As the third wave of Covid-19 cases in Southeast Europe subsides, the region's economic recovery is gaining momentum. Continuing fiscal support and returning consumer and business confidence are boosting growth, though tourism - a key industry for many countries in the region - remains at below-crisis levels.

Covid-related uncertainties led to a contraction of Southeast Europe's mergers and acquisitions (M&A) market in 2020 but market players expect a recovery in 2021 amid positive signals from the economy, ample liquidity and cheap financing. "There is money in the market. Both strategic and financial investors have substantial capital resources, financing is cheap due to still very low interest rates and the time is right for companies that want to expand, consolidate or diversify and transform their business by acquiring resources and new technologies," a market analyst said. In Romania, the region's biggest market, M&A deals worth 4.9 billion euro were concluded in 2020, down by 6%, according to PricewaterhouseCoopers (PwC). The number of transactions in the country in 2020, however, increased 18%.

In late 2019, the European Commission unveiled a set of initiatives dubbed the European Green under which the bloc should reach carbon-neutrality by 2050. The Green Deal will be pivotal for Europe in the next decade and not catching up with an increasingly ambitious EU creates a risk for any member state’s economy. Where does Southeast Europe (SEE) stand in this context?

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The coronavirus infection reached Southeast Europe (SEE) at the end of February, as the first case was reported in Croatia on February 25. By mid-March the number of confirmed Covid-19 cases in the region was approaching 1,000 and most countries had declared a state of emergency. Restaurants and shops, with the exception of pharmacies and food stores, had pulled down their shutters and air carriers had cancelled most of their flights. As countries closed their borders, supply chains and relations with clients on foreign markets were disrupted. A drop in orders forced companies to cut production and warn that they may need to lay off staff. The sectors most exposed to China were the first to take the blow but as the disease went global, its impact could be seen across the board, fueling fears about an impending economic slowdown.