Accession and negotiation
CEE states, 27–28
complexities of (See Accession complexities)
Copenhagen criteria, 28
euro adoption (See Euro adoption)
financial arrangements, 28
Maastricht Treaty, 29–30
process elements, 28–29
Single European Act of 1986, 29
transitional arrangements, 28
Accession complexities
CEE states, 32–33
EU membership, 30–31
gross domestic product (GDP), 33–34
negotiations, 31
political considerations, 34
positive social changes, 33
Romania state, 32–33
security considerations, 32
Albania
agriculture, 206
challenges, 208
communist government, 206
GDP growth, 207–208
geographic location, 205
independence, 205, 206
inward FDI, 207–208
members, 206–207
open-market economy, 207
Armenia
Armenian homeland, 236
currency stabilization, 238–239
dram, national currency, 238
economy, 237–238
geographic location, 236
history, 235
privatization, 239–240
purchasing power parity (PPP), 239
Russian Revolution, 237
WWI, 236–237
Azerbaijan
currency, 243–244
GDP growth, 242–243
geographic location, 240, 241
independence, 240
inflation, 244
membership, 241–242
Nagorno-Karabakh region, 240, 241
oil-based economy, 242
Organization for Security and Cooperation in Europe (OSCE), 241
privatization, 243
and Soviet Union, 240
Belarus
economic crisis, 246
GDP, 247
geographic location, 244, 245
Poland invasion, 244, 245
ruble, 246–247
Soviet Union, 244
state-controlled companies, 245–246
trading partners, 247–248
WWII, 245
Belarusian ruble (BYN), 246–247
Bosnia and Herzegovina
Bosnian administration, split in, 126
Dayton Accords, 126
EU membership, 127
government indicators, 128
legislative and presidential elections, 127
violence outbreak, 126–127
voter turnout, 127
Bosnia-Herzegovina
banking sector, 212
cantons, 211
consumption economy, 213
culture and history, 208, 209
ethnic groups, 210–211
GDP growth, 212–213
geographic location, 208, 209
global financial crisis, 212
government, 211
independence, 209–210
industrial export-oriented economy, 211
international community aids, 213–214
market reforms, 210
non-nationalist politics, 214
sovereignty, 209
unemployment, 212–213
Bulgaria
agriculture, 195
corruption, 196
downfall of, 194
economic activities, 196–197
emergence of, 193
geographic location, 193–194
political structure, 194–195
Capital flow and currency rate control
benefits, 83
capital control measures, 86, 87
CEE economies, 83–84
control approach, 84
deflation, 83
independent monetary policies, 85
interest and exchange rates, 85–86
international trade, 82–83
Poland’s situation, 84–85
Capitalism, 9
CEE Countries
Albania (See Albania)
Bosnia-Herzegovina (See Bosnia-Herzegovina)
Bulgaria (See Bulgaria)
Croatia (See Croatia)
Czech Republic (See Czech Republic)
Estonia (See Estonia)
Hungary (See Hungary)
Kosovo (See Kosovo)
Latvia (See Latvia)
Lithuania (See Lithuania)
Macedonia (See Macedonia)
Montenegro (See Montenegro)
Poland (See Poland)
Romania (See Romania)
Serbia (See Serbia)
Slovakia (See Slovakia)
Slovenia (See Slovenia)
CEE regions. See Central and Eastern European (CEE) regions
CEE states
accession and negotiation, 27–28
accession complexities, 32–33
EU, 27
euro adoption, 35
Central and Eastern Europe (CEE) bloc
accession countries, 43
countries, 39–40, 43
definition, 39
economic development, 44
global financial crisis, 43
map, 44
socialist and communist, 40
socialist countries, 44, 45
Yugoslavia, 40
Central and Eastern European (CEE) regions
Baltic states, 2–3
collective region, 3–4
economies, 21–22
FDI (See Foreign direct investment (FDI))
geography and politics, 3–4
labor movement and political left, 9
liberal-democratic government expansion, 7–9
