2022 was a difficult year. To put a more positive spin on things, Rojs Peljhan Prelesnik & Partners Managing Partner Bojan Sporar, Deloitte Legal Senior Managing Associate Ened Topi, Redcliffe Partners Managing Partner Olexiy Soshenko, Drakopoulos Managing Partner Panagiotis Drakopoulos, and Polenak Partner Tatjana Shishkovska share what was, for them, the biggest positive surprise in 2022.
“In 2022 in Ukraine it is somewhat difficult to speak of positive surprises,” Soshenko begins. “However, looking back at 2022, there is a great deal of positive spirit and support for Ukraine and Ukrainian people from our allies and friends throughout the world,” he says. He highlights that “much support has been coming from private parties and individuals acting as volunteers,” in addition to supplies of weapons, humanitarian, and financial aid from allied countries and international organizations.
Soshenko also says that “different international law firms have been providing valuable support to legal businesses in Ukraine by offering secondment opportunities to Ukrainian lawyers or subcontracting Ukrainian law firms.” He is confident “that similar support has been provided in different industries and sectors. It is evident that – once the war stops – this support will naturally convert into rebuilding, investing, and making Ukraine a prosperous state.”
“The event with the widest global impact in 2022 has certainly been the invasion of Ukraine,” Sporar agrees. “While it is hard to use positive and war in any combination in a sentence,” he says, “what has certainly been positive is the worldwide reaction – at various levels of organizations and society – to the war. Both in terms of solidarity with and assistance to Ukraine as well as in (legally) dealing with domestic issues.”
And Topi is also on board: “I would say that all it started with the brutal Russian aggression to Ukraine which made energy security and independence a top priority for governments across Europe.” According to him, “although all has been set in motion by this ugly war – for the energy sector – interest and investment boomed.”
“If anything, 2022 has taught me to be cautious with surprises,” Shishkovska says. “So, this year, considering it has been a quite disruptive time, I’ll mark with a positive label only those things that go as planned.” In the new normal, she explains, “we just did not resume where we left it, in late 2019. It was a rather harsh awaking to the changed world circumstances.”
Quick Reaction Times in Slovenia
“The fighting in Ukraine had a domino and ripple effect on various European economies, including in Slovenia,” Sporar continues. “State bodies and autonomous regulators had to react quickly to a variety of matters such as bank runs, rising input prices, insolvency threats, and so on.” The actual surprise? According to him, “the agility and swiftness of activities that these bodies undertook, as they were traditionally considered slow to react. Not anymore.”
“We were faced with using new mechanisms and legislation that previously existed only on paper,” Sporar explains. As an example, he points to the rescue of Sberbank Slovenia: “everyone involved had to react quickly,” he says. “Assisting the Single Resolution Board, we were happy to see all the domestic bodies and agencies working towards the best solution in a matter of days,” he emphasizes. “Sberbank was sold in a proper procedure swiftly and Slovenia did not face any serious threats of a potential bank run.”
Energy in Albania
“Albania has traditionally been a country out of the Russian sphere of influence, in terms of energy, given the lack of domestic natural gas infrastructure and reliance of businesses and households on energy produced locally by renewable energy resources and imports,” Topi explains. In this context, during 2022, he says “we have witnessed a boom of local and foreign investors interested in developing large scale projects.”
Some of these focus on renewable energy, “with applications for wind and solar parks flourishing,” according to him, but others include “important foreign investors aiming to develop LNG projects and building new interconnector natural gas pipelines, that benefit Albania and the whole region.” Still, he points out, “the energy sector booming, unfortunately, owes much of its momentum to the war in Ukraine.”
ESG in North Macedonia
For North Macedonia, 2022 also translated into “emerging renewed interest in renewables and the emphasis put on the ESG,” according to Shishkovska. That “will be the main takeaway with a positive label in the Macedonian legal sphere.” All in all, the timing was just right, she explains: “the EU moved forward with its CSRD and EU Taxonomy, emphasizing the importance of ESG.” She notes that “2022 is the first reporting year for companies listed on the Macedonian Stock Exchange under the new Corporate Governance Code” – which introduces requirements regarding “the stakeholders, sustainability, and social issues.” Furthermore, she says “the MSE published an ESG reporting manual as a practical tool for implementing the ESG disclosure requirements,” to the latest international standards.
M&A in Greece
For Greece, “the biggest positive surprise in 2022 has been the unexpected increase in the number and size of M&A deals,” according to Drakopoulos. Besides the usual suspects – “real estate, tourism, and energy – significant growth in the number of deals has also been recorded in services, agriculture, and manufacturing,” he notes. “Given the unpredictability in the global post-pandemic business climate and the ongoing war situation in Ukraine,” he says they adjusted to the uptick through “new hires of senior lawyers as well as the overall acquisition of new talent, to increase our firm’s capacity to handle multiple projects simultaneously.”
To him, the “increased business came as a result of Greece’s geopolitical significance in the SEE region and solid local business climate – in the current global turbulent environment – combined with the heavy liquidity and increased appetite of investors.” Drakopoulos is optimistic “that this positive trend will continue since the factors that drove it are of a more strategic and long-term origin. Unless, of course, a massive global downturn occurs.”
Investments in Ukraine
For Ukraine itself, “as a result of the war, obviously new investments virtually stopped,” according to Soshenko, “but most existing businesses absorbed the shocks of the first months of the war and continue running their business in Ukraine.” He’s optimistic that, “when the situation stabilizes, there will be lots of opportunities for infrastructure, housing and construction, transport and communication, construction materials, metals, energy (both conventional and renewables), as well as the agricultural industries.” A huge amount of investment and financing will be needed for all of that, Soshenko notes. “Hopefully, most of the financing will be covered from the assets recovered from the aggressor, but financing from IFIs, foreign governments, as well as the private sector will be required as well,” he says.
Lessons Learned
Still, Shishkovska says, 2022 “opened a whole new playing field for curious minds and added literacy in ESG matters as a new required skill for lawyers.” She hopes the development is self-sustainable and “that it will grow from mandatory reporting to a corporate culture that recognizes the importance of a responsible attitude towards the environment and social issues.”
For Topi, “the events in Ukraine taught governments that energy security and independence are paramount.” He’s confident the renewed focus “on energy investments – thanks also to government policies aimed at transforming Albania into an important energy player – will be with us for a long time.”
“The positive impression of state bodies’ reactions will certainly stay,” Sporar says. “We thought nothing could surprise us after COVID, but now we see that, whatever happens, all levels of society, including the state, are here to react.” Another positive development here to stay, according to him, is the awareness “that we need to check and be careful who we are dealing with – sanctions checks, in addition to AML checks, are part of daily life now.”
Finally, according to Soshenko, “Ukraine will need not only to be rebuilt but to become a more modern and democratic state.” To that end, he reasons “there will be a huge demand for consultants, including lawyers. Eventually, this will bring a lot of interesting opportunities for foreign parties and Ukrainians especially.” Therefore, he concludes, “I am looking with a good deal of optimism into the future of Ukraine and the entire region, which will change for the better.”
This article was originally published in Issue 9.12 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
