Introduction

Abstract

Twenty five years ago, South East Europe (SEE) — comprising Albania, Bulgaria, Romania and the seven successor states of the former Yugoslavia (Bosnia & Herzegovina, Croatia, Kosovo, Macedonia, Montenegro, Serbia and Slovenia), embarked on a long, difficult and sometimes violent transition from the socialist/communist economic and political structures adopted or imposed after World War 2 towards market-oriented economies with democratic political structures.¹ With the fall of the Berlin Wall in 1989, Germany was united and Western Europe looked to restore the links with Central and South East Europe that were severed in 1945. In addition, European Union (EU) integration began to intensify, first with the Treaty of Maastricht (1992) and then with the introduction of the euro (1999). The EU acted, metaphorically, like a gigantic and increasingly powerful magnet, attracting the political and economic philosophies of SEE westwards. Midway through the region’s absorption into the EU, however, with four of its ten countries in the EU (or nearly in) and one already a member of the euro area, the region suffered a profound shock in the wake of the global economic and financial crisis in mid-2008 and the Euro-area crisis that followed in 2010.