Austrian Economics in the countries of Ex-Yugoslavia

On November 25, a new Austrian Economics Monthly took place on “Austrian Economics in the countries of Former Yugoslavia”. The economy, the social situation, and the scenario of individual freedoms in the Balkans and Europe, in general, were discussed. We had the privilege of listening to the contributions by Stephen N. Bartulica (Center for the Renewal of Cultur), Admir Čavalić (Multi), and Simon Sarevski (Austrian Economics Center). The webinar was moderated by Federico N. Fernández from the Austrian Economics Center and Fundación Internacional Bases.

In Bosnia-Herzegovina, Admir Čavalić stressed, a difficult situation is being experienced regarding the political crisis. Generally, when the general elections approach, politicians begin to block institutions, have a rhetoric of conflicts, and import a logic of fear to frighten the population.

One of the most relevant problems regarding economic freedom is the overload of the workforce, which is currently paying the government about 70% of their wages in taxes. Paradoxically – Čavalić explained – there is one of the best rates of monetary freedom in the world because they have a currency board, and not a central bank, which keeps the currency stable and the trust of individuals in it.

Although there are guarantees of freedom of expression, freedom in protests, and freedom in the media, they do not have economic liberty, which prevents the development of other individual freedoms. Still Čavalić emphasized that compared to the rest of Europe, restrictions due to COVID-19 have been less and individual freedoms are comparably greater in this context.

For his part, Simon Sarevski emphasized the historical consequences of the passage of communism in Macedonia since many people continue to vote according to their experiences after 1945. In addition, a tendency has been installed for citizens to vote in opposition to certain parties and not in their favor. But it was highlighted that if we compare Macedonian democracy with other democracies in the world, it still has a considerable way to go. However, if we compare the current reality with that of 1990, there is a more connected and freer Macedonia.

One of the main problems that Sarevski identified was the question of the rule of law. He mentioned that the legal system is relatively well structured, however those laws are not enforced and not all citizens are treated equally, particularly with the benefits for politicians. Regarding the pandemic, he agreed with Čavalić that compared to the rest of Europe the situation is not so unfavorable.

Finally, Stephen Bartulica talked about the situation in Croatia. Also, there the government did not impose major restrictions due to the pandemic, but the measures were no longer reasonable when the COVID Certificate Pass was introduced in recent days due to pressure. In addition, the liberal course of the measures has been abandoned and more and more restrictions are being imposed such as, for example, the unvaccinated population must take the test to go to work.

On the economic scenario, he explained that during 2020 Croatia’s GDP fell by 8%, however, the results could have been worse if lockdowns had been implemented. But that situation is also related to high public spending and its constant growth. Consequently, the Croatian economy has become much more dependent on the funds of the European Union and the Brussel’s decisions.