An Overview of South Eastern Europe

Progress of South Eastern Europe after the system change presents striking contrast to that of Central Europe and the Baltic States. The difference originates in part in the history. The Balkans is a place where various ethnic groups are scattered and has been called “Europe's powder keg”. Balkan Wars occurred in 1912 and 1913, and World War I began from gunshots in Sarajevo in 1914. Nationalism was contained during the socialist period. In the course of the transition the West mechanically applied the principle of self-determination to the former Yugoslavia, a multinational state, causing tragic ethnic conflicts. In addition, the West has encouraged rapid transition to a market economy with no regards to complicated circumstances in South Eastern Europe. In their economic assistance to countries in the region, the European Union and international financial institutions imposed the Washington Consensus such as trade liberalization, free mobility of capital, etc., causing disorder. After around 2000 these countries attained the economic development primarily led by consumption, relying on foreign capital, but their economies were vulnerable to external shocks. This region has been tossed about by the global financial crisis and the subsequent Eurozone crisis. Placing emphasis on history, this chapter gives an overview of trends after the system change and current situations in the Western Balkans.