199 10 3494 https://omeka.ibu.edu.ba/files/original/6ff4c6835b82ffddc226956e35d00231.pdf b419461f7ef0343b63b76efc09fc5437 PDF Text Text International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo The Impact of Free Trade Agreements on Economies of Western Balkan Countries Erkan Ilgün International Burch University, Sarajevo, Bosnia and Herzegovina eilgun@ibu.edu.ba Elvisa Buljubasic International Burch University, Sarajevo, Bosnia and Herzegovina buljubasicc_e@hotmail.com Globalization and integration are social phenomena that are used to describe the diffusion and connection of production, technology and communication throughout the world. When we talk about integration, one of the things that comes to our minds is international trade. There are certain benefits of this economic cooperation such as: support to economic development and promotion of human prosperity. But, also there are some disadventages: loss of jobs, lower wages, increase in trade deficits etc. The Western Balkan countries have been offered Stabilisation and Association Agreement by European Union. The Stabilisation and Association Agreement represents the structure of relations between the countries of Western Balkan and European Union for the implementation of Stabilisation and Association Process. Also, in 2006, Serbia, Albania, Bosnia and Herzegovina, Croatia, Macedonia, Montenegro, Kosovo and Moldova signed the Central European Free Trade Agreement. So the objective of this study is to investigate what impact the above mentioned free trade agreements and relations have upon the economies of West Balkan countries. The comparison will be done among the countries of West Balkan by analyzing macroeconmic factors (GDP growth, GDP per capita, GDP deflator, FDI, etc). Particular focus will be on Bosnia and Herzegovina and its standing in relation to European Union. Beside descriptive statistics we will use time series analyses to investigate whether the gains from free trade are higher than costs. The statistical data that will be analysed is taken form International Trade Center and World Trade Organization. Keywords: Free Trade Agreement, DEFTA, Economic Growth, International Trade 108 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 1560 Title A name given to the resource The Impact of Free Trade Agreements on Economies of Western Balkan Countries Author Author ILGUN, Erkan BULJUBASIC, Elvisa Abstract A summary of the resource. Globalization and integration are social phenomena that are used to describe the diffusion and connection of production, technology and communication throughout the world. When we talk about integration, one of the things that comes to our minds is international trade. There are certain benefits of this economic cooperation such as: support to economic development and promotion of human prosperity. But, also there are some disadventages: loss of jobs, lower wages, increase in trade deficits etc. The Western Balkan countries have been offered Stabilisation and Association Agreement by European Union. The Stabilisation and Association Agreement represents the structure of relations between the countries of Western Balkan and European Union for the implementation of Stabilisation and Association Process. Also, in 2006, Serbia, Albania, Bosnia and Herzegovina, Croatia, Macedonia, Montenegro, Kosovo and Moldova signed the Central European Free Trade Agreement. So the objective of this study is to investigate what impact the above mentioned free trade agreements and relations have upon the economies of West Balkan countries. The comparison will be done among the countries of West Balkan by analyzing macroeconmic factors (GDP growth, GDP per capita, GDP deflator, FDI, etc). Particular focus will be on Bosnia and Herzegovina and its standing in relation to European Union. Beside descriptive statistics we will use time series analyses to investigate whether the gains from free trade are higher than costs. The statistical data that will be analysed is taken form International Trade Center and World Trade Organization. Keywords: Free Trade Agreement, DEFTA, Economic Growth, International Trade Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2013-05-10 Keywords Keywords. Article PeerReviewed Identifier An unambiguous reference to the resource within a given context ISSN 2303-4564 https://omeka.ibu.edu.ba/files/original/7f0a546ee7265457301d3efb10c39f35.pdf 29b788873c2f5efa1834ff7766388db4 PDF Text Text International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo Global and State Policy and Modern Financial Crisis Izet Ibreljid Faculty of Economics, University of Tuzla ibreljic@yahoo.com Amra Nuhanovid Faculty of Economics, University of Tuzla amra.nuhanovic@untz.ba Lately dominates the impression that most holders of economic policies at the national and global level are not willing to give up his rigorous attitude and follow the recommendations on which there is scientific consensus is evident. However, consistent with considerations of instructions that the economics have been offered, would significantly reduce the frequency of crises and the damage that they bring with them. Until today the variety of conclusions are crystallized. Speaking of preventing financial crisis and its practical implementation in the process of creating the optimal macroeconomic policy is a priori highly desirable. So in the United States adopted a plan that aims to redeem the State risky investment, while the EU has a similar situation, because there are also carried out bank recapitalization. Considering the above, the paper analysed and presented the main activities undertaken on the road to recovery from the effects of the global financial crisis, as well as the latest developments in the global market, with special reference to the Euro zone. Keywords: World Economic Policy, G-20, World Economic Crisis, Answers, Challenges. 179 � https://omeka.ibu.edu.ba/files/original/ea73a42ce8f6cc19a961e1af47bd8f5c.docx ceb5353539396263dd206fa590282468 https://omeka.ibu.edu.ba/files/original/f08640923995480cfc27568206ab616b.pdf 149a074abb396820e02b9c7df0f09bed PDF Text Text International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo Globaland StatePolicy andModern FinancialCrisis Izet Ibreljic Tuzla University, Tuzla, Bosnia and Herzegovina ibreljic@yahoo.com Amra Nuhanovic Tuzla University, Tuzla, Bosnia and Herzegovina amra.nuhanovic@untz.ba Abstract Latelydominates the impressionthatmostholdersofeconomicpoliciesat the national andgloballevelarenotwilling togiveuphisrigorousattitudeand follow therecommendationson whichthereisscientific consensusisevident.However,consistentwithconsiderationsof instructions that the economicshave beenoffered,wouldsignificantlyreduce the frequencyofcrisesandthe damage thattheybring withthem.Untiltoday thevarietyofconclusionsarecrystallized.Speaking of preventingfinancialcrisisanditspracticalimplementation intheprocessofcreating theoptimal macroeconomicpolicyisa priorihighlydesirable.So intheUnitedStatesadoptedaplanthataimsto redeem theStateriskyinvestment,whiletheEUhasa similar situation, becausetherearealsocarried outbankrecapitalization.Considering theabove,thepaperanalyzedand presentedthe main activities undertakenontheroadto recoveryfrom theeffectsof theglobalfinancialcrisis, aswellasthelatest developmentsin the global market, withspecialreferenceto the Eurozone. Keywords:world economic crisis,answersandchallenges. policy, G-20, world economic JEL:F01, F44 Multilateraleffort prevention plantofinancial crisis Giventhatthemaincauseofmarketfailureeveryfinancialcrisis,theanti-crisispolicy is limitedmainlytotakeurgentmeasurestostopthecrisis,toreduceitsnegativeeffects,totake theactionsnecessary tosustaintheeconomy incrisis,aswellasqualitativemeasuresto overcomefromthecrisisandrestoretheeconomytoapathofsustainabledevelopment. Recentfinancialcrisis hasshownthatthemarketsystemisalongandindulgenttobe deformedinsomeimportantsegmentsinwhichitisnecessary topointout.Onthisbasis, marketfailureshaveledtothecrisis.However,inthelastfinancial crisishavenot yet discoveredalltheshortcomingsofthemarketandtherefore theanswertothecrisisisnot definitive. Whena crisisoccursinone sectorof the economy,there isincreasing unemployment,createssocialproblems,etc.The oppositeis theprocess ofovercomingthe crisis,withtherevivalofproductionincreasesemployment,economicactivity isgradually 1 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo returningtonormal,etc.Thisleadstoconclusion thatthecentreofactionagainstthestateof thefinancialcrisis,theeconomy andfinancialinstitutions.Therefore,inmostcrisesinthe economy requirescoordinatedaction by allparticipantsinthefinancialmarkets,whichhave beenaffectedbythecrisis.Itcoversawiderunderstandingandcreationofstrategies,plans and programs out of the financial crisis, then the achievement of political stability, the adoptionofspeciallaws,acts,conductsupplementary budgetandchangesinmonetary policy (IMF, (2009), p.116). Recoveryfromthefinancialcrisismay helpbetterexternalfactors,suchaseconomic growthorgrowthintheworldprice,andthereturnofcapital.Domesticfactorsofrecovery fromthecrisis areconsideredexternaladjustment,realcourses,lowinflation,etc. However, one shouldtakeinto accountother effectsofthecrisis,such asthesize of the public debt,low capacityutilization,discreditedreforms,highunemploymentandsocialcosts.Inthiscase,the policiesthatarerecommendedforrecovery fromthecrisisandeconomicgrowthasfiscal discipline,increaseexports,supportinstitutionalreformandsocialpolicy.Simply put,fiscal policy mustworktoreducefiscalpressureandprovidefiscalincentivestotheeconomyand monetarypolicyshouldhelptomaintaintheliquidity offinancialinstitutions,reduceinterest rates, and securelendingactivityof financial markets. Initialreactiontotheoutbreakofthecrisisfocusedonstoppingthe spreadofpanicand crisisinthemaintenanceofdemand(orpurchasingpower), whichusedthefundsfromthe budget,the CentralBank,theIMF,andother regionalfinancialinstitutions,whichhave the taskof providingfinancialassistance.Whenit comestothepsychologicaleffect,expressed panicinacrisisthatmakesthesituationevenworse,itisnecessary totakeonthe crisisfairly, transparentlyandtimelyinform,whatisthebestway tocombatthespreadofthefinancial crisis.Along with that, we havetomakeastrategyto stop the withdrawal of funds from banks andother financialinstitutions,anddetermineguidelinesforthetreatmentofshares,stock exchangesandsecurities.Further,it mustbe toworktowardsthestabilizationofthenational currencyandinpreventingspeculationloans,shares,realestate,currencies,etc.Ofcourse, thecrisismustbedesignedandrealisticadjustmentpolicies,whichfora givenperiodrequires savings,rationalization,denial,etc.Itshouldbebearinmindthattimeandadjustingthe resultswillbe thesameinallcountriesandbusinesses.Instrongereconomies,therecovery processisusuallyfaster,butitwillwithdrawandrecoverothers.Therecovery ofthe developingcountriesislonger andmore difficult,because theirgovernmentandtheeconomy weakenoughtoimplementeconomicreformsresolvemarketfailuresandeffectively pulled outofthecrisiscountry.Inthisconnection,there isalwaysa crisisshouldstrivetoprepare systemsolutionsandcustomize themactive economic policiestoovercome the crisis.These are institutionalandotherqualitativechangesineconomicandfinancialsystemsthathaveto provide sustainableeconomicdevelopmentwithout crises (IMF, (2009), p.117). The choiceofeconomicpoliciesinthefightagainstthefinancialcrisisdependsonthe natureofthecrisisanditsdepth.Fiscalrestrictionsmay be necessary,ifwekeepinmindthat thecrisisisoftenassociatedwithexpansionaryfiscalpolicy.Restrictivemonetary policy can alsohelpintheeliminationofmarketpressures.However,thecriseswhichare inseparable fromtheproblemsofliquidity andsolvency,thecentralbankmustbepreparedtoprovidethe resourcesandsupportbankliquidity,butalsoto protecttheroleofdepositorstokeeptheir trust.Suchpoliciesusually involvehighcostsanddonotprovideasafeeconomicrecovery. Therefore,itwould bemoreappropriateinthesecases,monetary expansionthatfacilitates 2 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo lending and lowers the cost of capital throughout the economy. Incentives,whicharestrongly takeninlate2008andduring2009havecontributedto mitigatingtheeffectsoftheglobalfinancial crisis,especiallystoppingdeepereconomic downturn.However,outofthecrisisshouldbe change investorbehaviorthrough institutionalandregulatory reform,changesinthestructureofconsumptionandproduction, andimprovingtheworld'sfinancialsystem.In ordertoreturnconfidenceinfinancial institutionsandfinancialinstrumentsisnecessary tocleanthecontaminatedassets,changein behavior offinancial institutionsand thestrengthening ofmanagement in thefinancial sector.Consideringtheabove,thefollowingfigureshowsthefunctionalmodelofresolving the financial crisis. Figure1 Functionalmodelto solvefinancialcrisis ANSWERSOFWORLDECONOMICPOLICY THEFINANCIALCRISIS GLOBALPLAN FORREFORM WORLDECONOMY NEWINTERNATIONAL FINANCIALARCHITECTU RE REFORM Regulationand supervision ofthe bankingand financialsystem IMF FINANCIAL STATE INTERVENTIO N GLOBAL RISK REDUCTIO N WORLD MACROECONOMIC MANAGEMENT Fiscal discipline Increasingexports Socialpolicy BANK Measures and activities ofglobal andnationaleconomicpoliciestocurb the financial crisisare:(1)Globalplantoreformandrevitalizetheworldeconomyandthecreationofa new international financial architecture, including: transparency, accountability, implementationof internationalstandardsandcodes,public debtmanagement,financial regulationandsupervision,fiscaldiscipline, strategy,selectionof appropriate exchangerate policy,socialprotection,thefightagainstmoney laundering,theestablishmentofflexible creditlines,reformtheIMF, WB,promote greater participationof the private sector, strengtheningthe bankingfinancialsystemtoreduce public expenditures(expendituresfor salariesofemployeesinthepublicsector,anda numberofsocialrightsandsocialtransfer payableby government)thatarenecessarytoreducethetaxburden...(2)Financialpointof stateinterventionmeans:turningdowninterestrates,liquidity credits,reductionofrequired reserves, facilitating access to credit forthe central bank in orderto provideadditional liquidity intheglobalandnationalfinancialsystems,strengtheningthesystemofdeposit insurance,becauseofthegreatersecurityforinvestorsandreducepanicandpressureson bankliquidity,theintroductionofthegeneralguarantee ofbankdebt,topreventthespread of the crisisand the collapse of banks,aswell asspecial guaranteesforinterbank claims, measurestounblockcreditandacceleratingthe processof lendingwhichstimulatethe economy.It is evidentthat theU.S. and Europe and otherdeveloped countries havedecidedto intervenetaxpayerfundsorthebudgettostop andpreventthespreadofthefinancialcrisisor 3 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo panic,contagion,illiquidityandinsolvency,causedbythefinancialcrisis.Fundinginthis case,may beinvestedinthreeways:throughloansthebudget-givenwiththecontrol efficiencytheirusewithabusinessplan,participationinthecapitalofthebankorcorporation whereby thestateprovidesprofitsharingandmanagementofcertainbanksorcorporations, andthenationalization ofthebanks (asinFrance). (3)Reductionoftheriskofglobal outbreak of thefinancialcrisis. Assoonasthesixprimary prescriptionsforreducingriskofanoutbreakofthefinancial crisis:1.avoidovervaluationof the localcurrency,allowing ittogovern itfluctuates,2. maintaining a high level of foreign exchange reserves, 3. the maintenance of a healthy banking system, while eliminating thecurrency, interest and conscripts disagreement, 4. activemanagementof balanceandparticularly off-balancesheetassetsandliabilitieswiththe surveillance techniquesandstresstestsona microandmacro level,5.avoidinghighinternal andexternaldebt,especiallywhenitcomestotransformingtheobligationoftheprivate sector, and finally(6)implementation of control of capital movements. Internationalscenarios formitigationconsequences offinancialcrisis Economichistory remembersthelargenumber offinancialcrises,whichiswhynevertoo early tobeginworkonitsprevention.Itisbelievedthatthepreventionandmitigationof financialcrises successful whenthecrisiscomes.Iftakethe interventionofthe financialcrisis intheearly stages,itwillsurelyberelativelyefficient,butastimepassesthecostsof interventionandpreventionofexponentialgrowth.Successofmitigationofthefinancial crisis is difficult to assess, since they register only failed attempts. Until today, many proposedmeasuresinorder tominimize thefinancialcrisis,whichcouldinthe futurehave strengthened thecurrent globalfinancial architecture,and improve itsfunctioning.This includes, roughly speaking: (1) increasingthetransparency of internationalmonetary relations,(2) strengtheningthe bankingandfinancialsystem,and(3)promote greater participationoftheprivatesector.Increasedtransparencyisakey reform,becausefinancial markets cannot functionwithoutadequate, reliable and fastinformationavailable. Foreign investorsthroughtransparencycaneasilyseewherepotentialproblemslieandavoidthe excess funds in areasthreatened bythecrisis(Soros, 1998, p. 134). Anotherwaytoimprovethepreventionoffinancialcrisesistostrengthenthebankingand financialsystemsindevelopingcountriessoastoimprove the supervisionandprudential standards,toensurethatthebanksmeetcapitaladequacy requirements,introduceadequate penalties for bad loans, print and qualify reliable information the lending activities of countries,etc.Weaknessesbankingsystemsarecommoninalldeveloping countriesoverthe pastdecades havepassedthroughthecrisisoflarge proportions.InthisregardtheIMF has introducedstandardsandcodesofgoodbusiness practiceintheareasofaccounting,auditing, corporate governance,paymentsystems,insurance andbanking.Thethird methodof preventioninthecrisisintheeconomyisgreaterprivatesectorinvolvementintheresolution offinancialcrisesindevelopingcountries by makingloanstorebuildandre-negotiateorwill beprovidednewsources,andnottoimmediatelyfleethecountry,asapreconditionfor officialaidfromtheIMF.Theessenceisthatborrowerstakesomeresponsibilityforthe crisis,if yougivetoo muchshort-termloans tounproductivepurposes. Inotherwords, 4 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo borrowersshouldbe"takenout"ofthecrisis,ratherthanbeallowedtoeasily getoutofthe country.Inthisregard,theIMF hasproposedthe creationofa sovereigndebt restructuring mechanism forthe rapid restructuring of debts in developing countries, which havethe problem of external debtsustainability. Thefinancialanalysismustalwaysbearinmindthefactthat,evenifyouapply allthe reforms,itcannoteliminateallfuturefinancialcrises.Whatwe canhopefor isthatthose reformswilldiminishorreducethefrequency anddepthofthecrisisinthefuture.Becauseof thefrequency ofglobalcrisisinthefinancialmarkets,many countriesandtheirgovernments havecreatedtodate,accordingtoownexperience,differentversions ofthescenarioof recoveryoftheworldeconomy (Ohmae,(2007)):(1)Americanscenario:Scenariosuggeststhat inallthestatesnecessary to increasedomesticdemandinordertoprovide thegrowth ofGDP. According to thisscenario are the best-knownandproposalsNobel laureates,suchas:PaulKrugman, (inorder toachievegoodeconomicresults,whileproviding assistancetoindividuals,advisesthatthe ruling administration quickly startswithstrong financial regulation,andCongresstodraftaplan of financial incentives,which shouldbe focused onconsumption.Theadministrationwillhaveto deal withmortgages,toreviewtheconditionsofthemortgageloan,yourproperty andstructuresthe significantcontrolthatwenowhaveinthefinancialsectorinawaythatwillallowprivatecapitalto re-enter thatsphere when theBOPisthecompany getting better), JosephStiglitz believesthat the recovery ofmoresubstantialinvestmentsininfrastructure,technology andalternativeenergysources, EdwardPrescot,saidthatresearchhasshownthattaxratesareakeyfactorindeterminingthe economichealthofdevelopedcountries,andthewillingnesstotakerisksandproductivity-the enginesofeconomicgrowth,whilehightax ratesare asureway ofchoking theengine,MasckinEricksaysthatcreditmarketsrequiregovernmentintervention,EdmundPhel pspointedoutthat lack of control in themanagementofequity causesmany problems,Claiv Gotzangerproposedinjectionof funds into thebanks.(2)Russianscenario:Proposes toholdnewBreton Woods,inordertoprevent thatacurrentbackupdollarworldcurrencyleadtothecollapseoftheentireworldmonetarysystem. Topreventthisfrom happening,weshouldintroducearegionalreservecurrency,and,sinceRussiais thethirdcountryintheworldforforeigncurrencyandgoldreserves,itwasdecidedthattheservice willgrowintoastrong regionalcurrency.Inaddition, thescenario insistsonarranging andorganizing nationaland internationalregionalinstitutes, thentilting large imbalancesbetweenvolumeof issuance offinancial instrumentsand real incomepossibilitiesofinvestmentprograms,andto increasethe accountabilityofpublic companiesbefore the shareholders, to strengthen the riskmanagementsystem, andthedisclosureof informationcompanies.