World Bank2012-12-042012-12-042012-06https://hdl.handle.net/10986/11888After they achieved 2.2 percent growth in 2011, early indications are that the economies of the six countries in South East Europe (the SEE6: Albania, Bosnia and Herzegovina (BIH), Kosovo, FYR Macedonia, Montenegro, and Serbia) are slowing drastically and can expect just 1.1 percent growth in 2012. Economic conditions in the Euro zone are holding back economic activity and depressing government revenues in SEE6 countries. With both public debt and financing pressures high, most countries in the region need to embark on major fiscal consolidation programs if they are to reverse their adverse debt dynamics and avoid financing problems down the road. The good news is that in general the SEE6 financial sectors are still relatively well placed, despite elevated risks and vulnerability to adverse shocks, especially the possibility of contagion if the Greek crisis should intensify. The bad news is social: SEE6 countries have the highest unemployment and poverty rates in Europe. Yet even with the difficult short-term situation, SEE6 countries now have historic opportunity to board the European 'convergence train' and over the long term reduce their per capita income gap with developed European Union (EU) countries. All earlier entrants were able to 'catch up quickly.' In principle, the same 'convergence train' is now pulling into the EU candidate countries in SEE6; but these gains are not automatic, they will materialize only if country policies and reforms facilitate them. The long-term SEE6 structural reform agenda must leverage greater trade and financial integration and reform labor markets and the public sector.en-USCC BY 3.0 IGOACCOUNTINGADVERSE EFFECTBALANCE OF PAYMENTSBALANCE SHEETBANK CREDITBANK DEPOSITSBANK FOR INTERNATIONAL SETTLEMENTSBANK LENDINGBANK OF GREECEBANKING SECTORBANKING SYSTEMBANKING SYSTEMSBANKRUPTCYBANKRUPTCY LAWBANKRUPTCY PROCEDUREBONDSBOOST TO GROWTHBUSINESS ENVIRONMENTCADASTRECAPITAL ADEQUACYCAPITAL ADEQUACY RATIOSCAPITAL EXPENDITURESCAPITAL INFLOWSCDSCENTRAL BANKCENTRAL BANKSCOMMERCIAL BORROWINGCOMMODITYCOMMODITY PRICESCONFIDENCE INDICESCONSOLIDATIONCONTRACT ENFORCEMENTCREDIT DEFAULTCREDIT DEFAULT SWAPCREDIT EXPANSIONCREDIT INFORMATIONCREDIT INFORMATION SYSTEMCREDIT LINECREDIT RATINGCREDITORSCURRENCYCURRENCY BOARDCURRENT ACCOUNT DEFICITCURRENT ACCOUNT DEFICITSDEBT LEVELSDEBT PAPERDEBT SERVICINGDEBT SERVICING COSTSDEMOGRAPHICDEPOSITDEPOSITSDIVIDENDDIVIDENDSDOMESTIC BANKDOMESTIC BORROWINGDOMESTIC CAPITALDOMESTIC CAPITAL MARKETSECONOMIC CRISISECONOMIC INTEGRATIONEMERGING ECONOMIESEMERGING MARKETSEMPLOYMENTENFORCEMENT SYSTEMENTERPRISE PERFORMANCEEQUIPMENTEQUITY INDEXEUROBONDEXCHANGE RATESEXPENDITUREEXPENDITURESEXPORT GROWTHEXPORT MARKETEXPORT PERFORMANCEEXPOSUREEXTERNAL DEBTEXTERNAL DEFICITSEXTERNAL FINANCINGFINANCESFINANCIAL CRISESFINANCIAL CRISISFINANCIAL MARKETFINANCIAL MARKET DEVELOPMENTFINANCIAL SECTORFINANCIAL STABILITYFINANCING SOURCESFISCAL BURDENFISCAL CONSOLIDATIONFISCAL DEFICITFISCAL DEFICITSFISCAL POLICIESFISCAL POLICYFIXED EXCHANGE RATESFLEXIBLE EXCHANGE RATEFLEXIBLE EXCHANGE RATE REGIMESFLEXIBLE EXCHANGE RATESFOREIGN BANKSFOREIGN CURRENCYFOREIGN CURRENCY DEPOSITSFOREIGN EXCHANGEFOREIGN EXCHANGE RESERVESFOREIGN FINANCINGFOREIGN INVESTMENTFOREIGN PORTFOLIOFOREIGN PORTFOLIO INVESTMENTFUTURE GROWTHGLOBAL BONDGLOBAL ECONOMYGOVERNMENT BORROWINGGOVERNMENT DEBTGOVERNMENT EXPENDITURESGOVERNMENT REVENUESGROWTH RATEHOST COUNTRIESINCOMEINCOME LEVELSINCOME TAXINCOME TAXESINDIVIDUAL FIRMSINFLATIONINFRASTRUCTURE INVESTMENTINSURANCEINTEREST EXPENDITURESINTEREST RATESINTERNATIONAL FINANCIAL INSTITUTIONSINTERNATIONAL FINANCIAL STATISTICSINTERNATIONAL SETTLEMENTSINVESTOR INTERESTISSUANCELABOR MARKETLABOR MARKETSLAWSLEGISLATIONLEGISLATIVE FRAMEWORKLENDERSLEVEL OF DEBTLIQUIDATIONLIQUIDITYLOANLOAN LOSS PROVISIONSLOAN PROCEEDSMACROECONOMIC ENVIRONMENTMACROECONOMIC MANAGEMENTMACROECONOMIC POLICIESMACROECONOMIC STABILITYMARKET ACCESSMARKET CONDITIONSMARKET DEVELOPMENTMARKET DEVELOPMENTSMARKET EFFICIENCYMARKET PERFORMANCEMATURITYMIGRATIONMINISTRIES OF FINANCEMONETARY FUNDMONETARY POLICYNATIONAL BANKNON-PERFORMING LOANSNONPERFORMING LOANSNOTARYNPLOIL PRICESOPEN ECONOMIESOUTPUTOVERSIGHT PROCESSESPENSIONPENSION REFORMPENSION REFORMSPENSION SYSTEMSPENSIONSPOLITICAL ECONOMYPORTFOLIOPORTFOLIO FLOWSPRIVATE CREDITPRIVATE CREDIT BUREAUPRIVATE FINANCINGPRIVATIZATIONPRODUCTIVITYPUBLIC DEBTPUBLIC FINANCEPUBLIC FINANCESPUBLIC SPENDINGPUBLIC-PRIVATE PARTNERSHIPSRAPID GROWTHREAL ESTATEREAL GROWTH RATESREAL SECTORREFORM PROGRAMREGIONAL TRADEREGULATORSREMITTANCESREORGANIZATIONRETIREMENTRETURNRETURNSRETURNS ON EQUITYRISK PREMIUMRULE OF LAWSELF-REGULATIONSETTLEMENTSINGLE MARKETSOCIAL PROTECTIONSOVEREIGN DEBTSOVEREIGN DEBT MARKETSOVEREIGN DEBT PROBLEMSSTOCK MARKETSTOCK MARKET VOLATILITYSUBSIDIARIESSUBSIDIARYSUPERVISORY AUTHORITIESTAXTAX ADMINISTRATIONTAX COMPLIANCETAX RATETAX RATESTAXATIONTRACK RECORDTRADE BALANCETRADE LIBERALIZATIONTRADE RELATIONSTRANSPARENCYUNEMPLOYMENT RATEUNEMPLOYMENT RATESVOLATILE ENVIRONMENTWAGESWorld Bank10.1596/11888