Revistă
cotată
CNCSIS,
categoria
B+
THE ANNALS OF THE
" TEFAN CEL MARE"
UNIVERSITY OF SUCEAVA.
FASCICLE OF THE FACULTY OF
ECONOMICS AND
PUBLIC ADMINISTRATION
VOLUME 10, NO. 1(11), 2010
EDITORIAL BOARD:
Carmen NĂSTASE
: Adrian Liviu SCUTARIU
Elena HLACIUC, Carmen CHA!OVSCHI, Mariana LUPAN, Ovidiu Florin HURJUI
SCIENTIFIC COMMITTEE:
Angela ALBU, „!tefan cel Mare” University of Suceava, Romania Paolo ANDREI, University of Parma, Italy
Stefano AZZALI, University of Parma, Italiy
George P. BABU, University of Southern Mississippi, USA
Christian BAUMGARTNER, International Friends of Nature, Austria Grigore BELOSTECINIC, ASEM, Chi =inău, Republic of Moldova Ionel BOSTAN, „Alexandru Ioan Cuza” University of Ia=i, Romania Aurel BURCIU, „!tefan cel Mare” University of Suceava, Romania
Gheorghe CÂRSTEA, Academy of Economic Studies, Bucharest , Romania Slobodan CEROVIC, Singidunum University, Belgrade, Serbia
Simion CERTAN, State University of Chi=inău, Republic of Moldova
Carmen CHA!OVSCHI, „!tefan cel Mare” University of Suceava, Romania Liliana ELMAZI, Tirana University, Albania
Cristian Valentin HAPENCIUC, „!tefan cel Mare” University of Suceava, Romania Elena HLACIUC, „!tefan cel Mare” University of Suceava, Romania
Elena IFTIME, „!tefan cel Mare” University of Suceava, Romania Marian JALENCU, State University of Chi=inău, Republic of Moldova Miika KAJANUS, Savonia University of Applied Sciences, Iisalmi, Finland Stefanos KARAGIANNIS, Institute of Tourism Research, Athens, Greece Maria MURE!AN, Academy of Economic Studies, Bucuresti, Romania Carmen NĂSTASE, „!tefan cel Mare” University of Suceava, Romania Alexandru NEDELEA, „!tefan cel Mare” University of Suceava, Romania Ion PÂRłACHI, ASEM, Chi=inău, Republic of Moldova
Rusalim PETRI!, „!tefan cel Mare” University of Suceava, Romania Abraham PIZAM, University of Central Florida, Orlando, Florida Ion POHOAłĂ, „Alexandru Ioan Cuza” University of Ia=i, Romania
Gabriela PRELIPCEAN, „!tefan cel Mare” University of Suceava, Romania Gheorghe SANDU, „!tefan cel Mare” University of Suceava, Romania Petru SANDU, Elizabethtown College, Pennsylvania, USA
Pavlo SHYLEPNYTSYI, Bucovina State Academy of Finance, Chernivtsi, Ukraine Doru TILIUłE, „!tefan cel Mare” University of Suceava, Romania
Ion TORONCIUC, National University Yuri Fedcovici, Chernivtsi, Ukraine Viorel łURCANU, ASEM, Chi=inău, Republic of Moldova
Diego VARELA PEDREIRA, University of A Coruna, Spain
Răzvan VIORESCU, „!tefan cel Mare” University of Suceava, Romania
Valeriy YEVDOKYMENKO, National University Yuri Fedcovici, Chernivtsi, Ukraine
Text review: Alina HODOROABĂ, Adrian Liviu SCUTARIU. Cover design: Adrian Liviu SCUTARIU
Contact:
Faculty of Economics and Public Administration „ tefan cel Mare” University of Suceava
Str. UniversităŃii nr. 13, Corp H, Camera H108
720229 SUCEAVA, ROMANIA Phone: (+40) 230 216147 int. 294 E-mail: cercetare@seap.usv.ro
Journal web site: www.seap.usv.ro/annals Faculty web site: www.seap.usv.ro
CONTENT
SECTION 1
ECONOMY, TRADE, SERVICES ...7
SPECIFIC PUBLIC RELATIONS TOOLS USED IN ONLINECOMMUNICATIONINS BY TOURISM
COMPANIES... 9
Associate Professor Ph.D.Nicoleta-Rossela DUMITRU Romanian American University, Bucharest, Romania Associate Professor Ph.D.Costel-IliuŃă NEGRICEA
Romanian American University, Bucharest, Romania Assistant Professor Ph.D.Manuela-Rodica GOGONEA Academy of Economic Studies, Bucharest, Romania
THE FINANCIAL CRISIS IMPACT ON THE DEGREE OF ECONOMIC INTEGRATION IN THE EU
COUNTRIES... 19
Professor Ph.D. Nicolae DARDAC
Academy of Economic Studies, Faculty of Finance, Insurance, Banks and Stock Exchange, Bucharest, Romania Assistant Ph.D. Student Iustina Alina BOITAN
Academy of Economic Studies, Faculty of Finance, Insurance, Banks and Stock Exchange, Centre of Financial-Monetary Research CEFIMO, Bucharest, Romania
THE THEORETICAL ASPECTS OF INTEGRATION PROCESSES ON THE REGIONAL LEVEL... 27
Ihor YASKAL Chernivtsi Yuriy Fed’kovich National University, Ukraine
Associate Professor Ph.D. Alexandru NEDELEA Stefan cel Mare University of Suceava, Romania
DOES THE ALBANIAN PENSION SYSTEM WORK?... 35
Ph.D. Edlira LUCI Ph.D. Dorina KRIPA University of Tirana, Albania
PESTICIDES POLLUTION OF FOOD - RISKS AND IMPLICATIONS FOR CONSUMER PROTECTION.... 46
Lecturer Ph.D. Corina ENE
Petroleum-Gas University of Ploie ti, Romania
THE CONSUMER ROLE IN HIGHER EDUCATION... 56
Ph.D. Student Maria-Lavinia POPESCU
Faculty of Economics Science and Business Administration, „Babe -Bolyai” University, Cluj-Napoca, Romania SECTION 2
MANAGEMENT AND BUSINESS ADMINISTRATION...66
FDI DEVELOPMENTS IN THE ROMANIAN ECONOMY... 67
Professor Ph.D. Maria MURE AN
Academy of Economic Studies, Bucharest, Romania Lecturer Ph.D. Oana CHINDRI -VĂSIOIU
Ecological University of Bucharest, Romania
VALUES: LINKING HOSFTEDE’S CULTURAL DIMENSIONS TOADRIAN-PAUL ILIESCU’S “RIGHT” &
“LEFT” INTERPRETATIONS FROM POPPER’S “OPEN SOCIETY”PERSPECTIVE... 74
Professor Ph.D.Carmen-Aida HUłU
„Gheorghe Asachi” Technical University of Ia i, Faculty of Textiles-Leather and Industrial Management Associated AssitantDorina łICU
“Alexandru Ioan Cuza” University of Ia i, Faculty of Philosophy and Social-Politic Sciences
CONTEMPORARY MANAGEMENT ASPECTS OF THE COMPANIES WITH INTERNATIONAL ACTIVITY. 82
Lecturer Ph.D. Sebastian ENE Lecturer Ph.D. Mihaela IONECI
Constantin Brâncoveanu University, Pite ti, Romania
EMPIRICAL REFLECTIONS REGARDING THE BENEFITS OF THE HUMAN CAPITAL... 88
Assistant Ph. D. Candidate Simona BUTA Lecturer Ph. D. Rozalia KICSI
DETERMINANTS OF CUSTOMER RELATIONSHIP MANAGEMENT (CRM): A CONCEPTUAL ANALYSIS. 95 Assistant Professor Mohammed ALAMGIR
Department of Marketing Studies & International Marketing, University of Chittagong, Bangladesh Lecturer Tasnuba NASIR
Faculty of Business Administration, University of Science and Technology Chittagong (USTC), Chittagong, Bangladesh Mohammad SHAMSUDDOHA
Department of Marketing Studies and International Marketing, University of Chittagong, Bangladesh