(3)Chinesescenario:According totheirscenario, the Chinese government is to overcome the negative effects ofthe crisis,a package of$ 586 billion dollars tofinanceinvestmentsininfrastructure,socialwelfarepayments,developmentofSMEs,andplan ned toincreasedomesticdemandby lowering taxesof17.6 billiondollars.Inthiscontext,Chinawillbe in thenextfewyearstoturn moretowardsagricultureandruralareas,asintheindustry,according to Chineseeconomists,thereisthegreatestpotentialfor 5 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo stimulatingdomesticdemandandprovidingthe basis forastableandrelativelyrapid economic growth. Any formofinternationalcooperationbetweencountriesshouldleadtosomeproposals thatwouldpartially undertakeinresponsetothechallengesoftheglobalfinancialcrisis.In connectionwiththis,inthe previoustable presentstheinternationalscenariosforpossible solutionstothefinancialcrisis,which,unfortunately,have notyetbeenfinalizedand unanimously accepted.OneofthemisalmostimpliedpropagatedactionFedapproval1,000 billiondollarstorescuebanks(700billiondollarsforFanny MeeandFreddyMec,and300 billiondollarsforCityGroup)aswellasnationalcorporationsandtheautomotiveindustry. Also,severalexpertssuggestedthescenariowiththedivisionoftheworldintothreeblocksof countries(Eastern,AmericanandEuropean),while othershavesuggested acompletedivision oftheworldinwhichthere willbenocommonblocksandinstitutions.Eachcountry,inthis finalversion,I hadtotakecareofthemindependently,whichmeansthatthestatehas strengthened tothemaximumimpactonthe economy. However, withexistingsevere financialproblemsduetothestrugglefor theredistributionof theworld'sresources,there wouldbeanincrease ininternationaltensionsandeven armedconflict.Onthisbasis,the naturalconsequenceof the newsituationontheworldeconomic scenewouldweakenthe influenceofdollars, whichwould no longerbe theworld'sreservecurrency.At the same time, wouldreducetheimportanceoftheeuro.MostoptimisticscenarioisoneinwhichtheU.S. hadsuccessfully overcomeavery seriouseconomiccrisis,whileBrazil,Russia,India,China managedtocopewiththeeconomicslowdownandaccepttheworkofcommoninternational financialinstitutionsasthebestremedy tosolveproblems.Especially,therearescenarios Chinese government,becauseitisfocusedonmeasurestoencourageitsconsumption(i.e.the abolitionof taxesonsales of cars withsmallengines, 74millionpeople withlowincomes wouldreceive the appropriate subsidies,retiredstate employeeswillreceive inadditiontoa pension,12millionteachers willreceivea highersalary,etc.). However,inthisvariantof the real economicpowerand still be on the fast-growing economies. Preventivemeasurestaken by governmentsandcentral forleaving the worldfinancialcrisis banksinsome countries Sincethelastfinancialcrisishitthewholeworldeconomy,manygovernmentswere forcedtorescuetheinternationalfinancial system,withpriority giventoensureeconomic recovery.Inthisregard,anumber ofmeasures were takentoimprovethefinancialstability, includinginjectingcapitalintofinancialorganizations,a significantexpansionof guarantees forbankliabilities bythecentralbankrecapitalization,andvariousliquidity programs.Ontheglobalfinancialcrisisarethe firsttomeetthegovernmentandthecentralbanksof developed countriesandthemeasurestakenincreasedmarketliquidity,primarily byreducingthebasic interestrateandthrowlargeamountsofmoney intothefinancialsystem.Stateaidpackages are rehabilitatedlossesoffinancialinstitutionsandstrengthenedcore capitalfor the credit function ofbanks,whichhaveabusiness perspective. Financial assistancewas providedfunds of state financialinstitutions. In additiontothe recapitalization were used, and other measures,suchasvarioustypesof guaranteesof interbanktransactions,the purchase of 6 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo troubled assetsfrom banks,toguaranteethedebtsoffinancialinstitutionsandcompanies,etc. Thedecisionsofcentralbanksonsecuringliquidity andmeasuresofloanguaranteefinancial sectorby thegovernmentandparliamentsofmostcountrieshaveprovedtobeeffectivein preventingthecollapseof the globalfinancialsystem(FSA, 2009,p.45).Indeveloping countries, governments have had to confront the economic slowdown through monetary policy,supportprogramsfor jobcreation,expansionof socialsecurity, etc.Inaddition,the governmentundertook awide range of measurestofacilitate financialproblemsof business, improvebusinessenvironment,fiscalandother incentives.Sectormeasuresarefunneledinto thehardest-hitsectors,especially intheautomotiveindustry,constructionandtourism.In general,thecurrentactionplanscoordinatedgovernmentsofaffectedlastworldfinancial crisis were aimedat:theefficient operations ofthe regulated financial markets, greatercontrol rating agencies, greater regulation of speculative hedge funds and other previously unregulatedfinancialproducts,harmonizationof accountingandauditingrulesempowering theIMF, etc. However,thereisnosinglemodelisapplicableandeffectiveforeachcountry.Common toallrecovery plansthatincludemeasurestorestoreliquidity.Thebasicdifferencebetween therecovery plansofindividualcountriesrelatestowhetherornottheirfinancialsectorwas directlyexposedtothetroubledsecurities.Therefore,twogroupsofcountriessuchasthe USA,GreatBritain,Germany,Austria,Italy, Sweden, France,Russia,whose financialsector hasbeendirectly exposedtotroubledsecuritiesandwhoserecovery plansmustincludethe funds needed to recapitalizebanks. Theseare recoveryplans inwhich theywriteoffthelosses ofthebankingsectorandreducethecapitalbaseofbanksandtheircreditcapacity.In additiontosupportthe recapitalizationof banksbankingsystemincludessignificantfunding forinter-bankguarantees,inordertohelprestore thecreditmechanismandconfidenceinthe bankstotheeconomyrestarted(FSA,2009,p.46). Thesecondgroupconsistsofcountries whose bankswere not exposed to troubled U.S. securities, such as Poland, the Czech Republic,SlovakiaandSlovenia,whichhaveahealthy banking system,butitisacrisis involvesexternalshocks.Theyare alsodirectlyexposedtotheproblemsthatare happeningin thefinancialmarketoftheEU,especiallyhamperedtheinflowofforeigndirectinvestment andadropinforeigndemand.Theirrecoveryprogramsweremainlyfocusedontheprovision offinancialassistancebycentralbanks,particularlytheEuropeanCentralBank.Evensome of themhaveextendedschedules insureddeposits,tocover alarger depositpotentialandnew financialinstitutions.Indoingso,somebanksare recapitalized,andtheother isthestate boughtone package of shares.Increasedthenumber of securitiesthatthecentral bank accepts whenapprovingyour loanapprovedandwithita significantamountoffunds the banking sector.Governmentsofdevelopedcountrieshaveprovidedforashortperiodoftimedifferent incentivepackagestohelp inordertomitigatethenegativeconsequencesoftheglobal financial crisis.This packages contented:infrastructure technology, energy,unemployment, budget deficits, tax cuts, rural areas, technological innovation, sustainable development, socialprotection,green technology,pension systems,etc.ThefinancialsectorsoftheUnited Kingdom,Germany,Austria,Italy,Sweden,FranceandRussiawere directly exposedtothe toxicassets,andrecoveryplansareprimarilyincludedfundstorecapitalizebanks.Besides,banks also included funds for inter-bank guarantee in order to help restore the credit mechanismand confidencein thebank to get theeconomygoing again. 7 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo So,itwasastate-ownedfinancialsectortopreventavarietyofbankruptcy. Inthis connection,thelargestpackageoffinancialassistanceprovided by theU.S.Government(787 billiondollars)andtheGovernmentofChina(586billiondollars). (FSF,(2008),p.4).In addition,thecentralbanksofthedevelopedcountriesaremitigatedmaximummonetary policy by loweringbenchmarkinterestratesandtakenothermeasuressuchasthepurchaseof governmentsecurities,bonds,andevencompanieswiththeaimtolaunchhaltedactivity on worldfinancialmarkets.Consideringtheinsufficientrecovery oftheU.S.economy,theFed hasdecidedthatthenexteightmonths"tofillin" 600billiondollarsto theU.S.securities markets,inordertoencouragetherecovery oftheAmericaneconomygottired.Immediately there wasa rise inoilprices,the valueof sharesonthe stockmarketandthe strengthening euro.UrgentnecessityofeconomicincentivesintheU.S.hasbeenrecognizedduringthe Bushadministrationinearly 2008.Eventhenforthispurposeapprovedapackageworth168 billiondollarsorslightly morethan1%ofGDP.However,thefirststimulusdidnotprovide anythingmorethanatemporary andshort-termreliefinthefinancialsystemandthehousing market. EconomicincentiveIIoccurredduringtheObamaadministration(Recoveryand Reinvestment Act of2009, ARRA). Theplanincluded the over 800billion. dollars (about 300 billionrelatedtotaxrelieftocitizensandbusinesses,250billionwent tostateandlocal governments with financial problems, 150 billion variety of infrastructure projects, 100 billionadditionalsupporttoworkerswhohavelosttheirjobs,etc.) (Zandi,(2010),p.229).In addition, the Act of the emergency economic stabilization USA which is the de facto approved 700 billion dollars(Zandi,(2010), p. 230).On the basisof thisplan, executed the purchasetroubledassets,especiallymortgagecoveredsecurities,whichrecapitalizedfinancial institutions.Inotherwords, the site wasclearedof non-coveredbanksof their assetsby purchasingsecurities,torevivethecreditmechanism.NotingtheU.S.aidpackagewould needtoincludetemporary taxcuts,investmentininfrastructure,aidtocitizenswholosttheir home, etc. Maincountriesanti-crisismeasuresmemberstatesoftheEU Asfortheindividualanti-crisismeasuresthatweremadeatthelevelofthegovernments oftheEUmemberstates,mostcountriesimplementedtheausteritymeasurestoreducepublic debtandensuremedium-termfiscalsustainability.Mostofthelessdevelopedmembershad or continuestohave programsof budgetsupportthroughtheIMFloan,whichinclude savings programsandstructuralreforms.Inordertoreduce thenegative impact of the globalfinancial crisis,a number of Europeancountrieshaveincreasedtheamountofguaranteeddepositsin banks.Thus,theEuropeanCommission5thDecember2009issueda declarationonthe recapitalizationofbanksinordertopreserveandsmoothfunctioningof theworldfinancial markets(theso-calledEuropeanEconomicRecovery Plan,EERP).Untiltheabovedate,the Commissionhasalready approvedrecapitalizationschemesinthethreemembercountriesas wellassomeindividualbanks'recapitalization.However, given thatthenature,scope and conditions of recapitalization mayquitedifferentfrom casetocase,the EUmember statesand individualbanksrequiremoredetailedguidancefromtheCommissiononthepossibility of recapitalization.Asthemostimportantobjectivesoftherecapitalizationare listedrestoring financialstability andconfidence,establishsmoothfinancingoftherealeconomy aswellas the prevention of systemic adverse effects due to the insolvency of individual banks. However,they areidentifiedandpotentialrisksforthecompetitivenessofthebankingsector, 8 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo onthreedifferentlevels:(1)bankrecapitalization inoneMemberStatecannotgiveanunfair advantageoverbanksinothermemberstates,(2)withinonecountrydoesnotgiveanunfairadvanta getobanksinrelationtoothers,and(3)capitalincreasemay notbeplacedinaless competitivepositionofthosebanksthataretryingtoborrowonthemarket,orshouldaspire togovernmentrecapitalizationtotheleastextent displaceprivatesectorNotwithstandingthe strengtheningof interventionistpoliciesandprotectionism,theEU continuedtosupportthe policyofopenmarkets,growthandprosperity.Accordingly,mostoftheEUplanproposes thefollowing:efficiently creatingplansforsavingpublicbanks,centralbanksshouldtakeon therole of clearinghousefor interbankmarkettoagainrestoreconfidenceamongcommercial banksandestablishedasystemofinter-banklending,itisnecessary toimplement rehabilitationprogramstoincrease GDPinthe EU countriesand accelerate the reformof the financial incentivemarkets.Inaddition,proposednewlegislationoneconomic governance. Specifically,itistougherpenaltiesagainstEUmemberstatesunlessit isdemonstratedby controlling publicfinances. Penalties will be at 0.2% of GDP,while in the process of punishmentwillbe includedinthosecountriesthatfailtocontroltheirannualspendingor reforming the economyin order to improve competitiveness. Itisnecessary toemphasizethattheaforementionedmeasures,includedintheplanof recovery fromtheglobalfinancialcrisis,andtherelatedfinancialsupportfortheunemployed andpoorhouseholds,investingininfrastructureprojects,energy,temporary taxcuts, environmental,socio-economic objectivespromotionofGreenfieldinvestment,labour market flexibility,protection ofemployees, businessdevelopment,enhancing competitiveness,etc.in allthesementionedactivities,specifically notedthatGermanyhasreducedsocialsecurity contributions(which shouldreducelabourcostsandincrease privateconsumption), increased socialspending,public investmentininfrastructure,schools,healthcare,investedinthe automotive industry,encourage privateinvestment,increase loanstoSMEs,etc.(CPU,2009). The latest activities of the European Commission during the 2012 were focused on establishingthe European framework for preventing and resolving (banking) crisis,to taxpayersandtheeconomy inthefuture,protectfromtheeffectsofthebankruptcy ofbanks. Sucha frameworkwouldrepresentthe firstphase of whichisinthe bankingunion.The proposalinvolvesvery closecoordinationbetweenMemberStatesandtoauthorizethe competentauthoritiestoshareholdersmay forcebanksthemselvesbearmostofthelossesif theirbanksintocrisis.Thereasonforthiskindofactivityisthefactthatthefinancialcrisisof2008the yearthatthebigbanksshouldbailoutbecausethey are"toobigtofail",orbecause suchbankscollapsecallsintoquestionthestability oftheentirefinancialsystem,soitis cheaper tosave thanruntheir bankruptcy.The problemisthattherescueof these banksgoing totheexpenseoftaxpayers,andnotattheexpenseoftheirrespective owners.Ontheother hand,thebankingunionwouldbe basedona commonschemeforinsurance of bankdeposits, thecommonEuropeansupervisory body thatwouldhavetheauthoritytomakedecisions regardingsystemically importantandbankswithcross-borderoperations,andthecommon fundfor thefinancingofcontrolled"fire" suchbanksandcoordinated setofinstrumentsand harmonized procedures. The proposalof the EuropeanCommissionhastherefore,a seriesof measuresandactions toaddressthecrisis,andthekey elementsarepreventionandearly intervention.The competentauthoritiesinthememberstatestoresolvethecrisiswouldhavetheauthorityto askthebankstodrawupplansforrecoveryandrestructuringcasestodealwithfinancial 9 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo stress.Competentauthoritieshavetherighttointerveneatanearly stage,beforethecapital levelfallsbelowtherequiredminimumlevel.Thesepowersincludethepossibility ofthe dissolutionof thebank andtheappointmentofaspecialmanagementbefore bankruptcy,the righttoconvenea shareholders'meetingtoadoptimmediate reforms,and requiresthebankto setupincooperationwiththecreditorsrestructuringdrawupaplanfor thedebt.Proposedby theCommission,eachMember Statewillneedtoalsoestablishafund towhichthebanksand investment funds to payfees depending on the riskprofile. Thesefunds would fund controlled"fire" troubledbanks. Eachfundwouldbe responsibleforthebankonitsterritory,whilefor thoseoperatinginmultiplecountriesagreedarrangementsbetweenthecompetentauthorities inthosecountries.Bankswere regularsubscriberstothefunds ayear to1% of the amount of depositsguaranteed bythestate.Itisemphasizedthatthefundscanbeusedonly for restructuringor orderly conductofbankruptcy ofinsolventbanks,andnotforrescueor assistancetobanks,on whatbasiswouldtheythenacquiredoveranunfairadvantageoverthe competition. It is especially important to prevent irresponsible banks use other people's money, based on asoundpremisethat in the eventof aproblem to the aid of thestateto lend. However, theremovalofthese structuralandinstitutionalproblemsatthesystemlevelis notdone allthatisnecessary.Interventionsundertakeninthefinancialsectorthroughthe variousformsoffinancialsupport(additionalliquidity,recapitalization,takingrisky assetsor contaminated),and variousformsofguaranteesandliabilities,eventemporarynationalization of certain financial institutions, have given good results in terms of getting out of the recession, credit growth activities, and some financial institutions have already realized profitsthankstothewrite-offlosses.Inadditiontotheformer,we needanewfinancialand institutionalinterventionsduringrecovery andgrowthbasedonnewcreditandinvestment expansion.Thekey istocreatesystemsolutionsthatwillminimizetheriskofnewcrises.In thissense,itis necessary toimproveregulationin monitoringsustainablefiscalandmonetary policy andprudentialdisableaccesstothesystempressuresasawholethrougha better understandingofrelationshipfinancialandrealsectorsandtheirvulnerability intermsof shocksandeconomic contraction,andthrougha better systemof monitoringandearly warning,improveriskmanagement,developcooperationwithother countries,effectively implementregulatory measuresandquicktoreact,withcaution(whichisneededfortherisk assessment)with theintroduction of financial innovations. Proposals andrecommendationsofsome economists’ possible wayspreventionof financialcrisis Many economistsstilldonotdaretowriteseriousarticleswhichledtoconcreteproposals onpossiblewaystopreventthisfinancialcrisis.However,duetothecomplexity ofthecase studies,itisnecessarytobrieflyinthe sequeltoexposethemostconstructivesuggestionsand recommendationsmosteconomic expertsonthepreventionandcontrol ofthefinancialcrisis in economictheory. Stiglitzproposalprimarily relatedtoreformingandmodernizingtheworld'sfinancial institutions, in terms of greater accountability, transparency and openness to the less developed countries(Stiglitz,(2004), p. 239).Accordingtohisanalysis, Stiglitzbelievesthat fromtheglobalfinancialcrisisandeconomicrecessiononlygetthe2013,butstillsuggests 10 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo thattheworldfinancialarchitectureismorefragiletoday thanbeforethecrisisandthatthe questioniswhenwillithappenagain.Whathasbeendonesofarinthearea ofreformofthe globalfinancialarchitecture isbad,thebankshave takenbillionsof dollarsfromthestateand continuedtodoso.Thisiswhy Stiglitzfor"NewWorld"orthe"newcapitalism".Keepingin mind the currentstate ofthe global economy, theNobellaureate proposesan interesting setof measuresthatshouldbetaken(buttheiruseisassumedtobeglobally changingsociety from theroots):theconstitutionofthebodythathasmostpowersandgreaterrepresentativeness thananybodywhichexiststoday becauseglobalcrisisrequiresaglobalresponse.Existing institutionsareinadequatetothemomentthatthey knewit,andsomehavecontributedtothe crisishappen. Furthermore,itisnotequallyproportionalrepresentationinthevotingstructure oftheinternationalfinancialinstitutions,therefore,needamoredemocraticrepresentation, andtheintroductionofanewglobalreserve systemwithonecurrency, weneedamultilateral systemthatdoesnotdependonthecurrencyofacountry,itisnecessarytoconnectallthecurrencies (modelled on SPV) to create a global currencythat would be permanent. In addition, the global financial reform would involve greater control and supervision of financial markets, reducing incentives forbankers, etc.(Stiglitz, (2004), p. 265). Proposal,whichwasbasedonaradicalreformofkey actorsoftheworldfinancialsystem gavealsoWaldenBello, (Reis,Guilherme,(2004),p.3)aprofessorattheUniversityofthe Philippines. Specifically,Bellobelievesthat theproblemisinthestructureandorganizational cultureoftheworld'sfinancialinstitutions (IMFandWorldBank),andthelackof responsibilityoftheMinistryofFinanceoftheUnitedStatesandalackoftransparency. That'swhyheis proposing the elimination of allstructural adjustment programs in developing countriesandincountriesthatare incrisis,thenreducingthenumberofprofessionalstaffin thesefinancialinstitutionsandreduceoperatingcosts.Themostimportant thinginallthisis thecreationoftheGlobalCommissionontheFutureoftheIMF,inwhichhalfthemembers of the Commissionshouldbe representativesfromnon-governmentalorganizations,because they arecivilsociety organizationsthathaveplayedadecisiveroleinthediscovery of destructive and undesirable effects of theadjustment program. ProposalRobertA.Mundell, (Little,Oliveo,(1999),p.9)aprofessorattheUniversity of Columbia,accordingtowhichintheXXIcenturyshouldfinally gettocreateanewworld financialorder,wasreflectedinthefollowing:the U.S.,JapanandtheEUshouldintroducea commoncurrency (“intor”)anduniquetheglobalfinancialsystem.World'smajorcurrencies the dollar, theyenandthe eurowouldhave afixedexchangerate, one over another. Japan's central bank to implement monetaryreform andthe fixedexchangerate in the ratio 100yen to the dollar, while theECBfixed euroexchangeratein the ratio of one euro to onedollar. Other currenciestopegtheir coursesforone ofthe aforementionedcurrencies,whichisdominantin thefield.FormedwouldbetheCentralBankoftheworld,whowouldworkunderthe currency boardandstrictly tocontrolthatnocountry in"intor”notprintmoneywithout backing.Accordingtohim,thecentralbankoftheworldrepresentedby theIMF,morein termsofcoordinationof thewhole business.Inthiscase,the Board ofGovernors would appointanoperationalbody whichwouldbecomposedofrepresentativesofthecentralbanks of 11 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo the threelargestandmostdevelopedeconomic entitiesintheworld(Japan,U.S.,EU). Speculators,who earnedbillionsof dollars onthe exchangerate differentialsbetweenthe world'scurrencies,woulddefinitely losetheirjobs,andtheriseofglobalGDPwouldbe doubled.Hebelievesthattheeuroopenedtheway "intor".Specifically,theeurowasfirst broughttothefundamentalchangesintheconfigurationoftheworldfinancialsystem,and thebestway tounderstanditscontributiontothenewworldorderwouldbetorealizethe monetary differencesandmovethecapitaltothenewmodelsoftheinternationaleconomy. Because of this great country are viewed as entities that are interconnected different currencies,fixedor flexible exchange rate. Theessence of hisideaswastocreate a global Crosscurrencybalanceandtopresentanewconfigurationoptionsworldcurrencies.Ifall three currency areas Isles stable prices, then among them should rule Cross currency exchange rate stable.Today,Mundellinsisted onthe adoptionof hisproposalinthe circles of therichandhighly developedcountries.Ifhisplantostabilizetheexchangeratebetweenthe threelargestcurrency wasadopted,itwouldallowasufficientincreaseinworldGDP.Onthe other hand,itcouldincrease thechancesof developmentandglobaleconomic stability,which would be expanded, andthe under-developedareas of theworld. RobertZoellick,(Rargavajas,(2009), p.15),WorldBankpresident,saidthatthe consequences of the global financial crisis for years. Zoellick argues that refers to the changingglobaleconomic map,soa strongcontributiontothe growthof the worldeconomy given numerouscountries.Inthisconnection,the statusofthe dollar asreservecurrency, accordingtohimisnolongersafe.Accordingtohim,theglobalcrisishadtolearn topredict. Therefore, it is necessary to create a group of finance ministers who will be able tocomprehend the problems in time. Multilateralism is necessary to develop a clearly constructedasenseofsharedresponsibility forthe sound basisof globalpolitical economy.In addition,itmustbe flexibleandinvolveactorswiththegreatestinterestintheeconomy. G-7 mustbe connectedalsoBrazil,China,India,Mexico,Russia, SaudiArabiaand SouthAfrica, thentheneedtoexpandtheFinancialStability ForumandtheIMF,strengthenfinancial supervision,multilateralnetworktoconnectwiththeenergy andclimatechangenegotiations ofnewmechanismsforthe protectionofforests,developnew technology,to providefinancial assistancetopoor countries, etc. AccordingtoGeraldCélente(“economicNostradamus”)contemporary worldand civilizationswillemergefromthefinancialcrisisonly ifitisabletolaunchnewproduction capacity,whichgofurtherthanthenewtechnologiesfor alternativeenergy.Hisforecastsare fairly concise,butwithoutany concretesolutions:thecollapseoftheglobalfinancialsystem, recessionanddepression,lackofhealthyfood,alcoholism,poverty inthecities,crime pandemic, pandemic diseases, riots, wars, etc. According to him, the economic tragedy Greeceonly the"beginningoftheend"thattheworldexpects.Manyhavecharacterizedthe globalcrisisasacrisisofcapitalismbutCelentethinksisactually thedestructionofhuman nature. Like hispredecessor,PaulKrugman(Krugman, (2012), p. 66)alsobelievesthat itis necessary torestructuretheglobalfinancialsystemandimposestricterregulationsinorderto avoidrepetitionof the financialcrisisof major proportions.However, heexpressedconcern thatthereformmomentumwearsoff, becausethere isnopoliticalwilltodoso.Accordingto 12 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo him,thegovernmentshouldbe more severe,becausefinancialmanagerscontinue to"reap" giganticbonusesandprofits.Becauseoftheslowandpainfulrecoveryfrom theglobal financialcrisis,unemploymentintheU.S.reacheditspeakinearly 2011.Therefore,the government,accordingtohim,shouldhelppeopleretainjobs,basicwages,socialservices andhealthcare, andoneofthewaystoovercomethecrisiscouldbeaglobalplanto encourageinvestmentingreentechnology,andamoreseriousapproachtoclimatechange that could help keep the level of demand. Essentiallysuggestions Krugman go towards liberalizationofinternationaltransactions, the liberalizationofdomestic financial markets, the emphasisonthestabilityofworldpricesofrawmaterials,energy andfoodproducts,and finally establishingfiscaldiscipline.Obviously,thelackoftransparencyisattherootofthe currentfinancialcrisis,andthuslong-termpolicy shouldbefocusedonincreasingthe transparency ofstructuralfinancialproducts.Inconnectionwiththis,inhisopinion,thereare atleasttwomovesthatshouldbe consideredatthe multilaterallevel,including:the role of creditrating agenciesand maturitymismatch in non-banking financial institutions. Thelackofaccuratepredictabilityofthefinancialcrisisineconomichistoryiswhat most intriguing contemporary macroeconomists is.Thus,accordingtoPaulSamuelson anticipated recoveryoftheglobaleconomyuntilthe2014(Samuelson,2009). Analyzingthedeepercausesof thefinancialcrisis,Samuelsonbelievesthata similar situation occurredinthe periodbetweenRoosevelt'sinaugurationinMarch1933 andthe beginningof World WarII. The lifespan of this Nobel Prize winner allowed him to experience the economic cyclemakesafullcircle,andstatedthattheglobaleconomy iscomingback, Keynes,accordingtowhichtaxpolicy anddeficitspendingareconsideredasmajor determinantsinthemanagementofthemarketeconomy.Inthiscontext,akey Samuelson proposalisaimedatrestoringpeople'sconfidence inthe globalfinancialsystem,despite the yearsbeforethefinancialcrisisbuiltupasa"houseofcards"withamoreriskyandtoxicfinancial derivatives. Nuriel Roubini believes that overly optimistic assessment of the current situation regardinghealthoftheAmericaneconomy couldbepremature(Roubini,2008). RoubinisaysthatshouldnotbeexcludedinthefutureanotherverystrongrecessivewaveintheU.S. andglobaleconomy,aftersummarizingtheeffectsofpaststimulusmeasurestaken bythe U.S. government to buttress the rapidly deflating as soon revived the American economyafterthecrisis.Hewas theonlyonewhopredicted thefinancial crisis in the U.S.He stillwarnsthatthe Fedwillbe a greatchallenge,because oftheskillstobe a leadinginterest rate policy,much willdependonthe U.S.,andthe globaleconomy.Roubiniannounces possible"W"recessionandbelievesthatitisnotoverbecause oftheriskassociatedwiththe cessationof(monetary andfiscal)stimulusinmostdevelopedcountries.Accordingtohim, there couldbe uptostag-deflation(recessionanddeflation), ifthe state andthe government increasetaxes,reducespendingandliquidity toreducefiscaldeficits.Inaddition,foodand energy pricesrisemuchfasterthantheyshould,sothisisoneofthereasonsforitsannounced "W"recession. Accordingtothe interpretationofGermaneconomistsMaksOtea(Ote,(2009),p.120) financialcrisesaremainly duetothefollowingreasons:thefinancialsectorisdeveloping faster thanthe realsectortoGDP,inadequateeconomicpoliciesof developedcountries, 13 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo leadingtoincreasingdebtandinflatetherealestatebubbleandotherfinancialderivatives. Thepossiblecollapseoftheworldfinancialsystemwarnedbackin2005andpointsoutthat in2001.Thefinancialorderwasso"sick"thatcouldcollapseatany momentoccurred. Financialcrisiscontainsa"crisisofinformation," because itisassumedthatmultinational corporationsandlargeprivateactorsinthefinancialmarketsmay determinethatthe informationandmanipulatethem(orspeculate),whichisdefinitely notgoodfortheworld economy.Therefore,stockexpertOte offersaprogramof a fewpointsinnoparticular, emphasizesthatinvestmentincertainactionssaferthanrealestate,goldisstillthenumber oneinvestmenttoolforemergenciesandtohumanbehavior(attheoutbreakofany crisisis almostalwaysa criticalfactor) cannotbepredicted withempiricalaccuracy,evenwhen something like the financialcrisisforecastersconstantlytrying. Thus,some importantlessonsfromwell-knowneconomistsinthe internationaleconomy resultingfromacareful studyofthecurrentfinancialcrisis.Learnfromothers' mistakesisnot easy,butitismuchfasterandmoreefficiently bylearningontheirownmistakes.Therefore, the financialcrisis confirm someof their mostimportant recommendations, in order toresolve seriouseconomicproblems,increase thelevelofconfidence andreducethe risks arisingfrom the financial sector. Possible scenarios for a new worldfinancialsystem Thefollowingisabriefoverviewofa few“good"and"bad" scenariosthatcouldhavea majoreffectonglobaleconomicdevelopmentsandtrendsduringthe2013,andthatthey are madeby MorganStanleyanalysts:(1)restoreinflation,(2)therealestatemarketintheU.S. has stagnated.