EU11 Regular Economic Report : Coping with External Headwinds

World Bank

EU11 Regular Economic Report : Coping with External Headwinds

Autores

World Bank

Editor

Washington, DC

Descripción

This study claims that despite the challenging external environment, EU11 countries did well in 2011. First, economic growth strengthened to above 3 percent (from around 2 percent in 2010) and the region fully recovered its output losses from the global financial crisis. Second, fiscal measures delivered reduction of around 3 percent of GDP in the EU11 average fiscal deficit. Third, the financial sector remained resilient to renewed concerns about negative feedback loops between insecure sovereign debtors and fragile financial markets. However, the good performance conceals important shifts in economic sentiment that occurred during the year. While the growth momentum was still strong in the first half of 2011, it slowed toward the end of the year, as the region started to feel the impact of lingering concerns about European sovereign-debt markets, creeping oil prices, and the global slowdown. With the downward trend in economic activity, labor markets remained slack. Unemployment rates hovered around those recorded in the midst of the global financial crisis with sluggish employment growth. The paper points out that the European economic growth model has delivered unprecedented welfare to the continent over the last half century. In spite of its remarkable success, several aspects of the European economic growth model require reform to ensure that it is sustainable. Among the priorities for many European states today are providing incentives for labor mobility, making public finances more sustainable, and adapting social security systems to demographic developments, and harmonizing regulation across borders. This note zeroes in on the EU11 region to explore what is driving their prosperity and growth. The main messages related to the drivers of growth and prosperity in EU11 are as follows: 1) Convergence; 2) Trade and finance; 3) Enterprise and innovation; 4) Labor; and 4) Government.

