IMPACT OF THE FINANCIAL CRISIS UPON EASTERN EUROPE COUNTRIES: STILL A PROBLEM FOR THE ECONOMY OF THE REGION?

The paper looks at the impact of the global economic and financial crisis on a number of central, eastern and south-eastern European countries. The global crisis can be viewed as three interdependent and mutually reinforcing crises: a financial crisis, a liquidity crisis, and a crisis in the real economy. The financial crises that have emerged and developed in the recent decades have been characterized, mostly of an international dimension, with shocks quickly propagating through capital markets, through the international banking activities and, through the money markets.East Europe was hit first by the global liquidity crisis, then by declines in capital inflows and plunging demand for their exports.Before the crisis, the Eastern region was experiencing an economic boom with rapid GDP and credit growth, but in the future East European countries will have to rely relatively more on internally-generated sources of productivity growth.