While growth in the new EU Member States currently far outpaces the EU-15, unemployment numbers are still worrying, says EBRD.
The European Bank for Reconstruction and Development (EBRD) published its Transition Report Update on 22 April, which clearly outlines that growth in countries across central and eastern Europe and the former Soviet Union is clearly outpaced overall global growth by 0.6 per cent in 2002. Growth is expected to climb in all three regions studied (Central Eastern Europe, South Eastern Europe and in the Commonwealth of Independent States, formerly the Soviet Union), but this could be only temporary, bankers caution.
Of particular concern to EBRD bankers is Poland, where growth has stagnated and unemployment has climbed to record figures by European standards, with the current figure now at 18.1 per cent. The EBRD projects that with enlargement, the current EU-15 will see a flow of workers from Eastern countries in the medium range.
The report also highlights a necessity to move from consumer driven economic performance to increased investment and national productivity. Until now, growth has been a product of increased capital flow into the country from investment which speculates on the political stability of the region. This needs to be enhanced, according the the EBRD, by tightened fiscal policy. South-eastern European States need to pay particular attention to building on existing stability and political reforms to improve the investment climate and attract much-needed foreign direct investment.