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12/03/2010 : Six years after EU enlargement – Austria and its Eastern neighbours

This Seminar is part of the series of Country Seminars our Directorate-General for Economic and Financial Affairs (DG ECFIN) has been hosting over the last few years. The intention is to bring together acknowledged experts from academia, applied research and economic policy to discuss topical issues and challenges that one or several EU Member States are facing within the overall European policy framework.

The Austrian economy has been affected to a particularly high degree by the transformation in Central and Eastern Europe and by EU enlargement of 2004. It has drawn early and substantial benefits from the new opportunities for trade in goods and services as well as for investment, as reflected in a lasting improvement in the current external account. However, domestic firms and their workforce have become subject to stronger competitive pressure which, while dampening the rise in labour cost, complicated keeping unemployment at its traditionally low level and added to demands for (temporary) protection of domestic producers and the internal labour market. At the same time, Austria plays an important role in the economies of its Eastern neighbours. Notably, Austrian banks have invested early and heavily in the emerging market economies in Central and Eastern Europe. Their strong involvement brought sizeable profits but also carries potentially high risks as revealed by the latest economic and financial crisis.

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