Slowing Exports, High Debt Shake Central and Eastern Europe
This is the VOA Special English Economics Report.
Leaders
of the European Union met Sunday in Brussels to discuss measures to deal with
the world financial crisis. But the emergency meeting showed growing divisions between
western European countries and newer members of the European Union.
Economies
in central and eastern Europe have been hit hard by the worldwide credit crisis
and less demand for exports in western Europe.
 |
| Hungarian Prime Minister Ferenc Gyurcsany, left, and Czech Prime Minister Mirek Topolanek at the E.U. meeting in Belgium |
Hungary’s prime minister, Ferenc
Gyurscany, has called for two hundred thirty billion dollars in aid for the
weakest of the twenty-seven members of the European Union. The leader of
Europe’s biggest economy, however, opposes such a large plan. German Chancellor
Angela Merkel has suggested targeted aid for a few countries instead.
The European Union and the International
Monetary Fund have already lent Hungary twenty-five billion dollars. Latvia
received more than nine billion from the I.M.F. in December. But demonstrations
fueled by the economic crisis led the Latvian government to resign last month.
The World Bank and two European
development banks agreed last week to provide up to thirty-one billion dollars in
aid to central and eastern Europe. A main concern is that the failure of some banks
or governments to pay their debts could send a financial shock across many
countries.
The effects could reach beyond central and eastern
Europe. Banks in Austria, Italy and Sweden that expanded into the area during
good times are now in danger of heavy losses.
Even
in countries outside the euro area, like Hungary and Poland, businesses and
individuals often borrowed in euros. Lower interest rates made euro loans a
good deal at the time. Now, those loans have become more costly as local
currencies have lost value. Chances are greater that foreign currency loans in
some countries will not be paid back.
But some of the central and eastern
economies in the European Union are in relatively good health. Poland is the
biggest and its economy is less dependent on exports. The Czech Republic is
also considered in a better position. The Czechs currently hold the E.U. presidency.
On Wednesday, banking supervisors from
the Czech Republic, Slovakia, Poland, Romania, Bulgaria and Hungary released a
statement. They expressed concerns that information about risks to financial
systems in central and eastern Europe is “often simplified and
misleading.”
And that’s the VOA Special English Economics Report,
written by Mario Ritter. I’m Steve Ember.
If you enjoyed this post, please consider to leave a comment or subscribe to the feed and get future articles delivered to your feed reader.
Slowing Exports, High Debt Shake Central and Eastern Europe
Bad loans could mean trouble for western European lenders. Hungary’s prime minister is calling for $230 billion in aid for weaker E.U. members. Transcript of radio broadcast:
05 March 2009
This is the VOA Special English Economics Report.
Leaders of the European Union met Sunday in Brussels to discuss measures to deal with the world financial crisis. But the emergency meeting showed growing divisions between western European countries and newer members of the European Union.
Economies in central and eastern Europe have been hit hard by the worldwide credit crisis and less demand for exports in western Europe.
Hungarian Prime Minister Ferenc Gyurcsany, left, and Czech Prime Minister Mirek Topolanek at Sunday’s E.U. meeting in Belgium
Hungarian Prime Minister Ferenc Gyurcsany, left, and Czech Prime Minister Mirek Topolanek at the E.U. meeting in Belgium
Hungary’s prime minister, Ferenc Gyurscany, has called for two hundred thirty billion dollars in aid for the weakest of the twenty-seven members of the European Union. The leader of Europe’s biggest economy, however, opposes such a large plan. German Chancellor Angela Merkel has suggested targeted aid for a few countries instead.
The European Union and the International Monetary Fund have already lent Hungary twenty-five billion dollars. Latvia received more than nine billion from the I.M.F. in December. But demonstrations fueled by the economic crisis led the Latvian government to resign last month.
The World Bank and two European development banks agreed last week to provide up to thirty-one billion dollars in aid to central and eastern Europe. A main concern is that the failure of some banks or governments to pay their debts could send a financial shock across many countries.
The effects could reach beyond central and eastern Europe. Banks in Austria, Italy and Sweden that expanded into the area during good times are now in danger of heavy losses.
Even in countries outside the euro area, like Hungary and Poland, businesses and individuals often borrowed in euros. Lower interest rates made euro loans a good deal at the time. Now, those loans have become more costly as local currencies have lost value. Chances are greater that foreign currency loans in some countries will not be paid back.
But some of the central and eastern economies in the European Union are in relatively good health. Poland is the biggest and its economy is less dependent on exports. The Czech Republic is also considered in a better position. The Czechs currently hold the E.U. presidency.
On Wednesday, banking supervisors from the Czech Republic, Slovakia, Poland, Romania, Bulgaria and Hungary released a statement. They expressed concerns that information about risks to financial systems in central and eastern Europe is “often simplified and misleading.”
And that’s the VOA Special English Economics Report, written by Mario Ritter. I’m Steve Ember.
If you enjoyed this post, please consider to leave a comment or subscribe to the feed and get future articles delivered to your feed reader.
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