Palabras clave

ACCOUNTING, AGRICULTURAL PRODUCTION, AGRICULTURE, ASSET CLASSES, ASSET PRICES, BALANCE SHEET, BALANCE SHEETS, BANK BALANCE SHEETS, BANK LENDING, BANKING SECTOR, BANKING SYSTEM, BANKRUPTCY, BASIS POINTS, BENCHMARK, BENCHMARKS, BOND SPREADS, BONDS, CAPACITY CONSTRAINTS, CAPITAL ADEQUACY, CAPITAL FLOWS, CAPITAL GOODS, CAPITAL INFLOWS, CAPITAL REQUIREMENTS, CD, CDS, CENTRAL BANKS, COMMERCIAL BANKS, COMMODITY PRICE, COMMODITY PRICES, COMPETITIVENESS, CONSOLIDATION, CONSUMER PRICE INDEX, CONSUMERS, CORPORATE BOND, CPI, CREDIT GROWTH, CROATIAN NATIONAL BANK, CURRENCY, CURRENCY DEPRECIATIONS, CURRENT ACCOUNT DEFICIT, CURRENT EXPENDITURES, DEBT, DEBT CRISIS, DEBT FLOWS, DEBT LEVELS, DEBT MARKETS, DEBT REDUCTION, DEBT SERVICE, DEBTORS, DEFICITS, DEFLATION, DEMOGRAPHICS, DEPOSIT, DEPOSITS, DIRECT INVESTMENT, DISPOSABLE INCOME, ECONOMIC ACTIVITY, ECONOMIC CONDITIONS, ECONOMIC CONSEQUENCES, ECONOMIC DEVELOPMENTS, ECONOMIC GROWTH, ECONOMIC OUTLOOK, ECONOMIC PERFORMANCE, ECONOMIC POLICIES, ECONOMIC POLICY, ECONOMIC PROBLEMS, ECONOMIC PROGRAMS, ECONOMIC SITUATION, EMPLOYMENT, ENFORCEABILITY, ENTREPRENEURSHIP, EQUIPMENT, EQUITY FLOWS, EUROPEAN CENTRAL BANK, EXCHANGE RATE, EXCHANGE RATES, EXPENDITURE, EXPORT GROWTH, EXTERNAL DEBT, FINANCIAL CRISIS, FINANCIAL INSTITUTIONS, FINANCIAL INTEGRATION, FINANCIAL MARKETS, FINANCIAL SECTOR, FINANCIAL SERVICES, FINANCIAL STABILITY, FINANCIAL SYSTEM, FINANCIAL TRANSACTIONS, FISCAL DEFICIT, FISCAL DEFICITS, FISCAL DISCIPLINE, FISCAL EFFORT, FISCAL EFFORTS, FISCAL POLICY, FISHING, FLEXIBLE EXCHANGE RATES, FORECASTS, FOREIGN BANK, FOREIGN BANKS, FOREIGN CAPITAL, FOREIGN INVESTMENT, FORESTRY, FREE TRADE, GDP, GDP PER CAPITA, GLOBAL ECONOMIES, GLOBAL ECONOMY, GLOBAL FINANCIAL STABILITY, GLOBAL TRADE, GOVERNANCE ISSUES, GOVERNMENT BANKS, GOVERNMENT BOND, GOVERNMENT BOND YIELDS, GOVERNMENT DEBT, GOVERNMENT DEFICITS, GOVERNMENT SPENDING, GRANT FUNDING, GROWTH POTENTIAL, GROWTH RATE, HIGH UNEMPLOYMENT, HUMAN CAPITAL, HUMAN CAPITAL DEVELOPMENT, INDEBTEDNESS, INDEXATION, INFLATION, INFLATION RATES, INTEREST PAYMENTS, INTEREST RATE, INTEREST RATES, INTERMEDIATE GOODS, INTERNATIONAL FINANCIAL MARKET, INTERNATIONAL SETTLEMENT, INVENTORIES, INVENTORY, INVESTMENT ACTIVITY, INVESTMENT CLIMATE, INVESTMENT PROJECTS, INVESTOR CONFIDENCE, LABOR COSTS, LABOR FORCE, LABOR MARKET, LABOR MARKETS, LABOR PRODUCTIVITY, LAWS, LEGAL SYSTEM, LEGISLATION, LENDING PRACTICES, LEVIES, LIBERALIZATION OF TRADE, LIMITED LIABILITY, LIQUIDATION, LIQUIDITY, LIVING STANDARDS, LOAN, LOCAL GOVERNMENTS, MACROECONOMIC ENVIRONMENT, MACROECONOMIC STABILITY, MARKET CONDITIONS, MARKET CONFIDENCE, MARKET DEVELOPMENT, MARKET EFFICIENCY, MARKET REFORMS, MONETARY FUND, MONETARY POLICY, MONEY MARKETS, MONOPOLIES, NATURAL DISASTERS, NET EXPORTS, NONPERFORMING LOANS, NPL, OIL, OIL PRICES, OPEN ECONOMY, OUTPUT LOSSES, PENSION, PENSION SYSTEM, PENSION SYSTEMS, PENSIONS, POLICY DECISIONS, POLICY ENVIRONMENT, PORTFOLIO, PORTFOLIO INVESTMENT, PRICE DECLINES, PRIVATE CONSUMPTION, PRIVATE CREDITORS, PRIVATE SECTOR CREDIT, PRIVATE SECTOR DEBT, PRIVATIZATION, PRODUCT MARKETS, PRODUCTIVITY, PRODUCTIVITY GROWTH, PROPERTY RIGHTS, PUBLIC DEBT, PUBLIC FINANCE, PUBLIC FINANCES, PUBLIC GOODS, PUBLIC INVESTMENT, PUBLIC SERVICES, PUBLIC SPENDING, PURCHASING POWER, REAL EXCHANGE RATE, REAL WAGES, RECAPITALIZATION, RESERVE, RESERVES, RETURN, RETURNS, RISK PROFILES, RULE OF LAW, SAFETY NET, SOCIAL SAFETY NETS, SOCIAL SERVICES, SOVEREIGN BOND, SOVEREIGN DEBT, SOVEREIGN DEBT PROBLEMS, STOCKS, SUBSIDIARIES, SUPERVISORY AUTHORITIES, SUSTAINABLE GROWTH, TAX, TAXATION, TELECOMMUNICATIONS, TOTAL DEBT, TRADE BALANCES, TRADE FLOWS, TRADING, TRADING SYSTEM, TRANSFER PAYMENTS, TRANSPARENCY, TRANSPORT, TREATY, TURNOVER, UNEMPLOYMENT, UNEMPLOYMENT RATE, UNEMPLOYMENT RATES, VALUE ADDED, WAGES