HOW TRACTORS TRADERS SEE THE ROMANIAN QUALITY MANAGEMENT SYSTEM...102
Assistant. Ph.D. Ramona Ioana TIPA
tefan cel Mare University of Suceava, Romania SECTION 3
ACCOUNTING FINANCES...109 REFLECTING THE COMPLIANCE AND PERFORMANCE DEGREE IN THE SPECIAL REPORTS OF THE
EUROPEAN COURT OF ACCOUNTS...110
Professor Ph.D. Ionel BOSTAN Professor Ph.D. Elena HLACIUC Lecturer Ph.D. Student Eugenia IANCU Lecturer Ph.D. Student Gabriela NEMłOI
tefan cel Mare University of Suceava, Romania
TAX TREATMENT OF NON-TRANSFERS...117
Professor Ph.D. Lucia PALIU-POPA
“Constantin Brâncu i” University, Târgu Jiu, Romania
AGGREGATE DIMENSIONS USED IN CARRYING OUT THE FINANCIAL BALANCE OF THE
ECONOMIC ENTITY IN FINANCIAL VISION...125
Associate Professor Ph.D. Diana-Mihaela POCIOVALI TEANU University Constantin Brâncu i of Tg-Jiu, Romania
Lecturer Ph.D. Camelia Cătălina MIHALCIUC
University tefan cel Mare of Suceava, Romania Lecturer Ph.D. Student Ani oara Niculina APETRI University tefan cel Mare of Suceava, Romania
DEPLOYMENT APPROACHES OF THE INTANGIBLE ASSETS UNDER THE FORM OF INTELLECTUAL
CAPITAL WITHIN THE ACCOUNTANCY PROCEDURES OF A COMMERCIAL COMPANY...135
Professor PhD. Iuliana GEORGESCU
University "Alexandru Ioan Cuza" , Ia i, Romania Assistant Ph.D. Student Irina CHIRITA
University „Stefan cel Mare”, Suceava, Romania
VALUE ADDED REPORTING:A CASE STUDY OF ABANS LISTED MANUFACTURING COMPANY
LIMITED IN SRI LANKA...142
Arumugam SUBRAMANIYAM Balasundaram NIMALATHASAN
University of Jaffna, Jaffna, Thriunelvely, Jaffna, Sri Lanka
ANALYSIS OF CONTEMPORARY ROMANIAN PUBLIC DEBT...148
Flavia BARNA Ovidiu MURA
West University of Timi oara
FAIR VALUE- THE UMBRELLA OF THE VALUATION BASES USED IN ACCOUNTING...155
Lecturer Ph.D. Diana COZMA IGHIAN University of North, Baia Mare, Romania Lecturer Ph.D. Cristina Silvia NISTOR
Babes-Bolyai University, Cluj Napoca, Romania
THE INTERNAL CONTROL SYSTEM OF THE CREDIT INSTITUTIONS...163
Lecturer Ph.D. Student Mariana VLAD
Associate Professor Ph.D. Mihaela TULVINSCHI „ tefan cel Mare” University of Suceava, Romania
THE INFLUENCE OF THE FISCAL POLICY AND THE AUTOMATIC STABILIZERS ON THE ECONOMY..170
Lecturer Ph.D. Irina- tefana CIBOTARIU Stefan cel Mare University of Suceava, Romania Ph.D. Mirela MATEI
SECTION 4
STATISTICS, DATA PROCESSING (INFORMATICS) AND MATHEMATICS ...176
STATIONARY AND NON-STATIONARY TIME SERIES...177
Associate Professor Ph.D. Elisabeta R. RO CA University „ tefan cel Mare” of Suceava, Romania
DEVELOPING WEB APPLICATIONS USING THE MDA PARADIGM...187
Lecturer Ph.D. Mihai-Constantin AVORNICULUI “Babe –Bolyai”University Cluj-Napoca, Romania
CONSIDERATIONS ON INTERPRETATION OF SAME CASESIN CONNECTION WITHARTICLE 10 OF
PATENT LAW NO. 64/1991...194
Eng. Ph.D. Sudent Tiberiu-Octavian CUJBĂ
“ tefan cel Mare” University of Suceava, Romania SECTION 5
LAW AND PUBLIC ADMINISTRATION...200 THE LOCAL BUDGET, SUPPORT FOR SUSTAINABLE DEVELOPMENT – CASE STUDY: THE LOCAL
BUDGET OF THE MUNICIPALITY OF PLOIESTI...201
Senior lecturer dr. Cornel Constantin LAZĂR
Lecturer dr. Mirela LAZĂR
Faculty of Economic Sciences, Petroleum-Gas University of Ploie ti, Romania
COMPARATIVE STUDY ON FINANCIAL AND ADMINISTRATIVE DECENTRALIZATION IN EUROPEAN
COUNTRIES...210
Lecturer Ph.D. Ana-Maria BERCU
Assistant Ph.D. Student Mihai-Bogdan PETRISOR Alexandru Ioan Cuza University of Iasi, Romania
LOCAL PUBLIC ADMINISTRATION PRINCIPLES IN ROMANIA-A CRITICAL POINT OF VIEW...220
PhD. Leonina-Emilia SUCIU Professor PhD. Ioan LAZAR
Babes-Bolyai University of Cluj-Napoca, Romania
UNITY AND DIVERSITY IN THE ROMANIAN LAW CONCERNING THE ADMINISTRATIVE AND
TERRITORIAL ORGANIZATION IN THE INTERWAR PERIOD...229
Lecturer Ph.D. Candidate Marilena-Oana NEDELEA „ tefan cel Mare” University of Suceava, Romania
COMMON FOREIGN AND SECURITY POLICY AS ENVISAGED IN THE LISBON TREATY...237
Asistant Eugenia Gabriela LEUCIUC Professor Ph.D. Elena IFTIME
“Stefan cel Mare” University of Suceava, Romania
CHANGES IN THE STRUCTURE OF ROMANIAN LOCAL BUDGETS...243
Lecturer Ph.D. Student Cristinel ICHIM
“ tefan cel Mare” University of Suceava, Romania
EVALUATION MODEL OF THE REAL CONVERGENCEOF THE CENTRAL AND EAST EUROPEAN
STATESIN RELATION TO EMU...249
Lecturer Ph.D. Vasile-Liviu ICHIM
“Stefan Lupascu” Institute of European Studies - Iasi, Romania
DECENTRALISATION AND SUBSIDIARITY IN THE MANAGEMENT OF LOCAL PUBLIC
ADMINISTRATION ...255
Lecturer Ph.D. Student Irina BILOUSEAC Assistant Petronela ZAHARIA
,, tefan cel Mare” University of Suceava, Romania
THE ROLE OF FINANCIAL RESOURCES FROM THE STRUCTURAL AND COHESION FUNDS IN THE
STRENGTHENING OF THE ADMINISTRATIVE-TERRITORIAL UNITS AUTONOMY...262
Assistant Ph. D. Student Elena RUSU (CHELARU) “Al. I. Cuza” University of Ia i, Romania
CONSIDERATIONS CONCERNING THE COMPLEX CHARACTERISTICS OF VOLUNTARY
MANSLAUGHTER - ART. 178 (3) ROMANIAN CRIMINAL CODE...272
Research Assistant Ana PIRLAC
THE ASSESSMENT OF THE SOCIAL DANGER OF THE CONCRETE ACT. THE RENUNCIATION TO
APPLY A PUNITIVE SANCTION...279
Doctor of LawDaniela Iuliana LĂMĂ ANU
Associate lecturer at the "Stefan cel Mare" University of Suceava, Romania
Prosecutor - Legal Department, Prosecutor of the Court of Appeal Suceava, Romania
SECTION 1
SPECIFIC PUBLIC RELATIONS TOOLS USED IN ONLINE COMMUNICATIONINS BY TOURISM COMPANIES
Associate Professor Ph.D.Nicoleta-Rossela DUMITRU Romanian American University, Bucharest, Romania
nicoletad01@yahoo.com
Associate Professor Ph.D.Costel-IliuŃă NEGRICEA
Romanian American University, Bucharest, Romania
negricea@yahoo.com
Assistant Professor Ph.D.Manuela-Rodica GOGONEA Academy of Economic Studies, Bucharest, Romania
manuela.gogonea@gmail.com
Abstract:
The creation and development of the Internet have determined global changes in all social fields, including communications and public relations. Thus, the traditional Public Relations tools and strategies have been adapted in view of new benefits regarding maintenance of contact with the tourism companies’ public.
