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2024/04/23 / Erste Group Research

CEE Special Report | Strong growth in CEE economies since EU's 2004 enlargement

In most CEE countries that joined in 2004, the level of GDP per capita is higher by 16 to 19 percent than it would be compared to the alternative scenario of non-membership (the synthetic method control estimations). Thus, CEE states are significantly wealthier than if they had not joined the EU. Looking from an angle of growth dynamics, real GDP per capita doubled in Romania and Poland over the last two decades. Slovakia also reached an outstanding performance, as GDP per capita is 75% higher compared to 2004. In Hungary, GDP per capita is 50% higher. Slovenia and Czechia gained 40%, but their starting point was the highest within CEE8. Further, nominal wages grew at least twice as fast as the EU27 average since 2008.

The CEE region is a net recipient of EU funds. CEE7 (Czechia, Hungary, Poland, Romania, Slovakia, Slovenia and Croatia) has received in total EUR 205bn since the EU membership of respective countries. Apart from monetary benefits, the EU offers harmonized regulations and a stable political and economic environment for businesses. Integration has deepened visibly since 2004. Slovakia and Slovenia, which joined the EU 20 years ago, are already fully integrated. Croatia fast-tracked and is missing only OECD membership to become fully integrated. Increasing level of integration assures checks and balances that prevent the region from drifting too far away from Western values and democratic status.

The pillars of the single market (free flow of goods, services, people and capital) benefit everyday lives mostly. Online purchases from other EU countries are on the rise, data roaming consumption has been increasing in Europe, membership in the Schengen Area saves time when crossing the border, euro banknotes in wallets make holidays carefree across Europe, providing some stabilization on the business side as well.

The elephant in the room: Eurozone enlargement. While fulfilling Maastricht criteria may prove to be challenging shortly after the series of shocks (pandemic and the war in Ukraine), a glance at the stage of development and level of income and price convergence looks encouraging. Czechia, Hungary, Poland and Romania are already more developed than most of the countries at their point of entry to ERM II. Further, euro adoption has brought much stronger stability of the exchange rate and improved predictability and transparency in setting prices.

Finally, the European Union still offers development opportunities for the region. Green transition and digital transformation are key areas in which the region can benefit from generous EU funding and support int he coming years.

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General information

AuthorErste Group Research
Product nameCEE Economies Special Report
Topic in focusFX, Macro/ Fixed income
Economy in focusCEE, Croatia, Czech Republic, Poland, Romania, Serbia, Slovakia, Slovenia
Currency in focusCroatian Kuna, Czech Koruna, Euro, Polish Zloty, Romanian Leu, Serbian dinar
Sector in focus-


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