In the last decades, many IFIs have provided immense support to the region as a whole, through finance, technical assistance and expertise. For the specific issues discussed, apparently pure finance is not sufficient. The  12  Nasdaq Baltic Market is the common equities market with harmonized trading rules and market practices, single trading system, joint trading lists, harmonized indexes, single membership and single trading and settlement currency, allowing investors easy access to all Baltic listed financial instruments through any of the exchanges. 15  so called “blended” funding, which combines provision of credit, grants, expertise and advice, at the same time, probably is the optimal support for sustained development. 16  5. Conclusion Investment was an important growth driver in the CESEE region before the outburst of the global crisis. However, after the crisis, investment ratios plunged across the board with the level of investment in most of the countries still below the pre-crisis maximum. The slow post crisis recovery is rather persistent and might have serious negative effects on the potential for growth of the region. One of the frequently underlined constraints for more rapid investment growth in CESEE region, among others, is the access to financing. Along this line, an important aspect is how to reconcile the current large investment needs in the region with the already high leverage level, both in the public and in the private sector. Public sector investment is usually concentrated on the infrastructure segment, an area where CESEE region has achieved substantial progress in the last two decades.

PLATFORM FOR DISCUSSION Speaking note  SPEAKER:  Anita Angelovska Bezhoska, Governor  DATE:  5-7 September 2018  LOCATION:  Vienna, Austria  NATIONAL BANK OF THE REPUBLIC OF MACEDONIA info@nbrm.mk www.nbrm.mk   INVESTMENT AND FINANCE, CHALLENGES FOR THE CESEE REGION This Speaking note was prepared for the EUROFI Financial Forum, 2018, organised in association with the Austrian EU Council Presidency  Contributors to the note: Ana Mitreska, Biljana Jovanovikj, Tanja Jakimova and Neda Popovska Kamnar Department: Monetary Policy and Research  1  Investment and Finance, Challenges for the CESEE Region  1. Investment in CESEE – historical perspective and recent developments The investment in spurring growth and supporting productivity and efficiency of an economy is a well-known principle. The larger the investments, the higher the potential to grow. Yet, the investment function is dependent on many factors such as expectations of investors, the already existing capital stock, the general business environment, the level of demand, technological progress, the possibility to invent and innovate, the leverage level, and the access to finance. Before the outburst of the global crisis, investment was an important growth driver in the CESEE region, though the growth was not sufficient to provide for stronger capital accumulation. Notwithstanding the heterogeneity among countries, prior to the crisis, investment was an important contributor to the overall growth, supported by large capital inflows, which propelled the productivity of the economies, as well.