(3)Japan'scentral bankwasbuyingEurobonds inanattemptto devaluetheyen againsttheeuro.(4)Italianpoliticsrevivescycleofcrisis.(5)GreeceremainsintheEU, whileresearchinearly2013suggeststhatthe EUandtheUnitedKingdomcome.(6)UK officially givingupthefightagainstinflation.(7)TherecessionisreturningtoAustralia.(8) Emergingmarketgrowthcontinuesapathofgrowthdrivenby investmentandexports.(9) Shocking Chinese restrictions could cause credit problems that could threaten both the Chinese and global economy.(10)Asiaincreasedexports.(11)Back to the"Soviet Union." Besides,severaleconomicandfinancialgurusarealsorangwithalarmingforecastsfor 2013(NourielRoubini,MarcFaber,Larry Edelson,KyleBassandothers).Notonly doesit provide for thecontinuationof theeconomicandfinancialcrisisaswellasitsexpansioninto the field armed struggle!So Roubiniin May2012announced that the2013crisis hitthe world sharperthanthose from 2008. As “Dr. Ruin” says, therecession in Europecreates theausteritymeasures, thestrong euro,thecreditcrisis in theperipheral countries oftheeuroareaandthe lackof consumer confidence.Inaddition,he saidthatthisyear couldoccur blockade aroundtheworldfinancialsystem.Thiscouldresultinfivefactors:the debtcrisisinEurope, China'seconomyisshaky,theslowdowninemergingmarkets,theriskofrisingoilpricesdue tothe developmentofIran'snuclear programandthe U.S."fiscalgap."Swissinvestor and financialadviserMarcFaberforhisthinkingofthenickname"DoctorDoom." Faberpredicts thattheU.S.governmentbeginsnew warsinresponsetothe economiccrisis.On the other hand,financialanalystLarry Edelsonin2013alsoseewar,andthatpredictionisbasedonthe 14 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo theoryofthecycleofwar,whichtellsaboutthelawsunderwhichcompaniesfallintoastate ofwar.AccordingtoEdelson,war cycletheorysuggests2013asoneinwhichthey could breakor inflamewarsinfluencedeconomic developments.Also,AmericanbusinessmanJim RogerswarnsthatcontinuedfinancialrescueindebtedEuropeancountriescouldprovokea newworldwar,becausewarweaponscouldbeboostedtradewar.EconomicanalystKyle Bassbelievesthatwarsoftenemerge asa resultof the economicdecline.In2013willbe restructuredbillionsofdollarsofdebts,andmillionsofreasonabledepositorswilllosea large percentageof itspurchasing power. TheUNhassetitsforecastfor 2013expressedmildwordsoftheaboveframework. Specifically,theUNpredictsglobaleconomicgrowthrateof2.4%in2013andfrom3.2%in2014. Thisslowgrowthwillnotbenearly enoughtoovercomeunemployment,withwhich many countriesarefacing.Withexistingpoliciesandgrowthtrends,EuropeandtheU.S.will takeatleastfiveyearstomakeupforlostjobscausedbytheGreatRecession2008and2009. BearinginmindtheUNforecasts,belowemphasizethekey elementsofhisreport:(1)Inthe eurozoneeconomy will2013growby only 0.3%,andthe2014by 1.4%,whichwouldbea shortstepforthebettercomparedtoadropof0.5%wasrecordedinthe2012.(2)U.S. predictsmodestgrowthin2013and2014,althoughtherealestatemarketstartedtoshow signsofrecovery.ThustheU.S.GDPin2013shouldgrowby only1.7%,whichis0.4% slower thanthe rate ofgrowthof 2.1% in2012.(3) Therewillbemoretoslowdownthe Japaneseeconomy,whichwillgrowthisyearby0.6%,andthe20140.8%,comparedwith 1.5% lastyear.(4)The economicproblemsof Europe,the USAandJapanwillbe in developingcountriesthroughweakerdemandforexportproducts tothesecountriesand increased instabilityin capitalflows and commodityprices. TheU.S. National IntelligenceCouncil (NIC)issued areport, "Global Trends 2030: AlternativeWorlds,"whichstatesthattheimpactoftheU.S.andtheglobaleconomy inthe coming decades of decline, and will until 2030 China will become the world's largest economy. WithChinawillbecomea neweconomic giantsandIndiaandsomeotherAsian countries.U.S.willnotfadeonly ineconomicterms,butwilldeclineinthecomingyearsand itsimpacton globalpolitics.Inthatsamereportcitesthefollowing"good"scenarios:(1)11 new economic giants:Bangladesh,Egypt,Indonesia,Iran,Mexico,Nigeria, Pakistan, Philippines,SouthKorea,TurkeyandVietnam,shouldbe2030wasabletotakehiseconomic positionof the EU.Incombinationwiththe major economiesofChina andIndia,thesegiants willbe11newcentreofglobalpowerwouldmovefromWestto East,and (2)Theworldwith8.3billionpeople.The world's2030weresupposedtoliveabout8.3billionhumans(as comparedto7.1billionfrom2012).Abouttwo-thirdsoftheworldpopulationby2030will liveincities.Mostofthepopulationwillhave accesstoadvancedtechnology and healthcare, and most countries, led by China and the United States, will develop international cooperation.However,thegrowthoftheworldpopulationwillleadtoconflictsoverwater andfood,especiallyintheMiddleEastandAfrica,andwillleadtoinstability oftheglobal economic collapse.Thereportalsocites8potentialworstcase scenarios,calledas"black swans" globaltrendsfor2030:(1)severe pandemic,(2)morerapidclimatechange,(3)the collapse ofthe EU/euro,(4) orfailure ofthe democratizationof China,(5)(not) thereformed Iran,(6)nuclear war,weapons of mass destruction, cyber-attacks, (7) geomagneticsolarstormcoulddestroy 15 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo satellites,powernetworkandmanysensitiveelectronicdevices,and(8)the disappearanceofAmericanpower.Thesechallengesandrisksarebestillustrated by Figure2. Figure2 Key risksto whichthe worldwillfaceinthe coming decade 21st century ECOLOGICALRISK Climatechange GrowthinCO2 emissions Greatcontamination GEOPOLITICAL RISKS Weapons ofmass Nationalizationofresources Growthofcorruption RISK SOCIAL RISKS Lackofdrinkingwater Foodshortages Pandemics andepidemics Strengtheningnationalhatred ECONOMIC RISK The disintegrationofthe worldfinancial system Chronic fiscalimbalances Unevenfood prices The imbalance ofthe labourmarket TECHNOLOGICAL RISK CyberAttacks Massdisinformation So,thekey challengestheworldwillfaceinthefutureare(un)willingnessoftheU.S. andtheEUtosolveits ownfinancialcrisis,theresolutionoftensions intheAsia-Pacific region,theIraniannuclear programandthewar inSyria.Inaddition,major threatsandrisks are:the dissolutionof the presentworld financialsystem,deepeningthe gapbetweenrichand poor,theextremevolatility inenergyandfoodpricesandthespreadofweaponsofmass destruction. Conclusion Thispaperoutlinesthemostimportantguidelinesinordertominimize thefinancialcrisis, whichsignificantly strengthenedinthefuturestructureoftheglobalfinancial systemand improveitsfunctioning.Asalready statedinthepaper,toagreaterextentinvolvesincreasing thetransparency ofinternationalfinancialrelations,strengtheningthebankingandfinancial system of the national economy and promote greater private sector participation in the financialsystem.Therefore,adirectresponsetotheglobalfinancialcrisis,they wouldmake thefollowingmeasures:providingliquidity support,i.e.withafacilitationofthecentralbank asthe"lenderoflastresort" andareductionofthereserverequirement,expandingfinancial safetynets,interventionsand"injection"ofcapitalinfinancialinstitutions,therestructuring ofglobal financial institutions,measures to start lending. 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Roubini,N.,(2008),TheCurrentU.S.RecessionandtheRisksofSystemicFinancial Crisis,Written TestimonyfortheHouse ofRepresentatives'FinancialServices Committee, Washington D.C Samuelson, P., (May2009), Opasnosttek 2012. Available:[http://www.nin.co.yu/misc/pretraga.php?txtKeyword=%D1%88%D1% 82%D0%B0+%D0%BD%D0%B0%D1] Soros, G., (1998),Krizaglobalnog kapitalizma, Rabic, Sarajevo. Stiglic,J. E., (2004), Protivrečnosti globalizacije, SMB-x, Beograd. Zandi, M., (2010), Financijski šok, Met d.o.o., Zagreb. 18 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 1615 Title A name given to the resource Global and State Policy and Modern Financial Crisis Author Author IBRELJIĆ, Izet NUHANOVIĆ, Amra Abstract A summary of the resource. Lately dominates the impression that most holders of economic policies at the national and global level are not willing to give up his rigorous attitude and follow the recommendations on which there is scientific consensus is evident. However, consistent with considerations of instructions that the economics have been offered, would significantly reduce the frequency of crises and the damage that they bring with them. Until today the variety of conclusions are crystallized. Speaking of preventing financial crisis and its practical implementation in the process of creating the optimal macroeconomic policy is a priori highly desirable. So in the United States adopted a plan that aims to redeem the State risky investment, while the EU has a similar situation, because there are also carried out bank recapitalization. Considering the above, the paper analysed and presented the main activities undertaken on the road to recovery from the effects of the global financial crisis, as well as the latest developments in the global market, with special reference to the Euro zone. Keywords: World Economic Policy, G-20, World Economic Crisis, Answers, Challenges. Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2013-05-10 Keywords Keywords. Article PeerReviewed Identifier An unambiguous reference to the resource within a given context ISSN 978-9958-834-23-3 https://omeka.ibu.edu.ba/files/original/ab02e598dfb2ee29348c9c70c64c0d1e.pdf e70675f50db7ff35f164a1b79c305c6a PDF Text Text International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo Branding B&H - Sarajevo as a Touristic Destination Alen Husukid International Burch University, Sarajevo, Bosnia and Herzegovina alenhusukic@hotmail.com At a time when B&H is on the one of the lowest levels of development in Europe, and when most of economy branches are undeveloped, it is very hard to say what should be considered as starter of economic development. We decided to consider tourism sector as a field that could contribute the most, and as a field that has biggest chances and opportunities to increase economic well-being of people in B&H. Tourism industry is one of the most important industries in the world, especially in Europe. Its contribution to total worlds GDP is about 7,5%, engages more than 75.000 employees that is about 7% of total world employment, more than 750 millions of international tourists arrive all around the world in 2011 and all these indicators increase every year. B&H has all conditions to become tourism oriented European country. It is found in heart of Europe, on intersection of important communication and transportation roads. It has all necessary natural and social resources, favorable climate, geographic and geomorphologic conditions, to have good developed tourism sector. But for progress of any branch of economy good strategy and clear goals must be defined. In this research branding of BiH / Sarajevo will be taken as starting point of this progress. Keywords: Brand, Destination Branding, Image, Globalization, GDP. 29 � https://omeka.ibu.edu.ba/files/original/9b71484c7fc8f5b6cd0cc284817fb5ee.docx 2d54aaf554abf564c96a9f62534b83cb https://omeka.ibu.edu.ba/files/original/800a83a14dd6481e8e3650ad32a3772f.pdf a21fb6148b9ee484ba93890404363a3b PDF Text Text International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo Branding B&H - Sarajevo as a Touristic Destination Alen Husukić International Burch University, Sarajevo, Bosnia and Herzegovina alenhusukic@hotmail.com Erkan Ilgun International Burch University, Sarajevo, Bosnia and Herzegovina aeilgun@ibu.edu.ba Abstract At a time when BiH is on the one of the lowest levels of development in Europe, and when most of economy branches are undeveloped, it is very hard to say what should be considered as starter of economic development. But I decided to consider tourism sector as a field that could contribute the most, and as a field that has biggest chances and opportunities to increase economic well-being of people in BiH. Tourism industry is one of the most important industries in the world, especially in Europe. Its contribution to total worlds GDP is about 7,5%, engages more than 75.000 employees that is about 7% of total world employment, more than 750 millions of international tourists arrive all around the world in 2011 and all these indicators increase every year. BiH has all conditions to become tourism oriented European country. It is found in heart of Europe, on intersection of important communication and transportation roads. It has all necessary natural and social resources, favorable climate, geographic and geomorphologic conditions, to have good developed tourism sector. But for progress of any branch of economy good strategy and clear goals must be defined. In this research branding of BiH / Sarajevo will be taken as starting point of this progress. Keywords: Brand, destination branding, image, globalization, GDP. Introductıon “Places are products whose identities and values must be designed and marketed” (Kotler, 1999). Branding of the countries, cities, regions or places is very popular in marketing science during the last two or three decades. One of the most important reasons why destination branding became popular all around the world is very high level of competition between cities as a touristic destination. Because of globalization phenomena every place can become competitive and attract tourists, so this competition forced marketers to find out new strategies and models for attraction of the tourists. Main goal of branding is to create an unique and distinctive concept to identify the brands higher value in relation to the competitors.1 Destination branding is not very different from product or service branding, but its difference lies in the manner of crating the brand concept, revealing a common link in brand strategy when it comes to success. Many 1 Juan A. Garcia, Mar Gomez, Arthuro Molina, “A destination-branding model: An empirical analysis based on stakeholders”, University of Castila La Mancha, Spain, 2012, page 647. 29 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo authors and economy experts tried to explain concept of destination branding. All of them described factors that are crucial for crating brand of the place. Brand identity and destination image are two important indicators for a successful destination branding. Destination image is critical to crate the positive and recognizable brand identity.2 Existing of strong relationship between destination image and satisfaction of tourists shows high importance of these two variables. Also brand identity, as a result of destination image can be part of the crating satisfaction of the visitors. It is sure that branding is important part of the marketing and can contribute a lot to reach goal, for all products, services or destinations. Functions of branding can be expressed by level of identification and differentiation. “Identification can be defined as a level of reorganization of the product or brand by consumers, while differentiation is creation or demonstration of unique characteristics in a company's products or brands compared to those of its competitors.”3Brand association is one more important element in process of branding a destination. It influences consumer, or tourist, evaluation toward the brand or brand choice. “Perceptions about a brand are reflections of the brand associations held in consumer memory”.4 This element is considered as one of the most important parts of creating brand image. Brand associations are classified into three major parts: attributes, benefits and attitudes. According to Keller (1999), attributes are those descriptive features that characterize a brand. “In other words, an attribute is what a consumer thinks the brand is or has to offer and what is involved with its purchase or consumption. The benefits that may occur are the personal value consumers associate with the brand attributes in the form of functional, symbolic, experiential attachments. That is, what consumers think the brand can do for them? Brand attitudes are consumers’ overall evaluations of the brand and are the basis for consumer behavior (e.g., brand choice).”5To crate successful brand and image of the destination, different approaches can be used. Some of them are: creating of cultural mega events, heritage promotion or construction of iconic buildings. “Image of destination is also influenced by cognitive and affective factors. Cognitive evaluation refers to beliefs and knowledge about an object whereas affective evaluation refers to feelings about the object.”6 It can be concluded that, for the good branding of the destination, accommodation quality, scenic view, friendly people, natural and social resources are not enough. Place needs to be unique and different from other places, to be selected as a final destination. 1. DESTINATION BRANDING MODELS Because of its importance and contribution to economic development many cities developed strategy for branding of own places, events or manifestations. Some of them did it in a good way and sow benefits, but a lot of these cities failed in their mission. In literature it is possible to find several theoretical models for this topic, but their implementation into practice is harder part. Reasons for failure are different. Considering 2 Hailin Qu, Lisa Hyunjung Kim , Holly Hyunjung, „A model of destination branding:Integrating the concept of the branding and destination image“, Jeonju University Srepublic of Corea, 2011, page 466. 3 Differentiation – definition, Retrieved on February 3 2013, from http://en.mimi.hu/marketingweb/differentiation.html 4 Keller, K.L. (2003). „Strategic Brand Management.“, Upper Saddle River, NJ: Prentice Hall. 5 Hailin Qu, Lisa Hyunjung Kim , Holly Hyunjung, „A model of destination branding:Integrating the concept of the branding and destination image“, Jeonju University Srepublic of Corea, 2011, page 467. 6 Hailin Qu, Lisa Hyunjung Kim , Holly Hyunjung, „A model of destination branding:Integrating the concept of the branding and destination image“, Jeonju University Srepublic of Corea, 2011, page 467. 30 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo BiH or Sarajevo as an advantageous region for branding, it would be good idea to compare it with branded destinations from the past. Bad examples are also useful to see mistakes and avoid them, or change the strategy. 1.1. Examples of Bad City Branding Berlin Since 1990, its planners, business leaders, and government officials made a strategy for branding of Berlin. They wanted to use city’s painful history to create new, better image of the city – city that is good for everyone. Although Berlin is center of the German culture, one of the most progressive cities in Europe, place of very famous music and film fairs, it didn’t help to create a good image and good brand of the city.7 High unemployment level and repositioning itself by building positive image on a negative past are unbridgeable barriers for branding of Berlin. City with all these advantages must change its strategy and start rebranding process. Beijing Beijing has won the race for hosting the Olympic Games in 2008 and authorities in the city tried to use this to brand Beijing. The process of Beijing branding involved promotion of the positive qualities of the city and a physical reconstruction of the city. It tried to present a cultural, modern, cosmopolitan, and people-based city. The biggest mistake during the process of Beijing branding was mismatch of government and people. View of the authorities and view of the citizens and tourists about the city, were very different, so they couldn’t overcome these differences. Also they wanted to see results of the branding very fast, but branding is long-term process. Other examples of bad branding of the cities are: - - 1.2. London – wrong strategy, poorly managed transport and unfocused brand values; Belfast – logo without clear idea and several branding strategy mistakes; Jerusalem – brand cannot be everything for everyone, what is tried to do with this city; Toronto – “Toronto Unlimited” campaign was not successful as it was expected. Id didn’t become 24-hour city; some other cities (Vancouver, New York, Las Vegas) had better results with similar ideas. Tourism and business of Toronto didn’t have big progress. Birmingham and Bristol are other cities in Great Britain that tried to become world’s brand, but they are still in shadow of Manchester, Leeds, and Liverpool. Examples of good city branding Smile! You are in Spain Colombia is passion! I Love NY! Oklahoma Native America! 