The economic impact of the Kosovo crisis on the candidate countries has been more limited. Bulgaria and Romania have suffered most, mainly from the disruption of the transport route through the Danube. Their current account balance has deteriorated, while the environment for foreign investment in the Balkan region has become more difficult. With the early resolution of the conflict, the main problem of a potential slowdown in investment faced by both countries has disappeared. The key to investor confidence continues to be the progress made by these countries as they pursue reform in preparation for EU accession.
Privatisation continues to make progress in all countries.
In some countries, privatisation has been extended to the utilities sector. In others, there have been successful sales of minority stakes in a number of big telecommunications companies. The accession process has triggered sustained efforts to complete the process of building market economies and is now a driving force behind strengthening the competitiveness of these countries. However, whereas the trade integration between the EU and the candidate countries has moved forward rapidly, there is still much scope for increasing bilateral trade between the candidate countries. The overall volume of foreign direct investment into the Central and Eastern European countries increased in 1998.