Central and Eastern Europe: Structural Current Account Deficits and Increasing Foreign Debts (V)
Persistant current account deficits and increasing foreign debts are alarming though hardly discussed trends of East Central Europe's economic development. Part five: Conclusions and sources.
Rainer Tomassovits and Joachim Becker - Oct. 17, 2006
It can be concluded that a number of Central European states are 'in the ‘red region’ of vulnerability' (Onaran 2006: 249) compared with data of former crises in Latin America. Taking into account the balance of payments situation and the amount and structure of the external debt, the Baltic states appear extremely vulnerable to a financial crisis. In Hungary and Slovakia, the indicators are better than in the Baltic states but, nevertheless, their vulnerability is high.
The structures of balances of payments and the evolution of external debts are problematic in the cases of the Czech Republic and Poland but their external vulnerability is considerably smaller than in the afore mentioned states.
Slovenia displays the most positive structure of the all balances of payments, nevertheless its external debt has increased considerably. Slovenia would seem to be the least vulnerable of the present EU member states of Central East Europe.
The degree of vulnerability seems to be related to the economic model. Bohle (2006) identifies three models in Central Eastern Europe. The Baltic model is characterised by an almost indiscriminate opening of the economic and the dismantling of the welfare state. The model of 'embedded neoliberalism' of the Visegrad states (Czech Republic, Hungary, Poland, Slovakia) is characterised by actively wooing foreign capital in the manufacturing sector and the partial dismantling of the welfare state (although to a significantly varying degree).
Slovenia is characterised by a variety of neo-corporatism. Transformation in Slovenia was characterised by the search for social consensus and a high degree of social protection was maintained. The government sought to preserve a space for domestic capital, especially in strategic sectors.
External vulnerability is highest in the Baltic model, especially in its most extreme cases of Estonia and Latvia, and it is lowest in the neo-corporatist model of Slovenia. The "embedded neoliberalism" falls in between.
You can download the series as one article in pdf-format (116.48 KB)
Bohle, Dorothee (2006) "Race to the bottom"? Die Dynamik der Konkurrenzbeziehungen in der erweiterten EU. In: Prokla, 36(3), pp. 343-360.
Cepal (2004): Estudio económico de América Latina y el Caribe 2003-2004. Santiago de Chile.
Fárek, Jiři (2004): Problem zahrni�?ní zadluženosti ve světové ekonomice a politice. In: Mezinárondní politika, No. 11, pp. 4-8.
Hölscher, Jens and Stephan, Johannes (2006): Money and credit integration in an enlarging Eurozone: Methodological issues. In: Ekkard Hein, Arne Heise, and Achim Truger (eds.): European Economic Policies. Alternatives to Orthodox Analysis. Marburg, pp. 181-197.
Onaran, Özlem (2006): Speculation-led growth and fragility in Turkey. Does EU make a difference or 'can it happen again'? In: Ekkard Hein, Arne Heise, and Achim Truger (eds.): European Economic Policies. Alternatives to Orthodox Analysis. Marburg, pp. 225-253.
Ugarteche, Oscar (2001): La deuda externa de América Latina y por qué es impagable, otra vez. In: Chris Jochnik and Patricio Freire Pazmiño (eds.): otras caras de la deuda. Propuestas para la acción. Caracas and Quito, pp. 55-86.
The Vienna Institute for International Economic Studies (WIIW): Handbook of Statistics 2005: Central, East and Southeast Europe. Bratislava. (30.9.2006)
National Bank of Poland
Czech National Bank (31.8.2006)
Bank of Slovenia (31.8.2006)
Hungarian Central Bank (31.8.2006 )
National Bank of Slovakia
Bank of Estonia (31.8.2006)
Bank of Latvia (31.8.2006)
Bank of Lithuania (31.8.2006)
The structures of balances of payments and the evolution of external debts are problematic in the cases of the Czech Republic and Poland but their external vulnerability is considerably smaller than in the afore mentioned states.
Slovenia displays the most positive structure of the all balances of payments, nevertheless its external debt has increased considerably. Slovenia would seem to be the least vulnerable of the present EU member states of Central East Europe.
The degree of vulnerability seems to be related to the economic model. Bohle (2006) identifies three models in Central Eastern Europe. The Baltic model is characterised by an almost indiscriminate opening of the economic and the dismantling of the welfare state. The model of 'embedded neoliberalism' of the Visegrad states (Czech Republic, Hungary, Poland, Slovakia) is characterised by actively wooing foreign capital in the manufacturing sector and the partial dismantling of the welfare state (although to a significantly varying degree).
Slovenia is characterised by a variety of neo-corporatism. Transformation in Slovenia was characterised by the search for social consensus and a high degree of social protection was maintained. The government sought to preserve a space for domestic capital, especially in strategic sectors.
External vulnerability is highest in the Baltic model, especially in its most extreme cases of Estonia and Latvia, and it is lowest in the neo-corporatist model of Slovenia. The "embedded neoliberalism" falls in between.
You can download the series as one article in pdf-format (116.48 KB)
Sources
Bohle, Dorothee (2006) "Race to the bottom"? Die Dynamik der Konkurrenzbeziehungen in der erweiterten EU. In: Prokla, 36(3), pp. 343-360.
Cepal (2004): Estudio económico de América Latina y el Caribe 2003-2004. Santiago de Chile.
Fárek, Jiři (2004): Problem zahrni�?ní zadluženosti ve světové ekonomice a politice. In: Mezinárondní politika, No. 11, pp. 4-8.
Hölscher, Jens and Stephan, Johannes (2006): Money and credit integration in an enlarging Eurozone: Methodological issues. In: Ekkard Hein, Arne Heise, and Achim Truger (eds.): European Economic Policies. Alternatives to Orthodox Analysis. Marburg, pp. 181-197.
Onaran, Özlem (2006): Speculation-led growth and fragility in Turkey. Does EU make a difference or 'can it happen again'? In: Ekkard Hein, Arne Heise, and Achim Truger (eds.): European Economic Policies. Alternatives to Orthodox Analysis. Marburg, pp. 225-253.
Ugarteche, Oscar (2001): La deuda externa de América Latina y por qué es impagable, otra vez. In: Chris Jochnik and Patricio Freire Pazmiño (eds.): otras caras de la deuda. Propuestas para la acción. Caracas and Quito, pp. 55-86.
Statistical Sources
The Vienna Institute for International Economic Studies (WIIW): Handbook of Statistics 2005: Central, East and Southeast Europe. Bratislava. (30.9.2006)
National Bank of Poland
Czech National Bank (31.8.2006)
Bank of Slovenia (31.8.2006)
Hungarian Central Bank (31.8.2006 )
National Bank of Slovakia
Bank of Estonia (31.8.2006)
Bank of Latvia (31.8.2006)
Bank of Lithuania (31.8.2006)
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