Comments (14)

• Borislav

  Finally, Serbia is in the process of acquiring a $2 billion loan.
  ----
  We'll see how much, $2 or $3 billion loan of IMF, it doesn't matter as the statist Government (no matter which political parties were in power) completely managed to destroy private sector in last 8 years (I don't count private monopolies backed by Government as private sector).

  Sorry neighbor, but your article is mainly misleading (not so dramatic as is in British newspapers like Daily Telegraph, Economist or Financial Times, but still is).

  Don't have time to completely comment, but:
  - Hungary is bankrupt because of Ferenc Gyurcsany.
  - Latvia is completely destroyed as they had housing bubble (epic fail).
  - Estonia and Lithuania follow Latvia.
  - Don't know situation in Romania and Bulgaria.
  - Slovenia is doing very well.
  - Czech and Slovak Republics are so far good.
  - Poland - not bad.

  Out of EU:
  - Ukraine - total disaster (epic fail).
  - Serbia - disaster.
  - Croatia - disaster by autumn as they will face tourist Armageddon.

  Published: March 24, 2009 9:44 AM

• ehmoran

  #

  Anybody on this one,

  I was just thinking that maybe all this so-called bail-out money authorized by Congress was used to pay Interest to Major Worldwide Money Changers for money borrowed to support the U.S. Debt.

  Any comments and/or responses????

  Published: March 24, 2009 9:48 AM

• Mashuri

  This is what Peter Schiff missed and why I wouldn't touch any Euro stocks with a ten foot pole until this mess sorts itself out. There will be a lot of casualties when the dust finally settles.

  Published: March 24, 2009 12:32 PM

• ProudCapitalist

  Is it really correct that *$400 billion* of the debts will have to be paid during 2009 alone? My rough estimate is that this number corresponds to about 14% of the GDP of centra/eastern European countries. And since Russia is almost half of that, and not at all very much indebt, it is more like 25% of GDP for all other central/eastern European countries.

  Payments and GDP are of course not directly comparable, but it still seems too huge for me to take at face value. Does someone have furhter sources for such estimations?

  
  Borislav, funny that you give the note "epic fail" to Latvia and Ukraine (and them only). Those are THE two countries to which Swedish banks (except the always conservative Handelsbanken) have lent huge amounts of money. They hit bulls eye there, I suppose (or rather, they created the "epic fail" through their lending). (I'm Swedish).

  The original founder and traditional controling owner of Swedbank, a trust with roots in farmers organisations (though I don't know too much about that political stuff) has recently gone bankrupt. They borrowed money to finance a new crisis stock emission of their own Swedbank. Then the stock price fell drastically below the emission course they signed up for...
  

  Published: March 24, 2009 5:03 PM

• George

  The 400B was probably (previously) assumed to be rolled over. Now they need a new plan...

  PS: The US is planning on borrowning about 2.5T this year (2009). What's interesting is that there is another 2.5T coming due this year which needs to be rolled. So the US Treasury needs to issue about 5T this year.

  Published: March 24, 2009 10:14 PM

• Josh Rae

  Excuse me sir, but in the sixth paragraph I believe you have made a small mistake. You claim that 1.5 billion dollars of the loans made to eastern europe came from western europe. I believe the figure you are looking for is 1.5 trillion. The source you cite seems to concur. If you're ever in need of a freelance editor, please feel free to contact me. Cheers, and thank you for the interesting article.

  Published: March 24, 2009 10:19 PM

• Petr

  Talking about Central&Eastern Europe as a single economic region is overgeneralizing. For example the idea that Eastern and Central European banks are a burden to their West European owners is not universal. It may even be the other way around in some cases: The largest Czech bank - Ceska sporitelna, owned by Austrian Erste had in 2008 record yearly profit of CZK 15.8bn, up 26% from 2007. The entire profit was paid out as divident, 97.99% of it to Erste.

  http://praguemonitor.com/2009/03/05/česká-spořitelna-pay-record-dividend-czk-155bn-erste-bank ... "Erste's capital is relatively low these days due to intangible assets write-offs and other factors, which is one of the reasons for the steep fall of the stock recently. Ceska sporitelna, on the other hand, is well off in this respect."

