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External competitiveness of EU candidate countries

Author

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  • Orszaghova, Lucia
  • Savelin, Li
  • Schudel, Willem

Abstract

As the current financial crisis has shown, macroeconomic imbalances such as persistent current account and trade deficits, can seriously undermine a country’s resilience to economic shocks. Maintaining and enhancing external competitiveness has thus become of increasing concern, particularly to European Union (EU) candidate countries whose economic growth models have been challenged in recent years. Drawing on previous studies, this paper assesses developments in the external competitiveness of EU candidate countries between 1999 and 2011. Taking a broad approach to the issue of competitiveness, the paper considers various indicators of both short and long-term competitiveness, including those related to domestic prices and costs, export performance, and institutional and structural issues. In the context of EU integration, comparisons are drawn with developments in the EU12. We find that, during the pre-crisis period, all candidate countries experienced robust export market growth, but also suffered losses in price and cost competitiveness. In terms of export characteristics, progress has been heterogeneous and also fairly slow when compared with the EU12. All candidate countries have increased their number of export products and trading partners, but only a few have been able to export more complex products. As regards structural issues such as corruption and bureaucratic efficiency, all countries have performed quite poorly with the exception of Iceland. JEL Classification: H3, H6, E6, G1

Suggested Citation

  • Orszaghova, Lucia & Savelin, Li & Schudel, Willem, 2013. "External competitiveness of EU candidate countries," Occasional Paper Series 141, European Central Bank.
  • Handle: RePEc:ecb:ecbops:20130141
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Vesna Bucevska, 2015. "Currency Crises in EU Candidate Countries: An Early Warning System Approach," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 62(4), pages 493-510, September.
    2. Comunale, Mariarosaria, 2014. "Long-run determinants and misalignments of the real effective exchange rate in the EU," MPRA Paper 59571, University Library of Munich, Germany, revised Sep 2014.
    3. Orszaghova, Lucia & Schudel, Willem & Dautovic, Ernest, 2014. "Intra-industry trade between CESEE countries and the EU15," Working Paper Series 1719, European Central Bank.
    4. Mladen Vedris, 2013. "The Republic Of Croatia Before Its Entry Into The Eu: Expectations And Limits," Interdisciplinary Management Research, Josip Juraj Strossmayer University of Osijek, Faculty of Economics, Croatia, vol. 9, pages 415-434.
    5. Madalina Ecaterina Popescu & Maria-Isadora Lazar, 2015. "Analysis of the Post-Crisis Economic Performances in the European Union," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 11(3), pages 5-14, June.
    6. O. Kostoska & P. Mitrevski, 2016. "Evaluating foreign trade specialization and qualitative competitiveness of a transition economy: the case of Macedonia," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 43(3), pages 633-655, August.

    More about this item

    Keywords

    EU candidate countries; export growth; export specialisation; external competitiveness;

    JEL classification:

    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • H6 - Public Economics - - National Budget, Deficit, and Debt
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • G1 - Financial Economics - - General Financial Markets

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