The Impact of the Global Economic and Financial Crisis on Central, Eastern and South-Eastern Europe: A Stock-Taking Exercise

67 Pages Posted: 2 Jul 2010

See all articles by Sandor Gardo

Sandor Gardo

Oesterreichische Nationalbank (OeNB)

Reiner Martin

European Central Bank (ECB)

Date Written: June 17, 2010

Abstract

The paper first reviews the main drivers of the growth and real convergence process in central, eastern and south-eastern Europe (CESEE) since 2000 and assesses the key macro-financial strengths and vulnerabilities of the region at the beginning of the global economic and financial crisis. The main part of the paper reviews financial and real economic developments in these countries since the crisis started to impact the CESEE region. The paper finds that developments have been rather heterogeneous in the region. CESEE countries with the largest economic imbalances tended to be most affected. National and international support measures appear to have helped to stabilise financial markets, and parent banks of foreign bank subsidiaries in CESEE were committed to sustaining their exposure to the region. The degree to which CESEE governments were able to use policy instruments to counter the real effects of the crisis is rather heterogeneous, depending inter alia on the exchange rate regime in place and the initial fiscal positions.

Keywords: Financial crisis, vulnerability indicators, central, eastern and south-eastern Europe

JEL Classification: F15, F32, G01, G15, G18, H30

Suggested Citation

Gardo, Sandor and Martin, Reiner, The Impact of the Global Economic and Financial Crisis on Central, Eastern and South-Eastern Europe: A Stock-Taking Exercise (June 17, 2010). ECB Occasional Paper No. 114. Available at SSRN: https://ssrn.com/abstract=1626117

Sandor Gardo

Oesterreichische Nationalbank (OeNB) ( email )

Otto-Wagner-Platz 3
1090 Vienna
Austria

Reiner Martin (Contact Author)

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

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