Financial Times: Eastern European economies battered hard

Kyiv Post ^ | 02/27/09

[TigerLikesRooster]

Financial Times: Eastern European economies battered hard

Yesterday, 12:21

This should have been a year of celebration in central and eastern Europe. It is 20 years since the Berlin Wall fell, the 10th anniversary of Nato's eastward expansion and five years after the European Union began its enlargement into the region: from the Baltic to the Black Sea, the countries that escaped from Soviet rule have much to commemorate.

But the global economic crisis has spoilt the party. Instead of building on the achievements of the past two decades, the region's leaders are feeling the economic foundations shaking under their feet.

All of Europe is heading towards its worst economic crisis since the 1930s. But compared with the wealthy west, central and east European nations are in a weaker position to respond. The dangers are so great that European Union leaders meeting in Berlin last Sunday agreed to back a doubling of International Monetary Fund resources to $500bn (£348bn, €391bn) to support the CEE countries in what Angela Merkel, German chancellor, called an "extraordinary international crisis".

At risk is not only the economic development of vulnerable countries but even their political stability. Nobody expects a repeat of 1930s evils. But mounting anger over recession, unemployment and debt could fuel populism with unpredictable consequences. As in western Europe, there could be social and ethnic tensions. Reformist governments, multinational companies and banks could all become the targets of public protest when livelihoods are threatened. "The economic crisis will impact . . . eastern Europe more than western Europe because the political and economic systems in eastern Europe are more vulnerable," says Carl Bildt, Sweden's foreign minister.

[TigerLikesRooster]

Ping!

[Revolting cat!]

Except one of the poorest at one time, according to the WSJ last week, Slovakia. Go figure! The wolld upside down.

[BobS]

Kidnap George Soros and demand a ransom for all he's worth. He started it by getting Obama elected. Market confidence started dropping when it was obvious what will happen last year.

And release Soros in a T-shirt and boxers in the dirtiest hooker bar you can find and call the cops. How can his hedge fund be +8% last year? Nothing else survived. A judge may just open his transactions up for public view. Market manipulations are a big no-no. And everybody that worked for him will be open.

[fso301]

Of course Eastern European countries are hard hit. The reason is Russia. Anyone who invested in the region has understandably pulled their money out.

[BobS]

You know Germans weren’t hit as hard by the mortgage crap because they mostly own quasi-condos. It just happened to be that way. If the EU didn’t exist, Deutchmarks would be the way to go.

[BobS]

"Of course Eastern European countries are hard hit. The reason is Russia.

That's not the way it works. Every country now sees our president as a very weak one given to whims with currency. Eastern European presidents see Russia as a known stable entity. They will align with stability instead of misguided Trust.

[fso301]

That's not the way it works. Every country now sees our president as a very weak one given to whims with currency. Eastern European presidents see Russia as a known stable entity. They will align with stability instead of misguided Trust.

Well, I agree with you there but my point was that Russia is who yanked the rug out from under Eastern Europe. A weak America is what will force Eastern Europe to realign with Russia.

[dfwgator]

Except one of the poorest at one time, according to the WSJ last week, Slovakia. Go figure!

Yep. If I had to live outside of the US, Slovakia is probably at the top of my list. It's a beautiful country, people are friendly, and a very good percentage do speak English. I've been trying to learn some Polish in the past few years, and Slovak and Polish are fairly similar.