This workpaper is intended to determine the extent of PR tools and methods utilisation, based on a research developed within several Romanian hotel units.
In this context, the application of the structural method has generated results that create encouraging online communications perspectives, taking into account the use of specific public relations tools.
Keywords: tourism, online public relations, Internet, website, e-mail.
JEL Classification: M30, M31, M37, M39
1. INTRODUCTION
As an integral part of everyday life, communication has become a major factor for society and individual; thus, the success depends to a great extent on the ability to communicate. For a
modern organisation, communication represents an essential component of marketing activities, due to the ever more dynamic environment where it functions (increased exigency of customers, competitors’ strong moves, etc.). This fact determines the organisations in any field, including tourism, to pay higher attention to marketing communication, as a set of signals sent by the company to its (internal or external) public, to the purpose of influencing its attitude and behaviour.
Thus, (Tran V., 2002, pg. 7) communication is defined as a "process by which an emittent transmits information to a receiver by means of a channel, aiming at producing specific effects on the receiver”. In other words, each communication process has a specific structure, based on a
specific relation developed by the trinomial emittent-message-receiver. A transfer takes place between the emittent and the receiver; the message transmission is performed based on a specific code.
While the message is chareacterised by coherence, fluency, clarity, and is determined by
space, time and emittent’s state of mind, the code is fixed, invariable, abstract, reduced to a small
number of signs.
Within the complex environment where the companies function, one can speak about a communication marketing, which is exclusively informational, apparently, taking into consideration the importance and value of information nowadays. Actually, this market is a combination of two components: information and interest. In this interest context and from the marketing point of view, communication has to lead to action taking and decision making, regarding the procurement or non-procurement of a (tourism) product.
The research referred to in the work used the enquiry as a research method, and the questionnaire as a tool. The sample consisted of 87 Romanian hotel units, located in the main tourist areas of the country. The conclusions, based on the information collected, referred to the initial assumptions, confirming or invalidating them.
2. INTERNET COMMUNICATION TENDENCIES
Under the influence of border opening and, partially, border elimination (Nistoreanu P., ), initiated in the last years, one can notice a process of market internationalisation, followed by an increased competitiveness and a stronger need to offer and receive information.
At the same time, a process of market internationalisation and globalisation of company activity is under development, which implicitly changes communication’s coordinates. This new position is supported by Internet communication; the research carried out within the big companies
shows an increase of activity dimensions within the network: more news „is consumed”, more electronic mail messages are transmitted, more articles and reports are elaborated, more financial transactions are concluded, more sites are visited and more sales take place.
Thus, the Internet shows the tendency to take over part of communication load, but at a different dimensions and by different means. Within these new Internet communication tendencies, the barriers of distance or language disappear, and so do the obstacles determined by the interference of intermediate agents, influenced by sets of rules and subjective thinking; therefore, the communication becomes direct and leads to a personalised relation (exchanges of texts,
images, messages, etc . take place rapidly).
A remarkable advantage of Internet communication is visual communication, which allows transmission of a wide range of messages; the images are meant to strengthen and stabilise the message, facilitate understanding, decoding and reception of the message by a wide range of means. To this effect, one can notice several advantages of visual presentations: catch the attention, look good,, improve perception, eliminate the monotony of texts, strengthen the verbal message, allow the pointing out of differences , etc.
Referring particularly to the tourism field in Romania, we found out that the increase of
Internet utilisation, which was 33% in 2007, reaches 32%, in 2009, and the number of the people that check the Internet before leaving on holidays has grown considerably. In June 2005, the first three Romanian tourism portals showed jointly little over 463.000 unique visitors, according to statistics displayed by Trafic.ro (site that analyses the Internet sites from visitors point of view). In the same period of 2009, the number of visits almost doubled, reaching 866.000 for the three tourism sites: www.infoturism.ro, www.romaniantourism.ro, www.infotravelromania.ro.
Other tourism sites that are worth mentioning: www.hartionline.ro, www.rotravel.ro, etc. There are plenty of tourism units (agencies, hotels, restaurants, etc) that have their own site (Eximtur, Marshal agency, etc) or are linked to a portal specialised in accommodation offers (www.cazare.ro, ,www.pensiunituristice.ro) or provision of tourism information (www.iTurism.ro).
There is also the Ministry’s official site (www.mdrt.ro.) which focuses less on offers, reservations, and more on the news section, that is useful to the people directly involved in the Romanian tourism activity (press releases, amendments of regulations, various notices, etc.).
Table 1. –Results of SMART-financial on-line poll
Promotion means Percentage Promotion means Percentage
Internet 36% Indoor advertising 6%
TV advertising 28% Outdoor advertising 4%
Direct Marketing 12% on-line advertising 5%
Advertising publications 6% Radio 3%
Source: www.bizwords.ro, 2008
One can notice the high percentage, over 50%, scored by the Internet, on-line advertising and direct marketing, in general.
3. PR STRATEGIC ROLE IN TOURISM
Generator of considerable public incomes, tourism is one of the most important economy
sectors; it has had the most rapid development within the national economy, provisions for 2020 indicating approx. 1.760 mil.Tourists (Piovesan L, 2005).
