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Spillovers of the Greek Crisis to Southeastern Europe: Manageable or a Cause for Concern?




During the boom years in the run-up to the global financial and economic crisis, Greece established close economic ties with the Southeastern European (SEE) region. As a consequence, the current Greek sovereign debt crisis could potentially have adverse economic implications for SEE. Both real and financial transmission channels might have a bearing, though in most countries real economic linkages do not seem as strong as the degree of interconnectedness in the realms of banking and finance, where risks might materialize both directly and indirectly (i.e. via changes in expectations and risk perceptions). So far, the Greek crisis has only had a relatively limited impact on SEE. Available buffers and policy tools have helped SEE to cope with the related risks and also provide some more room for the region to address vulnerabilities caused by the Greek crisis that may materialize in the future. Possible challenges appear to be largest in the realm of banking, even though banking sector adjustment during the crisis has been fairly orderly so far. However, the recent intensification of the sovereign debt crisis in euro area countries may put the macrofinancial resilience of SEE countries to a much stiffer test, given its ramifications on external demand, potential negative feedback loops affecting European banks and a further rise in global risk aversion.

Suggested Citation

  • Peter Backé & Sándor Gardó, 2012. "Spillovers of the Greek Crisis to Southeastern Europe: Manageable or a Cause for Concern?," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 1, pages 31-48.
  • Handle: RePEc:onb:oenbfi:y:2012:i:1:b:2

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    References listed on IDEAS

    1. Jesús Crespo Cuaresma & Jarko Fidrmuc & Mariya Hake, 2011. "Determinants of Foreign Currency Loans in CESEE Countries: A Meta-Analysis," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 4, pages 69-87.
    2. Warnock, Veronica Cacdac & Warnock, Francis E., 2008. "Markets and housing finance," Journal of Housing Economics, Elsevier, vol. 17(3), pages 239-251, September.
    3. Crowe, Christopher & Dell’Ariccia, Giovanni & Igan, Deniz & Rabanal, Pau, 2013. "How to deal with real estate booms: Lessons from country experiences," Journal of Financial Stability, Elsevier, vol. 9(3), pages 300-319.
    4. Balázs Égert & Reiner Martin, 2008. "Real Estate, Construction and Growth in Central and Eastern Europe: Impact on Competitiveness?," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 2, pages 52-72.
    5. Brixiova, Zuzana & Vartia, Laura & Wörgötter, Andreas, 2010. "Capital flows and the boom-bust cycle: The case of Estonia," Economic Systems, Elsevier, vol. 34(1), pages 55-72, March.
    6. Mark Robinson & Grant M. Scobie & Brian Hallinan, 2006. "Affordability of Housing: Concepts, Measurement and Evidence," Treasury Working Paper Series 06/03, New Zealand Treasury.
    7. Gan, Quan & Hill, Robert J., 2009. "Measuring housing affordability: Looking beyond the median," Journal of Housing Economics, Elsevier, vol. 18(2), pages 115-125, June.
    8. International Monetary Fund, 2011. "Macroprudential Policy; What Instruments and How to Use them? Lessons From Country Experiences," IMF Working Papers 11/238, International Monetary Fund.
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    More about this item


    Financial stability; banking sector; sovereign debt crisis;

    JEL classification:

    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • G2 - Financial Economics - - Financial Institutions and Services
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • P2 - Economic Systems - - Socialist Systems and Transition Economies


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