7 Julia Winfield-Pfefferkorn, “The branding of cities – Exploring city branding and importance of brand image”, Syracuse University.August 2005, page 79. 31 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo Paris – City of light! All these maintained slogans are part of successful campaigns and branding missions of some cities or countries. If London’s or Belfast’s slogans were part of bad strategies, these ones are piece of successful and well done city/country brandings. New York In 1970, the State of New York decided to promote tourism to help offset a recession, and asked the Ad Agency Wells, Rich and Greene, and graphic artist Milton Glaser to develop a campaign, and the “I Love NY” slogan was created along with the campaign which is still one of the most recognized and successful campaigns in the history of great emotional branding.8 Authorities and people responsible for this mission had a clear directions and goals. On the beginning New York was presented as a city of different people that are able to reach their dreams. During 3 or 4 decades New York changed a lot because of the campaign. It was the place with very high housing costs, crime rate and density of living during 1970s and 1980s. A lot of citizens escaped from there. But during 1990s and after, it became one of the cities with the highest rate of immigration. Since 1990s it has added more than 685.000 people, which was the highest percentage of large cities during that period.9 Paris City with a very long history and starting point of some of the most important events happened in the past, is still world’s important destination. Six attractions in Paris draw more than 25 million visitors yearly. Disneyland in Paris, the Eiffel Tower and the Louvre are some of the most visited places in the world.10 Paris is European cultural and communication center, with famous fashion and manufacturing of luxury articles. 11 One of the cities with income mostly generated from tourism industry, and world tourism leading city. It was not difficult for city’s authorities to decide on branding Paris. The city had all qualities to become a brand. Unique culture, history, attractions and personality make Paris one of the most distinctive city brands in the World. Important events that were organized and incorporated in branding strategy helped in progress of the city. Football World Cup from 1998 was the most visited football manifestation in history. Paris fashion week and similar events attract thousands of tourists every year. Other examples for good and successful branding strategy for the city branding are: - Oklahoma – successful changing image of the city caused financial support and good strategy;12 8 Landa, Robin. “Advertising by Design, Creating Visual Communications with Graphic Impact”John Wiley & Sons, New Jersey, 2004, page 28. 9 Julia Winfield-Pfefferkorn, “The branding of cities – Exploring city branding and importance of brand image”, Syracuse University. August 2005, page 35. 10 Julia Winfield-Pfefferkorn, “The branding of cities – Exploring city branding and importance of brand image”, Syracuse University.August 2005, page 44. 11 Phillip’s “Paris World Encyclopedia”, 2004, page 176. 12 Hailin Qu, Lisa Hyunjung Kim, Holly Hyunjung, “A model of destination branding: Integrating the concepts of the branding and destination image, Jeonju University, Republic of Korea 32 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo - - Sydney – Olympics 2000 were used in a good way. Progress in tourism, business and development of whole city could start. San Francisco – started a very successful “Only in San Francisco” city branding campaign. Strategy was good, sufficient funds were provided for advertising and result was economy and tourism growth. Liverpool – the city offers sense of real Britain culture, with many bars and clubs, many financial centers and dramatic architecture. Offers something to everyone. 2. POSIBLE OPTIONS FOR BIH / SARAJEVO BRANGING From the examples analyzed before, their success and fails, good strategy for Sarajevo branding could be made. BiH as a country and its capital city Sarajevo, have all qualities and conditions for becoming one of the most famous country or city in region and Europe. Its multiculturalism, history, architecture, events and infrastructure are something that most cities in Europe don’t have. Most of them aspire to have similar characteristics as Sarajevo and BiH already have. It is only necessary to use all these qualities and results would be seen. Sarajevo has a very long history. The biggest world’s empires, such as Ottoman (1463 1878) and Austria-Hungarian (1878-1918)13, left the stamp in BiH and Sarajevo. Buildings from these periods are still found and used as an important places in the city. Period before Ottomans was also very turbulent and active. A lot of castles and old houses were built during the period of Medieval Bosnia (1180 - 1463). Some of them are renovated and became museums. After the Austria-Hungarian monarchy, the country of South Slavs was established. It was called Republic of Yugoslavia. Some of the most important events from I and II World War happened in BiH and Sarajevo. Austrian archduke Franz Ferdinand and his wife Sofia were killed on Latin bridge in Sarajevo in 1914. That was one of the reasons why I World War started. Sarajevo’s museum was established and dedicated to this event, with the pictures, weapon and other materials originally preserved from the assassination. Sarajevo Winter Olympic Games from 1984 were the best organized and visited games in history of the Olympics until that year. Three mountains in the city got infrastructure for the winter Olympic sports, several sport halls were made and all of these were destroyed during the war 92-95. This war is another important event for BiH, Europe and whole world that occurred in BiH. All these important elements could be used for creating brand of BiH or Sarajevo. Although BiH and its capital city have all these positive conditions, this process of branding would be very hard. There are few reasons why. First and maybe the most important is bad image of the country in the world. That image was created during the last war. Most of the people when heard word Bosnia or Sarajevo think about the war and all bad thinks happened then. It is said that branding process starts with the creating good image of the product in the mind of customers. So this point is very negative and should be changed. Second, all infrastructure must be renewed or build again. Transportation in the city and in the country is very old and residual. Winter sport infrastructure on the mountains is destroyed and unused. It means a lot of money and financial support is 13 Stephen E. Sachs, “Sarajevo: A Crossroads in History”, 1994, Junior disunion. 33 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo needed to start the process, what also could be a huge problem and in this time unfortunately impossible. There are also some other problems, but these two are the biggest and the most important. Model I – Sarajevo – European city of multiculturalism and coexistence of people with different religions First possible solution for Sarajevo branding has many advantages. The city has all necessary resources. It is already multicultural place with all its advantages and disadvantages. Other important elements are buildings from several different periods, rising in the city as evidence of multiculturalism. More than 150 mosques, the most important places built during the Ottoman period, evidence of Islam and existence of Muslims. At the same time, a lot of catholic and orthodox churches rising at same places as mosques are rising. Jewish temples are also important buildings found in Sarajevo. Because of this Sarajevo is called “European Jerusalem”. To use this model, good advertising strategy must be developed. Advertising and marketing are very expensive, but considering existence of all other resources, this could be the only expense. Of course as we mentioned before, image of the city should be changed and transportation infrastructure must be renewed. Model II – Sarajevo – Olympic city Idea about revival Olympic Games spirit already exist, but wrong strategy and reasons for doing this are used. Politics take place in the idea and there are not funds that could be enough to have success in this mission. Generally idea is good and there are good chances to make brand of Sarajevo based on this. But there are crucial things that should be done, and it would be very expensive process. All infrastructures from the Olympic Games must be renovated, because it was destroyed during the war. Process of branding Sarajevo as Olympic city would be very long. To do this a lot of financial support, good marketing strategy, support from the authorities and participation of all citizens must take place in the project. Model III – Sarajevo – European center of culture, Sarajevo Film Festival (SFF) Sarajevo Film Festival is already very important and famous event in the region and Europe. Many world famous stars visited this manifestations and it has all qualities to become leading event in the region. It is the reason why thousands of tourists come to Sarajevo during July and August. Organization of SFF started in 1995 and became traditional. It had a lot of success during the last years and attracts many visitors from the Europe, but with the financial support and enthusiasm of city authorities it could be much more then it is now. One of the disadvantages for this event is lack of accommodation capacities and infrastructure in city of Sarajevo. In next few years Sarajevo is planning to organize few very important manifestations and one of them is cultural event in 2014 called “Sarajevo, the bridge of cultures”.14 It is expected that city will host more tourists than 1984, for Olympic Games, and this could be chance for renewing and building of new tourism infrastructures. 14 Sarajevo, the bridge of cultures 2014“, retriewed 21th March 2013from http://www.klix.ba/vijesti/bih/izsarajeva-2014-godine-poruke-mira/120916032 34 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo Model IV – BiH – See Olympic Mountains, nature, sea and different civilizations on one place This model of branding BiH, not only Sarajevo, could have the most contribution for economy. As it is described before, all necessary resources exist, but BiH doesn’t use all of them. Advantages for BiH are resources that are suitable for both winter and summer tourism. In the same time country owns mountains and sea and lakes, which are very important part of tourism. Disadvantage and threat for this model of BiH branding is competition. Most of the neighbor countries such as Croatia, Slovenia and Montenegro, are tourism developed countries. They have good offerings and in this moment these countries are more developed in tourism sense than BiH is. They all have good strategies and started to implement them, so BiH as a country must think about something different and must invest much more to become competitive with them. This model could have the biggest direct and indirect influence on whole economy, and could contribute to increasing of well being of BiH citizens. 3. SURVEY To support and proof important statements from this paper the survey was conducted. As it is maintained before, image of the country or place is important for its branding. There are also few elements that must be created for successful branding, such as: brand awareness, brand loyalty, brand recognition, positive brand feeling and perceived quality. To analyze these elements questionnaire with the appropriate questions was delivered to the respondents. The data for this study were gathered through mail questionnaires that were distributed to respondents on internet and directly, from February 15th to March 23th 2013. Answers on internet were collected by docs.google.com, and then all responds were statistically analyzed in SPSS program. The profile of respondents is shown in Table 1. The total respondents for this study are 335, but 32 of them are eliminated because of incomplete responds, so final sample size is 303. The study sample comprises respondents who vary on such characteristics as gender, age, marital status, education level, monthly income, nationality (BiH, UK, Germany, Italy, Serbia, Croatia and Turkey) and living area. 35 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo Table 1.Profile of Respondents of Destination Branding Survey Item Gender Description Male Female 15 – 25 26 – 35 36 – 55 55+ BiH Other Single Married (children) Married(No children) Divorced High school University Graduate school Other 0€ 0 – 350 € 350 – 550 € 550 – 1000 € 1000 €+ Age Nationality Marital status Education Monthly income How travel often you Average days stayed on the trip Once a year Twice a year More than 2 times Frequency 143 160 165 98 26 14 141 162 221 64 14 4 70 143 81 9 45 51 102 102 3 155 113 35 Percentage (%) 47.2 52.8 54.5 32.3 8.6 4.6 46.5 53.5 72.9 21.1 4.6 1.3 23.1 47.2 26.7 3.0 14.9 16.8 33.7 33.7 1.0 51.2 37.3 11.6 1–3 4–7 8 – 14 14+ 28 196 56 23 9.2 64.7 18.5 7.6 Questionnaire was composed of three different types of questions: Yes/No questions, scale questions (from very high to very low) and multiple choice questions. Some of information that we got by the questionnaire are used for descriptive analyses, such as data from table 1. Other important piece of survey was in relation between the factors and mutual influence on each other. For this part correlation analyses were used. 3.1. Results According to theoretical models of A. Friedman (2012), Risitano (2011) and M. Yasin (2007) destination brand depends on several different variables, but for this research 6 of them are chosen, and these are: brand recognition, brand awareness, image, brand quality, brand feeling and loyalty of the visitors. For every variable appropriate questions are composed and analyzed in statistical program, so results of the research will be described in the next few paragraphs. 3.1.1. Brand recognition 36 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo In this part it was necessary to see level of knowledge of tourists about BiH. The main question was how familiar with BiH are they. 63,7% of them answered that they know a lot about the country, 23,8% said they are familiar with the country, while less than 10% said they only heard about BiH from the friends. To support these answers few basic questions about BiH were structured and answers were satisfying. The respondents had 97,7% correct answers for question “where is BiH located”. More than 94% knew what religion of people live in BiH is. 3.1.2. Brand awareness For brand awareness two main indicators are very important. First is perceptual of foreign tourists that knew the destination before they travel. More than 60% knew the destination and were familiar with it, while other read about the country and learned from the friends. Second indicator was the typology of communication channels trough which tourists knew the destination. The most of the visitors learned about BiH on the internet (46%), heard from the friends (34%), while other`s source of information were TV, newspaper and other sources. 3.1.3. Brand feelings and loyalty While testing feeling and loyalty of tourists we wanted to know their opinion about the country. Most of the respondents, doesn’t matter if they visited BiH or heard about friends that visited, have positive feeling about BiH. At the same time large percentage (80,1%) of them like or respect the country. Table 2. Tourists Opinion About Bih / Sarajevo Frequenc y Percent 38 I visited, and I have positive feeling 27,5 5 I visited, and I have negative 3,6 feeling 41 My friend visited, and has positive 29,7 feeling 7 My friend visited, and has negative 5,1 feeling 39 I read about, and have positive 28,3 feeling 8 I read about, and have negative 5,8 feeling 138 100,0 Total 3.1.4. Brand quality 37 Cumulative Percent 27.5 31.1 60.8 65.9 94.2 100.0 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo Variables that are considered as important for respondent’s opinion about destination quality were factors such as accommodation, restaurants, nature, architecture and general opinion about quality of trips in BiH. 90,8% of tourists think that BiH and Sarajevo have unique architecture and more than 95% of them think that country owns beautiful nature. It is important to notice that they are very satisfied with the quality of restaurants and accommodation. 44,9% said that quality is very good, 38% good and 16,7% think that accommodation and restaurants quality is normal. Although most of the respondents that visited BiH and Sarajevo agreed accommodation and restaurants quality is satisfying, they think that prices of the same are not very high. 46,9% answered prices are normal, 19,8% think prices are very high, while 25,4% said that prices of this factor are high. 3.1.5. Brand image Brand image questions in questionnaire were related with the safeness of the country, perception of the foreign respondents about BiH and Sarajevo and general opinion in their minds. Result of 18,2% respondents that think that BiH is not a safe place, is bad for the country and contributes to a bad image. Table 3. What associates you on BiH ? War Many mosques and churches Olympic Games Sarajevo Film Festival Nature Old bridge in Mostar Međugorje Other Total Frequency 97 22 31 23 25 77 10 18 303 Percent 32.0 7.3 10.2 7.6 8.3 25.4 3.3 5.9 100.0 Cumulative Percent 32.0 39.3 49.5 57.1 65.3 90.8 94.1 100.0 Answers from table 3 are also negative for the country. The war and Old Bridge in Mostar, which is also association on the war, are two things that are the biggest associations of BiH in people`s mind. More than half of respondents choose war and Old Bridge as BiH associations. 3.1.6. Correlation analysis The correlation concept gives a mathematical value for measuring the strength of the linear relationship between two variables. It can take values from -1 to +1 with: +1 representing absolute positive linear relationship (X increases, Y increases), 0 representing no linear relationship (X and Y have no pattern), -1 representing absolute inverse relationship (as X increases, Y decreases).15 15 Zafer Konakli, „Research Methods with SPSS applications“, Sarajevo, 2012, page 99. 38 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo Table 4. Pearson correlations RECOGNITI FEELING LOYAL QUALIT IMAGE ON S AWARENESS TY Y 1 .681** .958** .878** .865** .908** .681** 1 .708** .654** .692** .675** IMAGE RECOGNITI ON .958** .708** 1 FEELINGS ** ** .878 .654 .817** AWARENES S .865** .692** .826** LOYALTY .908** .675** .846** QUALITY **. Correlation is significant at the 0.01 level (2-tailed). .817** 1 .826** .908** .846** .918** .908** .918** 1 .927** .927** 1 As it is explained before, if correlation is higher than 0, there is positive correlation between the variables. In this case, significance is 0 (0.0005) for all relationships, and there is very strong positive correlation between all variables. The strongest is between image and quality (0.908), while the weakest is between quality and recognition (0.675), but it is still strong positive correlation. CONCLUSION Through this research paper we tried to explain importance of destination branding, especially during the last 20 or 30 years, when globalization takes very important role in every business. For some it is disadvantage and threat, but for these who have successful and good defined strategy this phenomenon can be a chance and advantage. Another issue is global economic crisis, which is part of every branch during last 7 or 8 years. Influence of the crisis must be incorporated in all policies and strategies, and then its influence would be the lowest. Tourism and destination branding is one of the ways for overcoming both economy and political crisis in BiH. The country is in transition and that is another negative circumstance, but it is time to start the progress on all fields. There are many things that must be changed in BiH to have success in tourism sector. First of them is to change political atmosphere. During the last 30 years the country is in phase of economic and political stagnation, and crisis is component of all economy segments. Political instability is reason why the crisis occurs for a many years in BiH. Another result of this instability is bad organization of tourism sector. Authorities are not supporting businesses and don’t show any interest for the progress. Second element that must be changed is bad image of BiH in eyes of European people, mostly because of the war. Changing of this image could be very hard and long process, but without success in here, development of tourism is not real option. Image of destination is crucial factor in every well developed touristic place. To achieve this goal good marketing and promotion strategy must be conceived. It could be impossible in here, because of financial elements. In this situation BiH as a country is very far from progress in tourism. References 39 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo Group of authors (2008), “Strategija razvoja turizma Federacije Bosne i Hercegovine za period 2008-2018”, Federal ministry of environment and tourism BiH, Sarajevo Geoffrey I. Crouch (2007),”Modeling destination competitiveness: a survey and analysis of the impact of competitiveness attributes on sustainable tourism”, Australia Hailin Qu, Lisa Hyunjung Kim , Holly Hyunjung (2011), „A model of destination branding:Integrating the concept of the branding and destination image“, Jeonju University Srepublic of Corea Jennifer Blanke and Thea Chiesa (2012), “The Travel & Tourism Competitiveness Report 2011”,World Economic Forum 2011, Geneva Jin Huh (2006), “Destination Branding as an Informational Signal and Its Influence on Satisfaction and Loyalty in the Leisure Tourism Market”, Blacksburg, Virginia Juan A. Garcia, Mar Gomez, Arthuro Molina (2012), “A destination-branding model: An empirical analysis based on stakeholders”, University of Castila La Mancha, Spain. Julia Winfield-Pfefferkorn (2005), “The branding of cities – Exploring city branding and importance of brand image”, Syracuse University. Keller, K.L. (2003). „Strategic Brand Management.“, Upper Saddle River, NJ: Prentice Hall. Li Zhang, Simon Xiaobin Zhao (2009), “City branding and the Olympic effect: A case study of Beijing”, Fudan University China. Landa, Robin. (2004 ), “Advertising by Design, Creating Visual Communications with Graphic Impact”John Wiley & Sons, New Jersey Nergis Aziz, Efstathios Kefallonitis and Barry A. Friedman (2012), “Turkey as a Destination Brand: Perceptions of United States Visitors”, American International Journal of Contemporary Research. Norjaya M.Y., Mohd N.N. and Osman M. (2007), “Does image of country of-origin matter to brand equity?”, Emerald Group Senija Causevic and Paul Lynch (2012), „Political (in)stability and its influence on tourism development“, Elsevier. Stephen E. Sachs (1994), “Sarajevo: A Crossroads in History”, Junior division. Zafer Konakli (2012), „Research Methods with SPSS applications“, Sarajevo 40 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 1469 Title A name given to the resource Branding B&H - Sarajevo as a Touristic Destination Author Author HUSUKIC, Alen Abstract A summary of the resource. At a time when B&H is on the one of the lowest levels of development in Europe, and when most of economy branches are undeveloped, it is very hard to say what should be considered as starter of economic development. We decided to consider tourism sector as a field that could contribute the most, and as a field that has biggest chances and opportunities to increase economic well-being of people in B&H. Tourism industry is one of the most important industries in the world, especially in Europe. Its contribution to total worlds GDP is about 7,5%, engages more than 75.000 employees that is about 7% of total world employment, more than 750 millions of international tourists arrive all around the world in 2011 and all these indicators increase every year. B&H has all conditions to become tourism oriented European country. It is found in heart of Europe, on intersection of important communication and transportation roads. It has all necessary natural and social resources, favorable climate, geographic and geomorphologic conditions, to have good developed tourism sector. But for progress of any branch of economy good strategy and clear goals must be defined. In this research branding of BiH / Sarajevo will be taken as starting point of this progress. Keywords: Brand, Destination Branding, Image, Globalization, GDP. Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2013-05-10 Keywords Keywords. Article PeerReviewed Identifier An unambiguous reference to the resource within a given context ISSN 978-9958-834-23-3 https://omeka.ibu.edu.ba/files/original/7060c5e96a083d5b4f8d38575361806a.pdf 899c46add93f8569e62398f1ba42e699 PDF Text Text International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo Environmentally-Sensitive Hospitality Enterprises: A case study in a Green-Star certified Hotel in Turkey Hasan Hüseyin Soybalı Afyon Kocatepe University, Afyon, Turkey hsoybali@aku.edu.tr Ahmet Baytok Afyon Kocatepe University, Afyon, Turkey ahmetbaytok@aku.edu.tr Mustafa Hotamışlı Afyon Kocatepe University, Afyon, Turkey hotamisli@aku.edu.tr Degradation of the ecological balance is one of the important and popular issues in the world in recent times. This fact, raised from the unconscious use of use of natural resources by the human beings, has revealed itself in the form of climate change, threatening or disappearance of certain plants and animal species, natural resource depletion and air, water and soil pollution. In order to eliminate this disadvantage, the tendency towards the sustainable use of all resources at international, national and local scales is on the increase today. The alternative tourism and ecotourism, as sustainable and nature-based tourism types, have become the popular tourism kinds in the tourism industry whose basic products are based on the natural resources for the sustainable use of the resources. As well as the practises of environmental protection and improvement of environmental awareness, encouragement and promotion of positive contributions of tourism enterprises to the environment are some of the subjects which have gained great importance in recent years. For this purpose, a certain standard practices for the tourism enterprises in all countries had been developed and has continued to be improved. The environmental sensitivity of tourism enterprises in Turkey had been tried to develop in 1990s through the Eco-Friendly Tourism Enterprise Certificate (a green pine symbol), but it has not seen enough interest. For his reason, environmental awareness campaign was reviewed in 2008 and brand new Environmentally Sensitive Accommodation Enterprise Certificate (a Green-Star Symbol) practise was started. The main purposes of Environmentally Sensitive Accommodation Enterprise (ESAE) are the 152 �International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo protection of environment, improvement of environmental consciousness and encouragement of environmentally-sensitive hospitality enterprise constructions and operational management. ESAE practices include water saving, energy efficiency, reducing the amount of environmentally hazardous substances and waste, promoting the use of renewable energy resources, environmentally-sensitive planning starting from the stage of investment, environmental compliance, ecological architecture, raising awareness about environmental sensitivity and provision of education. This study aims to draw attention to Green-Star Symbol provision by evaluating the conceptual framework of ESAE Certificate and demonstrate the contribution of ESAE practices to the sustainability through a case study. Semi-Structured interview questions and analysis of secondary data related to the hospitality enterprises as qualitative research methods will be employed within the scope of research. Keywords: Environment, Hospitality, Turkey, Green-Star. 153 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 1606 Title A name given to the resource Environmentally-Sensitive Hospitality Enterprises: A case study in a Green-Star certified Hotel in Turkey Author Author HUSEYIN SOYBALI, Hasan BAYTOK, Ahmet HOTAMIŞLI, Mustafa Abstract A summary of the resource. Degradation of the ecological balance is one of the important and popular issues in the world in recent times. This fact, raised from the unconscious use of use of natural resources by the human beings, has revealed itself in the form of climate change, threatening or disappearance of certain plants and animal species, natural resource depletion and air, water and soil pollution. In order to eliminate this disadvantage, the tendency towards the sustainable use of all resources at international, national and local scales is on the increase today. The alternative tourism and ecotourism, as sustainable and nature-based tourism types, have become the popular tourism kinds in the tourism industry whose basic products are based on the natural resources for the sustainable use of the resources. As well as the practises of environmental protection and improvement of environmental awareness, encouragement and promotion of positive contributions of tourism enterprises to the environment are some of the subjects which have gained great importance in recent years. For this purpose, a certain standard practices for the tourism enterprises in all countries had been developed and has continued to be improved. The environmental sensitivity of tourism enterprises in Turkey had been tried to develop in 1990s through the Eco-Friendly Tourism Enterprise Certificate (a green pine symbol), but it has not seen enough interest. For his reason, environmental awareness campaign was reviewed in 2008 and brand new Environmentally Sensitive Accommodation Enterprise Certificate (a Green-Star Symbol) practise was started. The main purposes of Environmentally Sensitive Accommodation Enterprise (ESAE) are the protection of environment, improvement of environmental consciousness and encouragement of environmentally-sensitive hospitality enterprise constructions and operational management. ESAE practices include water saving, energy efficiency, reducing the amount of environmentally hazardous substances and waste, promoting the use of renewable energy resources, environmentally-sensitive planning starting from the stage of investment, environmental compliance, ecological architecture, raising awareness about environmental sensitivity and provision of education. This study aims to draw attention to Green-Star Symbol provision by evaluating the conceptual framework of ESAE Certificate and demonstrate the contribution of ESAE practices to the sustainability through a case study. Semi-Structured interview questions and analysis of secondary data related to the hospitality enterprises as qualitative research methods will be employed within the scope of research. Keywords: Environment, Hospitality, Turkey, Green-Star. Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2013-05-10 Keywords Keywords. Article PeerReviewed Identifier An unambiguous reference to the resource within a given context ISSN 2303-4564 https://omeka.ibu.edu.ba/files/original/bac5c426b79cfcb854935d27d078ce06.pdf 8a2d4334b9aeb43829461e4a95edbab9 PDF Text Text International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo Budget Deficits and Democracy: The Case of Turkey Hakan Hotunluoğlu University of Adnan Menderes, Nazilli, Turkey hakanhotunlu@gmail.com Recep Tekeli University of Adnan Menderes, Nazilli, Turkey rtekeli@adu.edu.tr There is a vast body of literature on the political economy of budget deficits. These studies used different models to explain the political motivations behind budget deficits. There are some studies to explain the budget deficit in developed countries and assume that budget deficit is an expected outcome of fiscal policy in democratic countries. However, the studies have come to conclusion before analyzing whether the democracy affects budget deficit or not. To our knowledge there have not been many studies to explain whether the level of a country’s democracy affects budget deficits or not. In this paper, we will show a country’s level of democracy has a positive effect on budget deficit using a single country: Turkey. This research based on a time series analysis covering 35 years between 1975 and 2010 by using VAR (Vector Autoregressive) method. Our results suggest that Turkey’s level of democracy has indeed effects on budget deficits. We also find evidence that before the local election is held governments uses expansionary fiscal policies in order to increase the reelection probabilities. Keywords: Budget Deficits, Democracy, Political Budget Deficit. JEL classification: D72; H61; H63 141 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 1509 Title A name given to the resource Budget Deficits and Democracy: The Case of Turkey Author Author HOTONLUOGLU, Hakan TEKELI, Recep Abstract A summary of the resource. There is a vast body of literature on the political economy of budget deficits. These studies used different models to explain the political motivations behind budget deficits. There are some studies to explain the budget deficit in developed countries and assume that budget deficit is an expected outcome of fiscal policy in democratic countries. However, the studies have come to conclusion before analyzing whether the democracy affects budget deficit or not. To our knowledge there have not been many studies to explain whether the level of a country’s democracy affects budget deficits or not. In this paper, we will show a country’s level of democracy has a positive effect on budget deficit using a single country: Turkey. This research based on a time series analysis covering 35 years between 1975 and 2010 by using VAR (Vector Autoregressive) method. Our results suggest that Turkey’s level of democracy has indeed effects on budget deficits. We also find evidence that before the local election is held governments uses expansionary fiscal policies in order to increase the reelection probabilities. Keywords: Budget Deficits, Democracy, Political Budget Deficit. JEL classification: D72; H61; H63 Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2013-05-10 Keywords Keywords. Article PeerReviewed Identifier An unambiguous reference to the resource within a given context ISSN 2303-4564 https://omeka.ibu.edu.ba/files/original/630d8a0aeefdc68a37ed7fda07bc28d5.pdf 57a2ec7b778e354b1a705d539a248ce1 PDF Text Text International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo The Concept and Development of the Civil Dialogue at EU Level Indira Hasanovic International University of Sarajevo, Sarajevo, Bosnia and Herzegovina indira.hasanovic@gmail.com This paper analyzes the concept of civil dialogue as well as its development in the EU level. Civil dialogue is an expression of participatory democracy; therefore the participation of citizens in decision-making and policy is essential to democracy. However, democracy becomes quite complicated when discussing the issue at the European level because of the structure of the European Union which is based on an ad-hoc approach. The other reason for the increasing validity of the dialogue with citizens in the Union should search for partial and troubling results of public opinion surveys that show a low level of understanding of mechanisms of action of the European institutions among citizens of the member states of EU. As result, French and Dutch referenda on the Constitutional Treaty have shown that there is a serious disconnection between citizens and policy makers at the European level. Therefore, the role and contribution of CSOs (especially NGOs) in the process of EU policy is extremely increased, in the last decades. Civil dialogue between civil society and public institutions at all levels is seen as a powerful tool that could help improve communication and citizen participation in decisions and policies made. Still difference in the level of development of the dialogue between the various EU institutions and NGOs is directly related to the degree of their work. From all EU institutions, European Commission has made the most progress in formalizing and institutionalizing consultations and dialogue with NGOs. Importance of growing engagement NGOs within the EU is indeed evaluated, both in terms of the policy process, and as a contribution to solving the democratic deficit through more participating forms of participation. The aim of this paper is to review the current practice of the civil dialogue at EU level through the analysis of several cases, and through them deficiencies and problems of previous practices of dialogue between the EU and NGOs will be shown. Keywords: European Union, Civil Dialogue, Democratic Participatory Democracy, Ngos, European Commission. 171 Deficit, � https://omeka.ibu.edu.ba/files/original/ebba7db4a8e667c004a73832d4315249.docx 8147a2ef6aedd14917f3f2f299b1e5af https://omeka.ibu.edu.ba/files/original/295126f93b779658f9c18c20ec89a62e.pdf 75f96e1c23de44efbee1dd433cc5fed6 PDF Text Text International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo The Concept and Development of the Civil Dialogue at EU Level Indira Hasanović International University of Sarajevo, Sarajevo, Bosnia and Herzegovina indira.hasanovic@gmail.com Abstract This paper analyzes the concept of civil dialogue as well as its development in the EU level. Civil dialogue is an expression of participatory democracy; therefore the participation of citizens in decision-making and policy is essential to democracy. However, democracy becomes quite complicated when discussing the issue at the European level because of the structure of the European Union which is based on an ad-hoc approach. The other reason for the increasing validity of the dialogue with citizens in the Union should search for partial and troubling results of public opinion surveys that show a low level of understanding of mechanisms of action of the European institutions among citizens of the member states of EU. As result, French and Dutch referenda on the Constitutional Treaty have shown that there is a serious disconnection between citizens and policy makers at the European level. Therefore, the role and contribution of CSOs (especially NGOs) in the process of EU policy is extremely increased, in the last decades. Civil dialogue between civil society and public institutions at all levels is seen as a powerful tool that could help improve communication and citizen participation in decisions and policies made. Still difference in the level of development of the dialogue between the various EU institutions and NGOs is directly related to the degree of their work. From all EU institutions, European Commission has made the most progress in formalizing and institutionalizing consultations and dialogue with NGOs. Importance of growing engagement NGOs within the EU is indeed evaluated, both in terms of the policy process, and as a contribution to solving the democratic deficit through more participating forms of participation. The aim of this paper is to review the current practice of the civil dialogue at EU level through the analysis of several cases, and through them deficiencies and problems of previous practices of dialogue between the EU and NGOs will be shown. Keywords: European Union, civil dialogue, democratic deficit, participatory democracy, NGOs, European Commission. Introduction Development of an idea of civil society is coming from different roots, where many scholars have contributed by their discourses and definitions. John Locke was the first in modern times who defined civil society "as a separate entity independent from the State."(Schade, 2000, p.10) According to his definition people are the members of the community in which their social life is developed without government interference. He believes that the state should be preserve, complete and regulate the natural state of society. Unlike Locke, Thomas Paine considers the ideal civil society as one in which civil society regulates its own affairs in order to leave as less space as possible for the interference of the government. On the other hand, Alexander de Tocqueville emphasizes that the role of an independent association of a civil society, is where "associations are 1 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo schools of democracies where the democratic thinking, attitudes and behaviors are taught in order to protect individual rights against potential authoritarian regime." (Paffenholz and Spunrk, 2006, p.4) He also believes that these associations should be on a voluntary basis and be built at all levels (local, regional, national). Jurgen Habermas has focused his concept of the role of civil society in the public sphere. Habermars believes that "the political system needs to articulate the interests of the public space by putting different views on the political agenda," (Habermas, 1992, p.374) while marginalized groups should be organized and a way should be found in order to articulate their interests. This is necessary primarily because the political parties and parliaments should "take into account public opinion outside the established structures of power", (Habermas, 1992). The conclusion to be drawn from this review of the basic principles of the concept of civil society is that different understandings and interpretations of civil society have influenced the theoretical debate and empirical research as well as the historical relationship of political emancipation of citizens. In an early stage, the civil society in Western Europe (18th and 19th century) was enhanced by economic and academic elites who demanded civil and human rights and political participation. The Definition and Role of Civil Society In 1960 new social movements such as the liberalization of women, environmental movements were emerging which significantly expanded the scope of activities of civil society. Eastern Europe has faced political, economic and social transformation where civil society played an important role in the establishment of democratic structures. Their success is dependent on various factors, the incorporation of democratic procedures in its own structure and organization, especially after the changes of the system. Democratic functions of civil society are the ones that build and increase the level of democratic political culture and develop appropriate democratic values, and create the conditions for democratic institutions of government action. "The basis for considering all variants of concepts and practices of civil society is an ideal-typical paradigm of civil society and legal state." (Vujadinovic, 2007, p.22) Edward's model of the concept of civil society is reflected by three items as the "civil society means different things to different people" (Edwards, 2004, p.3): 1. Civil society as a world of voluntary association that aims to develop values such as tolerance and cooperation. 2. Civil society as the good society aims to foster positive norms and values, where activities are directed towards specific social and political goals. 3. Civil society as part of the public space that aims to provide a space in which citizens can discuss issues of common interest. This role is essential when it comes to finding appropriate solutions and making decisions that are important to society.(Edwards, 2004, p.18-54) Edwards' main hypothesis is that each of these roles can independently achieve results in terms of social change, as well as other results that are usually attributed to civil society. "Civil society is based on the principles of autonomy (for the autonomous, voluntary, spontaneous highlighting the identity of the citizen), associatively (self-organization of citizens and associative effects on the spontaneous association in the form of civic initiatives, social movements, non-governmental organizations) and the public (for the public and media disclosure issues and goals of activities and specific actions of self-civil society actors with the aim of problems resolved individually, pressing the government)."(Vujadinovic, 2007, p.23) Civil society activism is the control mechanism in 2 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo the political control of the actions of state bodies, holders of political power. Seven basic functions of civil society are: 1. The protection of citizens, whose main function consists of the protection of life, liberty and property, and the state of despotism 2. Monitoring responsibilities, but mainly monitoring activities that may relate to different issues, such as human rights advocacy 3. Public communications which are based on lobbing interest especially of marginalized groups, as well as raising public awareness of issues important to society. 4. Socialization, which should contribute to the creation of democratic attitudes among citizens, mutual trust and tolerance 5. Building community through participation in voluntary associations that strengthen ties between citizens 6. Mediation between the state and citizens, i.e. role of balancing power and negotiations with the government, the establishment of relations among various interest groups. 7. Provision of services is an important part of the activities of civil society groups. (Paffenholz and Spunrk, 2006, p.23) State-civil society relations consider well organized state that guarantees the rights that enable the functioning of civil society. The discourse of civil society in the last decade appears to struggle against the totalitarian form of government, which contributes to the destruction of civil society. Namely the development of a democratic political culture is essential for civil society, which is itself in a reciprocal relationship. From the above mentioned, we see that these factors influence the development of civil society as the quality of political culture, political institutions, the law and public opinion, etc. Thus, civil society is defined as a public space in which citizens seek to actively and freely participate in all spheres of social life through self-organization, in order to publicly control and evaluate the work of government institutions, raise public awareness and knowledge of performance authorities outside of the state institutions. According to many contemporary theorists, the definition of civil society is in relation to the "totality of institutions, organizations and individuals located between the family, the state and the market, where people voluntarily join to contribute to the common interest."