Globalisation, the creation of new destinations and the new technologies have modified the competitive environment of the countries; at present, the most powerful tourism promotion tool is represented by the image (of the country, region or tourism product). If we refer to the international level, the strategies for image building or tourism promotion are the following: creation of a new tourism image, re-positioning of a traditional tourism destination, creation of awareness in a competitive framework, brand creation, etc.
In this context, the investment in public relations by elaboration of communication strategies emphasises the PR (public relations) contribution to tourism development. The PR
activities are long term processes and have in view the assembly of direct contacts maintained by the tourism company with the customers, the managers of other companies, the opinion leaders, the representatives of public power, mass media, etc. , that creates confidence in the company and a favourable opinion for it and its products. The most common PR techniques are the following:
(table 2)
Table 2– Presentation of public relations techniques
PR techniques Activities
News dissemination
The tourism organisation regularly informs the consumers and the public on the launch of a new product, opening of a new destination,
development of marketing events, etc.
Speeches Communication within internal or external events, focused on
performances of the tourism company.
Special events Drawing the public attention on the tourism organisation’s offer.
Identification materials
Written, audio- visual or electronic documents, that provide „technical”, financial or commercial information, and also contribute to creation of a specific image of the company.
Social activities The tourism company gets involved into social or charitable activities.
Sponsorship The tourism company supports (financially also) social and humanitarian
causes (cultural, sports, religious activities, etc.).
Source: Marketing turistic, page. 376, by V. Balaure, I. Cătoiu, C. Veghe ,
In case of well-known destinations, the tourism promotion is planned and financed by collaboration and public-private partnership. This guarantees and brings more promotion resources, that may be allocated by a long term strategy and a marketing and communication process where the objectives and targets are well defined.
With respect to Romania’s promotion as a tourism destination on the external markets, here is the budget allocated, according to the strategy, for the main promotion activities, on the three
Table 3 - Budget allocated for Romania’s promotion
- bill. lei -
Promotion activities Europe North
America
South-East Asia
Public relations 15 5 3
Special events 10 4 2
Tourism exhibitions 40 1 3
E-Marketing/Internet 5 5 2
Direct marketing 15 5 2
Advertising 20 4 3
Sales promotion 2 1 1
Other promotion activities 3 2 2 Total by market groups 110 27 18
Overall Total 155
Source : Strategia pentru relansarea turismului românesc, ANT, 2006, pg. 93
The public-private partnership in tourism promotion is a crucial aspect; as most of the tourism companies are small and tend to establish short term objectives and take individual decisions , while the goal should be an overall approach of tourism. This is an important issue regarding involvement into promotion activities of promotion and strengthening of collaboration between various actors, so as to insure participation of all parties to the process.
The research in the field (Piovesan L, 2005)., emphasises the importance of investment in PR communication strategies that may contribute to tourism development. Thus, in order to increase efficiency of PR activity in promoting a company image, a set of issues should be taken into consideration:
- a PR project should take into account all the parties (stakeholders) involved into the
tourism field (accommodation units, tourism associations, vocational associations, trade-unions, municipalities, local tourism agencies that work for public institutions, Ministry and/or National Tourism Commission, National Tourism Offices, European Union, etc.).
- market research is an essential tool that provides specific information and offers a clear
picture of the existing situation ; at the same time, it allows quantity and quality researches in the tourism sector, and investigation of tourism trends in general.
- strategic plan: selected PR methods (for communication with mass media, public
personalities and customers, product positioning, special events, company identification, etc.). - creation of a monitoring and evaluation system, in order to check fulfilment of
performances and objectives
3.1. E-PR – CONCEPT AND ADVANTAGES FOR THE TOURISM COMPANIES
With regard to communication and informing, the Internet allows the possibility to reverse the communication roles (emittent – receiver); this fact supports communication and contributes to a better informing and regular updating of the information.
The online (e-RP) public relations represent the totality of communication actions oriented to promotion or protection of the tourism organisation or its components (brand, products, website), to the aim of generating a positive interaction/ understanding (perception) of/from the public, by means of the on-line tools. e-RP represents the most recent tool used by the tourism organisation in view of reaching the communication policy objectives..
Here are some of the e-PR advantages (Negricea, 2010):
- The tourism organisation may address the target-public directly and interactively – in the
- The public has at its disposal a wide range of informing tools – at any moment, the
information launched by the organisation may be evaluated and selected from a multitude of independent sources, by the tourist or other interest groups.
- The online environment offers the opportunity to easily develop various PR processes -
One can easily organise events for a numerous public located in various regions (online conferences, discussion groups, workshops, online workshops, newsletters, etc..)
- The public takes a proactive part to the online PR processes – In the online environment,
the public of the tourism organisation may share with the interested people its experience or perception concerning the organisation’s activity or products.
- Effective management of critical situations– The tourism organisation may use various
online tools to release the tension of relations with the target public; these tools allow fast reactions, so that the effect of potential conflicts can be reduced in very short time, with maximum efficiency.
- Lower costs than the traditional PR environment.
3.2. ONLINE PR TOOLS
Among the services that can be used as communication and informing tools (Negricea, 2010), we would like to mention:
- The website: it is a collection of web pages, network services, mainly htlm documents
that form a consistent pack offered usually by one server. For an efficient communication and informing, both the design and the software must comply to the requirements of the public (the effective or potential tourist). A website must load rapidly, offer easy access to (regularly updated) information, contain attractive elements for each type of public (occasional visitors, permanent visitors, customers, etc.). A corporate website allows promotion of tourism company values, products and services provided, immediate publication of news, maintenance of a permanent relation with the targeted public;
- Electronic mail – this is the most often used and most popular Internet application ; it
can be used for sending out press releases (accompanied by the tourism company’s logo or even photos), invitations to events, congratulation messages, etc.; this is a fast, efficient and cheap communication tool.
- Forum – it is the place where one can discuss various topics; the discussion groups may
address both the tourism company members and the large public;
- Banners – posting information about the company on another site (non-competitive),
particularly news, information, e-commerce etc.;
- Newsletter – may publish a specific topic, may be stored (archived and accessed when
needed), the public may subscribe or unsubscribe to this service.
3.3. ONLINE PR TECHNIQUES IN THE TOURISM FIELD
Among the most often used techniques of online public relations we mention:
- Organisation of online events – supposes the organisation of online workshops,
presentations, exhibitions, show and sale, competitions, question and answer sessions with personalities or specialists, supporting of events;
- Monitoring of brand related statements – is focused on managing the reputation of the
tourism organisation, and all brand related statements. The purpose of this activity is identification and perpetuance of positive elements posted on various websites or identification and management of various negative elements related to the organisation’s brand. (There are online applications that allow the implementation of this PR technique, for instance www.googlealert.com.; by means of this automate tool, the organisation may be daily informed, by email, on the mentions referring to the organisation and also its competitors.);
- Management of unfavorable situations – the online environment is a free environment
organisation, the OPR expert has to consider developing actions such as: prompt reactions on the organisation’s website, press releases, transmission of personalised e-mails to opinion-makers, editors of various online and offline publications, main customers and partners.
- Other OPR techniques - maintenance of close relationships with the editors of online
publications or mass media in general, good relationships with the bloggers, the event sites, sites for opinions and product category ranking, web folders, provision of „white paper” and case studies, maintaining contact with the target public by RSS (Reader Software Services), viral marketing campaigns, newsletters, lobbying, relationships with the Governmental environment and various local communities.
