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2023 in the Rear-View Mirror

Issue 10.12
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As 2023 comes to a close, reflections on the year reveal challenges and achievements across Romania, Bulgaria, and Ukraine. Tuca Zbarcea & Asociatii Managing Partner Gabriel Zbarcea, Schoenherr Bulgaria Local Partner Ilko Stoyanov, and Avellum Managing Partner Mykola Stetsenko share their thoughts on what kind of a year it has been.

Romania – Steady as She Goes

To start off, Zbarcea says that, for him, the glass is always half full. “Another year together, another year spent with our families and friends, with our team members and our clients is yet another great reason to celebrate. Therefore, for me, 2023 was better than the previous year.”

Taking a closer look at the strongest drivers of business for 2023, Zbarcea shares that, for their firm, corporate and M&A and dispute resolution are areas that have “always been busy.” On top of those, “real estate, banking and finance, as well as employment, competition, and tax areas have been on the rise. We also received lots of interesting mandates in energy and infrastructure.”

Looking at the overall legal landscape, Zbarcea reports a few updates of note. “We’ve had quite a few legislative changes this year, but I’d say that those affecting the labor market are the most important ones, along with the changes in the fiscal area,” Zbarcea says of Romania. “Equally important, another major amendment which was brought to the PPP and concession laws will further pave the way for more public-private partnership projects and works concessions and service concessions in Romania,” he adds.

“If there is one lesson I learned from the pandemic, it is the one of resilience and hope,” Zbarcea says, taking a cautiously optimistic approach when looking at 2024. “We need to be prepared for change and resilient in the face of unpredictability,” he adds, concluding: “Of course, challenges are ahead for the business community, especially following the implementation of the fiscal consolidation package, but, at the same time, I’m sure there will also be different opportunities, including private and public investment opportunities. For example, I’m confident that the EU-funded investment in public infrastructure will act as a strong stimulus to growth for the Romanian economy.”

Bulgaria – Busy as Ever

From Stoyanov’s perspective, 2023 went by better than expected. “The year was trended to be a bit slower than 2022 given the start of Q1. However, there were several interesting and challenging projects in the first half of the year,” he reports. “Alongside the different projects we have been working on in 2023, we started a few strategic ones in the middle of the year that led to excellent results.”

He says that, for their office, it was all about M&A. “Our busiest practice in 2023, as it has been always, was M&A. I would say that this is representative for the whole market, as M&A makes the largest part of the activities of the big law firms in Bulgaria,” he explains, somewhat resonating with what Zbarcea outlined as well. Moreover, Stoyanov reports that, for Bulgaria, “the biggest impact on the legal market in the past year were made by the strategic investments in the telecom industry,” which were led by foreign buyers according to the Schoenherr Partner.

Finally, Stoyanov adds that he is hopeful that the trend for increasing investments and stability in Bulgaria will remain. “We do believe that the Bulgarian economic growth will recover in the second half of the year bringing a lot of new opportunities for the market,” he stresses.

Ukraine – Resilience and Hope

“2023 so far has been quite a challenge for us as a firm and for Ukraine in general,” Stetsenko says of his country. “On the one hand, we had a lot of aspirations about the end of the war with Russia and the potential reconstruction of Ukraine. So far this has not materialized, although some serious discussions about new investments have been underway in recent months,” he shares. “On the other hand, Ukraine managed to increase its air defense potential with Western help thus creating a high level of security for large cities where people and businesses returned to their normal lives – almost to a pre-war level.”

Furthermore, looking at the year from a business perspective, Stetsenko reports a steady rhythm for Avellum. “We hoped that the flow of large projects would increase in the second half of 2023, but it was not the case. Work levels remain stable, but they are roughly at the level of the COVID-19 year of 2020,” he says.

“Our disputes practice has been very busy with diverse cases ranging from high-profile white-collar crime investigations to successful defenses of our international clients at the Supreme Court to investment arbitrations representing the Ukrainian Government,” Stetsenko continues. “I think this is quite representative of all major law firms on the market since disputes work is generally on the rise.” In addition, he also stresses similar areas of note as Zbarcea: “Our transactional practices, namely M&A, finance, competition, and real estate have been generally active, especially competition and M&A. We see some inbound investments both from private equity and strategic investors and it is very encouraging.”

However, looking at the legal market as a whole, he still thinks that transactional practices are underperforming and that it is “reflective of the state of the Ukrainian economy. Hopefully, as war insurance becomes widely available, there will be even more investment and lending in Ukraine.”

As for the road ahead, it does not appear to be a smooth one. “Next year will be a challenge for Ukraine and the world in general, and it will reflect upon us a firm, too,” Stetsenko says wearily. “We still hope that the democratic world will find a solution to end the war with Russia, as well as to ensure that it does not repeat. This is the number one priority for democratic nations across the world. It is now clear to everyone that Ukraine is fighting pure evil, and it is very important to call it that way,” he stresses. “Politicians and opinion leaders should paint it black and white to their voters and followers. Otherwise, dictatorships and the rule of the strong will spread around the world.” He adds that, with this narrative in mind, “we pray for the end of this war and look forward to doing an enormous job of building a new Ukraine after the war. Ukraine is on the path toward the EU and a lot of work is yet to be done.”

This article was originally published in Issue 10.12 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.