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The Impact of the Global Economic Crisis in the Old and New Cohesion Member States of the European Union

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  • Farkas, Beáta

Abstract

Within the European Union cohesion member states were hit hardest by the global economic crisis. In this region, devel-opment relied more heavily on the influx of foreign capital compared to other emerging regions, which, in turn, made these coun-tries more vulnerable to the effects of the crisis. The extent of the downturn depended on the imbalances accumulated before the crisis. As a result, the growth outlooks of Poland, Slovakia, and the Czech Republic have deteriorated least, whereas Hungary fell behind the Visegrád countries. Ireland and the new cohesion member states facing a difficult situation reacted more flexibly to the crisis than the Mediterranean countries. The cohesion member states suffered more significant losses in areas key to growth poten-tial (investments, education, innovation), and were forced to employ harsher austerity measures in these areas compared to the Northern/Western central states, which supports econometric analyses forecasting a slow-down of convergence. This also makes it necessary to redefine the concept of integration.

Suggested Citation

  • Farkas, Beáta, 2012. "The Impact of the Global Economic Crisis in the Old and New Cohesion Member States of the European Union," Public Finance Quarterly, Corvinus University of Budapest, vol. 57(1), pages 53-70.
    • Handle: RePEc:pfq:journl:v:57:y:2012:i:1:p:53-70
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    File URL: https://unipub.lib.uni-corvinus.hu/8995/
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    References listed on IDEAS

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    1. Sabine Herrmann & Adalbert Winkler, 2009. "Financial markets and the current account: emerging Europe versus emerging Asia," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 145(3), pages 531-550, October.
    2. Michael Mitsopoulos & Theodore Pelagidis, 2011. "Understanding the Crisis in Greece," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-29475-2, May.
    3. Herrmann, Sabine & Winkler, Adalbert, 2009. "Real convergence, financial markets, and the current account - Emerging Europe versus emerging Asia," The North American Journal of Economics and Finance, Elsevier, vol. 20(2), pages 100-123, August.
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    Cited by:

    1. Ivan Todorov, 2016. "Currency Integration of the New EU Member Countries," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 3, pages 82-117.
    2. Farkas, Beáta, 2013. "Changing development prospects for the Central and Eastern European EU member states," MPRA Paper 48172, University Library of Munich, Germany.
    3. Thomas Gehring & Sebastian Oberthür & Marc Mühleck, 2013. "European Union Actorness in International Institutions: Why the EU is Recognized as an Actor in Some International Institutions, but Not in Others," Journal of Common Market Studies, Wiley Blackwell, vol. 51(5), pages 849-865, September.

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    More about this item

    Keywords

    European integration; cohesion countries; convergence;
    All these keywords.

    JEL classification:

    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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