naming of, 2–3
national planning end (See National planning system)
neoliberalism, 6–7
political bloc, 2–3
post-communist economic transformations (See Post-communist economic transformations)
transition influences, 4
CIS countries
Armenia (See Armenia)
Azerbaijan (See Azerbaijan)
Belarus (See Belarus)
definition, 235
Georgia (See Georgia)
Kazakhstan (See Kazakhstan)
Kyrgyzstan (See Kyrgyzstan)
member states, 235
Moldova (See Moldova)
Russia (See Russia)
Tajikistan (See Tajikistan)
Turkmenistan (See Turkmenistan)
Ukraine (See Ukraine)
Uzbekistan (See Uzbekistan)
Commonwealth of Independent States (CIS) bloc
definition, 45
economic challenges (See Economic challenges, CIS)
economic cooperation, 48–49
establishment of, 45, 46
failures of, 47–48
functions, 47
geographic location, 46
goals, 46–47
purposes, 47
Contagion effect
CIS currency crisis, 62
selected currencies vs. dollar, 63
Soviet Union countries, 61–62
Copenhagen criteria, 28
Croatia
corruption, 131
economic indicators, 129, 131
economic output, 203
FDI inflow, 202–203
GDP growth, 202–203
geographic location, 200–201
inflation, 203
macroeconomic trends, 204
parliamentary system, 201–202
population, 201
reforms, 204
service sectors, 203–204
transition scores list, 131, 132
WWI and WWII, 201
Currency crisis, 49, 51
Currency suicide. See Currency war
Currency war
and CEE countries, 81, 82
Chinese Yuan, 80
and CIS countries, 82
currency rate manipulation, 80, 81
definition, 51, 79
dollar, 80
exchange rate manipulation, 79–80
imports and exports traders, 80, 81
national governments, 60–61
process of, 79
rent seeking, 52, 61
United States, 52, 61
Czech Republic
Bohemia Kingdom, 177
coalition government, 134–135
Communist Party, 177, 178
currency, 179
exports, 134
GDP growth, 178, 179
geographic location, 176, 177
Great Moravian empire, 176, 177
Holy Roman Empire, 176, 177
imports, 178, 179
national politics, 131, 134
presidential election, 134
Soviet-led invasion, 178
transition scores list, 131, 133
DNA. See National Anticorruption Directorate (DNA)
Eastern Europe political risks
assessment techniques of, 154–155
Bosnia and Herzegovina, 126–128
Bulgaria, 129, 130
country ranking list, 125
Croatia, 129, 131, 132
Czech Republic (See Czech Republic)
democratic governance, 125–126
Estonia, 135–136
EU member states, 156
Freedom House, 155
government indicators, 124
Hungary, 137–139
Latvia, 139–141
Lithuania, 141–143
Poland, 143–145
Romania, 146, 147
Serbia, 146, 148, 149
Slovakia (See Slovakia)
Slovenia, 152–154
Eastern Europe regional blocs
Baltic states, 40–41, 42
CEE (See Central and Eastern Europe (CEE) bloc)
CIS (See Commonwealth of Independent States (CIS) bloc)
Russian government, 41
transition countries, 41, 42, 43
Eastern European markets
adaptation, 121
challenges, 98
economic restructuring, 103–104
education system, 102–103
foreign communication, 121
global financial crisis, 97
historical and cultural perspectives, 98
labor market, 99
legal framework and trading policies (See Legal framework and trading policies)
multinationals’ failure (See Multinationals’ failure)
political factors, 97, 98
ranking (See Ranking, Eastern European markets)
Russia, role of, 122
skill mismatches (See Skill mismatches)
skills development, 99
social and economic issues, 121–122
Soviet Union, 97
supply and demand, 99
transition economies, 98
Economic challenges, CIS
advanced economies, 57
BRICS countries, 59–60
central banks, 53
Chinese market, 54–55
contagion effect, 61–63
currency crisis, 49, 51
currency exchange rate, 58–59
currency suicide, 60–61
currency war, 51–52, 61
debts, 56–57
depreciation, 50
emerging market currencies, 52
