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This article discusses the impact of the economic crisis on the Western Balkans and the measures taken to combat it. It explores the region's vulnerability to external events, the decline in revenue and expenditure, and the need for sustainable growth and competitiveness. The article also highlights the importance of human capital development and outlines the Europe 2020 National Reform Agenda.
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A Social Agenda for the Western Balkans – The Economic Context Yngve Engström, DG Enlargement Sarajevo 25 May 2011
Findings Post Crisis • Region susceptible to external events • Low overall savings combined with increases in public debt & slow down in remaining privatisations limits fiscal space for investments • In general debt sustainable, but vulnerable to external shocks • Revenue decline much steeper than expenditure decline • Sharpest cuts in expenditure in capital expenditure (20% decline in Western Balkans) • Under-execution of capital expenditure
Findings Post Crisis • Limited reductions and in some cases increases in current expenditure • Increased social transfers but still stalled poverty reduction and questions re targeting of social transfers • Delayed implementation of reform agenda has impeded growth • Need to move from externally stimulated growth to internal/endogenous growth • Increase competitiveness, increase & diversify exports • Importance of human capital development
Synopsis of views on policies for growth • Economic growth vital for securing socio-economic development and key element of the accession process • “New” growth agenda: revised & reinforced version of the old agenda of structural reforms with an enhanced sense of urgency • Focus on improving the business environment, targeted regulatory reform, developing human capital, priority infrastructure investments and greater trade integration
Europe 2020 - National Reform Agenda • Macro • Guideline 1: Ensuring the quality and the sustainability of public finances • Guideline 2: Addressing macroeconomic imbalances • Guideline 3: Reducing imbalances within the euro area • Micro • Guideline 4: Optimising support for R & D and innovation, strengthening the knowledge triangle and unleashing the potential of the digital economy • Guideline 5: Improving resource efficiency and reducing greenhouse gases • Guideline 6: Improving the business & consumer environment, and modernising and developing the industrial base
Europe 2020 - National Reform Agenda • Employment • Guideline 7: Increasing labour market participation and reducing structural unemployment • Guideline 8: Developing a skilled workforce responding to labour market needs, promoting job quality and lifelong learning • Guideline 9: Improving the performance of education and training systems at all levels and increasing participation in tertiary education • Guideline 10: Promoting social inclusion and combating poverty
Smart Growth Sustainable Growth Inclusive Growth Innovation « Innovation Union » RCI, Regional R&D Strategy, SEE IC, WBIF Climate, energy and mobility « Resource efficient Europe » ECT, SEETO, RENA. WBIF Employment and skills « An agenda for new skills and jobs » SEECEL, SEE Employment Network, RCI , SEE IC Education « Youth on the move » ERISEE Competitiveness « An industrial policy for the globalisation era » SEE IC, CEFTA, WBIF, Sector Competitiveness Strategy Fighting poverty « European platform against poverty » RCC Social Agenda Conference, SEE Health Network Digital society « A digital agenda for Europe » eSEE Agenda+ Convergence with Europe 2020
