Economic Crisis and the Changes in Functioning of International Financial Institutions: The Case of European Developing Countries

The aim of the paper is to assess the international financial institutions (IFIs) response to the global economic crisis in the European developing countries. In their response to the global crisis, the international financial institutions have increased funds for shock financing as well as significantly reformed their instruments. The Euro area is faced with a new attitude towards the international financial institutions, particularly the International Monetary Fund. With regard to the European developing countries, the research reveals that IFIs expanded its policy lending. The economic outlook includes the rate of economic growth, inflation rate and fiscal deficit. The results of analysis showed that the European developing countries, regarding the economic growth have shown a different rates—from a sharp decline to positive growth. All countries had inflation rate above the average of EU members and fiscal deficits. To prevent future financial crisis in the European developing countries it is necessary to create safety net by EU member countries, then to reform IMF.