems of the past decade seem to be behind them and the country is looking ever more attractive to overseas investors Some might claim that Poland was the catalyst for change among the Soviet Blocs countries back in 1980 when the protests from the Gdansk shipyards, through the shipbuilders´ trade union Solidarnoıä, first came to the attention of the world and found the support of the western nations and the Catholic Church Poland has a long and profound history as an independent nation bridging Western and Central Europe with Russia and the east Nevertheless, at times Poland had to face belligerent neighbours and the nation has suffered as a result However, the events of 1980 and the following years culminating in the fall of the Iron Curtain have been of a mixed blessing for Poland The nation has experienced a great deal of migration of its younger people in search of better prospects elsewhere and its diaspora is spread worldwide but the combination of a favourable geographical location between Germany and Russia, a well-educated workforce, a long established trading history and a well-earned reputation as a hardworking people has allowed a deep change in the economic outlook of the nation Throughout the 1990s and the decade after the turn of the century Poland has remained an attractive location for foreign investment The key figure for investors has been the steady growth in productivity of the workforce and the increasing (but sometimes too slow) improvements in the country’s infrastructure With a significant population and a broader scope of economic activity, including a confident and relatively solvent consumer sector in comparison to the smaller ex-Comintern nations, Poland has a come out of the recent upheavals in good shape reflected in the Zloty which has held up well against foreign currencies Whether or not Poland will adopt the euro in the coming years is most probably a political rather than an economic question Introduction of the euro will no doubt benefit foreign investment further and encourage even more trade with other European nations However, on a po- 624 | Financial Crisis in Eastern Europe: Road to Recovery litical level, a degree of fiscal independence at a monetary level allows Poland (at least to some extent), to make its own decisions in the future which are best suited to its requirements rather than the stipulations of the ECB However, Poland is likely to adopt the euro in 2012/2013 and use of the euro in business is already widespread across the country The Czech Republic seemed to have suffered most from the draconian influence of the Soviet Union on its satellite nations As a committed member of the Warsaw Pact and a follower of the more stringent Communist model following the suppression of the 1968 uprising it seemed the Czech Republic (or as it was then Czechoslovakia) would struggle to adapt to the rigours of a market economy However, the Czech Republic has turned out to be a shining star among the former Comintern countries, no doubt helped by its proximity to the substantial German market and undoubtedly a highly educated population with a strong tradition of engineering and technical expertise, This goes right back to the 19th century when the territory now within the confines of the Czech Republic underwent a dramatic industrial expansion By comparison, after the comparatively harmonious break up of Czechoslovakia in 1993, Slovakia lost its way somewhat and found itself aligned strongly with the Russian Federation and shackled with a populous government which seemed more interested in lining the pockets of accomplices and confidants than providing accountable and competent government This period in the economic and political wilderness and a certain international isolation started to be redressed at the beginning of the new decade as the political landscape and the populous came to the realisation that a re-integration and participation in the global economy were vital elements of the country’s future prosperity This political and economic U-turn has been rewarded and the Slovak economy has now proven to be one of the most dynamic and foreign investment friendly in the whole of Eastern Europe The fiscal regime has also demonstrated itself to be highly attractive to large foreign investors Sensibly the country has also begun to look at broadening the scope of the economy in order to avoid an overreliance on large scale car manufacturing and the consequent swings in demand which might affect the Slovakian economy in the future Lithuania for instance retained and carried on its close ties to the Scandinavian (particularly Sweden and Finland) countries despite its incorporation into the Soviet Union, as the Baltic people had always looked across the Baltic Sea for trade and cultural ties As a small nation with a limited population and diminutive domestic market trying to find its feet in a rather brutal economic climate of the early nineties Financial Crisis in Eastern Europe: Road to Recovery | 625 it sought close relations and, of course, investment from Sweden and Finland Although hit sharply by the economic crisis of 2008 which also rolled into 2009, the government of Lithuania acted in a pragmatic manner throughout 2009 It introduced tax changes and took consolidation measures which partially restored confidence in the economy and provided a solid footing for the coming years Russia has and always will be to some extent an enigma In 1989, prior to the break-up of the Soviet Union, it was still the world’s second largest economy after the USA and was the leading and most powerful Eastern European nation However, the collapse of the old state-run economy laid bare the real condition of the Soviet