The online public relations require permanent attention for observance of each marketing environment component, maintenance of stable relationship with each interest group with which the tourism organisation interacts. A crucial aspect of OPR activity is deontology and professional ethics (etiquette).
4. RESEARCH ON ONLINE COMMUNICATION BASED ON PUBLIC
RELATIONS TOOLS USED BY THE TOURISM SERVICE PROVIDERS IN ROMANIA
4.1.PRELIMINARY RESEARCH PHASES
The main objective of this study is to determine the extent of e-PR techniques utilisation by the tourism service providers in Romania; we mention that the research took into account only the
accommodation units / the hotels that could be contacted by electronic means (Web page, e-mail).
The research assumptions were the following:
H1:The major part of hotels in Romania develop PR activities. H2: Over 1/3 of hotels’ PR activity develops online.
H3: The main tool used by accommodation providers is electronic mail H4: Most hotel owners consider that the online PR activity is efficient.
H5: The target public of online PR activity is represented by the tourism agencies.
The general collective of the research, which is the people to whom the information shall be
extended / generalised, is represented by the accommodation providers in Romania, and the poll unit is, depending on the case, the person assigned to deal with promotion of the company image in
every hotel (the person may belong to marketing department, PR, sales department, etc.)
The data collection method was the enquiry; the tool was the questionnaire; it was sent by
email to the respective company, in attention of the person assigned to deal with the company image.
The research was carried out in the period 17 Aug. – 13. Sept. 2009 (we selected the
common season for both the mountain units, less affected by seasonality, and the seaside units). The sample size was 87 hotels (of all categories), located in Bucharest, ConstanŃa, Valea Prahovei (Sinaia, Predeal, Bu teni...) and Bucovina. The sample was intended to be larger, the
questionnaire was sent out to more hotels, but they didn’t respond, therefore they were not included in the sample . However, we considered that the research is feasible, because, as one can notice, the most important tourism regions are represented in the sample (this was an issue targeted in the beginning of the study).
4.2.RESEARCH RESULTS
The first part of the questionnaire was focused mainly on determination of the extent of utilisation of traditional PR techniques in the communication activity of Romania’s hotels. We
10,44%
89,56%
include PR activity
do not include PR activity
Chart1.Structure of hotel units by extent of utilisation of PR techniques in the communication activity
The chart shows that 89,66% (78 hotel units) of the total hotel units (87 hotel units) apply one or several PR techniques.
Important for the research is verifying the hypothesis which says that hotel dimension and category has an impact for PR techniques breakthrough degree in units communication activities.
Table 4 –Hotel dimension and category test results for PR techniques breakthrough degree in communication activities
Conjecture characteristics Impact Factors
Link (relation )Intesity level
(Pearson link coefficient and threshold increasing factor compared with 5% signification factor
Hotel dimension C = 0,399 with p = 0,004 < 0,05 PR techniques breakthrough
degree Hotel categories C = 0,455 with p = 0,031 < 0,05
As conclusion we may see the both factors influence (especially for hotel dimension) for PR technique breakthrough degree.
Further on, the research focused on the 78 hotel units that use PR techniques.
The next question referred to the rank of online public relations (OPR) within the global PR activity of each hotel. Again, the question included examples of PR activities, in order to obtain
realistic data.
44 46 48 50 52 54
Percentage of OPR within PR activities (%)
47,44 52,56
b etween 20% – 50% under 20%
Chart 2 - The OPR percentage within PR activities
Thus, for 41 hotels, the OPR activity represents less than 20%, and the respective hotels represent 52,26% of the total.
Once we obtained the outline of the PR activity of hotel units in the country, we proceeded to investigate the concrete tools used in OPR . Below one can see the types of responses:
Table 5 – Distribution and structure of responses by the OPR tool preferred by the hotel services providers
The OPR tool preferred by the hotel services providers Number units Structure of units (%)
Website 37 47,43
electronic mail 13 16,66
Forum 11 14,10
Banner 9 11,53
Newsletter 8 10,25
Total 78 100 16,66%
14,10% 11,53% 10,25% 47,44% Website electronic mail Forum Banner Newsletter Chart 3
The communication research had also in view the efficiency of online PR activity.
Table 6 – Distribution and structure of responses concerning the efficiency of PR activity
The efficiency of PR activity
Number units
Structure of units
(%) It is efficient 53 67,94 It is not
efficient 19 24,35
no response 6 7,69
Total
78 100
It is
efficient It is not
efficient no response 67,94% 24,35% 7,69% 0,00% 10,00% 20,00% 30,00% 40,00% 50,00% 60,00% 70,00% Chart 4
Based on the results obtained and chart 4, one can state that more than half of the hotel units (64,94%) consider them efficient, particularly in the context of extended communication and Internet utilisation in all fields.
The research attempted also to determine the public targeted by the hotel units within their
OPR activities.
Table 7 - Distribution of responses by selection of targeted public
The public targeted by the hotel units within their OPR activities. Number units Structure of units (%) tourism agencies
18 28,20
Loyal customers
27 34,61
Potential customers
22 23,07
Other 11 14,12
Total 78 100
Loyal customers
34,61% tourism agencies
28,20%
Potential customers
23,07% Other categories
14,12%
Chart 5
The major part of the tourism units (27 units), representing 34,61% , are oriented toward the loyal customers (both natural persons that visit the hotel and legal persons, institutions that send their employees to the respective units), while only 14,12% of the total target other categories.
The research conclusions revealed the following results:
H1: The major part of hotels in Romania develop PR activities –confirmed, 89,66% of the hotels have a promotion policy and develop PR activities.
H2: Over 1/3 of hotels’ PR activity develops online. – not confirmed, the majority (52,56%) allocated only 20% to online PR.
H3: The main tool used by accommodation providers is electronic mail – notconfirmed, the website being used by 47, 43% of the units.
H4: Most hotel owners consider that the online PR activity is efficient. – confirmed, approx. 70% consider it is worth investing in OPR activities.
H5: The target public of online PR activity is represented by the tourism agencies. – not confirmed, the public is represented by the hotel customers, with which, as the hotel management considers, a long term relationship of mutual advantages should be developed,
In the end, we have discovered an opening to this type of public communication – the application of PR techniques and tools in the online environment, an environment that incorporates the characteristics of traditional media (TV, radio, newspapers, magazines) and includes, in addition, a set of new features.
5. CONCLUSION
The main research results revealed some issues that partially contradicted the initial assumptions.
In this context, we can assert that the online environment allows the development of
personalised PR campaigns and offers the opportunity to educate the target public and attract it by
games and entertainment elements, involve it and change it into a key element of the relationship with the other public categories.
Also, one can notice that it decreases dependence on various traditional channels, as the web site becomes one of the main PR tools of the organisation. By means of this tool, the information about the organisation may be easily taken over by other sites.
