Brexit will have\u00a0direct economic consequences for the countries of Southeast Europe (SEE) as they could lose EU funding but pain could be limited, according to Erste Group analysts.
\nIt is unclear what the arrangement will look like after March 2019, but the UK may still decide to keep funding some programmes, while other net contributors, including Germany and France, will have to\u00a0provide more financing after Brexit, mitigating the negative impact of the UK leaving the EU on the bloc’s budget,\u00a0the analysts say in their Central and Eastern Europe (CEE) Insight\u00a0published on Erste Group’s website. Croatia\u00a0and Romania are all assigned to receive around or above 20% of their last year\u2019s GDP in total for the seven years in the period 2014-20. Croatia, however, did not receive much in the previous programming period, given its accession in 2013. Therefore the increase in inflows should still be tremendous, the analysts opine.\u00a0 Croatia’s government and analysts expect a gradual acceleration of inflows and stronger contribution of EU projects to the investment cycle ahead. Thus, all major disturbances in the EU funding mechanism could make the Croatian investment outlook somewhat less rosy, but there are no\u00a0major risks to Erste’s baseline forecasts, as private consumption is seen as a key driver of growth in the medium term.\u00a0 The theoretical loss of EU structural and cohesion funds associated with Brexit in Romania is estimated at between 300 million euro and 500 million euro annually, but this could\u00a0materialise\u00a0only after 2020.\u00a0The financing gap could be covered by the expanded involvement of the private sector in large investments projects, including public-private partnership (PPP) and stronger bank lending to the corporate sector, according to Erste analysts. Apart from the EU funds, the Romanian economy could suffer from smaller inflows of remittances and weaker exports, as goods shipped by Romania to the UK totalled 2.5 billion euro in 2016. As a candidate country, Serbia would not be strongly affected by the UK\u2019s decision to leave the EU. Firstly, pre-accession funds can be seen as a specific form of EU funding and their size is relatively modest, so this category of funds would not be cut in the case of a “hard Brexit”\u00a0from the EU budget. Secondly, there will be a limited impact on trade connections, as Serbia could sign some\u00a0bilateral deals with the UK. No significant impact is seen on remittances, as Serbian emigration is mostly concentrated in continental Europe, Erste analysts say. Slovenia, in turn, is one of the best performers regarding its EU fund absorption rate and investment prospects in this country are heavily dependent on these funds, as seen last year, when Slovenia recorded a slowdown and weakening on the investment side before the adoption of the new EU budgetary framework. That said, a reduction of the EU fund potential could bring more uncertainties regarding Slovenia\u2019s investment outlook. However, Erste analysts do not expect that Brexit will heavily reduce the availability of EU funds in the short run, so there will be no major risks to the baseline forecasts in the medium term.<\/p>\n","protected":false},"excerpt":{"rendered":"
Brexit will have\u00a0direct economic consequences for the countries of Southeast Europe (SEE) as they could lose EU funding but pain could be limited, according to Erste Group analysts. It is unclear what the arrangement will look like after March 2019, but the UK may still decide to keep funding some programmes, while other net contributors, […]<\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8],"tags":[],"class_list":["post-2712","post","type-post","status-publish","format-standard","hentry","category-see-news"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p9PjAq-HK","_links":{"self":[{"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/posts\/2712","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/comments?post=2712"}],"version-history":[{"count":0,"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/posts\/2712\/revisions"}],"wp:attachment":[{"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/media?parent=2712"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/categories?post=2712"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/tags?post=2712"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}