(Anheier, Regina, 2005, p.54) Here the concept of civil society is based on democratic ideals of liberalism in which a citizen is referred to as an individual, who participates in various elements of a democratic and community life. This vision of society means that citizens are formed into groups or associations to influence the political process, i.e. "creating channels of communication between citizens and government directly and indirectly."(Mavrikos-Adamou, 2010, p.516) This means that civil society occupies a key site between the elite and the citizens, and between the state and the market. Civil society is experiencing its expansion in the 1980s and early 1990s in Eastern Europe, the emergence of mass movements that aimed at the democratization of society, which until then was almost unheard of. As a reason it could be also included, the collapse of the Soviet Union which opened many discussions about: what is actually civil society and their actual role. Deepening of the integration process, the EU has a growing direct influence on the everyday issues of EU citizens. The Treaty of Amsterdam further contributed to the development of civil society, transferring some of the areas subject to interstate cooperation in justice and home affairs. This is also contributing to greater EU powers and this rank the issues on the agenda of the EU. European Citizen Action Service (ECAS) i is one of the first organizations that the EU has contributed to strengthening of the NGO sector in relation to the EU institutions in order to develop Europe’s citizenship. According 3 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo to many writings, the development of civil society at the European level initiated in the last decade a very strong effect and great interest of the European institutions, primarily because the concept of civil society is offered as an universal solution to social and political problems. The definition of civil society organizations and their role in participatory democracy at the EU level Today there is controversy in terms of different interpretations about what is the role of civil society in modern societies, and which correlation is between the civil society and the state. Starting from Theda Skocpola that emphasizes "the crucial role of the state is in the development of civil society" (Howard 2003, p.44), Jonah Levy insists that “the relationship between state and society civil should not be hostile, and that the state exclusion is not enough to develop a good civil society."(Howard 2003, p.38) From this we can conclude that the citizen as an individual modern society should have the opportunity to pursue their interests in a social space. Most citizens are the easiest to realize their interests through involvement in the work of civil society organizations (CSOs). From a legal point of view there are several different names for the civil society organizations that can be classified into several forms such as: associations, NGOs, cooperatives, non-profit sector, voluntary organizations, etc. The way in which the citizens will act depends on their interest, which can be characterized as a professional activity within the civil society through voluntary work, providing public support for the initiative or for an exit to the street. The meaning of civil society should primarily lie in the strength of arguments and supporting certain values and interests. Michael Edwards believes that "the organization of the civil society should be part of the public sphere, and their actions in the public arena can contribute, and thus positively affect the rendering of a decision."(Edwards, 2005) According to many authors, civil society organizations are considered "social phenomenon which represent fifth economic power in the world."ii In further defining civil society, Wesley Scott and Likanen see civil society as "the political power of the central development of values and social goals of the community that is reflected in the function of modernization and democratization of the state and social relations." (Wesley Scott J. and Likanen, 2010, p.424) From this we see that civil society is a major political factor in articulating and shaping social and collective rights. Different interpretations of the role of civil society are coming from different historical experiences, which are in the process of globalization, the changing role of the state in everyday life. "Thus, in the Western countries to strengthen civil society linked to any questioning of the traditional role of the state in social protection …….or the development of civil society will be brought into connection with dissatisfaction progress in economic development .... while in Central and Southern Europe, the development of modern society civil is most commonly associated with the collapse of the socialist concept of the state and changes in the model of collective behavior." (Žeravčić, 2011, p.4) For the definition of civil society, the EU institutions typically use the definition adopted by the European Committee Economic and Social Committe gave in his opinion, "The Role and Contribution of Civil Society Organizations in the Building of Europe."iii Civil society organizations include: 1. Participants in labor market (i.e. trade unions and employers' associations, socalled. social partners) 2. Organizations representing social and economic participants which are not social partners in the strict sense (consumer organization) 3. Non-profit organization (NGOs) 4 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo 4. Organizations in the community, i.e. organizations established within the company level following goals focused on the members (youth associations, all organizations through which citizens participate in local and city life) 5. Religious communities. (Petrenko and Kallins, 2007, p.29) Contemporary debates increasingly put emphasis on civil society when it comes to the process of democratization and social reform as an important player in the overall political, social and economic development. The assignment of the role of civil society organizations is reflected in their increasing efforts to solve social problems, and representing the general interests through participation in the political process. By this we mean the participation of civil society in the formulation, adoption and implementation of public policy in society. According to Diamond, civil society organizations are "important in strengthening democracy as opposed to authoritarianism, check the state and make it accountable to the citizens, to represent the interests of citizens, enabling the flow of information, stimulate democratic participation by improving democratic values."(Kunac, 2066, p.16) As a direct result of the challenges that representative democracy is facing in the context of contemporary global trends appear to participatory democracy and civil dialogue. Citizen participation in the decision-making and enforcement is an integral part of participatory democracy. However it is important to emphasize that participatory democracy is not replaced for a representative democracy, i.e. it does not eliminate the powers of the representatives of the executive and legislative powers in decision-making and enforcement. The purpose of representative democracy in principle would mean that the citizen through the electoral process give his/her voice for legitimacy to certain parties that make political decisions which represent their interests. Together with representative democracy, participatory democracy is the foundation on which the modern democratic society is based. However, globalization has caused significant social and political changes, and therefore as a result people develop feelings that through representative democracy they cannot directly influence the factors that have an impact on their lives. The process of decision-making has become more or less technical work that could enable more citizens through their representatives to contribute to quality of life. The inability of representative democracy to allow ordinary citizens to participate in decision-making is born in the idea of participatory democracy, which is now standard in developed countries. The idea of participatory democracy is based on two key principles: 1. Individuals should have the opportunity to participate in political decision making, which directly determines the quality and direction of their lives 2. Society should be organized to encourage individuals (citizens) to participate in political decision-making and to ensure public media space for joint participation in the process. (Žeravčić, 2011, p.3) In addition to enabling the continuous participation of citizens in the political process, participatory democracy allows citizens to advocate and defend their interests in policymaking. The role of civil society in this process is very important, "first by enabling citizens to successfully advocate for their interests over the public authorities, and second direct protection of enjoyment of certain rights from which the right to participate in the decision-making process derives"(Žeravčić, 2011, p.3) These two reasons mentioned above and the role of CSOs in the process of adoption and application of the law has been recognized in international documents, the Lisbon Treaty of the EU and Recommendations of the Committee of Ministers of the Council of Europe to member states on the legal status of civil society in Europe. EU Lisbon Treaty, Article 11. “Institutions' of Union allows citizens and organizations to express their views and share public opinion in all areas of Union action. It also states that institutions maintain an open, transparent and 5 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo regular dialogue with civil society organizations and civil society"(EU Lisbon Treaty, 2010). According to the recommendations of the Committee of Ministers of the Council of Europe states that all levels of government need to provide an effective and equal participation of civil society in dialogue, exchange of views on issues of importance to the community. It also points out that "civil society organizations should be consulted on draft legislation and other documents affecting their status."(Council of Europe, 2007) What is important to emphasize is that the institutional mechanisms citizen participation in the legislative process and other public policy differs from country to country. Differences appear in the scope of mechanisms, types of documents and entities involved in this mechanism. From this we see that the CSOs plays a very important role in providing public services that take place in cooperation with the authorities. Their functioning as informal actors in the political process allows them to influence the decision-making process, the formulation of alternatives and keeping up the pressure for better implementation of decisions. It is important to emphasize that the role of NGOs in the political process is not only influencing the decision-making power but also an attempt to find solutions to specific problems. The increasing engagement of civil society based on participatory democracy makes the democratically elected government more transparent and closer to the citizens. One of the most important activities of CSOs to influence the process is best described by the term advocacy (policy advocacy). The concept of advocacy by Reid means "to influence social groups in shaping social and political outcomes in government and society." (Reid, 2003, p.3) Advocacy is "raising the voice" on important issues and guide them towards a resolution in favor of those who "do not hear" or those who are not “loud enough”. When we talk about the orientation towards advocacy Reid suggests two types of advocacy: 1. Advocacy directed at government relating to actions to public institutions, i.e. decision-making and the process of making and implementing policy. 2. Advocacy oriented society emphasizes the important role of NGOs in creating public opinion, setting priorities and actions of citizens. This type of advocacy NGOs is responsible for the analysis, interpretation and transmission of information in society, which is usually carried out through public media campaigns, education, publications, and act. (Reid, 2003, p.6). It should be noted that the state is still obliged to immediately accept all requests and suggestions from civil society organizations, but it shall maintain a dialogue based on arguments and facilitate the participation of the same conditions to all civil society organizations wishing to participate in the creation and implementation of public policy. It is important to emphasize that the structured dialogue between the state and civil society can contribute to strengthening the role of civil society and thereby strengthen the state to cope with modern challenges. The role of NGOs and advisory mechanisms of dialogue at the European Union level Modern democratic society means a society that allows its citizens to achieve its set objectives within the public space. Citizens' interests can be divided into economic, social or political. The citizen is to realize "their social interests within civil society formation, or engaging in the work of civil society" (Žeravčić, 2010, p.6). NGOs are considered the most distinguished actors of civil society. When it comes to non-governmental organizations (NGOs) and their definition it is often described as very diverse, heterogeneous organizations with very different goals, motivations, structures, but the important point is 6 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo that NGOs are very deeply rooted in the development of civil society. We can say that by giving greater importance to civil rights in Europe, people increasingly founded such organizations which dealt with social issues and needs and protection of interests of citizens. Because of the different definitions of non-governmental organizations, the general definition of non-governmental organizations should include the following elements as basic: 1. NGO are independent, especially the government and other public bodies. 2. NGOs act in the public interest, i.e. addressing issues related to the welfare of the people and society. 3. Non-profit organization’s 4. Democratic organizations that are formed voluntarily (COM, 2000). Specifically, the role of non-governmental organizations in EU policy has a particularly important role in the broader European management; we can say that the European decision-making very much depends not only on several European institutions and nations. Based on this we can conclude that the dialogue with non-governmental organizations play a crucial role in European governance. Traditional forms of democracy should be strengthened by including citizens and their associations in a consistent dialogue on certain issues and thus contribute to EU policy. Civil society needs to find a way to increase their abilities, acting as an intermediary in the exchange of information and opinions between citizens and government. Also, one of the reasons for giving greater importance of dialogue with NGOs and EU are worrisome poll results by which it was found that EU citizens have very little knowledge and understanding of the structure and mechanisms of action of the European institutions. These results were reflected in a declining turnout of citizens in elections for the European Parliament, as well as a rejection of the Irish people in the referendum to give their support to the ratification of the Nice Treaty. "Thanks to the new institutional and symbolic framework as given by the Treaty of Maastricht and the concept of citizens' Europe, a sudden increase in the number of networks of NGOs actively involved in lobbying and dialogue with the European institutions and the gradual explicit recognition of their role in the strategic documents of the EU"(Vidačevak, 2008, p.238). Out of all institutions, the European Commission has made the greatest progress in formalizing and institutionalizing consultation and dialogue with non-governmental organizations. In 1997 the issuing of the first important document that sets the principles based on which the cooperation of European institutions with NGOs are developed. Notification of the European Commission entitled Promoting the role of voluntary organizations and associations in Europe.iv This document is intended to promote a stronger civil dialogue at European level, to highlight the growing role of nongovernmental organizations within the EU, and to point out the problems and challenges they face. Another goal of this paper is to enhance the role and capacity of NGOs to be involved in the process of European integration. In 2000, followed by a Discussion paper European Commission called the Commission and NGOs: Building a Stronger Partnershipv, standing in the same, had two goals: "The first objective is to review the existing relations between existing problems of the European Commission and NGOs, and the second is to suggest possible guidelines in order to strengthen mutual relations” (COM, 2000, p.2). According to this document the existing cooperation and desire to improve relations between the European Commission and NGOs would be based on five main guidelines: 1. Participation in the democratic decision-making process in the EU is primarily legitimized by the elected representatives of European citizens. However, NGOs can contribute to promoting more participatory democracy in the European Union 7 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo 2. 3. 4. 5. and beyond. The fundamental right of the citizens is the freedom to form associations for mutual benefit. Belonging to an association provides an opportunity for citizens to participate actively in the new modes of action in addition to options for action through political parties and trade unions. The role of the association is recognized as an important component of civil society in supporting the democratic system of government, which is of particular importance in the context of EU enlargement. According to the so-called Copenhagen criteria, EU membership requires that the candidate country has achieved stability of institutions guaranteeing democracy, the rule of human rights and respect and protection of minorities. Non-governmental organizations can make a significant contribution to the development of democracy and civil society in the candidate countries. Representing the views of certain groups of citizens before the European institutions-The role of NGOs is that the views represented in front of the European institutions, certain groups of people (such as people with disabilities, ethnic minorities) or on specific issues (such as environment, life standard). In particular, many NGOs have the opportunity to come into contact with the poorest and most vulnerable groups of the population, and to ensure that they are the voice for those who are not loud enough through other communication channels. Their participation in the shaping of policy principles and policy implementation is of great importance for the EU. In some cases, they can act as a balance of activities and exchange views with other stakeholders in the society. Contribution to decision-making is the specific expertise of non-governmental organizations that put them in political debates. Through connections at local, regional, national and European level, NGOs can provide assistance in the development of EU policy. In particular, NGOs can provide feedback on the performance or other results of certain political decisions, and thereby contribute to the task of the Commission in defining and implementing policies. There are also a number of institutional mechanisms for consultation with NGOs that are significantly different in terms of the degree of openness, technical details, as well as the actors involved in it (for example, forums for dialogue sessions hearing at the European Parliament, individual consultations with members of the committee NGOs, focus groups, round tables, workshops, seminars, etc.). Contribution to manage project-specific expertise that NGOs can bring to the management, monitoring and evaluation of projects funded by the EU. The contribution of NGOs Especially important in the fight against social exclusion and discrimination, protecting the environment and providing humanitarian and development assistance. The expertise and dedication of NGO staff and their willingness to work in difficult operating conditions makes NGOs a vital partner of the Commission, both within the EU and beyond. Contribution of European integration-encouragement of national NGOs to work together to achieve goals, a European network of non-governmental organizations provide an important contribution to the formation of a "European public opinion" in order to recognize NGOs as a true European political entity. At the same time, through a convenient way they contribute to support of European integration. The strengthening of relations between the European Commission and NGOs can help both parties to be successful in achieving their goals. At the same time, the Commission should recognize and support the development and independence of NGOs (COM, 2000, p.4-5). 