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Brussels (pte021/22.07.2005/13:22) - In a report released on Thursday the World Bank http://www.worldbank.org said that the east European countries that joined the EU in May 2004 are suffering from an economic hangover.
The eight countries, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, the Slovak Republic and Slovenia, enjoyed an investment and production boom immediately bfeore accession, but the first half of 2005 has seen a decelerated output growth. Only Estonia experienced gross domestic product growth, said the report, with Poland, Slovenia and Hungary recorded the worst deceleration of all the countries.
Thomas Blatt Laursen, chief economist in the World Bank's Europe and Central Asia region, said the eight nations must now work on reforms to ensure they benefit from membership in the affluent western club.
"The pre-accession period created a crucial window of reform opportunity that may be closing quickly after EU entry," he said in a quarterly report on the eastern European nations.
"Companies, individuals and governments that did not take adequate advantage of this opportunity may take longer now to catch up to average EU living standards," he warned.
The World Bank cautions that the countries must ensure individual input and effort to narrow the economic gap with their western counterparts.
Last month's EU summit, which fell apart due to the eurozone nations being unable to agree on how to fund itself, has not helped the new nations' hopes of receiving an infusion of cash.
"Catching up will require more than an infusion of EU transfers, including because some new member states have limited absorptive capacity," Laursen said.
But he stressed that, "Further efforts to secure macroeconomic stability and continued structural reforms to boost the investment climate and enhance labour market flexibility are also needed".
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