state led enterprises Russia became to some extent a political and economic backwater for ten years as living standards fell and the country lurched from one crisis and conflict to the next, helped only by its endless natural resources However, the “Wild West” economic policies of the nineties which enriched a small percentage of the population primarily at the cost of the majority of the populace have now been somewhat left behind The recent governments of the Russian federation have attempted to introduce reform to simplify the tax system and reduce bureaucracy in order to encourage foreign investment outside the field of energy supply This has to some extent been successful and was built on the back of a well educated population Although, problems remain in encouraging the growth and establishment of small to medium sized companies which tend to reflect a more mature economy and facilitate distribution of wealth down through the population at large There remains the issue of government corporatism and the link between the large (mainly energy) groups The Russian political elite are still strong and company policy is still driven by non-economic decisions Remarks from leading politicians still also tend to send waves of concern across national boundaries Although, such outpourings should be taken with a pinch of salt as they tend to reflect the boisterous nature of Russian politics (aimed at a public audience) rather than any attempt to undermine reform And yet, Russia is still a leading technological nation with a world renowned space program and a robust and export-oriented arms industry It manufactures leading equipment which is sold worldwide and in many instances has a competitive edge over similar products from US, French, German and British arms industries As the Russian administrative and tax regime becomes more transparent and companies participate less and less in the so-called ‘black economy’, tax revenues will continue to allow more latitude for social policy in order to improve the living standards and education assistance for the working population What cannot be ignored is the potency and influence of Russia’s huge natural resources Not only in the numbers; e.g balance of trade, foreign reserves etc but also in the geo-political sphere in which the leading industrial nations and 626 | Financial Crisis in Eastern Europe: Road to Recovery the newly influential BRIC countries (of course including Russia) are determining foreign policy and strategy primarily with an eye on the sourcing of vital raw materials Russia seems to hold all the good cards at the moment, but being an energy resource rich nation can also be a poisoned chalice It can hide severe structural weaknesses and paper over holes in economic policy Russia is acting with renewed confidence on the world stage but must continue with the, until now, successful economic reforms They have started to pay dividends for the whole nation at large, rather than just the few Bulgaria is located in the south-eastern corner of Europe and has strong links with the Balkan area and Greece It is also geographically close to Turkey and the Ukraine as a consequence of its Black Sea coastline From a Western European viewpoint Bulgaria has been an attractive tourist destination Since the fall of the ‘iron curtain’ it also became a popular location for property investment However, these images mask the real Bulgaria The decline of heavy industry in the nineties and the taint and actual reality of high levels of government corruption resulted in a substantial free-fall in economic output well into the late nineties All the usual standard indicators for social and economic ranking (including the corruption index) during this period, had Bulgaria wallowing in the lower division among the poorest South American and Central Asian nations After the cataclysmic political events of the late nineties a kind of national unity was finally found Bulgaria went on a new path of economic reform and progress which was only halted by the banking and economic crisis of 2008 Reforms included, among others, large scale privatisation, rationalisation of the government budget and reduction of the government spending deficit, a fixed rate of exchange with the then DM and subsequently with the euro, a crackdown on tax evasion, introduction of more efficient insolvency laws, the reduction of some tax rates and the abolition of state licencing All these changes combined to form a solid environment for economic growth in the years after the turn of the century Despite the strong economic growth in the years from 2002 to 2008, Bulgaria did not remain untouched by the 2008 crisis The dangers of overreliance on foreign capital, whether for lending in the banking sector, ownership of the manufacturing sector, or for turnover and liquidity in the domestic stock market, became apparent as Bulgaria suffered the same shocks as other Eastern European through no fault of its own i.e by simply being a player in the international economic arena However, the monetary reserves of the Bulgarian National Bank allied with sensible and pragmatic fiscal policies and the absence of any significant banking collapses sustained the confidence of investors and the rating agencies in the Bulgarian economy There is a cautious optimism about Bulgaria’s future outlook Taking into consideration the geographical advantage that Financial Crisis in Eastern Europe: Road to Recovery | 627 the country is a bridging point between the Middle East and Europe, it has relatively low labour costs, a geographical proximity to a number of major markets, a welleducated workforce, a pro-business legislative environment and, last but not least, a pleasant