Stronger together: why Central- Eastern Europe needs deeper regional dialogue

For most of the post-Cold War period, Central and Eastern Europe (CEE) was treated as Europe’s convergence project: a set of economies catching up, modernising and integrating into the single market. That story is no longer accurate.

Today, the region is one of the main engines of European growth, responsible for the bulk of the EU’s industrial expansion, a rising share of its exports, and the most dynamic shift in its defence and energy landscape.

The question is no longer whether the region can grow, but whether its growth can be directed toward a coherent, long-term strategy. And that requires something Europe has rarely excelled at: sustained and structured regional dialogue.

The case for deeper cooperation is stronger now than at any point in the past two decades.

Europe’s economic geography is changing. While the Eurozone is expected to expand by barely 0.8% next year, much of CEE continues to grow between 3-4%. Poland, Czechia, Slovakia, Hungary, Romania and the Baltics now account for almost a fifth of the EU’s GDP on a purchasing-power basis, up from 13% 20 years ago. This shift is not a statistical curiosity; it reflects the relocation of manufacturing, the absorption of EU funds, and the emergence of new supply-chain corridors that increasingly run north–south rather than west–east.

Security has become an equally powerful driver. The war in Ukraine has transformed the region’s strategic relevance. Poland will spend more than 4% of GDP on defence next year, the highest in NATO after the US. Romania and the Baltics are rapidly expanding their capabilities, and the region as a whole now accounts for more than 20% of Europe’s defence procurement. Logistics corridors running through Poland, Slovakia and Romania have become Europe’s arteries for military and humanitarian support. Energy security, long taken for granted in Western Europe, has become a central pillar of policy: within just two years, the region reduced its exposure to Russian gas from more than 50% to under 20%, largely through new liquefied natural gas (LNG) capacity, interconnectors and diversified contracts. A transformation of this speed and scale is difficult to imagine without some shared strategic understanding.

Yet this new economic and geopolitical weight sits atop a set of unresolved structural tensions. The region continues to converge in terms of wages and productivity, but not in terms of innovation. Europe spends around 2.2% of GDP on R&D, well below the US or South Korea. Most CEE economies remain deeply embedded in manufacturing and assembly rather than research and intellectual property. Demographics are a looming constraint: by 2030 the working-age population is expected to shrink by roughly 8%. Infrastructure, although expanding, remains uneven. The European Investment Bank estimates that the region needs around €400 billion in energy and grid investment by 2035, not to mention multi-billion-euro upgrades to rail and port capacity. And the region’s capital markets, despite progress, remain fragmented. The stock exchanges of Warsaw, Prague and Budapest combined are still smaller than a single mid-sized Western European exchange, limiting liquidity, valuation and exit opportunities.

On paper, these gaps look like a straightforward policy challenge. In practice they are a coordination challenge. No country in the region can address them alone, and the EU’s mechanisms — cohesive though they often are — tend to operate on a timescale and through a policy lens that does not always reflect the more urgent needs of the region’s economies. A more structured form of regional consultation is not a substitute for EU integration; it is a complement that strengthens it.

For the region to make full use of its advantages, it needs a shared economic vision rather than a set of parallel national strategies. The first part of that vision should concern Europe’s industrial and energy base. The shift toward electrification and low-carbon manufacturing is already reshaping investment flows. Battery factories, semiconductor packaging lines, and new centres for power-electronics manufacturing are being built not in Western Europe but in Poland, Czechia, Slovakia and Hungary. These investments depend on reliable, affordable and predictable energy systems. Coordinated planning of grid capacity, joint power-purchase frameworks and cross-border permitting would lower costs and allow the region to scale much faster than it can today.

The second part of the vision involves the region’s competitiveness. CEE’s demographic decline cannot be reversed, but its economic value can be increased. The region needs a coherent skills agenda around engineering, cybersecurity, energy technology and applied AI; and it needs to align industrial policy with the needs of companies that are already moving up the value chain. Universities and employers operate across borders in practice, but policy remains overwhelmingly national. A regional framework for skills, research and technology transfer would accelerate the move away from low-margin manufacturing toward more advanced production.

The third part involves connectivity, both physical and financial. Projects such as the Three Seas Initiative, Via Carpathia or Rail2Sea demonstrate that when infrastructure is treated as a regional rather than national priority, delivery accelerates. Yet the region still lacks the equivalent of a capital-markets alliance that would harmonise listing standards, connect clearing systems and pool liquidity. Without such an effort, many of the region’s most promising companies will continue to list in Amsterdam, London or New York simply because those markets offer scale.

None of these challenges can be solved by dialogue alone. But without dialogue, they cannot be solved at all. Europe’s political cycle is increasingly fragmented, and so are its economic structures. To preserve the region’s momentum, CEE needs a standing mechanism for consultation: annual competitiveness reviews, energy-policy coordination, digital and AI working groups, defence-industry roundtables and a permanent platform for capital-market alignment. This is not about creating a bloc within the EU but about ensuring that the EU’s fastest-growing region acts with the coherence required by its importance.

Why does this matter now? Because Europe is entering a decade defined by competition — for capital, for technology, for energy, and for security. Central and Eastern Europe has the geography, the workforce and the industrial base to shape the continent’s response to all four. But momentum without structure is not a strategy. The region’s success will depend on whether it can grow together rather than merely grow in parallel. Stronger together is not a slogan; it is the only realistic path to sustaining convergence and anchoring Europe’s future.