A report on macroeconomic and financial sector stability in the candidate countries, released by the Commission on 16 April, calls on these countries to develop their own capacity for implementing permanent and continuous risk monitoring.
The Report concludes that the ability of most candidate countries to cope with potential future macroeconomic challenges and to safeguard macroeconomic stability in the medium term, has considerably improved.
It warns that candidate countries’ real convergence with current Member States has so far been relatively modest and growth performance has been mixed. Average GDP per capita measured on the basis of purchasing power standards (PPS) for all candidate countries reached 35.2 per cent of the EU average in 2000 – basically the same level as in 1996. It ranged from below 30 percent in Bulgaria, Romania and Turkey, to 86.2 percent in Cyprus. Slovenia, at 69.4 percent, tops the transition candidate countries.
Candidate countries’ average real GDP growth rates in the period from 1996 to 2000 stretched from minus 1.6 percent in Romania to 5.2 percent in Poland. As a result of initial transition recessions and on-going restructuring in the enterprise sector, unemployment remains a major problem in most countries, with unemployment rates in 2000 varying from 4.9 percent in Cyprus to over 15% in Bulgaria, Lithuania, Poland, and Slovakia.
The report urges the candidate countries to create an environment that facilitates faster growth and accelerated real convergence. It adds that the catch-up process depends on continued high investment and rapid technological change. In 1996 to 2000, average annual FDI inflows to the transition candidate countries ranged from 1.2 percent of GDP in Slovenia to 7.4 percent of GDP in Lithuania.
In the area of the financial sector stability, the report says that almost all candidate countries have made great strides in reforming their financial sectors. Nevertheless, further development and expansion is clearly necessary, states the report.