climate Therefore, Bulgaria’s growth should return to pre-crisis levels provided that the government is able to sustain the development of the country’s infrastructure The seductions and attractions of the free market were wholeheartedly embraced after the fall of the Iron Curtain by the ex-Comintern nations However, the disciplines and sanctions of the market were unforgiving and a number of nations which we have discussed fell into difficulties early on and it took them several years to return to historical levels of output The challenges of balancing government income and meeting the growing expectations of a free electorate have remained a problem to this day for most of the former Soviet Republics Nevertheless, despite early criticism from the Western European nations (over high levels of corruption, bloated bureaucracy as a relic from the Communist era, opaque legal and tax systems, expensive populist policies rather the pragmatic approaches, fiscal profligacy and weak controls over financial lending) the Eastern European nations have reacted well to the crises They introduced measures across the board to reduce government spending, attracted foreign investment, improved government transparency and stabilized currencies In fact, one could say that these countries have reacted more resolutely and implemented far more change which will benefit the populace in the long term as opposed to the so-called advanced Western European nations such as France, Italy, the United Kingdom, Germany and Spain They have struggled to battle against the vested interests of stakeholders who have proven to be particularly intransigent when it comes to necessary corrections such as the increase of the retirement age, reductions in social security spending, reduction of salaries in the public sector in order to balance the books, over-bloated and inefficient health systems and so on It seems that the people of Eastern Europe have been (and still are) accustomed to change and hardship Therefore, they are willing and able to take necessary measures (and pain) in order to restore financial and economic stability in the near and long term future How this develops in the future will be interesting to see The Western European countries will remain the ‘economic powerhouses’ in the coming years, but as Eastern Europe and Russia grows and develops at the rates predicted in 2010, the game of catch-up is likely to be completed within a decade or two How the European Union and the political landscape will then look remains a matter of conjecture The Eastern European nations are likely to become bolder in their demands for influence upon EU policy and increasingly reluctant to accept and adopt policy shaped by the old West European 628 | Financial Crisis in Eastern Europe: Road to Recovery nations The fulcrum of economic and political power will slightly shift over to Eastern Europe and this change will have an impact on economic, non-economic, social and political trends all over Europe Hamburg, December 2010 Dirk Schreiber Financial Manager, Steinhoff Europe Financial Crisis in Eastern Europe: Road to Recovery | 629 Editors` Vita Jens Jungmann, Financial Auditor (PL & RO), CPA, CFE The editor and author is one of the managing partners responsible for Rödl & Partner´s international business As a CPA, CFE and a Polish and Romanian certified auditor Mr Jungmann has 20 years experience in advising enterprises from all industry sectors and of different sizes which operate in Central and Eastern Europe Prior to his work in CEE, he started his professional career at a larger German audit firm Thereafter, he was employed by one of the Big His work took him to Dresden, Stuttgart, Boston, Poznan and finally to Warsaw Mr Jungmann served for many years as a court-appointed expert witness in accountancy matters for the District Court in Poznan For over seven years he was a member of the Audit Committee of the German-Polish Chamber of Industry and Commerce Additionally, he acted as an employers´ representative in the Social Dialogue Committee in Wielkopolskie Province (Poland) Editors` Vita | J Jungmann, B Sagemann (Eds.), Financial Crisis in Eastern Europe, DOI 10.1007/978-3-8349-6553-0, © Gabler Verlag | Springer Fachmedien Wiesbaden GmbH 631 Prof Dr Bernd Sagemann, LL.M., MBA, M.B.L.-HSG The editor and author is Director at an international operating company in Germany and is responsible for the Accounting & Controlling division at headquarters as well as at the regional level Prior to his current occupation he gained experience as Manager of Assurance and Corporate Finance at one of the Big audit companies and subsequently as Head of Accounting / Finance at renowned businesses After completing his education and training as a graduate in fiscal affairs as well as economics and macroeconomics studies, the author completed post-graduate studies in Financial Service Management at the University of Wales (MBA), law at the University of Münster (LL.M.) and European and International Business Law at the University of St Gallen (M.B.L.