  Published: March 25, 2009 12:32 AM

• Borislav

  What is real situation in CEE?

  An illustration of Wall Street’s and the City’s attempt to destabilize the EU banking system and the Euro
  http://www.leap2020.eu/GEAB-N-33-is-available!-Growing-Transatlantic-tensions-on-the-eve-of-the-G20-summit-An-illustration-of-Wall-Street-s-and_a2940.html?PHPSESSID=5f54908a18e64d8b731986e993757b3b

  @Petr
  The same story with banks in Slovakia, Poland, Serbia, Croatia and even bankrupt Hungary. They all have record earnings and dividends.

  @ProudCapitalist
  Hungary is epic fail, too, but I forget to put it. Later this year it will be followed by Serbia and Croatia.

  About Latvia:
  Latvian example is simply the best for country leaders all over the world how NOT to run a country. It is impossible to sustain the high growth if it comes from construction boom and excessive consumption only without any productivity growth and real production.
  I remember two years ago, when Latvia experienced huge imbalances like current account deficit over 20%, two-digit inflation, overheated labor market and 10% GDP growth some foreign experts warned that this will lead to hard landing. Their arguments were that there were numerous examples of emerging economies that experienced the same problems. But Latvian authorities said that this is not going to happen to us because we are somewhat special and our economy will cool down sooner or later. Now we see that we are "nosing special" comparing to other emerging economies.
  ---
  Typical housing boom just like was in UK, Ireland, Spain and USA.

  Published: March 25, 2009 6:31 AM

• Alex

  Borislav,

  glad to see someone else from Latvia here! Would be nice to connect, are you on one.lv or skype?

  Published: March 25, 2009 5:16 PM

• Borislav

  @Alex

  I don't know how you concluded that I am from Latvia :-). The writer of article is my neighbor (Romania), and because my first comment was about Serbia, guess from where I am.

  Still, we can talk via Skype, no problem if you want ;-).

  And my Government will today sign arrangement with IMF. We'll get $3 billion bail-out, I mean credit as would Government and media say. And this money will go to National Bank of Serbia for protection of currency. Disgusting!!! All money will be spend on the defending stupid exchange rate! I can't believe!!!

  And Romania is bailed out with $20 billion by IMF... By summer, Croatia.

  Published: March 25, 2009 6:45 PM

• Alex

  @Borislav,

  Sorry, I was misled by use of first person plural here:

  >> But Latvian authorities said that this is not going to happen to us because we are somewhat special and our economy will cool down sooner or later. Now we see that we are "nosing special" comparing to other emerging economies.

  Published: March 26, 2009 3:21 AM

• Borislav

  @Alex

  Ah, you don't have to say sorry. I'm not offended ;-).

  And that about Latvia I copied from one site.

  Peace.

  Published: March 26, 2009 3:47 AM

• Milan

  Borislav,

  do you know more concrete details about the situation in Serbia?
  Please drop me an email at (milan at trninic dot info).

  Thnaks

  Published: March 26, 2009 11:02 PM

• Max

  I think there is another important point to stress:

  Neither the Landesbank Bayern nor the Societe Generale are "private" banks in the regular sense of the name. The Landesbank is state-owned and only (like the Sparkassen) operates under the cover of private market ideas. It's a bit like the Deutsche Bahn, that is a private-enterprise owned by the government of Germany.

  In so far it is not surprising that those banks are now in trouble, seeing that the Landesbank Bayern like other state-owned institutes in Germany, has a lot of trouble. Unlike the Deutsche Bank which still hasn't touched even a cent of bailout money (Konjunkturpaket). Though you are right when you stress the interconnectivity of Eastern Europe and Central Europe, especially Germany and Austria.

  Published: March 31, 2009 9:42 AM