Top ten risks in Europe

1. Fiscal crises
2. Cyberattacks
3. Unemployment or underemployment
4. Energy price shock
5. Failure of national governance
6. Profound social instability
7. Data fraud or theft
8. Interstate conflict
9. Failure of critical infrastructure
10. Asset bubble

The top mover in the region compared to 2018 is “energy price shock”, which rose eight places to become the fourth major risk, ranking first in Serbia and in the top five in another 12 economies (including France and Spain). Even though prices in the region increased slightly, and in some cases fell in 2018,27 business executives in the Balkans seem very concerned about rising energy prices, as they are predicted to increase by up to 40% in 2019.

Europe continues to recover from the 2008–2009 financial crisis, but the region is, at the same time, facing decreasing growth forecasts compared to 2018.29 It is therefore not surprising that “fiscal crises” ranks fifth in the region. It is the top business concern in five countries (Denmark, Greece, Ireland, Slovenia and Turkey) and in the top five in 11 others, mostly Eastern and Southern European economies.

Other top-ranked risks include “failure of national governance”, which ranked among the top two predominantly in Central and Eastern Europe and the Baltics, and third in Greece, Portugal and the United Kingdom. Some of these countries have seen significant internal political struggles in recent months (Romania, Slovakia), continued unstable governments in office (Bosnia and Herzegovina), or uncertainty with regards to the outcome of upcoming elections (Croatia).

Lastly, this year, “large-scale involuntary migration” entered the list of the top ten business risks, especially in countries along the so-called Balkan route and those with large shares of migrant populations (including Germany and Switzerland).

As for Western Balkans, following top risk categories were defined as follows:

Albania

1. Failure of financial mechanism or institution
2. Unmanageable inflation
3. Failure of regional and global governance
4. Fiscal crises
5. Critical information infrastructure breakdown

Bosnia and Herzegovina

1. Failure of national governance
2. Profound social instability
3. Unemployment or underemployment
4. Large-scale involuntary migration
5. Interstate conflict

Republic of North Macedonia

1. Large-scale involuntary migration
2. Failure of national governance
3. Failure of urban planning
4. Illicit trading
5. Profound social instability

Montenegro

1. Failure of financial mechanism or institution
2. Fiscal crises/Misuse of technologies
3. Fiscal crises/Misuse of technologies
4. Unemployment or underemployment
5. Energy price shock

Serbia

1. Energy price shock
2. Failure of national governance
3. Unemployment or underemployment
4. Interstate conflict
5. Profound social instability