-HSG) In the context of his vocational doctor thesis for Doctor of Philosophy at the University of Hamburg, he undertook a comprehensive review of the causes and effects of the Asian Crisis and their implications for the region Alongside his daily business activities, the author is honorary professor at the FOM, University of Applied Sciences, and lectures primarily on Finance and Tax Law Dr Sagemann is engaged in scientific research in the origins of financial crisis as well as in the field of economic, legal and corporate development of the Southeast Asia Region and the People´s Republic of China, promulgating several publications about these objects of investigation 632 | Editors` Vita Authors` Vita Nicole Arnold, LL.M The author is employed by an international operating company in Germany After completing her studies in economics and international management, Ms Arnold passed a post-graduate study of law (LL.M.), focusing on M&A at the University of Münster Besides this, she graduated as an International Certified Accountant (ICA) at the Frankfurt School of Finance & Management She has gained experience in international markets during her field of work covering the automotive, real estate and service sector Ms Arnold has worked in Spain and the United Kingdom before focusing in particular on eastern European markets In her current position, she is responsible for the consulting and co-ordination of standardized operations within the Finance division She coordinates with specialists and service providers in the area of corporate setup, (re)structuring and process development projects as well as conducting market entries from the financial, commercial, as well as legal and tax sides Dr Roland Felkai Dr Roland Felkai, Graduate Economist, Master of Arts, born 1968 in Bremen/ Germany, studied economics at the Universities of Münster and London He started his career in 1996 at the London office of a big-six-company and was seconded to Hungary in 1997 to build up a German Tax Desk in Budapest In 1998 he became Managing Director of Rödl & Partner, Budapest and responsible for all service lines (audit, tax and legal services) Dr Felkai has advised a significant number of investors in the last 13 years in tax planning opportunities, particularly in relation to M&A transactions The author has published a wide range of papers on Hungarian and international tax law and is a lecturer at the University of Hamburg He is also correspondent of the journals “European Taxation” and “Internationales Steuerrecht” Authors` Vita | J Jungmann, B Sagemann (Eds.), Financial Crisis in Eastern Europe, DOI 10.1007/978-3-8349-6553-0, © Gabler Verlag | Springer Fachmedien Wiesbaden GmbH 633 Joerg Gulden Joerg Gulden, German Certified Tax Advisor, studied Economics and Organisational Science in Munich and Austin, Texas From 1994 to 1998 he was employed at a German audit firm in Dresden After two years in a management consulting firm in Stuttgart, he changed to a major German based professional service firm Since 2003, he is the Partner in charge of the firm’s activities in South-eastern Europe and the Middle East Being specialised in international taxation and M&A, he has been advising numerous foreign investors including some of the Global Fortune 500 during their investment process into the region Minko Karatchomakov Attorney at Law Minko Karatchomakov, lawyer (Germany), studied Bulgarian and German law in Sofia, Erlangen and Munich After graduating from University Erlangen-Nürnberg, he absolved his post-graduate legal traineeship with the Higher Regional Court in Munich Mr Karatchomakov has been with Rödl & Partner since 2007 and participated in the establishment of the Rödl & Partner’s Sofia office as a recognisable advisor of European corporate clients Since 2009 he has held the position of head of the Bulgarian branch and has expanded Rödl & Partner’s activities to the city of Plovdiv In 2010 he was appointed associate partner at Rödl & Partner He advises investors, developers, traders and financial institutions in conducting business in Bulgaria or with Bulgarian partners in the area of M&A transactions, restructuring under company law, insolvency, employment, real estate transactions and renewable energy projects Klaus Kessler Klaus Kessler, Attorney at law, Partner and Managing Partner of Rödl & Partner Ukraine Business, is responsible for the development and implementation of standards and procedures and the management of the offices in Kiev and Kharkov Conjointly he provides legal consultation to companies with a focus on investments in Ukraine and the regions of South-Eastern Europe As a member of Rödl & Partner’s international M&A Practice Group and as a consequence of his long M&A experience in Eastern Europe, Mr Kessler is responsible for M&A projects in this region 634 | Authors` Vita Prior to Rödl & Partner, the author worked as Junior Associate and Associate at two Munich based law firms with an international profile During this time he was responsible for well-known clients in the field of patent, licence and trade mark law He represented the clients in the federal patent court of Germany and handled international trademark and domain disputes before the European Trademark Office (HABM, Alicante) and WIPO (World Intellectual Property Organisation) in Geneva Before to his time in Munich, he worked six months for San Francisco based law firm Ostermann and Partners Mr Kessler studied Law at the University of Bayreuth and Munich In addition, he attended courses at the University of California in San Diego for nine months He received his admission to the German Bar in 1998 Tobias Niklas Kohler Tobias Niklas Kohler is Rechtsanwalt (Attorney-at-law) at the Landgericht München I (admitted April 2006) and Member of the Lithuanian Bar (July 2010) After completing his German high school diploma (Abitur) in 1996 he studied law in Munich Between 2004 and 2007 he worked as a lawyer and attorney-at-law with the international multi-disciplinary professional services firm Rödl & Partner in Riga, Vilnius and Warsaw Since March 2007 he has been head of legal and tax in Lithuania and since December 2007 head of the Rödl & Partner office in Vilnius Today he is Partner and responsible for all legal, tax, audit and accounting services provided by Rödl & Partner in Lithuania He advises investors, developers and trading firms