BIBLIOGRAPHY:
1. Balaure V., Cătoiu I., Veghe C, (2005) - Marketing turistic, Uranus printing house, Bucharest
2. Dumitru N.-R., (2008) Promovare turistică – particularităŃi în turismul social, Ed.
Universitară, Bucharest
3. Gogonea R.-M., (2006) - Cercetarea statistică în turismul rural, Ed. Universitară,
Bucharest
4. Nedelea Al., (2003) - Politici de marketing în turism, Economic printing house,
Bucharest
5. Negricea C.-I., (2010) - Proiectarea, dezvoltarea i implementarea aplicaŃiilor de marketing online în activitatea organizaŃiilor., PhD workpaper, A.S.E. Bucharest, 2010
6. Nistoreanu P., Management în turism servicii, Biblioteca Digitală, ASE, Bucure ti
7. Piovesan S. L., (2005) Turismul: rolul strategic al relaŃiilor publice, www.prawards.ro
8. Tran V., (2002) Teoria comunicării, SNSPA, Communications and Public Relations
University “David Ogilvy”, Bucharest, pg. 7 9. www.prawards.ro
10.www.infotravel.ro
THE FINANCIAL CRISIS IMPACT ON THE DEGREE OF ECONOMIC INTEGRATION IN THE EU COUNTRIES
Professor Ph.D. Nicolae DARDAC
Academy of Economic Studies, Faculty of Finance, Insurance, Banks and Stock Exchange, Bucharest, Romania
nicolae.dardac@fin.ase.ro
Assistant Ph.D. Student Iustina Alina BOITAN
Academy of Economic Studies, Faculty of Finance, Insurance, Banks and Stock Exchange, Centre of Financial-Monetary Research CEFIMO, Bucharest, Romania
iustinaboitan@yahoo.com
Abstract
Our study aimed to assess the degree of heterogeneity of the macroeconomic framework of the 27 EU member countries, against the background of turmoil manifested in the international financial markets. In this regard, we applied a hierarchical cluster analysis technique, for two moments of time, countries being grouped according to the values recorded by a series of key macroeconomic and financial indicators. In the year 2008 we noticed an increase of the groups’ number and fragmentation, due to the amplification of the economic gap in the pan-European area. Empirical analysis revealed the presence of some outlier countries (Bulgaria, Czech Republic, Cyprus, Romania, Poland, Slovenia, Hungary and Ireland) whose macroeconomic features are the most dissimilar with the other EU Member States. We concluded that the increase in countries heterogeneity, as a result of strong imbalances at national level, has a negative impact on the economic integration process and the achievement of real and monetary convergence.
Keywords: economic integration, financial crisis, 27-EU countries, macroeconomic heterogeneity, cluster
analysis.
JEL Classification: C49, F15, G01
1. INTRODUCTION
The current financial crisis marked the end of a period characterized by pursuit of profit taking and increasing risk. To counteract the spreading of its adverse effects it was necessary the prompt and concerted intervention of central banks and governments, materialized in the taking of urgent measures, designed to restore confidence in international financial system. What in August 2007 seemed to be a problem of sub-prime mortgage market in the U.S., later it turned into a global financial crisis. Financial markets have started to record serious disturbances, threatening the financial institutions’ robustness and their capacity to face the current shocks. Consequences of financial crisis continue to make their presence felt, after two years from the onset, the size of the losses generated being still unknown.
Accordingly, we can state that the actual financial crisis has affected, at different magnitudes, all national financial markets, and has propagated, indirectly, into the real economy, too. In Europe, it overlapped the comprehensive economic and financial integration process. The surveys made by several international organizations in tranquil times revealed an incomplete and insufficient degree of integration, particularly in the banking sector of EU countries. Hence, there is room for further integration, especially in terms of market completeness and cross-border activity, in order to ensure lower costs and higher product diversity.
The question that arises is: could be still achieved the objective of economic and financial integration of EU countries in the context of the current global crisis? In this respect, our study aims to assess the extent to which financial crisis has contributed to the loss of synchronization of the economic integration process of the 27 EU countries.
of goods and services, movements of capital and labor, is not viable in the absence of coordination of economic policies at European level. At present, however, the economies of EU member states are confronted with major distortions and imbalances in terms of the volatility of currency exchange, unemployment, inflation rate, the share of public debt in GDP, the current account deficit, the different pace of GDP growth contraction, indirect taxation etc. In order to cut off the generalized economic slowdown and to restore a stable economic climate, EU member states are implementing a recovery plan designed to coordinate and align their economic policies, towards the achievement of a state of financial stability and economic growth.
In this paper, by applying a cluster analysis technique, we intend to detect countries in EU that show similar, homogeneous patterns according to a number of key macroeconomic indicators. Particularly, we want to assess the degree of cross-country economic homogeneity in terms of macroeconomic variables, for two reference time periods: the year 2006, characterized by strong, sustained economic growth, high rates of investments and consumption, increased pace of lending activity, optimistic expectations concerning revenues and standard of living, and 2008 which marked the beginning of a sharp deterioration of both financial and economic environment. Also, we analyze which countries tend to be in the same cluster, displaying common economic features, and how evolves the cluster composition over the two periods considered. The paper was structured as follows: section 2 provides a brief overview on the methodology applied; section 3 depicts the indicators employed in the analysis, the results obtained and their explanation and the last section summarizes the main findings.
2. METHODOLOGY-AN OVERVIEW
Cluster analysis is an unsupervised learning, exploratory technique, that identifies the complex relationships in a given dataset of variables, without imposing any a priori restriction. Consequently, the initial dataset doesn’t need the distinct specification of a target variable (the dependent variable) and respectively, of predictor ones (independent variables). All variables have the same importance, because the analysis’s goal is not to predict a certain value, but instead, to identify the presence of specific patterns or correlations among variables, to include the different variables or cases into more homogenous groups.
The entities’ clustering is based exclusively on the similarities identified in the variables’ structure. Yet, the results obtained are valid only for the ex-ante defined sample, they cannot be generalized to the entire sector/economy. According to Romesburg [2004], this technique represents “a mathematical microscope for looking at the relations of similarity among a given set of objects. It cannot be used for making statistical inferences about these relations to a larger population. Any inferences a researcher makes by studying the tree are made by using reasoned analogy rather than by using formal statistical methods”.
Cluster analysis focuses on the examination of the interdependencies between variables, its finality consisting in gathering similar entities into more homogenous groups, named clusters.
Therefore, when doing a cluster analysis there must be completed several stages:
• definition of the research goal, of the assumption to be tested and the selection of the most significant variables. In this respect, Sorensen, Gutierrez [2006] argue that the selection of variables to be included in the cluster analysis is of major importance, since it is the data themselves that structure the results. Leaving out or adding an important variable may hence alter the results significantly.
of a greater importance in establishing the similarities between entities, denaturizing the results. In this study we chose a normal standardization, determined as the ratio of (the current value of a variable – average value) to standard deviation.
• selecting a clustering procedure. Economic literature has consecrated three main procedures: k-means clustering, hierarchical clustering and two-step clustering. The clustering procedure we chose to implement was the agglomerative hierarchical clustering,
because it allows the grouping of resembling countries, without specify ex-ante a pre-established number of clusters. The agglomerative technique places, firstly, each country into a distinct group, then proceeds to the merger, at each step, of the two countries that have the least dissimilarity into successively larger clusters, according to the agglomerative method chosen.
• selecting an appropriate method for data aggregation. The most frequent applied methods are
single linkage (nearest neighbor), complete linkage (furthest neighbor) and average linkage.
In this study we have applied, comparatively, all the three methods above mentioned.
