Hi, this is Misha Savic in Belgrade and Gresa Kraja in Pristina. Welcome to our weekly newsletter on what’s shaping economics and investments from the Baltic Sea to the Balkans. You can subscribe here.

Belgrade’s Trump Tower 

Donald Trump’s return to the White House is casting a fresh light on his family’s dealmaking in southeastern Europe.

Jared Kushner, his son-in-law and a senior adviser to the US president-elect during his first administration, is pursuing a luxury hotel project in the Serbian capital, Belgrade, that will be bear the Trump name through a license deal. In Albania, Kushner’s firm won preliminary approval from Prime Minister Edi Rama’s government for a $1.4 billion luxury resort along the Adriatic coast, on an island once used as a military base.

Kushner’s projects, which add to a rush of global ventures by his investment firm, Affinity Partners, have come under scrutiny on both sides of the Atlantic. The Balkan investments in particular involve close collaboration with governments in the region.

In the US, Democratic lawmakers have raised the prospect that Affinity, working with the Trump Organization, may be designed as a workaround for foreign leaders to pay Trump officials without disclosure.

Critics have also spoken out in the region. In Belgrade, many locals are outraged that the hotel site will involve demolishing a former army headquarters that stood as a ruin to commemorate NATO’s 1999 bombing of the country. Across from the seat of government, the authorities delisted the site as a protected landmark.

Albanian opposition parties have argued that recent changes to the country’s protected area laws may have been tailored to accommodate Kushner’s plan, raising concerns about the environmental impact.

A military bunker on a beach on the island of Sazan, Albania. Photographer: Adnan Beci/AFP

But Kushner is touting the investments as a boon to the region. He said the Belgrade project will make a “tremendous Trump Tower’’ after the licensing deal with his father-in-law’s firm – dismissing accusations of any conflicts. “I’ve lived through a lot of scrutiny in the past few years,” Kushner told Bloomberg News in an interview. “I’m not a stranger to it. I’m just going to do what’s right.”

Around the Region

Serbia: President Aleksandar Vucic criticized a US decision to sanction the country’s sole refiner, controlled by Gazprom, as excessive — and said “some kind of transaction” will be needed to ensure its functioning. “It’s not an easy situation for Serbia,” Vucic told Bloomberg News in an interview. 

Aleksandar Vucic in Belgrade on Jan. 10. Photographer: Oliver Bunic/Bloomberg

Estonia: Native Russian speakers, who make up almost 30% of Estonia’s population, have found themselves in the government’s crosshairs. Some in the security establishment say a range of heavy-handed measures may backfire. 

Ukraine: European allies have become cautiously optimistic that US President-elect Donald Trump won’t force Kyiv into premature negotiations with Russia. 

Poland: Prime Minister Donald Tusk accused Russia of planning to carry out “acts of air terror” against airlines worldwide as he urged European partners to join forces in countering Moscow’s alleged sabotage attempts. 

Czech Republic: The Prague Stock Exchange is preparing for its first major initial public offering in more than four years after steam-turbine manufacturer Doosan Skoda Power announced plans to float a minority stake. 

Chart of the Week

Romania’s budget concerns were on top of investors’ minds at the Invisso CEE Forum in Vienna this week. The government’s 10-year local-currency yields have topped 8% for the first time since early 2023, with analysts watching for plans to reduce the fiscal shortfall following months of political turmoil. Romania needs to find buyers for €13 billion in eurobonds this year in that environment. 

By the Numbers

• Moldova is bracing for double-digit inflation this year amid an escalating energy crisis triggered by Gazprom’s decision to cut off gas supply to a key power-generating breakaway region, the country’s top central banker told Bloomberg News. 
• Romania kept its key interest rate steady with annual inflation continuing to hover above 5%. Poland also held off. Hungarian price-growth, meantime, jumped almost a percentage point to 4.6%. 
• Hungary is bracing for a potential wave of early redemptions of its popular inflation-linked retail bonds after record interest payments of 1.3 trillion forint ($3.3 billion) this year. The government says budget financing isn’t at risk. 

Things to Watch

• Ukrainian President Volodymyr Zelenskiy and Poland’s Andrzej Duda will be among attendees at the World Economic Forum in Davos, Switzerland, next week as the world’s elite ascend to the ski resort. 
• Slovenian President Natasa Pirc Musar began political talks for the country’s new central bank governor, with a decision potentially coming next week. 
• Polish laboratory operator firm Diagnostyka to publish its IPO prospectus. 

Final Thought

Romania’s prime minister sported a new tattoo for 2025. On his TikTok account, Marcel Ciolacu could be seen rolling up his sleeve to bare the phrase “The VAT won’t rise” in fresh ink on his forearm. Not exactly rock-and-roll, but it sent a signal in a country plunged into political turmoil after a fringe candidate pulled out a shock victory to beat him in November’s presidential vote — a contest that was later annulled. Amid the upheaval, Ciolacu is under pressure to tackle the widest budget deficit in the EU, and investors are convinced that will involve tax hikes. Not so, Ciolacu declaimed in his New Year’s tattoo. With a rerun of the presidential vote due in May, the commitment will have to outlast the body art, which had vanished from Ciolacu’s arm two weeks into the year.  

Photographer: Marcel Ciolacu

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