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The future of the EU's competitive position: The role of Central Eastern European countries

Author

Listed:
  • Matteo Ferrazzi
  • Francesca Guadagno

    (The Vienna Institute for International Economic Studies, wiiw)

  • Doris Hanzl-Weiss

    (The Vienna Institute for International Economic Studies, wiiw)

  • Jochen Schanz
  • Tomáš Slačík
  • Robert Stehrer

    (The Vienna Institute for International Economic Studies, wiiw)

Abstract

The Draghi Report recommended actions to secure the long-term EU competitive position but did not discuss the challenges related to specific countries or regional groups, including those of Central and Eastern European (CEE) countries. While CEE economies remain focused on manufacturing, especially the automotive industry, they are gradually shifting from being the EU's manufacturing hub to developing higher value-added activities. However, income convergence has slowed, suggesting the need to rethink their growth model. Our research highlights growth opportunities and suggests ways to reduce barriers to innovation. Policy should focus on three areas strengthening human capital, fostering innovation, and addressing energy intensity and its relatively high costs. Key actions include increasing labour market participation, ensuring access to start-up finance and risk capital, and reducing the region’s reliance on brown energy, particularly through grid and generation investment and the development of greener businesses.

Suggested Citation

  • Matteo Ferrazzi & Francesca Guadagno & Doris Hanzl-Weiss & Jochen Schanz & Tomáš Slačík & Robert Stehrer, 2025. "The future of the EU's competitive position: The role of Central Eastern European countries," wiiw Policy Notes 93, The Vienna Institute for International Economic Studies, wiiw.
    • Handle: RePEc:wii:pnotes:pn:93
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    References listed on IDEAS

    as
    1. Vasily Astrov & Richard Grieveson & Doris Hanzl-Weiss & Sebastian Leitner & Isilda Mara & Hermine Vidovic, 2021. "How do Economies in EU-CEE Cope with Labour Shortages?," wiiw Research Reports 452, The Vienna Institute for International Economic Studies, wiiw.
    2. Stöllinger, Roman, 2021. "Testing the Smile Curve: Functional Specialisation and Value Creation in GVCs," Structural Change and Economic Dynamics, Elsevier, vol. 56(C), pages 93-116.
    3. Francesca Guadagno & Doris Hanzl-Weiss & Robert Stehrer, 2024. "Where are the Growth Potentials in CESEE? An Illustration of Sectors and Products Using the Product Space," wiiw Research Reports 474, The Vienna Institute for International Economic Studies, wiiw.
    4. Alexandra Bykova & Viktrória Döme & Richard Grieveson & Francesca Guadagno & Doris Hanzl-Weiss & Nadya Heger & Niko Korpar & Sebastian Leitner & Jan Muś & Magdolna Sass & Bernd Christoph Ströhm & Andr, 2024. "Toward Innovation-driven Growth: Innovation Systems and Policies in EU Member States of Central Eastern Europe," wiiw Research Reports 476, The Vienna Institute for International Economic Studies, wiiw.
    5. C. A. Hidalgo & B. Klinger & A. -L. Barabasi & R. Hausmann, 2007. "The Product Space Conditions the Development of Nations," Papers 0708.2090, arXiv.org.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Competitiveness; trade; innovation; Central Eastern Europe;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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