Focus on Transition

Editorial 
Recent Economic Developments
Developments in Selected Countries 
Maciej Krzak

Studies
Large Current Account Deficits – The Case of Central Europe and the Baltic States 
Maciej Krzak
A number of transition economies from Central and Eastern Europe have recently run large current account deficits, which raises the question of the sustainability of such deficits. This paper draws on theoretical results and empirical findings to determine the factors that impact on current account sustainability. Moreover, it addresses the issue of the sustainability of large current account shortfalls by analyzing a number of relevant economic indicators in the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland and Slovakia. As the country sample is small and the time frame short, statistical inferences are impossible and generalizations are difficult to make. The main conclusion is that large current account deficits do not automatically imply problems with their financing or even a currency crisis. However, a combination of large current account deficits with a budget deficit, falling foreign currency reserves, real appreciation, strong domestic credit expansion or contagion effects are a likely crisis trigger. 

The Introduction of the Euro: Implications for Central and Eastern Europe – The Case of Hungary and Slovenia 
Peter Backé and Olga Radzyner
The study deals with the implications the introduction of the euro has for advanced transition countries from Central and Eastern Europe. It examines the EMU-related aspects of EU Eastern enlargement, looks into the economic effects the introduction of the euro will have on Central and Eastern European economies and discusses the policy challenges EMU poses for the EU applicant countries. In the analysis, the examples of Hungary and Slovenia are used to illustrate the effects and implications monetary integration has and will have for the Central and Eastern European countries. 

Currency Boards in Central and Eastern Europe – Experience and Future Perspectives 
Niina Pautola and Peter Backé
The 1990s have witnessed a revival of currency board arrangements. Central and Eastern Europe has played a major role in this process: Estonia, Lithuania, and more recently Bulgaria have adopted this distinctly rule-based monetary framework. The study reviews the experience of these three countries with or under their currency board regimes to date and analyzes the future perspectives of these arrangements in Central and Eastern Europe, in particular against the backdrop of the unfolding transition process and the prospective integration into the European Union.

OeNB Activities
Lectures organized by the Oesterreichische Nationalbank 
The Current Economic Situation in Bulgaria –
First Experiences after the Introduction of the Currency Board – Roumen Avramov 
The EBRD Transition Report – Christof Rühl 
Capital Market Development in Transition Economies – Eva Thiel 
Fiscal Federalism in Russia: Evolution, Problems and Prospects – Stephan Barisitz 
The “East Jour Fixe” of the Oesterreichische Nationalbank – A Forum for Discussion 
Preparation of EU Enlargement – The Commission’s View – Albrecht Rothacher 
Attitudes toward EU Accession in the Czech Republic, Hungary, Poland,
Slovakia, Slovenia and Austria – Christian Haerpfer 
Eastern Enlargement of the EU: How Much Is It Worth for Austria? – Wilhelm Kohler 
Presentation of the DG II Spring 1998 Forecast for the Central and Eastern European Countries – Andries Brandsma 

Conference on Current Account Imbalances in East and West: Do They Matter? 

Technical Cooperation of the Oesterreichische Nationalbank with Central and Eastern European Transition Countries 

Statistical Annex
Compiled by Andreas Nader
Gross Domestic Product 
Industrial Production 
Unemployment Rate 
Consumer Price Index 
Trade Balance 
Current Account 
Total Reserves minus Gold 
Central Government Surplus/Deficit 
Gross Debt in Convertible Currencies 
Exchange Rates 
Discount Rates