Global challenges,Global challenges, EUropean EUropean

answers,answers, CEE CEE

prospectsprospectsTamás SzemlérTamás SzemlérPh.D, scientific deputy directorPh.D, scientific deputy director

Institute for World Economics Institute for World Economics of the Hungarian Academy of Sciencesof the Hungarian Academy of Sciences

6th DRC Summer School on Regional Co-6th DRC Summer School on Regional Co-operationoperation

Budapest, 5-12 July 2009Budapest, 5-12 July 2009

MTA VILÁGGAZDASÁGI KUTATÓINTÉZET INSTITUTE FOR WORLD ECONOMICS OF THE HUNGARIAN ACADEMY OF SCIENCES

MTA VILÁGGAZDASÁGI KUTATÓINTÉZET INSTITUTE FOR WORLD ECONOMICS OF THE HUNGARIAN ACADEMY OF SCIENCES

Global challengesGlobal challenges Financial and economic crisisFinancial and economic crisis

About the nature of the crisis – is there About the nature of the crisis – is there something new under the Sun? something new under the Sun?

Irregularity or normal feature of the Irregularity or normal feature of the system?system?

Short and long term effectsShort and long term effects Systemic changes?Systemic changes? The role of the state?The role of the state?

Beyond the economy Beyond the economy

EUropean answersEUropean answers Adequate reaction speed? Adequate reaction speed? Global challenge – existing EU Global challenge – existing EU

rules/regulations – basically national rules/regulations – basically national answersanswers Logical?Logical? Efficient?Efficient? Costs?Costs? Danger?Danger? Alternatives?Alternatives?

CEE prospects: questions for the CEE prospects: questions for the long runlong run

What are the „national economies”?What are the „national economies”? What possibilities are there for the What possibilities are there for the

adaptation to the international adaptation to the international environment?environment?

What factors do strengthen/soften the What factors do strengthen/soften the external effects? external effects?

What are the consequences…What are the consequences… ……on the macroeconomic level?on the macroeconomic level? ……in the microsphere?in the microsphere? ……in the societies?in the societies? ……in the political systems?in the political systems?

Prophecies? – Be Prophecies? – Be careful…careful…

„„Fitch Affirms Lehman Brothers Derivative Fitch Affirms Lehman Brothers Derivative Products at 'AAA'; Stable Outlook Products at 'AAA'; Stable Outlook (Mon Jan 28, (Mon Jan 28, 2008)”2008)” „„(…) LBDP's 'AAA' rating is based on its conservative (…) LBDP's 'AAA' rating is based on its conservative

capitalization and collateralization, high-quality capitalization and collateralization, high-quality counterparties, and restrictive operating guidelines. counterparties, and restrictive operating guidelines. LBDP is a bankruptcy-remote entity and passes market LBDP is a bankruptcy-remote entity and passes market risk emanating from its transactions to LBSF via 'back-risk emanating from its transactions to LBSF via 'back-to-back' transactions. Credit risk is retained by LBDP to-back' transactions. Credit risk is retained by LBDP and is supported by a high level of capital in liquid and is supported by a high level of capital in liquid instruments maintained at a third-party custodian, as instruments maintained at a third-party custodian, as well as by the strict operating guidelines in place.(…)” well as by the strict operating guidelines in place.(…)”

Source: http://www.reuters.com/article/pressRelease/idUS212058+28-Jan-Source: http://www.reuters.com/article/pressRelease/idUS212058+28-Jan-2008+BW200801282008+BW20080128

……but sooner or later, the crisis but sooner or later, the crisis will be overwill be over

No production factors destroyedNo production factors destroyed Very different from e.g. an after-war situationVery different from e.g. an after-war situation

The importance of psychological factorsThe importance of psychological factors What are the actual expectations based on? What are the actual expectations based on?

Statistical effectsStatistical effects Late 2009: the reference period (e.g. for Q4/Q4 comparisons) Late 2009: the reference period (e.g. for Q4/Q4 comparisons)

will already be a „bad one” will already be a „bad one” The statistical effects can substantially help reach the turning The statistical effects can substantially help reach the turning

pointpoint After the crisis: economic policies matterAfter the crisis: economic policies matter

What was the state of a given country when the crisis What was the state of a given country when the crisis broke out – and in what state will that country be at the broke out – and in what state will that country be at the end of the crisis?end of the crisis?

CEE countries are not uniform!CEE countries are not uniform!

THANK YOU FOR YOUR THANK YOU FOR YOUR ATTENTION!ATTENTION!

Questions? Remarks? - Feel free to contact me:Questions? Remarks? - Feel free to contact me:

tszemler@vki.hutszemler@vki.hu

Visit also our website:Visit also our website:

www.vki.huwww.vki.hu

MTA VILÁGGAZDASÁGI KUTATÓINTÉZET INSTITUTE FOR WORLD ECONOMICS OF THE HUNGARIAN ACADEMY OF SCIENCES

MTA VILÁGGAZDASÁGI KUTATÓINTÉZET INSTITUTE FOR WORLD ECONOMICS OF THE HUNGARIAN ACADEMY OF SCIENCES