00:00190 billion euros from the West went to East.
00:03It 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.
00:18The Euronews Business Show, where we sit down with leaders in business.
00:23I'm Angela Barnes, Euronews' Business Editor,
00:25and it's a pleasure to welcome to the stage, please, our guest for this episode of the show,
00:31Jan Rujitska, who is advisor to the owners of PPF Group,
00:36which is a privately held international investment group.
00:40Please welcome Jan to the stage.
00:42How do you do?
00:43Thank you very much. Pleasure. Take us in.
00:45Pleasure to have you on The Big Question.
00:47Now, first of all, we're here, of course, to talk about EU enlargement.
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.
00:57But let's, of course, start, first of all, on a positive 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, they 100% grew their
01:48export 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.
02:00So cheaper wages, good workforce, and also, you know, now traditional industries like defense, heavy machinery, energy, is 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, Volkswagen,
02:40French guys.
02:41Everybody 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 EU15, EU27, candidate countries, are small businesses.
02:56They are driving our economies, and they are reasoned by also we, bigger companies, are successful.
03:01For 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.
03:10And, of course, everybody is looking for opportunities.
03:13But that EU enlargement will let grow the businesses of small companies, medium size, which then will drive valuation of
03:21ourselves as well.
03:27But I just want to talk in more detail about PPF's experience, because you were founded in 1991 in Czech
03:34Republic, before 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 sent to Eastern European countries, started to enjoy market capitalist economy after 40 years of communism.
04:04There was a big, gross push.
04:0630 years, sometime till COVID, was really exceptional.
04:10And during this moment, we also entered European economy and a single market, which was just another kicker.
04:18However, the world has changed.
04:20The world is less globalized.
04:22We see more geopolitics.
04:24And we, as a family company, we can move a little bit faster than guys who are on a stock
04:29exchange.
04:30So we are no longer in Russia, no longer in China, no longer in Southeast Asia.
04:35And everything what we invested, and our madam owner and her daughters, so the Kellner family, 45 billion euro of
04:43assets, everything is being invested to Europe.
04:46So when people are telling us, go to China, go to Philippines.
04:49Me personally, I lived in China seven years.
04:51I always say, look, if you are doing business, for example, in India or China, then Moldova will be a
04:58piece of cake for you.
05:00Okay, Jan, let me ask you, you touched on stock markets.
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 with the current member states to get capital to those SMEs.
05:17Very good point.
05:18And 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, for our venture capitalist startups, it would be a dream to have a capital union.
05:37So these two things, we are begging various European Brussels associations, single market, single market, then second, capital union.
05:46Jan, could it actually help Europe compete with the US and China if we get these things right?
05:51Or do we risk making an already complex European market even harder to manage?
05:56So first positive, then we need to be also a little bit negative.
06:01So positive, look, European market is the best market in the world.
06:06Almost 500 million people, rich people, because we don't have a capital union and 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, we vote with our money.
06:31We are divesting from Asia and investing much more here.
06:35Not only because this is a great single market, but rule of law, democracy, predictability.
06:40All of this is positive.
06:43Risks, I think that the biggest risk is to lose the momentum.
06:46And let's be open here together with us.
06:49Our audience, maybe somebody from commission is watching us.
06:53You know, we are waiting so, so long.
06:55So I think that the biggest risk is to do nothing because 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 and we are losing it.
07:13So this is for me biggest risk.
07:15And from this perspective, maybe smaller enlargement.
07:18I mean, not geographical wise, but, you know, the ability, maybe it's only single market.
07:25It's some, maybe it's some freight rate agreement plus.
07:28But this is better than to wait, wait for enlargement.
07:32Jan, lastly, who do you think stands more to gain from enlargement?
07:36The candidate countries or 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 to 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.
07:50Thank you.
