Analysis of the Impact of Expenditures on Education and R&D on GDP in Central European Countries

The main purpose of this paper is to identify the impact of public spending on education and research and development (R&D) on the formation of gross domestic product (GDP) in nine Central European countries, which are divided into two clusters – "old" and "new" EU members. The study took into account official Eurostat data of both the EU and national statistical organizations for the period 2010–2019. The analysis of this impact was carried out using a system approach, statistics and econometric framework including panel data regression, Wald, Breusch-Pagan, Hausman tests. The main finding of the present study is the identification of additional income in terms of GDP in Euro per capita for selected countries, which is obtained from adequately spent public funds for education and R&D. Our results showed that the strongest influence of these expenditures for the "old" members was in Germany and Austria, and for the "new" – in Slovenia and Czechia. It is proved that this impact is different in individual countries and is determined by the public financial policy of national governments.

Efficiency of Implementing Climate/Energy Targets of the Europe 2020 Strategy and the Structural Diversity between Old and New Member States

The most important goals included in the Europe 2020 Strategy are climate/energy targets, which determine not only the achievement of its other goals but also climate neutrality by 2050. This article aims to assess the efficiency of implementing the climate/energy targets of the Europe 2020 Strategy and to analyse changes over time, taking into consideration the structural diversity between the old (EU 15) and new EU members (EU 13) in the period of 2014–2018. The assessment of changes in the efficiency of climate/energy targets over time adds value to the evaluation methods used to date in this area. This was done using data envelopment analysis (DEA) and the Malmquist index. Earlier works usually specified only the level of target achievement, mostly jointly in relation to all of the goals of the Europe 2020 Strategy. The efficiency of their implementation at the macroeconomic level has not been studied. Furthermore, the added value of this paper consists in obtaining additional information concerning the internal structure and character of the studied efficiency of old and new member states. Changes in the efficiency level have been analysed with regard to the key climate/energy indicators used to monitor the Europe 2020 Strategy. Based on the results, the EU countries were divided into six groups with similar levels of efficiency in achieving energy and climate objectives and ranked using the DEA–Malmquist index according to changes in their level over time. This makes it possible not only to assess the performance of countries but also to formulate recommendations for decision-makers.

Development Prospects of Banking Sector in Central and Eastern European Countries in Terms of Financial Integration

This study examines banking transformations in Central and Eastern Europe (CEE) under conditions of economic liberalization, dependence between economic development of countries and efficiency of their banking systems. The comparative method and methods of economic-mathematical modeling were applied. Considering the positive correlation between financial structure and economic growth, confirmed by literature findings, the development of the financial sector can become a crucial factor in convergence for the new EU members. Analysis revealed lower depth of financial sector in Central and Eastern European countries region in comparison to the Eurozone, but higher efficiency and growth rates. Regression models confirmed the significant causality between financial sector expansion and economic growth of CEE countries, but extremely high foreign market shares in the banking sector of region create prerequisites for financial shocks transmission through contagion channel in case of economic instability in the countries of banks’ origin.

Decline of democracy—the European Union at a crossroad

Although EU member states have committed themselves to upholding the fundamental democratic values enshrined in Article 2 Treaty on European Union, violations of these values could be observed in some member states—first and foremost in Hungary and Poland. This article studies whether these negative developments, which are often summarized under the terms backsliding or erosion of democracy, should be classified as a loss in the quality of democracy or even as a decline of democracy. By drawing on Gero Erdmann’s (2011) theoretical definition of decline of democracy and using Democracy Barometer data for the period between 2004 and 2016, this form of loss of the quality of democracy is analysed for the 28 EU member states. In addition, the EU’s role in safeguarding democracy in its member states is discussed. The article shows that it is not only the new EU members that show a decline of democracy more frequently, but the old EU members. The EU as guardian of the democratic fundamental values is failing to live up to its role despite the numerous instruments it has at its disposal.

Serbia’s relations with its Western Balkan neighbours as a challenge for its accession to the EU

Serbia, as the second regional frontrunner (after Montenegro) in the EU accession process, hopes to be able to meet the required conditions and join the EU by 2025 which the European Commission 2018 enlargement strategy declared as the earliest possible date for the admission of new EU members. However, some of the EU’s expectations and requirements which Serbia has to meet, particularly those regarding the ‘normalisation’ of its relations with Kosovo and the resolution of ‘bilateral disputes’ which it has with some other neighbours, seem to be very tough and challenging for the Serbian government. The article discusses the recent developments in Serbia’s relations with its ‘most problematic’ neighbours and critically assesses the strength of problems in these relations as an obstacle for Serbia’s accession to the EU. The article shows that thanks to EU assistance and the commitment of interested parties to find a common ground, Serbia’s relations with Kosovo may become even less of an obstacle to its accession than its relations with its three western neighbours, particularly Croatia.

Serbian agricultural cooperatives and their path towards the European Union: Legal aspect

The association of farmers as a model of sustainable rural development is a significant factor in the rapid development of agriculture and the improvement of the position of agricultural producers. The economic importance of cooperatives in the world and Europe is continuously growing, especially in the conditions of global and regional economic and financial crises, when cooperatives show a high degree of resistance to the shocks of these crises and a high percent of survival on the market. The European Union recognizes the growing role of cooperatives. The European Commission define the cooperative sector as protector and promoter of the European model of social economy, and as an extremely important factor in building and preserving local "social capital" - trust, mutual assistance and horizontal ties between citizens and organizations. New EU members and candidate countries preparing to join the EU, including the Republic of Serbia, should promote cooperatives as a key aspect of economic development and social policy. The aim of this paper is to analyze the current legal position of agricultural cooperatives in Serbia, and to determine the degree of harmonization with EU regulations and comparative analysis of their legal regulation in the EU Member States. Based on the conducted analysis, recommendations will be proposed in order to improve the legislative framework of agricultural cooperatives in Republic of Serbia in order their future successful functioning on the EU market.

Comparative analysis of innovation performance of European Union countries

This paper aims to examine the innovation performance of 28 European Union countries. Hypothesis of the paper states there is a significant difference of innovation performance between the old and the new EU members. Furthermore, the role of SMEs regarding innovation capacity may not be the same across EU. Using K-means clustering results indicated Germany, Ireland, France, Luxemburg and Austria as the most innovative countries and Bulgaria, Estonia, Latvia, Hungary, Poland and Slovakia as the least innovative countries. Czech Republic, Croatia, Cyprus, Denmark, Finland, Greece, Italy, Lithuania, Malta, Netherlands, Portugal, Slovenia, Sweden, United Kingdom and Spain were found to have a medium level of innovation performance. Furthermore, United Kingdom surpassed the average innovation level of the cluster for the small sized enterprises. Croatia was below the average level of the cluster regardless of the size of the enterprise. Romania was the outlier with the least innovation. In order to facilitate more innovation these findings may be valuable in creating more country specific recommendations for entrepreneurial policy.

Roadmap for the adoption of the euro in Hungary: dangers and opportunities

In April 2003, the EU Accession Agreement was officially signed for the Czech Republic, Estonia, Cyprus, Hungary, Latvia, Lithuania, Malta, Poland, Slovenia and the Slovak Republic. These countries are destined to become EU members in May 2004. As part of the “acquis communautaire”, participation in the new version of the exchange rate mechanism (ERM II), and subsequently in the European Monetary Union (EMU) is obligatory for all new EU members (no opt-out clause is available). Therefore, the question today for the accession countries is no longer whether or not to enter the eurozone but rather the time horizon when the entry should happen. Journal of Economic Literature (JEL) code: E42, E58, F33.