eurozone, 54
G20 summit, 58
International Monetary Fund (IMF), 53–54
Japan bank, 53
Japan’s inflation rate, 55–56
Plaza Accord, 60
quantitative easing (QE), 52
recession, 49
reciprocal trade barrier, 61
ruble exchange rate, 49–50
Russia’s international reserves, 51
Switzerland, 58
world economies, 52–53
Economic restructuring, 103–104
EME. See Evaluating emerging market (EME)
ERM. See European Exchange Rate Mechanism (ERM)
Estonia
communism, 165
economies, 164–165
flat tax policies, 166
GDP growth, 166–167
government, 164
information technology (IT) sector, 167
International Monetary Fund (IMF), 168
internet voting, 164
market economy, 167–168
occupation, 163–164
population, 163
Soviet Union, 164
EU. See European Union (EU)
Euro adoption
CEE states, 35
European Commission, 36–37
integration process, 35–36
other CEE states, 37–38
Poland bank, 35
post-communist transition, 35
Schadler’s study, 36
trading system, 35
European Exchange Rate Mechanism (ERM), 29
European Union (EU)
accession and negotiation (See Accession and negotiation)
Central and Eastern European (CEE), 27
roles, 27
Evaluating emerging market (EME), 161
FDI. See Foreign direct investment (FDI)
Financial repression, 76
Foreign direct investment (FDI)
CEE total stock, 17–20
corporate imperialism, 15
definition, 13
economies, 15–16
GDP, 16, 17
growth, 13, 15
inflow, 16–17
patterns, 20
stabilization period, 21
top investor countries, 17
transition period, 20–21
Future considerations and challenges
2016 outlook, 159
CEE states, 157–158
Chinese slowdown, 158–159
domestic demand, 157–158
evaluating emerging market (EME), 161
Grexit, 158
gross domestic product (GDP), 158
Russian economy, 160
transition periods, 160–161
Ukraine, 157, 159
Georgia
economic activities, 250
exports, 251–252
GDP growth, 250–251
geographic location, 248–249
hydropower stations, 252
independence, 249
inflation, 251
kingdoms, 249
Red Army, 249–250
tourism, 252
Greek crisis. See Grexit
Grexit, 158
Growth challenges
capital flow and currency rate control (See Capital flow and currency rate control)
CEE countries, 70
currency wars (See Currency war)
gross national savings, 70–71
indebtedness (See Indebtedness)
inflation control (See Inflation control)
investment flow, 70
Hot money, 78
Hungary
economy, 185
Fidesz, 137
forint currency, 185
GDP growth, 185–186
geographic location, 183–184
law, 137
political and economic issues, 137, 139
private sectors, 185
racial rhetoric, 137
transit scores, 137, 138
WWII, 184–185
Indebtedness
bank policies, 75
Belgium, 74
Canada, 74
central banks, 78–79
debt-to-GDP ratio, 72, 73
Eurozone, 76, 77
financial regulatory measures, 78
financial repression, 76
fiscal austerity, 72–73
global financial crisis, 75
government policies, 76
hot money, 78
importance of, 71–72
inflation, 73, 74, 78
infrastructure building, 72
Italy, 73
Japan, 73
public and private debts, 77
tax rate, 76
during World War I & II, 72
Inflation control
across Europe, 90–91
Central, Eastern and Southeastern Europe (CESEE), 88
definition, 86
geopolitical tensions, 88–89
macroeconomic trends, 88
non-euro area EU countries, 89–90
Poland, 86, 88
quarterly GDP growth, 88–89
targeting (See Inflation targeting)
Turkey, 89
Inflation targeting
advantages, 93, 95
central banks, 94
characterization of, 93
core, 92
and disinflation, 91
emerging markets, 94
Eurozone, 91–92
falling energy prices, 92–93
interest rates, 93
policy instruments, 93
Integration and accession
Berlin Wall collapse, 1–2
Bosnia and Herzegovina, 22
Bulgaria, 22–23
CEE regions (See Central and Eastern European (CEE) regions)
communism, 2
Croatia, 23
Czech Republic, 23