• choosing a unit of measure or an algorithm for the distance/similarity between countries, according to data type (interval, count, binary variables). It is important to mention that, in this case, the distance isn’t measured in physical units, but in terms of resemblance between the intrinsic characteristics of the countries considered. One must compute a resemblance coefficient, whose meaning can be interpreted in terms of a similarity coefficient, or as a dissimilarity coefficient. Therefore, the bigger the similarity coefficient’ value, the more
resembling the two countries. Instead, a high value of the dissimilarity coefficient indicates a low resemblance. As a measure for the distance between countries, we have decided to employ the squared Euclidean distance because, in the process of group building, it places
greater emphasis on outliers that depict extreme values and is suitable for continuous variables. The studies of Wolfson [2004] and Gutierrez, Sorensen [2006] propose the same approach, too.
• interpretation of the dendrogram (binary tree) and identification of optimal number of clusters. In practice, it is recommended that the branches of the tree be cut at a level which coincides with a large jump in the clustering levels of two consecutive nodes. The establishment of the correct number of clusters is, however, a subjective process, depending on the analyst’s experience. As Norušis [2008, pp. 364] points out, to find a good cluster solution, one must observe the characteristics of the clusters formed at successive steps and decide when it is achieved an interpretable solution or a solution that has a reasonable number of fairly homogeneous clusters.
3. RESULTS AND INTERPRETATIONS
As stated in the previous sections, the aim of our paper is to evaluate which EU countries depict similar experiences according to the dynamics registered by some business cycle variables. The selected key macroeconomic indicators, which are able to monitor the effects of the financial crisis impact on the economy are:
the reserve assets excluding gold. In line with the 5th edition of the IMF Balance of
Payments Manual, this item comprises Special Drawing Rights (SDRs), the reserve position in the Fund, loans to the IMF, deposits with foreign banks, foreign treasury bills, foreign bearer bonds, loans extended to foreign banks and accrued interest;
key interest rates set by central banks in EU 27 to indicate the trend interest rates should
follow and signal the monetary policy stance;
the Harmonized Index of Consumer Prices which measures the change in prices of all goods
and services purchased by urban consumers (households);
government debt ratios as percent of GDP. Data were collected from the European
security funds. Debt is valued at nominal value, and foreign currency debt is converted into national currency by using year-end market exchange rates;
the unemployment rates;
annual change (%) of real GDP. It is defined by European Commission as the value of all
goods and services produced less the value of any goods and services used in their creation;
annual change (%) of industrial production, excluding construction. It is known also as the
production index, which is an economic indicator reflecting production and industrial activity;
current account as a percent of GDP which covers all transactions (other than those in
financial items) that involve economic values and occur between resident and nonresident entities.
In Table 1 we have synthesized the output obtained for the two years considered, under the assumption of three different algorithms for computing the distance between clusters. We have formulated our conclusions keeping in mind the results obtained by applying all three linkage techniques, as they are qualitatively similar and relatively stable.
Table 1. Clusters’ membership
2006 Single linkage Complete linkage Average Linkage
Malta, Portugal, Cyprus, Spain, Slovenia, Ireland, Greece
Malta, Portugal, Greece, Cyprus, Spain
Malta, Portugal, Italy, Cyprus, Greece, Belgium, Spain
France, Germany Germany, Italy, Belgium, France
France, Germany Denmark, Netherlands,
UnitedKingdom, Sweden
Denmark, Sweden, Netherlands, United Kingdom
Denmark, Sweden, Netherlands, United Kingdom
Luxembourg Ireland,Luxembourg,
Slovenia Ireland, Luxembourg Slovenia, Italy, Finland, Belgium,
Austria
Austria, Finland, Czech Republic
Austria, Finland, Czech Republic
Slovakia, Poland Slovakia, Poland Slovakia, Poland Estonia, Latvia, Lithuania Estonia, Latvia,
Lithuania
Estonia, Latvia, Lithuania
Romania Hungary, Romania Romania Bulgaria Bulgaria Bulgaria
Hungary Hungary
Czech Republic
2008 Single linkage Complete linkage Average Linkage
Netherlands, Austria Netherlands, Austria,
Denmark Netherlands, Denmark Austria, Germany, France, United
Kingdom,
Luxembourg,Sweden Finland
Finland, Sweden, Ireland,Luxembourg
Finland, Sweden, Ireland, Luxembourg
Germany, France,
Italy,United Kingdom Germany, Italy,United Kingdom France, Greece, Portugal, Malta,
Belgium
Greece, Portugal, Belgium, Malta, Spain, Slovakia
Greece, Portugal, Malta, Belgium
Italy Estonia, Latvia,
Lithuania Estonia, Latvia, Lithuania Slovenia Czech Republic, Poland Czech Republic Ireland Hungary, Romania Hungary Bulgaria, Lithuania Bulgaria Bulgaria Cyprus Cyprus, Slovenia Cyprus, Slovenia
Spain, Slovakia Poland
Czech Republic Spain, Slovakia
Denmark Estonia Latvia Hungary Romania
According to the empirical results obtained for 2006, we have observed the following clustering patterns:
- Malta, Portugal, Greece, Cyprus and Spain have been identified by all the three linkage methods as being characterized by a synchronization of their economic cycles, according to the macroeconomic and financial variables considered.
- France and Germany are always in the same cluster.
- Denmark, Sweden, Netherlands and United Kingdom form a homogenous and stable cluster. - Ireland, Slovenia and Luxembourg are positioned almost in all cases in the same cluster. - Austria, Finland and Czech Republic are, in most cases, in the same cluster.
- Slovakia and Poland is another stable cluster
- Estonia, Latvia and Lithuania (the Baltic) are always included in the same cluster. This is not a surprising finding, as it is known that their business cycles are highly correlated and synchronized.
- Italy and Belgium are always in the same cluster.
- Hungary, Romania and Bulgaria are the outlier countries, meaning that they have particular, atypical economic characteristics, dissimilar to any other EU country.
Our findings relative to clusters’ structure are similar with those obtained by Gutierrez and Sorensen [2006], which have applied the same hierarchical clustering technique, but for 11 euro area countries, for the period 1998-2004. This confirms that, in times of financial stability and sustained economic growth, some particular countries display a natural tendency to cluster together, their economic cycles being more synchronized relative to other EU states.
Also, according to Crowley’s [2008] findings, the clusters’ structure is influenced by geographical issues. Indeed, most clusters tend to form around neighboring countries, especially euro area member ones, while non-member countries tend to cluster together (such as the Baltic) or to be outliers (Hungary, Romania and Bulgaria). This result is not surprising, being in line with the theory of the optimal currency area, which states that foreign trade within euro area is susceptible of business cycles synchronization between nearby countries.
Focusing on the common patterns identified through the three linkage approaches for the year 2008, we have remarked the following clustering of EU countries:
- Netherlands, Austria and Denmark are almost always positioned in the same cluster. As in 2006, Netherlands and Denmark share the same cluster. All of them depend heavily on foreign trade with other EU countries (particularly with Germany), exports counting for more than 60%. GDP is expected to fall in 2009 by about 4%, unemployment rate will rise at 4,2% , inflation rate is projected to decrease at around 1%, the budget deficit is expected to range between 2,5 – 3% of GDP and the current account deficit will rise up to 3% of GDP.