8 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo With this document, the Commission has recognized NGOs as partners in policy as representative of different groups of people and project management. The Commission also considered that the involvement of NGOs in the policy process could be a way of solving the problem of "democratic deficit" in the EU. "The impact of this particular document confirms many reactions to the document that were received from Member States and candidate countries." (COM, 2000) In response to the results of public opinion in the Member States which show a very low level of trust in the EU institutions and informing the citizens about the work thereof, the Commission in the midyear of 2001 published a White Paper on European Governancevi. White Paper on European Governance is the Commission's effort in upgrading and creating greater accountability, transparency and obligations of the parties involved in the policy process. It is very important that the Commission consultative process include mechanisms for response, evaluation and review, and also NGOs are expected to provide mechanisms to monitor the consultation process and to contribute to the creation of more transparent, open and accountable system. In addition to these general principles, the Commission has established minimum standards for consultation of the consulting process with NGOs. Minimum standards of consultation are meant for the general public and refer to "clear the contents of the consultation, publication of documents that are subject of counseling in a format adapted to a wider range of target groups, information (raising awareness about a particular counseling, for example. portal Your Voice in Europevii) the time limit for participation in a particular consultation and the establishment of mechanisms to check and pending feedback on the proposed new legislative measures and proposals for new policies." (COM, 2001) Minimum standards are systematically applied to all relevant policy initiatives. Civil society groups are becoming more active in lobbying in the European Union over the past decade, but this engagement, even when successful, often does not coincide with the interests of private interest groups. As Varleigh points out, "the EU's position towards civil society groups in the past was questionable, because the Commission shall be responsible for consultation only with certain non-governmental organizations that are essentially supportive of the Commission's policy, and sometimes even its role in the institutional process” (Warleigh, 2006, p.200). It is clear that in designing consultative forum for members experts are invited. The Commission has launched a debate on the role of civil society on the management of the European Union. She believes the institutionalization of relations with civil society as part of new management methods to increase legitimacy European Union through participation, thus empowering civil society. White Paper on Governance refers explicitly to the transnational public sphere as a single in which "the consultation becomes part of the discussion on the re-legalization of complementary models (representative) democracy" (Garcia, 2009 p.179). The Commission still refuses to grant consultative status to official associations; today there is no register of associations that lobby at the Commission. The only elements that have a registration system database is a CONECCS (Consultation, the European Commission and Civil Society)viii, founded by the Commission for greater transparency. "As part of the consultative forums and boards standards and criteria have been created which the Commission should follow in determining the relevant NGOs who will be involved in the consultation process."ix Into consideration following factors will be taken: "the potential impact of proposed policies in other areas, need for specific experience, expertise or technical knowledge, previous participation in consultations and the need for a balance where it matters, i.e. among representatives of large and small organizations, social and economic subjects, rower target groups and organizations from EU and non-member states"(Vidačevak,2008, p.242). Although not legally binding force, these codes should 9 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo confirm its value over time and thus become the foundation on which to develop dialogue between NGOs and the European institutions, as well as a step in the harmonization of policies towards non-governmental organizations at the national level of the current and future Member States. Cooperation between the European Commission and non-governmental organizations in the process of EU enlargement The literature says that the EU has a benevolent impact when it comes to the process of democratization in post-communist countries, "but notes that the EU Member States, as well as potential members strengthen the executive and bureaucratic power without adequate active participation of citizens" (Goetz and Hix, 2000). The integration into European structures largely depends on the potential candidates, namely that any country who wants to became a full member state must accept the values and standards of the EU. However, when it comes to the EU accession process it is very important to note that the rules are a big difference when it comes to the countries of Eastern and Central Europe and the Balkan countries. Both groups of countries are countries of the communist regime, but the difference between the first and second group of countries is that the second group of countries certainly gave a picture of instability, ballast of the past, historical events, etc. However, efforts of the EU when it comes to joining the post-communist Balkan countries certainly have made progress along the results, but still in front of them there is a huge task when it comes to meeting the set criteria. The Copenhagen political criteria set for the EU membership candidate countries seeking stability of institutions guaranteeing democracy, development, human rights, and particularly the respect for and protection of minorities at the EU's increasing attention to points. According Pridhamu, the EU's influence on the democratization of the candidate countries varies between three phases: 1. Phase 1 negotiations which preceded, when necessary to meet the Copenhagen criteria before negotiations 2. Phase 2 negotiations, when supplemented regularly monitors compliance policy conditions 3. Phase 3 after admission to membership, as a direct impact of the EU on a new application of weak countries, but also strengthen the indirect effects of European integration in the consolidation of democracy intensified creating networks that EU membership brings (Pridham, 2002, p.15). Based on this we can conclude that the most effective phase of democratization in postcommunist countries is 1 and 2, because from experience it is known that negotiations can begin without all the political conditions satisfied, and the establishment of provisional membership negotiations or termination of negotiations for serious violations of political conditions given. When the second case in the process is slow due to procedural reasons. "The whole process of implementation of institutional changes and a law course sees as great importance the development of civil society and exclusion of non-governmental organizations which complement the country. For the EU, NGOs are very important, independent source of information, and also they can act as a control mechanism in the field of reforms that are sensitive in political terms"(Pridham, 2002, p.17). The European Commission in its document entitled "Dialogue of civil society organization between the EU and the candidate countries" in 2005 confirmed its views that NGOs play a key role in the ongoing reforms for the candidate countries and potential candidates. In what the European Commission insists is "the need for stronger civil dialogue among civil society in the EU and candidate countries with understanding the best practices when it 10 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo comes to the enlargement process in which NGOs have an important role and a significant contribution" (Pridham, 2002, p.17). The EU's insistence on strong dialogue stems from the experience of the previous enlargement during which citizens demonstrated a low level of awareness of EU enlargement. Dialogue with non-governmental organizations for years is seen as an integral part of the political and social culture in member countries. However, the fulfillment of the above mentioned requirements is a prerequisite for joining the EU, as well as a complete success of the process of European integration. Dialogue with non-governmental sector for decades in the EU Member States an integral part of the political, social and economic culture cannot be passed as regulation or directive into the country or organizations because of its political history, this culture could not be developed. Exchange of experiences and knowledge among current and future member states are very important in building a civil society because there are no clearly defined standards when it comes to cooperation between governmental and non-governmental organizations. In helping meet the criteria for EU membership, the European Union has launched a series of initiatives to strengthen the role of civil society in these countries. This primarily refers to the pre-accession aids that act as the development of democratic processes, strengthening the capacity of NGOs in the sectors which are relevant for the implementation of the acquis. The Concept of the Commission on the role of civil society in the Western Balkans is set in the Enlargement Strategy 2010 which states that: "The activities of civil society are essential for a more mature democracy, respect for human rights and the rule of law. Such activities should improve political accountability, and encourage and expand the space for dialogue on social choices and strengthen the consensus for a pluralistic society; tolerance and reconciliation in society also contribute to more open, participatory and dynamic democracy. "Here we see the emphasis on tolerance and reconciliation because they are clearly recognized in the EU policy in the region that has not yet developed a pluralistic society among the fellowship. The EU has significant power in influencing the path of development, and proposes concrete and practical level for the Commission: "The culture of acceptance and appreciation is the role that civil society needs to take in order to enable the organization of civil society an engagement in effective political dialogue. Public consultation on policy initiatives and draft laws should be considered as general principles. Support to civil society by the government is often hampered by a lack of transparency and under-developed criteria “(COM, 2010, p.13). As you can see from the above example, a key objective of the Commission is to involve NGOs in effective dialogue with public and private actors, as well as involvement in monitoring the developments in the field of rule of law and respect for fundamental rights. In line with the previous extension the Commission insists on strengthening the role of civil society not only through communication and cooperation between the Member States and the candidate, but also to pay considerable attention to the role of civil society in the process of democratization and reconciliation which take place in these countries. "One of the main objectives of the program of NGOs is involvement of candidate countries in the activities of the networks and platforms of NGOs operating at EU level" (COM, 2010, p.14). The experience of the candidate countries and EU member states and the role of NGOs in the process of joining the EU Challenges which European Commission faced in regards to relations between the European Union and the new democracies established in the Central and Eastern Europe, were different for the Commission from all the other experiences she faced so far which were related to the enlargement of the European Union. Commission as a representative of 11 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo the Member States of the European Union has managed to capture a significant independent role in the eastern extension when it comes to formal policy proposals that have shaped the relationship between the candidate countries and potential candidates. The Commission as the institutional representative of the European Union, through capacity building and compliance functions within the process is the closest in the various activities of the candidate. The process of involving the civil society in the process of expansion has been slow, which included a contradiction. "In some of the aspects, the prominence of civil society in bringing down the communist regime in the late 1980s led to unexpected progress and impact of the civil society in the reconstruction and consolidation of democratic institutions and associations in post-communist Europe" (Bostic 2011, p.9). All this has led the European Union to administer first opportunity for civil society to participate in the political context of the enlargement process, in cooperation with the European Commission. "Under pressure from the EU, and encouraged by the need to gain popular support for reforms that require adjustment of the EU, most of the applicant countries have developed certain formal and informal mechanisms for participation in the NGO sector."x For example, "the Slovenian government, through its Office of European Integration at the start of negotiations for EU, sent a public invitation to NGOs to get involved in the preparation of the country for accession to the Union. Consultation with NGOs is conceived as a public conference to precede the development of the draft positions for specific thematic areas of the acquits in the various ministries. It was only after discussion with NGOs, the negotiating position is forwarded to the Government, the Parliament, and then Brussels" (Vidačevak,2001, p.244). Conducted research revealed very low turnout organizations, and obstacle to the establishment of a structured civil dialogue were discovered as well. In this research the main problem is the lack of a separate level of knowledge and awareness among NGOs, and the lacks of mutual trust between the government and NGOs. During 2001,the "Slovenian government adopted a regulation providing for a better structuring of its dialogue with the associations, most notably the establishment of the Commission for cooperation with civil society organizations, horizontal body of government composed of government officials from various ministries and activities that would gradually create a common government strategy for the development of civil society" (Vidačevak,2001, p.244). Specifically decision was made on the establishment of more formal forms of cooperation with NGOs. Another example is Poland, by whose establishment of the Office for European Integration launched a process of consultation with NGOs and other civil society organizations. The process of consultation took place in the partner groups, i.e. professional advisory bodies that participated in parallel with working groups set up to draft negotiating positions for each of the chapters of the acquis. The dialogue between the negotiating team and partner groups was significantly hampered mainly because of language in EU documents, "intelligible only to a small circle of employees in the administrative structures and the additional hurdle an inadequate knowledge of foreign languages, because it was feasible to translate hundreds of pages of documents for each EU meeting with the partner groups" (Vidačevak,2001, p.245). “These obstacles have led to a gradual weakening of links with partner groups, and are in an advanced stage of negotiations, dialogue with representatives of NGOs from consulting into a briefing on the progress of negotiations."(Hausner and Marody, 2001). Challenges faced by Slovenian and Polish governmental and non-governmental sector are largely paradigmatic for the other countries of Central and Eastern Europe. One of the preconditions for a constructive dialogue with the government is certainly organization and coordination. This problem was tried to be resolved in few candidate 12 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo countries by establishing the center, forums and networks that should facilitate the consultation process. To facilitate the process of counseling the candidate countries the NGO Centre of Slovenia (CNVOS), the National Forum of Hungarian NGOs called Civil Europe - Civil Hungary and the Polish Forum of Non-Governmental Initiatives (FIP) were founded. In Slovenia CNVOS 2002 was involved in policy and decision-making which resulted with creation of Resolution on normative activities in 2009 by the government, which guarantees a minimum standard of advice when it comes to the public and legal basis for the inclusion of NGOs as partners. "One of the great successes of the Polish NGO Forum initiative, which has served as an incentive to NGOs in other candidate countries is the establishment of the Polish NGO Office in Brussels," the organizational and technical support to organization European Citizens Action Service (ECAS) and the Charities Aid Foundation (CAF)."xi The primary objective of the Office is to establish contacts with the European institutions, the work of sectorial networks and platforms of NGOs at the EU level, participation in seminars, the possibilities of EU financial assistance and regular information on the work of the European institutions. "Notwithstanding any effort by the EU to invest in supporting the development of civil society in the candidate countries, in most of these countries are characterized by a high degree of confidence in the relationship of governmental and nongovernment sectors."(ESC, 1999) Main reason for this is the fact that the civil society in the countries of Central and Eastern Europe is considered as an opposition idea. Therefore, "the culture of consultation and dialogue as the basic democratic process is not continuously rooted in the tradition of these countries." (Rosenblum and Post, 2002). As cause of mistrust a technical nature of the negotiations and adjustments Union is considered. The neglection of dialogue with citizens and a large emphasis on the normative and technical aspects of the adoption of the acquis, including major "causes of the poor population support the candidate, accession to the EU."xii When it comes to the Western Balkan countries, which are currently undergoing various processes of democratization and reforms when it comes to EU membership. Many strategic reforms were undertaken in each of the Western Balkan countries and adoption of laws and policies to improve the state of the sector and the participation of NGOs in the process of participation in decisionmaking were established. Conclusion Civil society involvement in EU governance can improve democratic representation and also provide citizens with better means for affecting EU policy. Importance of involvement of civil society can also increase political inequality. Civil society participation in EU governance should not be seen as alternative, rather as a compliment, because by participation of civil society EU legitimacy crises can be reduced. It is more than obvious that national governances and regional authorities are not yet prepared to include civil society organizations into decision-making process and policy implementation. Opinions expressed are often not taken into account in European decisions, because groups have only access to the Commission and barely to the Council and the Parliament, which take the decisions. Still there are many restrictions to political participation in the institutional structure of the EU, but also there are more thing that are needed to be done, for example make political participation more representative, more democratically legitimized and more effective. 13 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo References Anheier, H. K. (2005). Riječnik civilnog društva, filantroije i neprofitnog sektora. Routledge. London. 54. Bostic, A. (2011). The role of the EUs Civil Society Development Assistance in the Process of Peacebuilding: The Case of EU Enlargement. Central European Journal of International & Security Studies. 5(1). 9. Bouza, G.L. (2009). Can Segmented Publics foster a general public sphere in the EU? An example from the Consultation process practices of the European Commission. Observatorio Journal. 9. 179. Commission of the European Communities. (1997).Communication: Promoting the Role of Voluntary Organizations and Foundations in Europe. Brussels. COM (97). 2-5. Commission of the European Communities. (2000). Discussion Paper: European Commission and Non-Governmental Organizations: Building a Stronger Partnership. Brussels. COM(2000). 2-5. Commission of the European Communities. (2001).White Paper on European Governance. COM (2001). 4. Commission of the European Communities. 2000.Discussion Paper: Commission and Non European Economic and Social Committee. (1999). The Civil Society Organized at European Level. Proceedings of the First Convention. Brussels. Edward, M. (2004). Civil Society. Cambridge:Polity. 3,18-54. Edwards, M. (2005). Civil Society in The Encyclopaedia of Informal Education. Retrieved March 30, 2012, from: www.infed.org/association.civil_society.htm European Commission. (2010). Enlargement Strategy and Main Challenges 2010-2011. Communication from the Commission to the European Parliament and Council. Brussels COMM(2010).13-14. Goetz, Hix. in: Pridham, G. (2002). Implementacija evropskih standarda dekokratije u procesu pridruživanaja EU: Usporedba Slovačka i Rumunija. Politička misao. Zagreb. 12. Habermas, J. (1992). Role of Civil Society and Public Policy. in: Between Facts and Norms. Frankfurt A.M.:Suhrkamp. 374. Hausner, J. and Marody, M. (2001). 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Understanding the Word Advocacy: Context and Use. in: Structuring the Inquiry into Advocacy. The Urban Institute. 1. Washington. 6. Rosenblum, N. L. and Post, R. C. (ed.). (2000). Civil Society and Government. Princeton University Press. Oxford. Schade, J. (2000). Civil Society: A complex debate. INEF, University of Duisburg. 10. Vidačevak, I. (2008). Nevladinsekorivlada: dijalogzaEvropu. Institut za međunarodne odnose. Zagreb. 238, 242-245. Vujadinović, D. (2007). Beograd. 22-23. Civilnodruštvoipolitičkakultura. PravnifakultetuBeogradu. Warleigh, A. (2006). Civil Society and Legitimate Governance in a Flexible Europe: Critical Deliberativisam as a Way Forward, in: S. Smismans (ed.) Civil Society and Legitimate European Governance. 200. Wesley, S. J. i Likanen, I. (2010). Civil Society and the Neighborrhood – Europeanization trough Cross-Border Cooropration?. Journal of Europan Integration. 32(5). 424. Žeravčić, G. (2011). Civilni društvo u procesu civilnog dijaloga. CIDI. Sarajevo. 