Estonia, 23–24
European community, 1
Hungary, 24
Latvia, 24
Lithuania, 24
Montenegro, 25
Poland, 25
Romania, 25
Serbia, 25–26
Slovakia, 26
Slovenia, 26
Western Europe, 1
Integration, economic impacts
CEE countries, 65
communism, 66–67
Dabrowski’s analysis, 68, 69
EU member states, 69
European Union (EU), 65
foreign direct investment (FDI) inflows, 66–67
GDP per capita, 68, 69
growth challenges (See Growth challenges)
macroeconomic variables, 67
state-owned enterprises (SOEs), 66
International Criminal Tribunal for the former Yugoslavia (ICTY), 104
Kazakhstan
education, 255–256
GDP growth, 254–255
geographic location, 252–253
health care system, 256
population, 254
poverty indicators, 255
regional economics, 256
Russian Revolution, 253–254
terrain, 253
trade policy, 255
Kosovo
ethnic division, 216
GDP growth, 217
geographic location, 215
government revenue, 218
information and communications technology, 218–219
members of, 216–217
Ottoman Empire, 215, 216
and Serbia, 214–215
World Bank and IMF, 218
Kyrgyzstan
agricultural sector, 259
GDP growth, 258–259
geographic location, 256–257
government policies, 258–259
independence, 257
membership, 257
population, 258
road networks, 259
Latvia
economic crisis, 171, 172
foreign investment, 171
GDP, 141
GDP growth rate, 171, 172
geographic location, 168–169
Latvians and Livs, 169
manufacturing industries, 170–171
membership, 169–170
national democratic governance, 139, 140
post-war period, 170
Soviet Union, 169
three-way ruling coalition, 139
Ukraine security crisis, 139
Legal framework and trading policies
ease of doing business list, 105–107
European Union (EU), 104
foreign investment, 107
International Criminal Tribunal for the former Yugoslavia (ICTY), 104
low-skilled workers, 105
Liberal-democratic government expansion
impediments, 8
parliamentary government, 7–8
Poland democracy, 8–9
potential pragmatics, 8
Lithuania
Barclays business, 176
biotechnology, 175, 176
blacklist, 141, 143
corruption, 141
EU membership, 174, 175
GDP growth rate, 174–175
geographic location, 173
Organization for Economic Cooperation and Development (OECD), 143
politics, 141
population, 173–174
transition scores, 142
Maastricht Treaty, 29–30
Macedonia
agriculture, 220
Country Partnership Strategy (CPS), 222
economic developments, 222
GDP growth, 220–221
geographic location, 219
IMF’s Precautionary Credit Line, 222
industrial sectors, 221
and Serbia, 220
Yugoslavia breakup, 220
Marshall Plan, 10
Moldova
economic crisis, 261
emigration, 261–262
GDP growth, 262
geographic location, 260
independence, 260, 261
macroeconomics, 262, 263
nationalism, 261
poverty, 263
and USSR, 261
Montenegro
Bosnian and Croatian War, 225
financial losses, 227
GDP growth, 227–228
geographic location, 223
industry and agriculture sector, 228
member of, 226
Partisans and Chetniks war, 224–225
referendum, 225, 226
and Serbia, 225–226
service-based economy, 226–227
tourism, 228
and Yugoslavia, 223, 224
Multinationals’ failure
business environment, 108–109
business proposal, 111
internal factors, 110–111
market environment, 108
political and economic environment, 108
strategic and leadership external factors, 107, 109, 110
National Anticorruption Directorate (DNA), 146
National planning system
consequences, 5–6
economic problems, 6
finance capital, 4–5
recession, 5
Western capital technology, 5–6
Neoliberalism, 6–7
Organization for Security and Cooperation in Europe (OSCE), 241
OSCE. See Organization for Security and Cooperation in Europe (OSCE)
Poland
and central Europe’s economy, 143
communist government, 187–188
establishment of, 186, 187
exports, 189–190
GDP growth, 189
