Hi, this is Andrea Dudik in Prague. Welcome to our weekly newsletter on what’s shaping economics and investments from the Baltic Sea to the Balkans. You can subscribe here.

Taking Off

Albanian Prime Minister Edi Rama promised to turn his country, one of Europe's poorest, into a tourism magnet. The lure of cheaper prices and a taste of the unknown compared with say Greece or Croatia has worked well so far, driving visitor arrivals to a record last year.

But for a lot of people, Albania remains off the beaten track. Its isolation during decades of communism under Enver Hoxha left it largely disconnected from the international travel network. Rama, who won a fourth term in power last month, wants to change that quickly.

When he toured the soon-to-be opened airport in Vlora, the gateway to Albania's southern beaches, he called it the “mirror of our ambition.” Financed by local investors, the $170 million facility will start charter flights over the summer and be fully operational by the end of the year, its chief executive said.

The demand is there. The airport in Tirana, the capital, last year handled 10.7 million passengers, up 48% annually, and the aim is to hit 12 million in 2025. For seekers of sun and sand, Vlora offers another dimension.

It will bring passengers to the region where Donald Trump’s son-in-law, Jared Kushner, is planning a glitzy development for rich tourists on the island of Sazan. “The goal is for the entire development on the island and surrounding area to create a powerful magnet for Vlora and Albania,” Rama said last month.

The beach at sunset in Vlora Photographer: Atdhe Mulla/Bloomberg

Around the Region

Serbia: Trump’s administration is pushing Balkan nations to take in migrants deported from the US, according to people familiar with the matter. Serbia is a notable target given its connections to the Trump family.

Poland: Prime Minister Donald Tusk called a vote of confidence in his governing coalition after his pick for president was defeated in an election last weekend. Karol Nawrocki, the candidate backed by opposition party Law & Justice, will instead become the country’s next head of state.

Ukraine: The mass deployment of drones has helped the country repel invading Russian forces, changing modern warfare and surprising the enemy. Drones launched from trucks hit airfields as far away as Siberia recently this month. 

Romania: The European Union offered the government in Bucharest a reprieve to introduce measures aimed at shrinking its ballooning budget deficit before moving to potential punitive action. The country, meanwhile, has sold debt in private placements to satisfy demand from investors until politicians come up with a plan.

Slovakia: Prime Minister Robert Fico ruled out the reappointment of Peter Kazimir as head of the country’s central bank. Kazimir was convicted of bribery last week by a court in Bratislava.

Chart of the Week

Bulgaria’s march toward joining the euro has been praised by the markets, even if less so by a lot of people in the country. Government bond yields fell to lows. Helped also by a global rally in equities, the Bulgarian stock exchange’s benchmark index has turned into the world's best performer for the past month.

By the Numbers

• Rating agencies warned that Poland’s politics may curb already-low appetite for reducing its fiscal deficit, which is set to top 6% of economic output for a second straight year. The central bank, meanwhile, kept interest rates on hold as expected, leaving the benchmark at 5.25%.
• NATO members should speed up a timetable to reach a defense spending target of 5% of economic output to deter a rapidly arming Russia, Lithuanian President  Gitanas Nauseda said.
• The Czech Republic and South Korea reached agreement on a landmark nuclear-energy project worth almost $19 billion.

Things to Watch

• Polish parliamentarians will vote on a motion of confidence in the governing coalition on Wednesday, which Tusk said will herald a “new beginning” for his cabinet.
• Hungary’s treatment of the LGBTQ+ community will remain in focus as tensions flare between the EU and Prime Minister Viktor Orban over his government’s discriminatory policies. 
• Romanian pro-European parties start talks on a new governing coalition agreement on Monday. 

Final Thought

Four months before the Czech election, Prime Minister Petr Fiala finds himself in a bind. Already trailing former premier Andrej Babis in the polls, he’s had to explain why his justice minister accepted a $45 million Bitcoin gift to his ministry from a convicted drug felon. The minister resigned and Fiala replaced him with a rising star from his party, Eva Decroix, hoping his critics can be silenced with a thorough probe into what went on. But the scandal, which sparked calls from the opposition for the entire cabinet to resign, has turned into a gift to billionaire populist Babis.

Petr Fiala is trailing in opinion polls before an election later this year. Photographer: Milan Jaros/Bloomberg

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