Abstract

This issue of the Regional Economic Outlook for Europe examines the moderate and uneven recovery occurring across the region. The varying speed of recovery in advanced Europe is closely linked to the degree of overheating and credit expansion going into the crisis. The even more varied speed of recovery in the economies of emerging Europe reflects country-specific vulnerabilities, external financing difficulties, and variations in their reliance on export demand. In the most vulnerable and hard hit countries in emerging Europe, coordinated assistance from the IMF, the European Union (EU), and other multilateral institutions eased the inevitable adjustment to considerably tighter constraints on external financing. Growth is expected to pick up during 2010-11, but the traditional drivers of the recovery are likely to be weaker than usual.

  • Abiad, Abdul, Daniel Leigh and Ashoka Mody, 2009, “Financial Integration, Capital Mobility, and Income Convergence,” Economic Policy, Vol. 24 (April).

    • Search Google Scholar
    • Export Citation
  • Abiad, Abdul, Giovanni Dell’Ariccia, and Bin Li, forthcoming, “Creditless Recoveries,” IMF Working Paper (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • Árvai, Zsófia, Karl Driessen, Inci Ötker-Robe, 2009, “Regional Financial Interlinkages and Financial Contagion Within Europe,” IMF Working Paper 09/06 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • Bakker, Bas B., and Anne-Marie Gulde-Wolf, forthcoming, “The Credit Boom-Bust in Emerging Europe: Bad Luck or Bad Policies?IMF Working Paper (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • Bank of England, 2010, Inflation Report, (February).

  • Basel Committee on Banking Supervision, 2009a, “Strengthening the Resilience of the Banking System—Consultative Document.” Available via the Internet: http://www.bis.org/publ/bcbs164.pdf?noframes=1

    • Search Google Scholar
    • Export Citation
  • Basel Committee on Banking Supervision, 2009b, “International framework for liquidity risk measurement, standards and monitoring—Consultative Document.” Available via the Internet: http://www.bis.org/publ/bcbs165.pdf?noframes=1

    • Search Google Scholar
    • Export Citation
  • Basel Committee on Banking Supervision, 2010, “Principles for Enhancing Corporate Governance—Consultative Document.” Available via the Internet: http://www.bis.org/publ/bcbs168.htm

    • Search Google Scholar
    • Export Citation
  • Benes, Jaromir, Johan Mathisen, and Srobona Mitra, forthcoming, “Modeling Macroprudential Policies in Emerging Economies,” IMF Working Paper (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • Berger, Helge and Österholm, Pär, 2008, “Does Money Matter for U.S. Inflation? Evidence from Bayesian VARsIMF Working Paper 08/76 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • Binici, Mahir, Michael Hutchison, and Martin Schindler, 2009, “Controlling Capital? Legal Restrictions and Asset Compositions of International Financial Flows,” IMF Working Paper 09/208 (Washington: International Monetary Fund); and forthcoming, Journal of International Money and Finance.

    • Search Google Scholar
    • Export Citation
  • Blanchard, Olivier, and Justin Wolfers, 2000, “The Role of Shocks and Institutions in the Rise of European Unemployment: The Aggregate Evidence,” Economic Journal, Vol. 110 (March), pp. C133.

    • Search Google Scholar
    • Export Citation
  • Blanchard, Olivier, 2007, “Current Account Deficits in Rich Countries,” IMF Staff Papers, Vol. 54, No. 2, pp. 191219.

  • Claessens, Stijn, M. Ayhan Kose, and Marco E. Terrones, 2009, “A Recovery Without Credit: Possible, but…,” Vox, May 22. Available via the Internet: http://www.voxeu.org/index.php?q=noted/3600

    • Search Google Scholar
    • Export Citation
  • Corsetti, Giancarlo, Keith Kuester, Andre Meier, and Gernot J., Müller, forthcoming, “Debt Consolidation and Fiscal Stabilization of Deep RecessionsAmerican Economic Review—Papers and Proceedings.

    • Search Google Scholar
    • Export Citation
  • Debrun, Xavier and Radhicka Kapoor, forthcoming, “Fiscal policy and Macroeconomic Stability: New Evidence and Policy Implications,” IMF Working Paper (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • Dolls, Mathias, Clemens Fuest, and Andreas Peichl, 2009, “Automatic Stabilizers and Economic Crisis,” CESifo Working Paper No. 2878 (Munich: CESifo).

    • Search Google Scholar
    • Export Citation
  • Duenwald, Christoph, Nikolay Gueorguiev, and Andrea Schaechter, 2005, “Too Much of a Good Thing? Credit Booms in Transition Economies: The Cases of Bulgaria, Romania, and Ukraine,” IMF Working Paper 05/128 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • Epstein, Natan, Manuela Goretti, and Erlend Nier, forthcoming, “Coping with Capital Flows Under an Inflation Targeting Regime: Lessons for Poland,” Selected Issues Paper, IMF Country Report (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • European Bank for Reconstruction and Development (EBRD), 2009, Transition Report 2009: Transition in Crisis? (London, November).

  • European Central Bank (ECB), 2010, Monthly Bulletin (Frankfurt, February).

