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Macedonia held early election in December as part of a EU-brokered deal that aimed to resolve a protracted political crisis. The crisis began in January 2015, when SDSM's leader Zoran Zaev, then in opposition, accused the coalition government of VMRO-DPMNE and DUI of corruption, illegal wiretapping of more than 20,000 people and covering-up a murder. The conservative VMRO-DPMNE won a close victory against SDSM in the election, but failed to agree with ethnic Albanian party DUI on the formation of a coalition government after talks stumbled over the official use of Albanian language in the country, among other issues.

The banking systems of the countries in Southeast Europe are largely seen as stable and economic recovery is expected to further support lending, in particular in countries which have been lagging behind so far. NPL ratios, which are currently high in some countries, are expected to decline. In Bulgaria, the forthcoming asset quality review of the banking system is likely to lead to the sale of bad loan portfolios and speed up the process of market consolidation.

The EU’s slow and disjointed response to the massive flow of refugees and migrants from the Middle East and North Africa left Southeast Europe in an unprecedented emergency. In March Slovenia sealed its borders to migrants, triggering a domino effect further south along the so called Balkan migrant route with Croatia, Serbia and Macedonia following suit. The move led to tension on the Greek-Macedonian border where thousands remained trapped, and put Bulgaria under increased pressure from illegal migrants.

Britain's decision to leave the European Union has unleashed volatility on the global markets, and SEE is no exception. The full impacts of the vote are still impossible to predict but for once analysts seem unanimous that the balance would be negative for most of us. However, whereas EU members in the region are mostly concerned about the economic repercussions of a potential Brexit, for candidates to join the bloc the biggest fears are that it may thwart their accession plans.

On December 11, Romania held parliamentary elections following a year of technocrat governance. Romania's left-wing Social Democrat Party (PSD), won the elections and will have 221 seats of a total of 465 in the two houses of parliament. In order to have majority and have the right to choose the new prime-minister, PSD must make a coalition or attract 11 members from the other parties that entered parliament.

Croatian citizens last month voted for parliament for the second time in less than a year. The early elections were scheduled in July, following the dissolution of parliament - the culmination of a months-long long political crisis. Following the vote in which the conservative HDZ won 61 of the 151 seats in parliament versus 13 for centre-right MOST, the two formations reached an agreement to form a coalition government. The new government will also rely on support from deputies representing ethnic minorities and some smaller parties.

The recent boom of low-cost carriers across Southeast Europe (SEE), particularly in Romania and Bulgaria, has created a new market which complements legacy airlines. Rising low-cost passenger numbers, especially in Romania and Bulgaria, are closely linked to the double-digit growth of international tourists to both countries in 2016. According to Bulgarian finance ministry data, more than 56% of foreign tourists who visited the country last year arrived by low-cost flights.

Feeding on an abundance of high-tech talent and financial support under European-funded programmes, the fledgling start-up ecosystem in SEE has evolved significantly over the past years, in Bulgaria, Croatia and Romania in particular. The leading accelerators in Bulgaria, LaunchHub and Eleven, alone have backed financially over 150 startups.

Serbia's president Tomislav Nikolic dissolved parliament in April and called early elections at the proposal of prime minister Aleksandar Vucic, who was seeking broader public support to push through overdue reforms. Vucic, however, will control 27 seats less in the new parliament, final official results showed. The SNS-led coalition won 48.25% of the votes.