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European Economic Integration and South-East Europe

European Economic Integration and South-East Europe

Challenges and Prospects

Edited by Klaus Liebscher, Josef Christl, Peter Mooslechner and Doris Ritzberger-Grünwald

With both transition dynamics and the EU integration process having shifted to the south-east of Europe, a region fairly marginalized in the literature, this book fills a gap by taking stock of where South-East Europe’s economies and institutions stood in 2004. The authors evaluate the potential for investment and growth within the South-East European region, including the role of trade and FDI, and discuss the challenges associated with unemployment, poverty and ‘brain drain’. The book also provides insights into the particular monetary and exchange rate policies applied, including cases of ‘euroization’, and finally makes an assessment, against this background, of the European perspective of the countries of South-East Europe.

Chapter 4: South-East Europe: opportunities and potential for investment and growth

Elisabetta Falcetti, Peter Sanfey and Sladjan Tepic

Subjects: economics and finance, regional economics, urban and regional studies, regional economics


1 Elisabetta Falcetti, Peter Sanfey and Sladjana Tepic 1. INTRODUCTION AND OVERVIEW The year 2004 is a significant landmark in the transition process. Not only does it mark the 15th anniversary of the fall of the Berlin Wall, but it is also the year when eight countries of Central Europe and the Baltics (CEB) joined the European Union (EU).2 For these countries, the transition to a market economy is not yet over, but full EU membership is a clear sign that many of the difficulties and hurdles associated with transition have been successfully overcome. Can this success be replicated in another part of the transition region – South-East Europe (SEE) – where the next wave of accession is expected in the coming years? This chapter examines the prospects for eight transition countries in SEE: Albania, Bosnia and Herzegovina, Bulgaria, Croatia, FYR of Macedonia, Moldova, Romania, and Serbia and Montenegro. We argue that these countries have the potential over the medium-term to grow rapidly and to become an increasingly attractive investment destination in the run-up to further EU expansion. This chapter outlines several reasons for cautious optimism about the future of SEE. Overall, our judgement is based on the clear and unmistakeable progress that the region has made since the late 1990s. Notwithstanding difficulties and occasional setbacks, it is now a region of opportunity and potential. Some of the recent progress in SEE has been remarkable. Politically, the most significant change has been the re-integration of Serbia and...

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