00:00190 billion euro from the west went to east. It would be a dream to have a capital union.
00:05So we need to have some popularity of EU in those countries and we are losing it.
00:15Welcome to The Big Question, the Euronews Business Show, where we sit down with leaders in business.
00:23I'm Angela Barnes, Euronews' business editor, and it's a pleasure to welcome to the stage,
00:28please, our guest for this episode of the show, Jan Rujitska, who is advisor to the owners of PPF Group,
00:36which is a privately held international investment group. Please welcome Jan to the stage.
00:42How do you do?
00:43Thank you very much. Pleasure. Take us to you.
00:46Pleasure to have you on The Big Question. Now, first of all, we're here, of course, to talk about EU
00:50enlargement.
00:51And we know that there are opportunities and we know there are risks, of course.
00:56We're going to talk about the risks in a moment, but let's, of course, start, first of all, on a
01:00positive note.
01:01So what do you see as the key commercial opportunities when you look at the candidate countries?
01:07So if you look on all enlargements in the past, they were net positive for both sides.
01:12Candidate countries becoming EU members, but also incumbents.
01:16If you look on the largest enlargement so far, which was 2004, including Czech Republic, where I'm originally from, our
01:22company,
01:23yes, we profited greatly from single market and access to cheaper credit and re-evaluation of our businesses.
01:29But then if you look on the West, they invested a lot.
01:33190 billion euro from the West went to East because of cheaper wages, high-quality workforce.
01:39In case of Spain, which is far, far away from countries like Serbia or Moldova,
01:45they 100% grew their export from Spanish companies to center-eastern Europe.
01:51Italy, 77% upgrade in exports.
01:54So from this perspective, if you look on the Balkan countries, Moldova and Ukraine, we found similarities.
02:00Cheaper wages, good workforce.
02:02And also, you know, now traditional industries like defense, heavy machinery, energy, it's sexy again.
02:10Yes, in the times of Green Deal, five, six years ago, you know, people said, you know, do we need
02:16defense?
02:16Do we need heavy machinery?
02:18Do we need steel factories?
02:19Now, again, it's very important.
02:21What's the business sentiment you find when you speak to other business leaders?
02:25What are they most excited about when it comes to those commercial opportunities?
02:28We need to divide two things.
02:30Yes, PPF is a large company.
02:32And many other large companies, I don't know, German, Rheinmetall, we can talk about, we can talk about automakers,
02:39Volkswagen, French guys, everybody is very active in center-eastern Europe.
02:43But the bulk, bread and butter of our economies is SMEs, ordinary Joes.
02:4965% of our economies, including EU 15, EU 27, candidate countries, are small businesses.
02:56They are driving our economies, and they are reasoned by also we, bigger companies, are successful.
03:02For them, EU enlargement is even much more important.
03:05And this is what we would like to see in enlargement.
03:08Not that we will profit as big guys, and of course, everybody is looking for opportunities,
03:13but that EU enlargement will let grow the businesses of small companies, medium size,
03:19which then will drive valuation of ourselves as well.
03:28But I just want to talk in more detail about PPF's experience,
03:31because you were founded in 1991 in Czech Republic,
03:35before Czech Republic was even created, of course, before joining the EU.
03:39How did joining the EU in 2004 change your opportunities as a company,
03:45and what can the EU learn from what you've experienced?
03:48I think it's not only about our experience, but also how the world is moving.
03:53So PPF was started in 1991 in the Great Reconstruction period.
03:57We all center-eastern European countries started to enjoy market capitalist economy
04:02after 40 years of communism.
04:04There was a big, gross push.
04:0630 years, some time till COVID, was really exceptional.
04:11And during this moment, we also entered European economy and a single market,
04:16which was just another kicker.
04:18However, the world has changed.
04:21The world is less globalized.
04:22We see more geopolitics.
04:24And we, as a family company, we can move a little bit faster
04:27than guys who are on a stock exchange.
04:30So we are no longer in Russia, no longer in China,
04:34no longer in Southeast Asia,
04:35and everything what we invested,
04:37and our madam owner and her daughters,
04:40so the Kellner family, 45 billion euro of assets,
04:44everything is being invested to Europe.
04:46So when people are telling us,
04:47go to China, go to Philippines,
04:49me personally, I lived in China seven years.
04:52I always say,
04:53look, if you are doing business, for example, in India or China,
04:57then Moldova will be a piece of cake for you.
04:59Okay, Jan, let me ask you,
05:01you touched on stock markets there.
05:03We have very fragmented capital markets in Europe.
05:06Are you concerned about that?
05:07And the challenges that will pose when we enlarge,
05:11because, of course, they struggle at the moment
05:13with the current member states to get capital to those SMEs?
05:17Very good point, and I am afraid very much so.
05:21Especially for those of us who live in Central Eastern Europe,
05:24we don't have a Frankfurt stock market,
05:27we don't have Amsterdam,
05:28we have teeny tiny stock exchanges in Central Eastern Europe.
05:31For us, for our SMEs,
05:33for our venture capitalists, startups,
05:35it would be a dream to have a capital union.
05:37So these two things,
05:39we are begging various European-Brussels associations,
05:42single market, single market,
05:44then second, capital union.
05:46Jan, could it actually help Europe compete with US and China
05:50if we get these things right?
05:51Or do we risk making an already complex European market
05:55even harder to manage?
05:57So first, positive.
05:58Then we need to be also a little bit negative.
06:01So positive, look,
06:03European market is the best market in the world.
06:07Almost 500 million people, rich people,
06:10because we don't have a capital union
06:12and a strong capital market,
06:14so our citizens have their money on deposit accounts.
06:17It would be great to do something about it.
06:19Still, the money is here.
06:21Also, innovation is here.
06:23I am not the guy who is crying about Europe.
06:26Europe is a great place.
06:27And again, we as a PPF,
06:29we vote with our money.
06:31We are divesting from Asia
06:33and investing much more here.
06:35Not only because this is a great single market,
06:37but the rule of law, democracy, predictability.
06:41All of this is positive.
06:43Risks, I think that the biggest risk
06:45is to lose the momentum.
06:47And let's be open here together with us.
06:49Our audience, maybe somebody from commission
06:51is watching us.
06:53You know, we are waiting so, so long.
06:54So I think that the biggest risk
06:56is to do nothing
06:57because we are also losing momentum in those countries.
07:01Let's not forget that you don't need 27 members to agree.
07:05You need 28, as we learned in Iceland.
07:08So we need to have some popularity of EU in those countries
07:11and we are losing it.
07:13So this is for me biggest risk.
07:15And from this perspective,
07:17maybe smaller enlargement,
07:18I mean, not geographical wise,
07:21but, you know, the ability,
07:23maybe it's only single market,
07:25maybe it's some freight rate agreement plus,
07:28but this is better
07:29than to wait, wait for enlargement.
07:32Yeah.
07:32Lastly, who do you think stands more to gain from enlargement?
07:36The candidate countries
07:38or the businesses already operating inside the EU?
07:41Candidate countries.
07:42Okay.
07:43Thank you very much.
07:43Jan, it's been an absolute pleasure
07:45to have you on The Big Question.
07:46Thank you very much for joining us on the show.
07:48It's been a real pleasure.
07:49Thank you very much.
