International Journal of Business and Social Science

ISSN 2219-1933 (Print), 2219-6021 (Online) DOI: 10.30845/ijbss

 

The Effects of the Global Financial Crisis on the Central and Eastern European Union Countries
Ebru Terazi, Seçil Senel

Abstract
After a period of strong expansion of economies across the world, in 2007 a crisis burst out in the real estate sector of the United States. With the collapse of Lehman Brothers in 2008 the crisis soon became global. Initially, it primarily affected the advanced economies of the United States and Western Europe, but the spillover of the crisis was unexpectedly powerful. The financial crisis has hit the various Member States of the European Union to a different degree. The global financial crisis affected the real economy in Central and Eastern European Union countries such as Czech Republic, Estonia, Latvia, Lithunia, Hungary, Poland, Slovenia, Slovakia, , Romania and Bulgaria through two main perspectives. First, the credit squeeze affected borrowing conditions for firms and households with subsequent adverse effects on domestic investment and consumption demand. Second, the downturn in the global economy, affected export demand severely. In this study the effects of the global financial crisis on the new European Union countries, how this question is handled by the European Union and which strategies are followed for crisis management will be discussed.

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