in Lithuania and abroad in legal and tax aspects regarding national and international business transactions Essentially he is focused on legal advisory and contract configuration regarding M&A, renewable energies, foreign direct investment, real estate transactions as well as structuring of transactions under tax and company law He has published a number of articles on various tax issues as well as on leasing law and on debt management in the Baltic States Furthermore he contributed to numerous compilations and publications on tax law and the investment environment in the Baltic States Authors` Vita | 635 Peter Reese The author is currently working as Managing Director at the BNP Paribas Corporate & Investment Banking unit based in Frankfurt As Senior Banker he is responsible for a number of large German corporates (mostly DAX & MDAX listed companies) As such he is a trusted advisor to his clients especially for strategic and capital market related topics After leaving high-school Mr Reese completed his bank trainee programme prior to enrolling at the University of Hamburg in 1988 where he studied Business Administration and Economics His main areas of interest were banking and finance related topics with a special focus on capital markets theory as well as derivatives pricing and risk management He also focused on Macroeconomics and within this subject field, in particular Monetary Policy In addition he was very much engaged in the fields of Law & Economics, Microeconomics and Game Theory In 1993 the author started his professional career with Dresdner Bank, subsequently working in several departments such as Market Risk Controlling, Corporate Finance - Equity Capital Markets and finally as Deputy-Head of a Treasury & Securities Advisory team In 2000 he joined Solution42, a mobile billing software maker, as CFO His main task was to prepare the company for an IPO In 2001, after a successful trade sale to Portal Software (today part of Oracle), Peter went back to Dresdner Bank to become team-head Structured Finance in the Financial Engineering department In 2004 he joined BNP Paribas as Senior Relationship Manager for large midcap companies André Scholz André Scholz, Wirtschaftsprüfer/Steuerberater (German Certified Public Accountant/Certified Tax Advisor), Partner and Managing Partner of Rödl & Partner Russia/ CIS, is responsible for all group activities within the region containing the offices in Moscow, Saint Petersburg, Minsk, Kishinev, Almaty and Tbilisi In addition he provides consulting services to companies with a focus on investment in Russia and the CIS His core focus is the audit of financial statements translated from local accounting principles into IFRS or German Accounting Standards As a member of Rödl & Partner’s International Audit Practice Group and in conjunction with his long experience as a Certified Public Auditor, Scholz is also responsible for the international quality assurance of audit practices Prior to Russia/ CIS, he worked on international audit and consulting projects in Mid-/Eastern-Eu- 636 | Authors` Vita rope and was based in Berlin Between 1997 and 2000 he was responsible for the audit practice in Bratislava, Slovakia Prior to this he worked for a German audit firm in Dresden He studied Economics at the University of Applied Sciences in Mainz and is coauthor of commentaries on Russian Accounting Rules Scholz is a member of the board of the German-Russian Chamber of Commerce and chairman of the Committee for Accounting and Taxes of the Chamber JUDr Maroš Tóth, MBA JUDr Maroš Tóth, MBA, attorney-at-law and a partner in the international firm Rödl & Partner, completed his studies at the Pavol Jozef Šafárik University in Košice (Slovakia) He received his doctor of jurisprudence (JUDr.) in 2000 and after successfully concluding his studies at the ESCP-EAP European School of Management in Berlin (Germany) he was awarded the MBA title From 2001 he has been involved as a commercial lawyer for Rödl & Partner, providing legal consulting services to clients and since 2008, is managing partner of Rödl & Partner Advokáti, s.r.o Mr Tóth provides legal advice mostly in the area of commercial law including company law, civil law M & A projects, real estate law and financing Rene Vazac, MBA Rene Vazac is Certified Public Accountant and Partner at the international law, tax advisory and audit firm Rödl & Partner Since 1997 she has been responsible for managing the audit department of Rödl & Partner in the Czech Republic, in 2002 promoted to partner at Rödl & Partner After completion of Business School in Prague, Ms Vazac successfully completed her studies at the Munich Ludwig Maximilian University From 1992 to 1997 she worked as Project Manager at the Munich office of the audit firm BDO She has been a member of the Czech Chamber of Certified Public Accountants since 1996 and has published numerous papers on accounting matters From 2000 to 2002 she taught at the Department of International Management at the University of Applied Sciences Amberg-Weiden She specialises above all in German and international accounting standards Authors` Vita | 637 ...Jens Jungmann / Bernd Sagemann (Eds.) Financial Crisis in Eastern Europe GABLER RESEARCH Jens Jungmann Bernd Sagemann (Eds.) Financial Crisis in Eastern Europe Road to Recovery With... outside investors ending up selling stakes to Warren Buffet and Mitsubishi Financial Group respectively In the following months several of the world’s largest banks and financial institutions had to. .. interlocking worldwide financial and trade systems Nevertheless they need to remain fitted together if our global system is to function in the future too In such circumstances we routinely tend to