Publication

This paper presents the main macroeconomic and fiscal challenges for five transition countries (Czech Republic, Estonia, Hungary, Poland, and Slovenia) during the EU accession process and beyond. Attention is concentrated on fiscal problems, given its crucial role in determining macroeconomic balances, but it also reflects the progress achieved in structural and institutional reforms. The authors argue that problems are most common in the areas of investment-saving, current account and fiscal balance, currency appreciations, unfinished transition, population aging and the environment. They contend that the prospect of EU membership offers a unique chance for importing stable institutions, a stable currency and credibility of economic policies, which should lead to less macroeconomic fragility.