Oct 28, 2009

Sponsor: Forum

The Impact of the Economic Crisis on Central and Eastern Europe

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When Romania and Bulgaria joined their Central and Eastern European neighbors in the European Union in early 2007, prospects for economic growth and stability in the region looked bright. Then, the September 2008 financial crisis in the U.S. quickly spread and produced a global recession whose effects are still felt today. Central and Eastern European countries were hit particularly hard: The average decline in GDP in these economies is expected to reach 6 percent in 2009, with some countries experiencing losses in the double digits.

Twenty years after the fall of the Berlin Wall and after two decades of successful political and economic reform, the countries of Central and Eastern Europe are facing difficult questions:

• Why have they been so vulnerable to the economic downturn?
• What went wrong? Did they exceed the “speed limit”?
• Did convergence with the EU play a role?
• Is their growth model damaged beyond repair, and is it time to seek a new model?
• What is the political impact of the crisis, and how will it affect democracy and governance?

Boris Begovic, president of the Serbia-based Center for Liberal-Democratic Strategies, addresses these questions, with comments by Mitchell Orenstein, Johns Hopkins University.