geographic location, 186, 187
government, 144
market economy, 188
presidential election, 143–144
privatization, 188
transition scores, 145
zloty currency, 189
Post-communist economic transformations
capitalism, 9
economic agents, 9–10
economic collapse, early-1990s, 10–11
hard-currency debts, 12
hourly labor costs, 13, 14
Internet per 100 inhabitants, 12–13
Marshall Plan, 10
post-1989 political/economic transformation, 11–12
workforce employment percentage, 13, 14
PPP. See Purchasing power parity (PPP)
Purchasing power parity (PPP), 239
Ranking, Eastern European markets
indicators to institutions, 112–113
institutional voids, 113–114
manufacturing bases, 111–112
strategies for (See Strategies, Eastern European markets)
Romania
economic instability, 191
GDP growth, 192, 193
geographic location, 190
Golaniad, 191
government, 191
industries, 192
National Salvation Front (NSF), 191
political uncertainty, 193
population, 191
WWII, 190–191
Russia
economic policy uncertainty, 267–268
economy ranks, 265–266
GDP per capita, 266
geographic location, 263–264
history, 264, 265
inflation, 268
membership, 266
nomadic Golden Horde, 265
oil and gas, 266–267
Russian Revolution, 265
Soviet Union partition, 265
Serbia
and EU, 148, 231–232
European Commission, 232
FDI trends, 233–234
GDP growth, 232–233
geographic location, 228, 229
member of, 230
and Montenegro, 230–231
and Russia, 232
Serbian Progressive Party (SNS), 146, 148
territory of, 228, 229
transition scores, 149
violence, 231
war casualties, 229–230
and Yugoslavia, 231
Serbian Progressive Party (SNS), 146, 148
Skill mismatches
education systems, 100, 102
endogenous growth model, 100
jobs, 101
labor markets, 99–100
regional mismatch, 102
unemployment rate, 100–101
Slovakia
Austro-Hungarian empire, 180
with Czech Republic, 181
domestic politics, 148
foreign investment, 183
GDP growth, 182–183
geographic location, 179, 180
NATO conference, 150, 152
parliamentary democratic republic, 181–182
public sphere, 148, 150
services sector, 183
transition scores, 151
Velvet Revolution, 181
Slovenia
and Croatia, 154
economic freedom, 200
GDP growth, 199–200
geographic location, 197
government, 152
government of, 199
judicial system, 199
members of, 198
multiparty system, 198
political administration, 152
population and language, 197, 198
prosperity, 199
territory of, 198
transition scores, 153
SNS. See Serbian Progressive Party (SNS)
Soft skills, 102
Strategies, Eastern European markets
capital markets, 118–119
Coca Cola, 116
firm types, 115
framework, 116
generic choices, 114
institutional voids, 116
labor markets, 116, 117, 118
openness, 120–121
and options, 115
political and social system, 119–120
Tajikistan
agriculture, 274
ancient cultures, 271
civil war, 271, 272
electricity demand, 275
empires and dynasties, 271
GDP per capita, 273–274
geographic location, 271, 272
population, 275
poverty, 273
private investment, 274
provinces, 272
public investment, 274
Russian ruble, 272
Turkmenistan
GDP per capita, 270
geographic location, 268, 269
government policy, 271
Human Rights Watch, 269
natural reserves, 270
Ukraine
agricultural development, 279
banking industry, 279
economic crisis, 278–279
education, 279
energy sector, 279–280
fragmentation, 275–276
GDP per capita, 277–278
geographic location, 275, 276
health system, 279
independence, 276
NATO partnership, 276–277
unemployment, 279
water and wastewater utilities, 280
Uzbekistan
commodity production, 281
diverse cultural heritage, 280, 281
exports, 282
GDP per capita, 281–282
geographic location, 280, 281
industrialization, 283
population, 280, 281
self-sufficiency policy, 282