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What can Bulgaria learn from
NMS-8 accession?
Joint BNB – IMF Seminar
Bulgaria – From Transition to Convergence:
The challenges ahead
Sofia, 2 May 2007
Norbert Wunner
European Commission
Directorate General for Economic and Financial Affairs
Introduction
NMS-8
• Common challenges
• … but substantial diversity
2004 accession – what has been the experience?
•
EU accession has been a catalyst for institutionbuilding reforms
•
Economic convergence has been boosted
2004 accession – what has been the experience?
GDP per capita income in 1997 and 2005 (EU25=100, in PPS)
90
SL
80
CZ
70
60
2005
45°
HU
SK
EE
50
LV
LT
PL
40
BG
30
20
10
0
45°
0
10
20
30
40
50
1997
60
70
80
90
2004 accession – what has been the experience?
Real GDP per capita (in PPS, EU-27=100)
100
SI
90
CZ
80
EE
70
SK
HU
LV
60
LT
PL
50
BG
40
30
20
10
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2004 accession – what has been the experience?
•
EU accession has been a catalyst for institutionbuilding reforms
•
Economic convergence has been boosted
•
Successful disinflation
2004 accession – what has been the experience?
Inflation in NMS-8 (HICP, annual % change)
14
12
10
SK
8
SI
6
CZ
4
PL
2
0
2000
-2
2001
2002
2003
2004
2005
2006
2007
2008
2004 accession – what has been the experience?
•
EU accession has been a catalyst for institutionbuilding reforms
•
Economic convergence has been boosted
•
Successful disinflation
•
… but signs of overheating in some countries
2004 accession – what has been the experience?
Inflation in NMS-8 (HICP, annual % change)
12
10
8
6
LV
EE
HU
LT
4
2
0
2000
-2
2001
2002
2003
2004
2005
2006
2007
2008
2004 accession – what has been the experience?
•
EU accession has been a catalyst for institutionbuilding reforms
•
Economic convergence has been boosted
•
Successful disinflation
•
… but signs of overheating in some countries
•
Improving labour market situation
2004 accession – what has been the experience?
Unemployment rates in NMS-8 (% of civilian workforce)
25
20
PL
15
SK
10
BG
LV
LT
5
0
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2004 accession – what has been the experience?
Unemployment rates in NMS-8 (% of civilian workforce)
14
13
12
11
10
9
8
HU
7
CZ
6
SI
EE
5
4
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2004 accession – what has been the experience?
•
EU accession has been a catalyst for institutionbuilding reforms
•
Economic convergence has been boosted
•
Successful disinflation
•
… but signs of overheating in some countries
•
Improving labour market situation
•
Fiscal consolidation
2004 accession – what has been the experience?
General government net borrowing in NMS-8 (% of GDP)
6
BG
4
EE
2
0
-2
-4
-6
-8
-10
-12
-14
2000
2001
2002
2003
2004
2005
2006
SI
PL
SK
2004 accession – what has been the experience?
General government net borrowing in NMS-8 (% of GDP)
2
LV
0
2000
-2
-4
2001
2002
2003
2005
2004
2006
LT
CZ
-6
-8
-10
-12
HU
Possible lessons for Bulgaria
1. Convergence takes time …
Possible lessons for Bulgaria
250
GDP per capita
(PPS, EU-15 = 100)
200
150
100
50
EU-15 (annual average growth: 2.0%)
EU-10 (annua averagel growth: 4.0%)
0
2005
2010
2015
2020
2025
2030
2035
2040
Possible lessons for Bulgaria
1. Convergence takes time…,
… cannot be taken for granted,
… and depends on sound economic policies
and good governance
2. EU transfers can help sustain convergence …
… but are no panacea.
Conclusions
1. EU accession has been an economic success
story for the new Member States
2. Bulgaria has started to benefit from accession
already during the pre-accession preparations
3. Reaping the full benefits of accession requires
sound economic policies, good governance and
sustained commitment to reform