Friday, July 10, 2009

More Stress in Eastern Europe

Ed Harrison of Credit Writedowns reports on what may be a worsening financial situation in Eastern Europe. There was much angst about this regions several months ago, but those fears were forgotten when accounting rules on U. S. banks were changed and a snap-back stock and commodities rally occurred/was engineered. Perhaps the gloom was warranted. The non-italicized intro and ending remarks of those of Dr. Harrison; the rest is his translation of the Austrian report.

Ten eastern European countries now looking to IMF for bailouts

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.

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