Emerging Market Economies: Why Eastern Europe Is Worst Off

This comes via der Standard, an Austrian daily. My translation below:

The international financial crisis has hit eastern Europe harder than previously expected, according to a press report. At least ten states are negotiating with the International Monetary Fund (IMF) for billion-dollar aid programs, Handelsblatt learned from within the IMF community. The applications’ status will be decided soon as possible. Given the continuing economic crisis a majority of the IMF’s management is in favor approval of further aid requests.

According to the report, among the countries which have requested assistance at the IMF for the fist time are Bulgaria, Croatia and Macedonia. Ukraine, Serbia, Romania, Belarus and Latvia speculate on receiving a faster payout or increased speculated IMF assistance. Hungary had not yet decided whether it needs more money from the fund. The IMF has recently approved the application of Bosnia, as the Bosnian Minister of Finance announced on Thursday. Bosnia-Herzegovina will receive a credit line of 1.57 billion U.S. dollars (1.13 billion euros) from the IMF.

In regards to emerging markets, this story makes clear how much worse the situation in Eastern Europe is than in Emerging Asia or Latin America.

Source

Zehn Staaten Osteuropas verhandeln mit IWF – Der Standard

Comments

[Dave Wrixon:]

Wonder who they blame the US or Russia?

Jul 10 01:39 PM

[ain't no fo...:]

"In regards to emerging markets, this story makes clear how much worse the situation in Eastern Europe is than in Emerging Asia or Latin America."

It also suggests a related problem, namely that the western European banks are on the hook for many of the loans that are now going bust in eastern Europe.

And these would be western European banks that are, not surprisingly, counterparties to U.S. banks via a vast array of derivatives, CDS and related instruments.

People tend to look at the picture one dimensionally, but there is no such thing in today's global economy.

Jul 10 02:14 PM