Although Mr Profumo describes UniCredit’s aggressive expansion into central Europe (it owns Poland’s Bank Pekao, Croatia’s Zagrebacka Banka and Bulgaria’s Bulbank) as “a great opportunity that offers the potential for enormous value creation”, the fact remains that the EU newcomers face daunting challenges in institutional and structural reforms.

Slovakia has achieved the greatest success since a centre-right coalition government ousted Vladimir Meciar, an authoritarian prime minister, in 1998. Ivan Miklos, Slovakia’s ambitious finance minister, has launched sweeping economic reforms, including a 19% flat tax on personal and corporate income and an aggressive deregulation of the labour market.

The new central and eastern European members of the EU are setting the pace on economic reform, stimulating a liberalising shake-up that the rest of the union has been trying to avoid. Nick Spiro reports.

Hansabank Group has announced the successful completion of the acquisition of the Moscow-based Kvest bank.

Romania is catching up with its neighbours as it prepares for EU membership. Politicians are keen to repeat 2004’s growth and investment levels – which means a busy time for banks.

Romania is celebrating a successful 2004 in which taxes were cut and GDP grew. Now its sights are set on EU accession and newly elected President Basescu faces some tough decisions in the longer term. 

Romania is catching up with its eastern European neighbours in the attraction of foreign direct investment. Matei Paun reports on last year’s record performance and conditions that bode well for the future.

Alarmist predictions, while unfounded, present opportunities for investors, says William Browder.

Serbia’s decision to focus on selling banks is drawing Greek institutions into the country, despite continuing political risk. Kerin Hope reports.

Since Viktor Yushchenko was elected president, a gold rush has begun in banking as foreign institutions begin to move in. Ben Aris reports from Kiev.