With a predicted growth rate of 3% this year, Macedonia is well on its way to an economic recovery, according to an IMF study this month. Experts came to Skopje to assess Macedonia's economic and financial state as part of the country's Precautionary Credit Line review. Macedonian authorities reiterated their commitment to achieving this year's fiscal deficit target of 2.5% GDP and to reducing the deficit nearly 2% by the end of 2012.

Albanian and Chinese officials met in Tirana on Monday (June 27th), where they agreed to boost economic and trade co-operation. In talks with Chinese Deputy Minister of Commerce Zhong Shan, Albanian Prime Minister Sali Berisha invited Chinese investment in the country, citing its rich mineral resources as well as its lucrative hydro-power and tourism industries.

The Saudi Development Fund has approved a $25m loan for construction of the Tirana-Elbasan Highway in Albania. Saudi Ambassador to Tirana Abdullah Abdulaziz al-Abdulkarim announced the news at a meeting with Albanian Finance Minister Ridvan Bode. The 2% interest rate on the loan will have a maturity period of 25 years with a 5-year grace period.

Bulgaria's economic health remains tied to neighbouring Greece's uncertain financial future, reported international consulting firm Ernst & Young in its latest summer forecast. An uncoordinated Greek debt restructuring could lead to a considerable tightening of credit throughout the eurozone. Unless the European authorities step in to ameliorate the situation, the EU could face severe repercussions. Bulgaria could experience increased stress on its banking sector coupled with waning export demand.

EU countries that are not eurozone members may be asked to join efforts in rescuing Greece from its debt crisis, according to Hungarian Prime Minister Viktor Orban. His country holds the rotating EU presidency. Orban believes that non-eurozone countries may be asked to provide a certain amount of their EU funds to help Greece.

Montenegro and the World Bank commenced talks on an $85m loan to support the country's financial system. According to Jan-Peter Olters, resident representative of the financial institutions in Podgorica, the credit may be disbursed in late 2011 or early next year.

On Monday (June 27th), the IMF approved a $683m stand-by payment to Romania after the country managed to cut its budget deficit to $1.75 billion in March. Authorities in Bucharest plan to treat the payment as "precautionary", according to an IMF statement. The statement explains that "Further efforts are now needed to implement deeper and challenging structural reforms in the state-owned enterprise sector in order to secure the economic gains from earlier reforms and enhance opportunities for investment and growth."

A potential withdrawal of Greek banks from the Romanian market will not have a serious impact on the local banking sector, according to the US-based financial company JP Morgan. Experts believe that local authorities have the necessary resources to provisionally take over branches of Greek banks active on the market and sell them to other financial groups later. Moreover, the National Central Bank would be able to absorb the shock in the case of such a development.

Turkey's national air carrier Turkish Airlines was named the best European airline at the 2011 World Airlines Awards during the Paris Air Show on June 22nd. Skytrax, the world's largest airline review website, determined the winner from a poll administered among 18.8 million airline passengers from 100 countries. Turkish Airlines also won awards for "World's Best Premium Economy Class Airline Seat" and "Best Airline Southern Europe".

Construction of Serbia's first solar power plant began on Monday (June 27th). The ceremony was held at Mt. Zlatibor in the south. The 5mW facility will be located 6km from the centre of Zlatibor. The first stage of construction is expected to be completed in spring 2012.

www.turkishweekly.net