Stuck deep in the red

Article Abstract:

Foreign lenders and investors are staying away from eastern Europe due to the region's political and economic instability. The Organization for Economic Cooperation and Development reports a sharp decline in total lending by international capital markets to eastern Europe and the Soviet Union since democratic revolutions started sweeping across Europe. This is due mainly to Western bankers' worries regarding the ability of the young democracies to control foreign borrowing. Without foreign financial assistance, eastern European nations may never recover from the poor state of their economies. Economic conditions have worsened due to the collapse of the communist trading system, the interruption of trading with Persian Gulf states due to the war, and the pressing need for capital to finance the restructuring and the transformation into competitive market economies.

Foreign investments, Reports, Cover Story, Eastern Europe, Representative government and representation, Representative government, Europe, Eastern

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Eurotrends

Article Abstract:

The European Community (EC) has set rigorous economic convergence criteria for its proposed economic and monetary union (EMU). EC leaders have agreed that the single currency system should be introduced in 1997 only if at least seven of the 12 EC member countries can pass four basic economic tests. Should less than seven EC member countries meet the requirements by 1997, the EMU is set to be automatically established in 1999. The four basic economic convergence criteria for EMU are an inflation rate within 1.5 points of the three lowest national inflation rates in the EC, interest rates within two points of the three lowest national interest rate levels in the EC, a currency that stays in the narrow band of the exchange rate mechanism for at least two years, and a budget deficit no higher than 3% of GDP with a public debt ceiling set at 60% of GDP.

Europe, Economic policy, European Union, Monetary unions, Economic indicators, International economic integration, Economic integration

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The industrialized world sits on a demographic powder-keg set on a short fuse

Article Abstract:

The slowdown in population growth in the 24 Organization of Economic Cooperation and Development (OECD) member countries may give rise to a sharp increase in the proportion of elderly people in the industrialized world. Lower fertility and mortality rates in OECD countries are expected to result in a demographic ageing trend that would increase the proportion of people over 65 years to 21.9% by the year 2040. The economic consequences of such a trend may include labor shortages and markedly higher spending on social services for the elderly. The OECD is urging policymakers to address the issues associated with the ageing process, but labor analysts believe little will be done while youth-unemployment remains high.

Admin. of social & manpower programs, Aged, Elderly, Social policy, Demographic aspects, Labor supply, Labor force, Population policy

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