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March 3rd 2009

Spike in Eastern Europe is Short-Lived

Last week, the currencies of Eastern Europe (Hungary, Poland, Czech Republic, etc.) received a nice bump from the announcement of a $25 Billion loan from several multilateral banks, as well as from a slight pickup in risk aversion. The sense of optimism proved to be short-lived, however, as the EU recently rejected a request to provide large scale ($200 Billion+) assistance to the the region. The swift and decisive refusal to intervene injected a fresh wave of uncertainty into a region that is already among the hardest-hit from the credit crisis. The move also carried important political implications, conveying that the EU still sees a clear distinction between eastern and western Europe. Bloomberg News reports:
Growth in Poland, the biggest eastern European economy, will slow to 2 percent, the slackest pace since 2002, the European Commission forecasts. Latvia, a former Soviet republic, will contract 6.9 percent.
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Posted by Adam Kritzer | in Emerging Currencies, Politics & Policy | 1 Comment »

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One Review of “Spike in Eastern Europe is Short-Lived”

  1. Yohay Says:

    Well, at least Poland still experiences growth, something that is quite rare nowadays…

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