Business climate analyses

Will Slovenia be the next euro-zone country to ask for a bail out? Some major reports have suggested that there is little cause for panic in Slovenia. Despite this, all the focus remains on the 7 billion eurohole in the banking system.

The liberalization of the Balkan economies was seen by the EU, the USA and the major international financial institutions as necessary to attract and steer, politically and financially, the ex-Yugoslav nations on the way to western model of society. The Central Eastern Free Trade Agreement (CEFTA) in its most recent shape was established in 2007 and since then have made achivements but also raised problems.

Romania’s Constitutional Court ruled on 25 June that some of the austerity measures to be implemented by the government are unconstitutional. To offset the ruling that pensions cannot be cut, the government decided to increase VAT. These events have prompted the possible delay in a rebound of local demand. This year will also see a one-off jump in inflation as an immediate consequence of the VAT increase.

Estonia will be the 17th eurozone member, the third of the ex-communist countries after Slovenia (2007) and Slovakia (2009) to join the common currency, the euro. Indeed, the EU authorities gave a positive assessment on Estonia’s readiness to join the eurozone, despite several macroeconomic and structural risks underlined by the authorities.

The recovery from the economic downturn in South East Europe (SEE) is delayed and the countries of the area are suffering from its effects, in particular on the society and productive activities. This survey, by the research unit of the Unicredit banking Group, highlights the perspectives, the weeknesses and strenghts of seventeen nations of the area with regard to the first quarter of 2010.

The international economic and financial crisis is damaging the whole European Union. Nevertheless the newest member countries are suffering more in terms of job losses and public accounts imbalances. Can this situation disrupt the integration process in the EU, given that it is built primarly on the commercial and financial exchanges between new members and founding states?

The European Union has officially accepted Bucharest as a member from January, 1st 2007. This historical event has contributed strongly to the positive economic trend experienced by the country in the last few years. Its GDP growth and the amount of foreign direct investments are higher than those of other countries of the area. Anyway Romania must still solve some structural, social and administrative problems. The beginning of 2008 has showed a substantial continuity with the previous year, and the trade deficit is rising due to imports of industrial machines and other investment goods.