Résumé en anglais.

Abstract

After a period of strong expansion of economies across the world, in 2007 a crisis burst out in the real estate sector of the United States. With the collapse of Lehman Brothers in 2008 the crisis soon became global. Initially, it primarily affected the advanced economies of the United States and Western Europe, but the spillover of the crisis was unexpectedly powerful. The financial crisis has hit the various Member States of the European Union to a different degree. The global financial crisis affected the real economy in Central and Eastern European Union countries such as Czech Republic, Estonia, Latvia, Lithunia, Hungary, Poland, Slovenia, Slovakia, , Romania and Bulgaria through two main perspectives. First, the credit squeeze affected borrowing conditions for firms and households with subsequent adverse effects on domestic investment and consumption demand. Second, the downturn in the global economy, affected export demand severely. In this study the effects of the global financial crisis on the new European Union countries’labor market and empleyment, how this question is handled by the European Union and which strategies are followed for crisis management will be discussed. Introduction

Financial crisis - the economic situation that is related to the banking panic, which includes significant production and financial sector losses, causes chaos on international markets, creates the stock market‘s downfall, financial bubbles, currency crises, and foreign loans, leads a sharp decline in economic activity and has a potential to cause an economic recession. The most common financial (economic) crisis occurs when certain financial institutions or funds invested in financial assets lose most of their value. Then international investors conducted their own funds to withdrawal from a country that may cause loss of confidence both in the country‘s economy and country's national currency. Most of the financial crises and recessions arised in nineteenth and twentieth century resulted and have been identified with the banking sector scare, the bursting of the financial asset - stock, commodity or real estate - bubbles. The current global financial crisis started in mid-2007 and had affected the whole world by September 2008. It is global, has engulfed almost every country and is stronger in intensity and coverage than of earlier crises such as Great Depression of 1930‘s and South East Asian Crisis in 1997. (Dhameja, 2010) Although the types of economic crisis, the reasons and circumstances in different countries in different periods are different, there can be found crises‘ common denominators and learnt from past mistakes. Monitoring of relevant macroeconomic variables, comparing them with the theory of the trends can provide early warning of impending crisis. Often there is a problem to select markers or macroeconomic indicators that could indicate economic crisis in advance. However, quantity of variables and their qualitative characteristics help to form a reliable picture of the country's economic situation. Conclusions and forecasts make a significant impact on future economic policy, which could help to avoid the negative impact of the crisis, or even avoid the crisis itself. In order to increase the efficiency in the financial markets and enhance the economic growth, policies for financial stability as well as for price stability should be implemented. (Manescield, 2006)A successfully functioning financial sector is an important condition for the growth of economy in every country. (Lakstutiene, 2008) If a country‘s financial sector is not functioning smoothly, then a financial crisis occurs. Financial crisis triggers economic consequences of inflation, unemployment, drop in purchasing power, growth of public debt as the government may have to devalue national currency or to borrow from the International Monetary Fund and others. Importance of the stability of financial system becomes very significant when a country‘s economy faces the crisis. The financial crisis is not just a phenomenon of recent decades. Each country specific fluctuations in the economy are known as the economic upswing and downturn. When the prolonged downturn proceeds, it is said that a very serious crisis occurs. The Global Financial Crisis and the Central & Eastern European Union Countries

The global financial crisis has significantly affected the European Union, especially the new members such as Czech Republic, Estonia, Latvia, Lithunia, Hungary, Poland, Slovenia, Slovakia, Romania and Bulgaria. Reasons and circumstances of economic crisis in different countries in different

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