3-6. i European Citizen Action Service (ECAS) was founded in 1991 as an international non-profit organization which is independent of political parties, commercial interests and the EU institutions. ECAS mission is to enable organizations and individuals to make their voice heard in the EU, providing advice on how to lobby and defend the rights of European citizens. ii This assertion has been relied by many authors OSNV research by Professor Lester Solomon to the cause of the 22 countries comparing GDP realized in the framework of civil society in the 22 states with the social production of certain states. In this study produced the data that the nonprofit sector in the 22 countries employing more people than jobs than some industries. Also this research has shown that depending on the democratic tradition there is a significant difference in the structure of the CD in some countries. The results 15 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo of this researching show very high importance that nonprofit sector has not only on the level of development of democratic and pluralistic values of a society, but also the degree of social cohesion, employment and economic development. iii Opinion on 'The role and contribution of civil society organizations in the building of Europe' CES 851/1999 Detailed information available at: http://www.eesc.europa.eu/resources/docs/ces8511999_ac_en.pdf iv Commission of the European Communities, 1997.Communication: Promoting the role of voluntary organizations and foundations in Europe. Brussels, COM (97) 241 final; 6.6.1997. v Commission of the European Communities, 2000.Discussion Paper: European Commission and Non Governmental Organizations: Building a Stronger Partnership. Brussels, COM (2000) 11 final, 18.1.2000. vi White Paper defines the principles and guidelines for the strengthening of relations with the European institutions, non-governmental organizations, as well as the active involvement of NGOs in the process of formulating and implementing policy. Following the White Paper was followed by several attempts to define a framework for dialogue, though they have not set up a structural framework, coherent and all encompassing dialogue, and therefore do not define the framework for counseling than just key principles to guide the process. vii More information on: http://europe.eu.int/yourvoice viii This database Contains information about the system and working methods of the Advisory Forum and other bodies through which the Commission shall consult with NGOs and civil society organizations in a formal and structured manner, as well as a directory of such organizations at the EU level. ix It should be noted that the Economic and Social Committee proposed a set of criteria that European NGOs if they want to become active participants in policy dialogue at EU level. These are permanently at the EU level; enabling direct access to the expertise of its members as a precondition for constructive consultation; representation of general interest that are consistent with the interests of European society, active member organizations in most EU Member States; responsibility to the membership; authority to represent and act on European level; independence and detachment instructions from external bodies; transparency of financing and decision-making structure (ECS, CES 357/2002). x Detailed information on page of the Slovenian Government, available at: www.gov.si/svez/uk/mainmenu xi Detailed information available at: www.eu.ngo.pl and www.ecas.org xii Latest Euro barometer survey on the attitudes of public opinion in the candidate countries for EU membership shows that in half of these countries support for the EU is lower than 50% (from 33% in Latvia to 46% in the Czech Republic). For more complete information see: European Commission - Euro barometer, 2002 16 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 1644 Title A name given to the resource The Concept and Development of the Civil Dialogue at EU Level Author Author HASANOVIĆ, Indira Abstract A summary of the resource. This paper analyzes the concept of civil dialogue as well as its development in the EU level. Civil dialogue is an expression of participatory democracy; therefore the participation of citizens in decision-making and policy is essential to democracy. However, democracy becomes quite complicated when discussing the issue at the European level because of the structure of the European Union which is based on an ad-hoc approach. The other reason for the increasing validity of the dialogue with citizens in the Union should search for partial and troubling results of public opinion surveys that show a low level of understanding of mechanisms of action of the European institutions among citizens of the member states of EU. As result, French and Dutch referenda on the Constitutional Treaty have shown that there is a serious disconnection between citizens and policy makers at the European level. Therefore, the role and contribution of CSOs (especially NGOs) in the process of EU policy is extremely increased, in the last decades. Civil dialogue between civil society and public institutions at all levels is seen as a powerful tool that could help improve communication and citizen participation in decisions and policies made. Still difference in the level of development of the dialogue between the various EU institutions and NGOs is directly related to the degree of their work. From all EU institutions, European Commission has made the most progress in formalizing and institutionalizing consultations and dialogue with NGOs. Importance of growing engagement NGOs within the EU is indeed evaluated, both in terms of the policy process, and as a contribution to solving the democratic deficit through more participating forms of participation. The aim of this paper is to review the current practice of the civil dialogue at EU level through the analysis of several cases, and through them deficiencies and problems of previous practices of dialogue between the EU and NGOs will be shown. Keywords: European Union, Civil Dialogue, Democratic Deficit, Participatory Democracy, Ngos, European Commission. Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2013-05-10 Keywords Keywords. Article PeerReviewed Identifier An unambiguous reference to the resource within a given context ISSN 978-9958-834-23-3 https://omeka.ibu.edu.ba/files/original/9a7a0ea1567e3b3a601d33eacf747b6a.pdf bb51dc5f770469a073887f9ab91ffc4a PDF Text Text International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo Speed of Financial Integration before and after European Union Membership Aida Halilovid International Burch University, Sarajevo, Bosnia and Herzegovina halilovicaida88@hotmail.com Uğur Ergün International Burch University, Sarajevo, Bosnia and Herzegovina uergun@ibu.edu.ba This paper investigates a dimension of financial integration of developing equity markets of European Union members which are Romania, Bulgaria and Croatia with global dominant equity markets. The analysis is performed at the country level using daily (five days) national stock market indices. Publicly available data (Yahoo Finance) for US’s S&P500, England’s FTSE and German DAX; data of Bulgarian SOFIX and Romanian BET indices received from their Stock market exchange and data for Croatian CROBEX are used. Closing prices were denominated in local currencies and considered in three different periods: period before EU membership, period after EU membership, and whole period starting from September 1997 to December 2012. Comparison the daily stock market indices of Croatia, Bulgaria and Romania with these mentioned developed and mature markets is a need to investigate the short-and long-run dynamics of equity markets that either have been or are prospective members of the EU and because U.S.’s, German and England’s market play an influential role in international stock market, all international investment flows are dominated by these developed markets. Unit root test, Augmented DickeyFuller test statistic, Granger causality, Granger cointegration test and recursive cointegration method are employed. Empirical results show that all indices are integrated in whole period. The relationship is significant in the period after EU membership, but not significant in the period before EU membership. For Croatia, US’s S&P500 index has the strongest impact on CROBEX in whole period. The result implies that EU membership has strong positive impact on the integration of developing EU countries. Keywords: Financial Integration, European Union, Equity Market, Unit Root Test, Granger Causality, Cointegration, Recursive Cointegration 28 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 1477 Title A name given to the resource Speed of Financial Integration before and after European Union Membership Author Author HALILOVIC, Aida ERGÜN, Uğur Abstract A summary of the resource. This paper investigates a dimension of financial integration of developing equity markets of European Union members which are Romania, Bulgaria and Croatia with global dominant equity markets. The analysis is performed at the country level using daily (five days) national stock market indices. Publicly available data (Yahoo Finance) for US’s S&P500, England’s FTSE and German DAX; data of Bulgarian SOFIX and Romanian BET indices received from their Stock market exchange and data for Croatian CROBEX are used. Closing prices were denominated in local currencies and considered in three different periods: period before EU membership, period after EU membership, and whole period starting from September 1997 to December 2012. Comparison the daily stock market indices of Croatia, Bulgaria and Romania with these mentioned developed and mature markets is a need to investigate the short-and long-run dynamics of equity markets that either have been or are prospective members of the EU and because U.S.’s, German and England’s market play an influential role in international stock market, all international investment flows are dominated by these developed markets. Unit root test, Augmented Dickey- Fuller test statistic, Granger causality, Granger cointegration test and recursive cointegration method are employed. Empirical results show that all indices are integrated in whole period. The relationship is significant in the period after EU membership, but not significant in the period before EU membership. For Croatia, US’s S&P500 index has the strongest impact on CROBEX in whole period. The result implies that EU membership has strong positive impact on the integration of developing EU countries. Keywords: Financial Integration, European Union, Equity Market, Unit Root Test, Granger Causality, Cointegration, Recursive Cointegration Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2013-05-10 Keywords Keywords. Article PeerReviewed Identifier An unambiguous reference to the resource within a given context ISSN 2303-4564 https://omeka.ibu.edu.ba/files/original/aea5d4a3fa11ac3777e202ce1e5eb644.pdf 685774f582a7b4241b73f03494bc62c9 PDF Text Text International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo EU Crisis: Economic Collapse Aida Habul University of Sarajevo, Sarajevo, Bosnia and Herzegovina aida.habul@efsa.unsa.ba Amila Pilav-Velid University of Sarajevo, Sarajevo, Bosnia and Herzegovina amila.pilav-velic@efsa.unas.ba Nermin Kuldija University of Sarajevo, Sarajevo, Bosnia and Herzegovina nermin.kuldija@bhtelecom.ba Adnan Šutrovid University of Sarajevo, Sarajevo, Bosnia and Herzegovina adnan.sutrovic@hotmail.com Merdzana Obralic International Burch University, Sarajevo, Bosnia and Herzegovina mobralic@ibu.edu.ba We consider economic crisis as one of the main problems which effect whole population on some particular part of geographic area. There are many factors that significantly took place in triggering the crisis, however, the main reason was the combination of unequal distribution of wealth and income and stock market intensified speculation which rampant during the monitored period. In this research, we discuss the emergence of the crisis, causes and its influence in the period from 2007 until today. Further, our main objective will not be only European Union, it will be the countries most affected by the crisis: Greece, Ireland, Portugal, Spain and Italy. These counties are frequently referred as PIGS. We will use statistical data, graphs etc. to show what the world’s economy went through. This information is taken from recognized sources for tracking economic variables. With analyzes of this information, it is going to be easier to understand what is happening in the EU economy, countries most affected by the crisis and in the most developed countries resilient to the crisis. When it comes to Bosnia and Herzegovina, we have identified the following causes of the financial crisis: political instability, lack of legal state, poor economic performance, high levels of poverty, etc. Both, inflation rate and GDP at current prices in Bosnia and Herzegovina for the 23 �International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo period 2006 - 2016 was the subject of our analysis. Furthermore, we discuss the European crisis and overcoming present financial crisis in the EU, with special emphasis put on Germany's role in finding future economic stability and prosperity. The role of The European Financial Stability Facility (EFSF) is thoroughly discussed and analyzed and the role of the organization that would continue EFSF activities after 2013, the European Stability Mechanism. At the end, we came to conclusion that this is a particular example how the banking crisis evolved into finance crisis, which is followed by currency crisis and at the end it takes characteristics of debt crisis. Keywords: EU Crisis, Economic Collapse, EFSF, Bosnia and Herzegovina 24 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 1473 Title A name given to the resource EU Crisis: Economic Collapse Author Author HABUL, Aida PILAV-VELIC, Amila KULDIJA, Nermin OBRALIĆ, Merdžana Abstract A summary of the resource. We consider economic crisis as one of the main problems which effect whole population on some particular part of geographic area. There are many factors that significantly took place in triggering the crisis, however, the main reason was the combination of unequal distribution of wealth and income and stock market intensified speculation which rampant during the monitored period. In this research, we discuss the emergence of the crisis, causes and its influence in the period from 2007 until today. Further, our main objective will not be only European Union, it will be the countries most affected by the crisis: Greece, Ireland, Portugal, Spain and Italy. These counties are frequently referred as PIGS. We will use statistical data, graphs etc. to show what the world’s economy went through. This information is taken from recognized sources for tracking economic variables. With analyzes of this information, it is going to be easier to understand what is happening in the EU economy, countries most affected by the crisis and in the most developed countries resilient to the crisis. When it comes to Bosnia and Herzegovina, we have identified the following causes of the financial crisis: political instability, lack of legal state, poor economic performance, high levels of poverty, etc. Both, inflation rate and GDP at current prices in Bosnia and Herzegovina for the period 2006 - 2016 was the subject of our analysis. Furthermore, we discuss the European crisis and overcoming present financial crisis in the EU, with special emphasis put on Germany's role in finding future economic stability and prosperity. The role of The European Financial Stability Facility (EFSF) is thoroughly discussed and analyzed and the role of the organization that would continue EFSF activities after 2013, the European Stability Mechanism. At the end, we came to conclusion that this is a particular example how the banking crisis evolved into finance crisis, which is followed by currency crisis and at the end it takes characteristics of debt crisis. Keywords: EU Crisis, Economic Collapse, EFSF, Bosnia and Herzegovina Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2013-05-10 Keywords Keywords. Article PeerReviewed Identifier An unambiguous reference to the resource within a given context ISSN 2303-4564 https://omeka.ibu.edu.ba/files/original/589978fe6b062e45cd55fa04192c4821.pdf 32790a5413c150a67602ec31024b094e PDF Text Text International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo Company’s Web Presentation Supported by Web Content Management System Aida Habul University of Sarajevo, Sarajevo, Bosnia and Herzegovina aida.habul@efsa.unsa.ba Amila Pilav-Velid University of Sarajevo, Sarajevo, Bosnia and Herzegovina amila.pilav-velic@efsa.unas.ba Nermin Kuldija University of Sarajevo, Sarajevo, Bosnia and Herzegovina nermin.kuldija@bhtelecom.ba Merdzana Obralic International Burch University, Sarajevo, Bosnia and Herzegovina mobralic@ibu.edu.ba Today, companies should be very careful when choosing their online strategies. It is not enough to only have website at-any-cost. Precisely, it is necessary to distinguish structure (web design) and content (presentations), which are placed on the corporate website. To create a web design, companies can opt for ready-made solutions (outsourcing) or to produce their own (in-house). But, surely, companies should not outsource web content creation, its maintenance and management, considering that reflects their business strategy as well as image. Implementation of a reliable Content Management System will allow that every employee of the company can easily and quickly change or update the content on the website, leaving IT experts to deal with the structure of the site, not content. For the research purposes, we have analyzed the case of a domestic company that operates in the ICT sector in Bosnia and Herzegovina, which web presentation was organized using Website Content Management System. The specially designed questionnaire was used as research instrument, and it was placed on the company's Web site. Therefore, visitors were able to share their opinion about satisfaction with: (1) web design, (2) content found on the site, (3) optimization of the website and (4) content for all devices from which it can be accessed. We found that 33.1% of visitors are not satisfied with web design, while other 25 �International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo visitors/participants in the survey considered it is good or average. Furthermore, 68.2% of users are satisfied in one way or another how company manages its site content. In addition, though the majority of users (44.5%) are accessing a website via desktop PCs, 81.6% of them considered that the website is well optimized/adjusted for all devices from which they access to the site. However, the paper findings find that Content Management System implementation in terms of separated web design and content can provide quality and effective company’s web presentation that will attract new but also retain existing customers (visitors). Keywords: Web Presentation, Web Content Management System, Bosnia and Herzegovina 26 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 1470 Title A name given to the resource Company’s Web Presentation Supported by Web Content Management System Author Author HABUL, Aida PILAV-VELIC, Amila KULDIJA, Nermin OBRALIĆ, Merdžana Abstract A summary of the resource. Today, companies should be very careful when choosing their online strategies. It is not enough to only have website at-any-cost. Precisely, it is necessary to distinguish structure (web design) and content (presentations), which are placed on the corporate website. To create a web design, companies can opt for ready-made solutions (outsourcing) or to produce their own (in-house). But, surely, companies should not outsource web content creation, its maintenance and management, considering that reflects their business strategy as well as image. Implementation of a reliable Content Management System will allow that every employee of the company can easily and quickly change or update the content on the website, leaving IT experts to deal with the structure of the site, not content. For the research purposes, we have analyzed the case of a domestic company that operates in the ICT sector in Bosnia and Herzegovina, which web presentation was organized using Website Content Management System. The specially designed questionnaire was used as research instrument, and it was placed on the company's Web site. Therefore, visitors were able to share their opinion about satisfaction with: (1) web design, (2) content found on the site, (3) optimization of the website and (4) content for all devices from which it can be accessed. We found that 33.1% of visitors are not satisfied with web design, while other visitors/participants in the survey considered it is good or average. Furthermore, 68.2% of users are satisfied in one way or another how company manages its site content. In addition, though the majority of users (44.5%) are accessing a website via desktop PCs, 81.6% of them considered that the website is well optimized/adjusted for all devices from which they access to the site. However, the paper findings find that Content Management System implementation in terms of separated web design and content can provide quality and effective company’s web presentation that will attract new but also retain existing customers (visitors). Keywords: Web Presentation, Web Content Management System, Bosnia and Herzegovina Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2013-05-10 Keywords Keywords. Article PeerReviewed Identifier An unambiguous reference to the resource within a given context ISSN 2303-4564 https://omeka.ibu.edu.ba/files/original/ee301d8c2c6796926e1afc0aaf94f361.pdf 29eeee4b59d7c15aadb8a7e2735d2b9b PDF Text Text International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo Do e-metrics really matter? Aida Habul University of Sarajevo, Sarajevo, Bosnia and Herzegovina aida.habul@efsa.unsa.ba Merdzana Obralic International Burch University, Sarajevo, Bosnia and Herzegovina mobralic@ibu.edu.ba Amila Pilav-Velid University of Sarajevo, Sarajevo, Bosnia and Herzegovina amila.pilav-velic@efsa.unas.ba Nermin Kuldija University of Sarajevo, Sarajevo, Bosnia and Herzegovina nermin.kuldija@bhtelecom.ba In contrast to other the most significant advantage of web site as communication channel in terms of customer relationships is possibility to count and track visitors’ path and thus provides valuable information regarding their profiling. This possibility is indicated as e-Metrics. Hence, the Web site is a great tool for a quick and inexpensive obtaining data about users-visitors. In the process of measuring visits of Web sites there are two approaches: the server-based measurement and user-based measurement. In this paper, we explain the use of both approaches, server-based measurement in the case of Google Analytics and gemiusAudience, and Alexa tool in the context of userbased measurement. This research is focused on the user-based measurement, which is observed through the website of the company that operates in the ICT sector on the domestic-Bosnian market. We studied some of the key parameters such as "reach", "page views". Furthermore, the identification of „visitor profile" was made using demographic and other data collected by the Alexa tool. In line with this, research is extended to a web page in the form of online questionnaire aimed to define user groups. Therefore, the survey results are presented and discussed, and then compared with the data collected by Alexa tools, which is used as a corrective tool for the results obtained through the survey. This study highlighted possible weaknesses in user-based measurements of the website audience. More specifically, the user-based measurement approach could not give a real picture of the actual website visitors. At the end, recommendations and guidelines for the future researches are given. Keywords: E-Metrics, Web Site, Bosnian Market. 27 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 1471 Title A name given to the resource Do e-metrics really matter? Author Author HABUL, Aida OBRALIĆ, Merdžana PILAV-VELIC, Amila KULDIJA, Nermin Abstract A summary of the resource. In contrast to other the most significant advantage of web site as communication channel in terms of customer relationships is possibility to count and track visitors’ path and thus provides valuable information regarding their profiling. This possibility is indicated as e-Metrics. Hence, the Web site is a great tool for a quick and inexpensive obtaining data about users-visitors. In the process of measuring visits of Web sites there are two approaches: the server-based measurement and user-based measurement. In this paper, we explain the use of both approaches, server-based measurement in the case of Google Analytics and gemiusAudience, and Alexa tool in the context of userbased measurement. This research is focused on the user-based measurement, which is observed through the website of the company that operates in the ICT sector on the domestic-Bosnian market. We studied some of the key parameters such as "reach", "page views". Furthermore, the identification of „visitor profile" was made using demographic and other data collected by the Alexa tool. In line with this, research is extended to a web page in the form of online questionnaire aimed to define user groups. Therefore, the survey results are presented and discussed, and then compared with the data collected by Alexa tools, which is used as a corrective tool for the results obtained through the survey. This study highlighted possible weaknesses in user-based measurements of the website audience. More specifically, the user-based measurement approach could not give a real picture of the actual website visitors. At the end, recommendations and guidelines for the future researches are given. Keywords: E-Metrics, Web Site, Bosnian Market. Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2013-05-10 Keywords Keywords. Article PeerReviewed Identifier An unambiguous reference to the resource within a given context ISSN 2303-4564