State of the Region Report, 2008
Sustaining Growth at the Top of Europe

The 2008 State of the Region Report is the fifth edition in a series of annual evaluations of competitiveness and cooperation across the Baltic Sea Region. The Report is organized into three parts: Part A of the Report describes the economic, political, and institutional context in which regional collaboration in the Region operates. Part B covers different aspects of the Region's competitiveness, including an assessment of its economic performance, an evaluation of its competitiveness fundamentals, and its position regarding the European Union's Lisbon Agenda. Part C looks at the relations of the Baltic Sea Region in the areas of environment and energy.


The key messages of the 2008 State of the Region Report are:

• The Baltic Sea Region is facing significantly more compleeconomic and political context for collaboration than 12 months ago, especially after the global economic crisis reached a new quality in mid-September.
• The Baltic Sea Region is well positioned to weather the global economic storm better than most of its peers, although for individual countries in the Region, especially Iceland, Estonia, Latvia, and to some degree Russia, there are tough challenges ahead.
• The Baltic Sea Region's medium-term economic performance remains strong and has up to the summer been characterized by many economiesoperating close to capacity at the top of the business cycle; since September the economic climate has, however, cooled significantly.
• The Baltic Sea Region remains one of the most competitive regions in the world, not muched changed relative to last year. Different parts of the Region continue to rely on significantly different sets of competitive advantages.
• The Baltic Sea Region hasthe potential to become a role model for a new integration approach in Europe, especially if the EU Baltic Sea Region Strategy leads to a new level of alignment between local, natinal, and cross-national policies.
• The Baltic Sea Region devotes significant political attention to the environment and energy efficiency. These efforts have resulted in clear achievements in both areas, but especially where collaboration on the level of the Region is needed to get effective action. 
  

The State of the Region Report is written for the Baltic Development Forum by Dr. Christian Ketels and prepared in collaboration with the Nordic Investment Bank and the Nordic Council of Ministers.