The eurozone debt crisis is stoking growing fears of spillover in the small and vulnerable economies of the Balkans, with stricken Italy and Greece close neighbours and major trade partners.
A World Bank report this week warned that the debt crisis, with its epicentre in Greece, could see economic links under threat, with trade, direct investment, bank lending and foreign remittances all at risk.
Trade with the EU is a key driver for exports and overall economic growth in the region, accounting in some cases for up to half of all activity, it said.
For Serbia, Bosnia, Macedonia, Montenegro, Kosovo and Albania, some 58.2 percent of their total exports in 2010 went to the European Union, mainly to Italy and Germany.
Concerns are even greater in Croatia which plans to join the EU in 2013.
"Almost all foreign banks in these countries are from EU countries, with a comparatively high share of Greek- and Italian-owned banks. Further stress on their respective parent banks could potentially create another credit crunch in the region," warned World Bank economist Ron Hood.
The World Bank projects growth in the region of 2.5 percent in 2011 and 2.1 percent in 2012 -- but only if the eurozone crisis is resolved, which appears increasingly open to debate as more and more member states get into trouble.
"Should the crisis worsen, economic growth in these countries could be much worse," Hood said.
Serbian Central bank governor Dejan Soskic warned that his country has "already been touched by the crisis."
"As a result, economic activity suffers and projections for next year's growth are in danger," Soskic said, with 2012 current forecast at 1.5 percent.
Serbian President Boris Tadic and Finance Minister Nebojsa Ciric recently voiced concern that the debt crisis in Italy might undercut exports there as Rome slashes spending and hikes taxes in a fierce austerity drive.
Italy is Serbia's main export market in the EU, notably for manufactured products, fruits and woods. In return, Italy is the third largest source of imports while Italian companies Fiat and Benetton are major investors.
The debt crisis in the eurozone comes at a bad time for the Balkans whose countries suffered badly in the fallout from the 2008 global financial crisis and were just getting back on their feet.
In Bosnia, the recovery was possible essentially because of a pick up in exports to the EU, Damir Cosic, a World Bank analyst, told the Sarajevo daily Oslobodjenje.
"As in the case of the (global) economic crisis (...) a significant slowdown (in growth) and a decrease of the consumption are expected in early 2012," Austrian bank Raiffensen said of the situation in Bosnia.
Serbian economist Ljubodrag Savic said he feared that "2012 and even 2013 are going to be very difficult" while Croati faces the same sort of problems with the economy expected to shrink next year as exports to Italy fall 11 percent so far in 2011.
If the crisis in the eurozone continues, it would also mean a decline in foreign direct investment, experts in Croatia warn.
Zdeslav Santic, a Splitska Banka analyst, estimated that 2012 would bring the a significant fall in living standards in Croatia, made more difficult by rising prices for energy and public utilities.
The unemployment rate, which hit 16.8 percent in September, is likely to continue high and companies could come under intense pressure, Santic said.
In Albania, trade with neighbour Greece has already fallen significantly while remittances from Albanians working there were down 11 percent in the first six months of 2011.
Kosovo, which has proclaimed independence from Serbia in 2008, has been generally spared from the eurozone crisis -- despite using the euro as its official currency -- due to its limited access to global markets, the International Monetary Fund said in a statement last week.
Many of its majority ethnic Albanian population of about two million depend of financial support from their relatives living abroad.
The IMF warned, however, that a "renewed downturn in the euro area could negatively affect remittances and foreign direct investment" in Kosovo, one of the poorest countries in Europe, with an unemployment rate of more than 40 percent.
Neighbouring Macedonia, home to some 2.2 million, has said it is prepared for a possible spillover from the eurozone crisis right next door in Greece.