International and Domestic Policy Responses to the Financial Crisis in Central and Eastern Europe: Lessons for Ukraine

By Polyvana, Tetiana | Romanian Journal of Political Science, Summer 2010 | Go to article overview

International and Domestic Policy Responses to the Financial Crisis in Central and Eastern Europe: Lessons for Ukraine


Polyvana, Tetiana, Romanian Journal of Political Science


Introduction

The ongoing financial and economic crisis raised a number of new questions and challenges to be addressed by academics and state officials both on the global and national levels. What are the primary causes of the crisis? What lessons should be learnt? How to adjust the global financial system and prevent such negative consequences in future? Those questions became subject for political discussions at the highest levels, such as the G20 Summits and the World Economic Fora in Davos.

The global crisis has many particular traits. One of them is the unequal distribution of the crisis impact across world regions. Central and Eastern Europe (CEE) is believed to be among the regions most severely hit by the crisis. According to the IMF assessments the overall GDP decline in the region in 2009 was around 8,4%. At the same time the region is anticipated to recover quite soon. The IMF forecasts the region to have a positive output starting already in mid 2010 and reaching 4,0% GDP growth in 2012 (2).

Meanwhile, individual countries in the region were also unevenly hit by the crisis. Estonia, Latvia, Lithuania were the most harshly damaged, registering a GDP decline in 2009 of -4,0%, -18,0%, and respectively -18,5%. At the same time, the Czech Republic (-4,3%), Slovakia (-4,6%) and Slovenia (-4,7%) suffered the least, withe the Polish economy experiencing a 0,97% growth in 2009 (3). The explanations for these differences in crisis impact across countries vary. Diverse macroeconomic and financial vulnerabilities, as well as national policy responses to the crisis are among them.

Central and Eastern European countries in times of the crisis became subject to a number of academic and policy studies and debates. Authors focused on the main causes of the crisis (Anders Aslund (4)), lessons to be learnt (Agnes Benassy-Quere, Benoit Coeure, Pierre Jacquet, Jean Pisani-Ferry (5)), or the role of the EU in dealing with the crisis (Zsolt Darvas, Bela Galgoczi (6)). Ukrainian authors are mostly focused on theoretical approaches to explain root causes of the crisis, its global imperatives and impact on the Ukrainian economy (Umantsiv Y., Shevchenko V Shelud'ko N, Shklyar (7)) . This paper comes to complete the existing literature in the field by analyzing the main successes and failures in policy responses to the crisis in Central and Eastern Europe on the global, regional and domestic levels, and thus revealing relevant lessons for Ukraine. The paper argues that despite the failure to prevent the crisis at all levels, coordination of actions at global and EU levels and high discipline of the CEE countries in national policy supported their efforts to manage the crisis efficiently. First of all, the paper presents key data on the extent to which CEE countries were affected by the crisis. Second, it introduces the main findings on successes and failures in policy responses to the financial crisis in CEE countries on global, EU and domestic levels. It finally reveals key obstacles to successful resolution of the crisis in Ukraine and draws recommendations for Ukraine.

CEE countries in crisis: heavy damages but fast recovery

Central and Eastern Europe was among the regions that were the most severely hit by the financial crisis. In 2009 the regional GDP declined by 8,4%, which was the lowest among all emerging and developing regions (Figure 1.) (8) This was to a large extent influenced by the growth in trade and financial links of the region with the rest of the world and especially with the EU after accession of the twelve new member states in 2004 and 2007. As the Director of the IMF's European Department Marek Belka said "because Europe is very open in terms of trade, and because its financial sector is so closely integrated with the rest of the world, the region cannot avoid being significantly impacted by the financial crisis" (9).

Indeed, market reforms in times of transition, liberalization of trade and financial markets and fast-growing economies of the region spurred international trade, attracted new investments and foreign capital. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

International and Domestic Policy Responses to the Financial Crisis in Central and Eastern Europe: Lessons for Ukraine
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.