This chapter was prepared by Kamil Dybczak, Carlos Mulas Granados, and Ezgi Ozturk with inputs from Vizhdan Boranova, Karim Foda, Keiko Honjo, Raju Huidrom, Nemanja Jovanovic and Svitlana Maslova, under the supervision of Jörg Decressin and the guidance of Gabriel Di Bella. Jaewoo Lee and Petia Topalova provided useful advice and comments. Nomelie Veluz provided administrative support. This chapter reflects data and developments as of September 28, 2020.
Bertrand Gruss (co-lead), Carlos Mulas-Granados, Manasa Pat-nam (co-lead), and Sebastian Weber prepared this chapter under the supervision of Enrica Detragiache and the guidance of Jeffrey Franks. Zan Jin provided excellent research support.
Christian Ebeke (co-lead), Nemanja Jovanovic, Svitlana Maslova, Francisco Parodi, Laura Valderrama (co-lead), Svetlana Vtyurina, and Jing Zhou prepared this chapter under the supervision of Mahmood Pradhan and the guidance of Laura Papi and Petia Topalova. Jörg Decressin provided useful advice and comments. Jankeesh Sandhu provided outstanding research assistance, and Nomelie Veluz was expertly in charge of administrative support.
Failed corporate structures lie at the heart of Serbia’s economic difficulties. But the government emphasized instead the need for public investment and labor tax cuts. Capital inflows pose additional challenges. External concerns leave little room to fiscal maneuver. This puts the focus on public expenditure reform. Recent changes in monetary arrangements are appropriate. These steps would best be taken further—toward inflation targeting. However, the envisaged fiscal relaxation calls much of this into question. Serbia has made significant progress in recent years.
Antonis Adam, Mr. James McHugh, and Mr. Theodora Kosma
This paper explores the effectiveness of the Central European Free Trade Area (CEFTA) and the Baltic Free Trade Area (BFTA). Estimates from a gravity model and bilateral trade data support the view that both CEFTA and BFTA helped expand regional trade and limit the emergence of a "hub-and-spoke" relationship between the CEECs and the European Union (EU). These empirical conclusions carry some important policy implications for the "second wave" of prospective EU members among Southeastern European Countries (SEECs). The paper argues that the SEECs should reconsider their bilateral approach to trade liberalization and move towards a multilateral free-trade area as exemplified by both the CEFTA and BFTA.
The COVID-19 pandemic has caused dramatic loss of human life and major damage to the European economy, but thanks to an exceptionally strong policy response, potentially devastating outcomes have been avoided.