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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.

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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.

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.

An emergency government decree that eases penalties for corruption offences has triggered the biggest street protests in Romania since the fall of Communism. Protesters see the decree as an attempt to weaken the fight against corruption and help politicians avoid criminal prosecution on graft charges. The decree prompted harsh reaction on the part of the European Commission, the embassies of Western countries in Bucharest and business organisations, including AmCham in Romania. President Klaus Iohannis has said he will challenge it at the Constitutional Court.

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.

The automotive industry generates an ever increasing share of the value added of the economies of Southeast Europe. In 2017 a total of 629,014 vehicles were manufactured in the region, according to the International Organization of Motor Vehicle Manufacturers (OICA). In 2017, annual growth rates of 9.7% in the region significantly exceeded the European average of 3.1% and the global average of 2.4%. This can be explained with the constantly increasing demand for new cars in line with the overall sound economic growth in SEE, paired with consumers’ preference for local brands, especially in Romania, the region’s largest market. Passenger car assembly in SEE is concentrated in three countries – Romania, Slovenia and Serbia.

Moldova will hold its first direct presidential elections in 16 years, as in March, its Constitutional Court ruled that the president will be elected by popular vote. So far, Moldova's president was elected for a four-year term by a majority of 60% of the MPs in the 101-seat parliament. The expected fight between socialist leader Igor Dodon and pro-European candidate Maia Sandu in round two of elections once again shows Moldova at its eternal crossroad between Europe integration and the more familiar Russian alternative.

Activity in the region has benefited from lower oil prices and the gradual recovery in the euro area, but elevated corporate debt is hindering private investment, according to the IMF’s latest World Economic Outlook report. The World Bank, for its part, has commented that a notable revival of investment underpinned economic growth, particularly private investment - both foreign and domestic. Exports are also helping to fuel this growth. Improving productivity, however, remains pivotal for boosting growth in the region.