- Finland, Sweden and Luxembourg compose a new cluster, without having a corresponding in the previous period. These countries are characterized by low inflation rates, of about 1,1%, the fall in GDP growth is projected to overpass 5,3%, the jobless rate was set at over 7% and the budget deficit is expected to be above the three percent limit (3,2 -4%).
- Greece, Portugal, Malta and Belgium. This cluster proved to be relatively stable over the two time periods analyzed, Belgium being the country that joined last this group. All of them display similar features of the key macroeconomic indicators. EC has warned them with the opening of the excessive deficit procedure as their budget deficit is well above the imposed limit of 3% of GDP. Real GDP growth is set to contract in 2009 with about 1, 3% in Greece and over 4% in the other three countries. Inflation will be low, ranging between 1, 8% and 3%, but persistently above the euro area average. Jobless rate is expected to reach 7-8%. Current account deficit contracted to around 7% of GDP. The high public debt and fiscal slippages limit the room for discretionary granting of fiscal stimulus.
- Spain and Slovakia seem to share common expectations regarding their economic environment in 2009. The inflation rate will be near 2%, budget deficit will mount to 5% and public debt to 30%, will face a persistent decline of unemployment rate of about 13% and GDP is expected to contract by over 4%. However, in perspective, it is expected that by end-2010 Spain faces a sharp rise of unemployment, up to 20%, meanwhile inflation will fall near zero.
- Estonia, Latvia and Lithuania are still in the same cluster, as in 2006. The projections for 2009 indicate similarities relative to their economic evolution: unemployment rate exceeding 10%, GDP fall of over 13%, inflation rate of about 3%, a current account deficit less than 3% and a budget deficit of about 5%.
- Bulgaria, Czech Republic, Cyprus, Romania, Poland, Slovenia, Hungary and Ireland are the outlier countries, each having its own cluster.
Relative to 2006 we have noted a significant increase in the number of outlier countries, meaning that they recorded a particular evolution of the macroeconomic and financial climate, that makes them dissimilar to any other country in the sample considered. For instance, in Czech Republic the downturn in real GDP was mainly due to the falling of investment activity and recession in major export markets, which overlapped the weak domestic demand. For the current year it is expected that GDP growth decrease by about 4, 1%. The government has adopted anti cyclical measures, by easing fiscal policy. The decline in volatile prices led to a sharp slowdown in inflation in 2008, which is expected to approach zero in 2009.
Bulgaria will record a contraction in the GDP growth of 3, 8%. Inflation is projected to reach 3, 5% and the unemployment rate will exceed 7%. If most European countries had been warned by the EC with regard to their excessive budget deficit, this is not the case of Bulgaria, the deficit being expected to rise at 1% of GDP. The major problem for the economy consists in the large current account deficit, which reached 24% of GDP in 2008. Although it is assumed to fall at 13, 3% in 2009 because of a sharp contraction in domestic demand, it is still difficult to be financed, so that it is believed that Bulgaria will require some financial assistance from the IMF and the EU.
Hungary is expected to record a sharp fall in real GDP growth in 2009, of about 6, 1%, in the context of the same deep decline of domestic and export demand (exports being the main source of economic growth). Unemployment rate is assumed to reach double-digit figures, inflation is expected to rise as a result of the pro cyclical fiscal policies implemented by government (focusing on indirect taxation by increasingvalue-added tax and excise tax). The budget deficit is expected to increase in 2009, until the upper limit of 3% of GDP imposed on by European Commission. The current-account deficit is expected to narrow in 2009 at 2, 7% of GDP.
Slovenia’s economy is highly dependent on foreign trade, as it exports about 70 percent of its production, mainly to EU members Germany, Italy, Austria and France. This high level of openness has significantly exposed it to adverse economic conditions in its main trading partners. The GDP is set to fall with 6%, the budget deficit will exceed 4, 8% of GDP and unemployment rate will rise to 6, 2%. Inflation is assumed to reach 0,5%.
Ireland is experiencing a severe contraction in the GDP growth, of 9, 8%. According to OECD, the peak wasn’t reached yet, GDP fall being expected to reach 14%. The budget deficit could reach 12% of GDP in 2009 and the unemployment rate is expected to rise at about 12, 2%. Inflation rate is projected to be low, at 1, 7%. Government intends to apply pro cyclical measures, such as substantial public spending cuts, wage lowering and increases in taxation.
Cyprus is the only country in the euro zone expecting positive GDP growth in 2009, projections ranging between 0, 3% and 0, 7%. Inflation is forecasted to drop to around 0.9% as the domestic economy, especially tourism and constructions, slowed down. Cyprus continued to have one of the lowest unemployment rates in the EU, of about 4, 7% and a budget deficit of only 0, 8%.
Romanian economy is expected to contract in 2009 by over 6%. The high degree of indebtedness of households and private sector and negative expectations concerning the dynamics of unemployment rate and wage policy contributed to a sharp decline in private consumption and investments. Imports severely contracted, which led to a severe adjustment of the current account deficit. Although inflation rate follows a descendent slope, there are still inflationary pressures caused by the depreciation of national currency and the rise of volatile and administered prices. The budget deficit is expected to significantly exceed 3% of GDP, as income collected to budget decreased significantly. Public debt is assumed to rise at 19% of GDP. As a consequence, the government has to adopt pro cyclical measures, consisting in tax rises and employees dismissals, although the economic slowdown has to be counteracted by anti cyclical actions.
Relative to clusters’ structure over the two time periods, one can note that, overall, it remained relative stable. The propagation of financial turmoil across EU countries overlapped on the intrinsic vulnerabilities of each country, which contributed to an increase of the heterogeneity of their economic framework and a slowdown of the process of economic integration.
4. CONCLUSIONS
Although the economic and financial crisis has affected both emerging and developed countries, its magnitude and implications on the national economies had been deeply different. Our paper aimed to assess the extent to which the current turbulent context has increased the divergence and heterogeneity between the 27 EU countries, in terms of the dynamics registered by some key macroeconomic variables.
A first conclusion is that the foreign trade was one of the transmission channels that linked developed countries, directly affected by the financial crisis, with the small emerging economies, dependent on trade.
Another finding suggests that some of the developed countries, where asset prices and financial leverage increased the most, were less affected as they appear to have escaped relatively lightly in terms of GDP loss. This is mainly the case of UK, an important financial center, which has the most diversified credit market in general, and the most complete market for mortgage products, being the only one in Europe that granted subprime loans. Although it was the first European country that declared entering recession, its GDP loss is expected to be of 4, 3% in 2009. At the opposite, Romania, Slovenia, Hungary, Ireland and The Baltic are experiencing a sharp fall in GDP growth.
countries. They are the most atypical in terms of macroeconomic features, both before and after the crisis onset.
In 2008 the generalization of recession throughout European countries has increased the macroeconomic discrepancies, slowing the pan-European economic integration process, fact suggested by a biggest group fragmentation relative to 2006.
To conclude with, we appreciate that, because of the financial and economic connections between EU countries, it is obvious that the recovery will be particularly externally driven, that countries cannot action in a separate, independent way. Therefore, stronger economic activity of foreign countries would contribute, firstly, to the recovery of the domestic GDP growth and will propagate through the trade channel to other countries. On the financial side, because of the increasing importance of foreign-owned banks in national banking systems, the restoring of the global market will depend on restoring the confidence, soundness and normal functioning of internal financial markets.
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