The period since the global financial crisis has been characterised by divergent economic experiences within the EU neighbourhood. The paper is structured into four parts. Part I starts with a comparison of the economic situation and outlook in the eastern and southern sub-regions of the EU’s neighbourhood, before turning to selected economic policy issues drawing on the detailed analysis contained in subsequent parts of the report.
Part II describes recent economic developments separately for the southern and eastern neighbourhoods, analysing the macroeconomic and structural policy challenges and reviewing key aspects of economic governance and the investment climate on a regional level. Part III consists of two thematic chapters. The first discusses the main economic factors underlying the ongoing social and political unrest in parts of the Southern Mediterranean, and the economic policy challenges they expose. The second examines trends in exchange rate policy and competitiveness in the two neighbourhood regions, identifying some patterns and policy issues. Finally, Part IV delivers a country-by-country analysis of the economies in the EU’s neighbourhood; including public finances, the financial sector, the balance of payments, social developments, as well as the structural reform agenda.