Regional Economic Outlook: Europe

May 2011

World Economic and Financial Surveys

Strengthening the Recovery

The May 2011 Regional Economic Outlook: Europe anticipates that recovery in the region will solidify, with recoveries in advanced and emerging Europe likely to be mutually reinforcing. Advanced Europe continues to absorb most of emerging Europe's exports, while the role of emerging Europe as a market for advanced Europe will expand. Chapters discuss the outlook and policy priorities for advanced and emerging Europe, and analyze the role of financial integration in the buildup and resolution of imbalances within the euro area.

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Introduction and Overview
  1. Advanced Europe: Tackling the Sovereign Crisis

Recovery Continues

Turning the Page on the Crisis: Policy Requirements

  2. Emerging Europe: Underwriting a Solid Recovery

Developments in 2010

The Outlook for 2011 and 2012 31 Risks to the Outlook 36 Key Policy Questions Going Forward

  3. Financial Integration, Growth, and Imbalances

Imbalances and Crisis

Why Was the Crisis So Severe?

Why Is Resolution of the Crisis so Protracted?

Restoring Growth and Preventing Future Excessive Imbalances


Annex: Data and Econometric Approaches
 Estimating Equilibrium and Excessive Imbalances
 Estimating Effects of Policies on Excessive Imbalances
 Appendix: Europe: IMF-Supported Arrangements
  1.1. Domestic Demand and Recovery in the Large Euro Area Countries
  1.2. Deleveraging in the Euro Area
  1.3. Unemployment and Inequality in the Wake of the Crisis
  2.1. Russia: A Tepid Recovery from a Deep Recession
  2.2. Turkey’s New Monetary Policy Strategy
  2.3. Discretionary Fiscal Policies Since the 2008–09 Crisis
  3.1. Why Did the Currency Board Countries in Emerging Europe Have Such Large Imbalances?
  3.2. Recent Developments in Bank Competition in Europe
  3.3. Crisis Resolution and Financial Integration in the United States
  3.4. How Far Have Current Account Imbalances Adjusted?
  3.5. How Can the Reemergence of Excessive Imbalances Be Prevented?
  1. European Countries: Real GDP Growth and CPI Inflation, 2009–12
  1.1. Selected European Countries: Share of Exports by Destination, 2009
  1.2. Greece, Ireland, Portugal, and Spain: Authorities’ Measures to Restore Confidence and Regain Competitiveness
  1.3. Advanced European Countries: Main Macroeconomic Indicators, 2009–12 21
  1.4. Selected European Countries: Headline Inflation and Contribution of Food and Fuel Prices
  2.1. Emerging Europe: Growth of Real GDP, Domestic Demand, Exports, and Private Consumption, 2009–12
  2.2. Emerging Europe: CPI Inflation, Current Account Balance, and External Debt, 2009–12 37
  2.3. Emerging Europe: Evolution of Public Debt and General Government Balance, 2009–12 40
  2.4. Emerging Europe: Selected Financial Soundness Indicators, 2007–10
  2.5. Emerging Europe: Employment Growth, 2008:Q3–2010:Q3
  3.1. Selected EU Countries: Sectoral Saving-Investment Balances, 2000–07
  3.2. Selected EU Countries: Current Account Balances and Real Domestic Demand, 2003–10
  3.3. Selected EU Countries: Growth in Value Added and Contribution by Sector, 2000–07
  3.4. Euro Area: Output-Capital Ratios, 2000–07