  • Fatàs, Antonio, and Mihov, Ilian, 2009, “The Euro and Fiscal Policy,” NBER Working Paper No. 14722 (Cambridge, MA: National Bureau of Economic Research).

    • Search Google Scholar
    • Export Citation
  • Financial Stability Board, 2009, “Exit from Extraordinary Financial Sector Support Measures,” Note for G20 Ministers and Governors meeting, 6–7 November 2009 (Basel: Financial Stability Board, November).

    • Search Google Scholar
    • Export Citation
  • Fonteyne, Wim, Wouter Bossu, Luis Cortavarria-Checkley, Alessandro Giustiniani, Alessandro Gullo, Daniel Hardy, and Seàn Kerr, 2010, “Crisis Management and Resolution for a European Banking System,” IMF Working Paper 10/70 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • Goretti, Manuela, 2008, “Wage-Price Setting in New EU Member States,” IMF Working Paper 08/243 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • Hilbers, Paul Louis Ceriel, Inci Ötker-Robe, Ceyla Pazarbasioglu, and Gudrun Johnsen, 2005, “Assessing and Managing Rapid Credit Growth and the Role of Supervisory and Prudential Policies,” IMF Working Paper 05/151 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • International Monetary Fund (IMF), 2003, World Economic Outlook (Washington, September).

  • International Monetary Fund (IMF), 2007, World Economic Outlook (Washington, October).

  • International Monetary Fund (IMF), 2009a, Regional Economic Outlook: Europe (Washington, May).

  • International Monetary Fund (IMF), 2009b, Regional Economic Outlook: Europe (Washington, October).

  • International Monetary Fund (IMF), 2009c, “The State of Public Finances Cross-Country Fiscal Monitor: November 2009IMF Staff Position Note 09/25 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • International Monetary Fund (IMF), 2009d, World Economic Outlook (Washington, April).

  • International Monetary Fund (IMF), 2010a, Global Financial Stability Report (Washington, May).

  • International Monetary Fund (IMF), 2010b, World Economic Outlook (Washington, May).

  • Mathisen, Johan, forthcoming, “Currency Mismatches in Emerging Europe,” IMF Working Paper (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • Mitra, Pradeep, Marcelo Selowsky, and Juan Zalduendo, 2009, Turmoil at Twenty: Recession, Recovery, and Reform in Central and Eastern Europe and the Former Soviet Union (Washington: The World Bank).

    • Search Google Scholar
    • Export Citation
  • Mitra, Srobona, and Esther Pérez Ruiz, forthcoming, “Labor Market Reforms That Could Make the Recession less Prolonged,” in Europe: Twenty Years of Transition (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • Mody, Ashoka, and Antu Panini Murshid, 2005, “Growing Up with Capital Flows,” Journal of International Economics, Vol. 65 (January), pp. 24966.

    • Search Google Scholar
    • Export Citation
  • Mody, Ashok, 2010, “Who Fell in 2009: Those with Current Account Deficits or With Extra Froth?Commentary posted on www.voxeu.org.

  • Mody, Ashok, and Franziska Ohnsorge, 2010, “After the Crisis: Lower Consumption Growth but Narrower Global Imbalances?IMF Working Paper 10/11 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • Ostry, Jonathan D., Atish R. Ghosh, Karl Habermeier, Marcos Chamon, Mahvash S. Qureshi, and Dennis B.S. Reinhardt, 2010, “Capital Inflows: The Role of Controls,” IMF Staff Position Note 10/04 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • Ötker-Robe, Inci, Zbigniew Polanski, Barry Topf, and David Vàvra, 2007, “Coping with Capital Inflows: Experiences of Selected European Countries,” IMF Working Paper 07/190 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • Rosenberg, Christoph B., and Marcel Tirpak, 2008, “Determinants of Foreign Currency Borrowing in the New Member States of the EU,” IMF Working Paper 08/173 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • Schadler, Susan, Paulo Drummond, Louis Kuijs, Zuzana Murgasova, and Rachel van Elkan, 2005, “Adopting the Euro in Central Europe,” IMF Occasional Paper 234 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • Schindler, Martin, 2009, “Measuring Financial Integration: A New Dataset,” IMF Staff Papers, Vol. 56, No. 1, pp. 22238.

  • Sgherri, Silvia and Edda Zoli, 2009, “Euro Area Sovereign Risk During the Crisis,” IMF Working Paper 09/222 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • Strauss-Kahn, Dominique, 2010, “Crisis Management Arrangements for a European Banking System,” Keynote speech at the European Commission conference Building a Crisis Management Framework for the Single Market, Brussels, March 19. Available via the Internet: http://www.imf.org/external/np/speeches/2010/0 31910.htm

    • Search Google Scholar
    • Export Citation
  • Tamirisa, Natalia and Deniz Igan, 2008, “Are Weak Banks Leading Credit Booms? Evidence from Emerging Europe,” IMF Working Paper 08/219 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • von Hagen, Jürgen, 2009, “The Monetary Mechanics of the Crisis,” Bruegel Policy Contribution 2009/08 (Brussels: Bruegel, August).