The Transmission of European Debt Crisis on the Region of Western Balkans: Some Stylized Facts

Abstract

This paper aims to analyze economies which are affected by the European debt crisis most by examining the effects on the Western Balkans countries reflected by Foreign direct investments flows of selected countries, trade performance indicators of Western Balkans and remittances from abroad. The analysis comprises the following countries: Albania, Bosnia and Herzegovina, Croatia, Macedonia, Montenegro and Serbia. The data set used in the analysis has been extracted from the following databases: UNCTAD, World bank, Eurostat, World Trade Organization from National statistics.Structure of the paper is given as follows: Section 2 deals with new economic trends and new developments in the countries of Western Balkans from the moment of their independence. Section 3 discusses the recent developments in the foreign trade for the last decades between European Union-27 and Western Balkan also it describes the main specific features of the overall trade performance indicators of Western Balkan for last two decades. Section 4 compares and analyses the implications of debt crisis in European Union-27 on the economies of Western Balkans during current debt crisis.Our findings show that the debt crisis in European Union-27 has indeed affected the countries of Western Balkans to a particular degree through financial and trade linkages.