The global financial crisis has been tumultuous for Iceland. Until recently considered a rich, successful and competitive nation, Iceland suffered a dramatic collapse of its economy and currency following the collapse of its banking sector in October 2008. It was forced to negotiate a loan from the IMF and further financial support from a number of countries, and saw the fall of its government. The crisis has led to renewed suggestions that Iceland may apply to join the EU and adopt the euro. Following the Government's fall in January 2009, a caretaker Government took over in February and elections are expected on 25 April 2009. The major partner in the caretaker left-wing coalition, the Social Democratic Alliance, was a member of the previous administration and is strongly pro-EU, but its new partner, the Left Green Movement, has said it will continue to oppose EU membership.

This note provides a political and economic overview of the current situation in Serbia. It looks at the halting progress which Serbia is making toward integration into the EU, held up to a large extent by Serbia's failure to cooperate fully with the International Criminal Tribunal for the former Yugoslavia, and at the dynamic political landscape of 2008 with both presidential and parliamentary elections. Serbia continues to have difficult relationships with some of its neighbours, particularly Kosovo, and is awaiting the outcome of the International Court of Justice ruling on the legality of Kosovo's February 2007 declaration of independence. The note also looks at the current economic situation in Serbia. While Serbia had seen strong growth since 2000, accompanied by the implementation of reforms, following the conflicts and crises of the 1990s, Serbia has suffered under the global financial crisis, primarily because of its large current account deficit. Serbia also suffers from high levels of unemployment and poverty.