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Top Challenges in SEE in 2015
8. januarja 2015 / 13:18

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Global financial crisis and uncompetitive environment have contributed significantly to deterioration of public finances in many countries of the region. Consequently, many governments will have to focus on implementing structural reforms, such as pension reform, labour market reform, healthcare reform, reorganisation and reduction of the public sector. As part of the agreement with the IMF, Serbia will have to reorganise public sector and reduce the number of employees by 25,000 in 2015 as well as lower the pensions and wages. Additional austerity measures will have to be implemented in Romania and BiH, both under IMF monitoring. Structural reforms and austerity measures can lead to a decline of public confidence in politics and a switch of public opinion against the integration with EU. Public discontent is most evident in Greece, where people completely lost confidence in politics and calls to leave the EU are becoming louder.

 

Omnipresent corruption remains one of the main challenges in the region. Governments are addressing it but will need to be more decisive and comprehensive at it if they wish to attract more foreign direct investments and speed up the integration towards EU.

 

Unresolved relations amongst countries contribute to the escalation of populism and incidents, which hamper mutual trade relations and hinder EU integration. This is most evident in the long lasting disputes between Macedonia and Greece, and Serbia and Kosovo. The Macedonian-Greek dispute also blocks the country’s entrance to NATO, where Macedonia has been a membership candidate since 1999. Status of Kosovo remains the main obstacle for Serbia on its path towards the EU. Due to unresolved border issues between Croatia, BiH, Montenegro and Serbia, we expect further delays and obstacles in accession negotiations.

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