Crisis Is Separating Eastern Europe's Strong From Its Weak »
Posted By gamahuche 8 months, 2 weeks ago in Business & Finance“The disaster spotlight is now being pointed at east and central Europe,” said Gernot Mittendorfer, the Austrian chief executive of Ceska Sporitelna, a large Czech bank owned by the Erste Group of Austria.
“But panicked investors are wrongly lumping all of the countries in this region together, and the reality is that there is not widespread rot.”
The most vulnerable are the newer states. Moody’s Investors Service warned in a report last week that western owners of East European banks are coming under pressure to withdraw capital from countries already reeling from budget deficits and foreign borrowing. The countries most at risk, the report said, are the Balkan countries, Hungary, Croatia and Romania.
While Asian economies recovered fairly quickly from the 1990s financial crisis by exporting their way out of recession, the export outlook does not look promising. Demand for goods is plummeting almost everywhere in the world.
Here in the Czech Republic, the problem hit home last week after foreign guest workers, who filled manufacturing jobs during the boom years, were offered free airline tickets and a 500-euro allowance to go home.
Few economists expect the region to avoid the recession rippling around the world. Nonetheless, Mr. Mittendorfer said, panic is not justified. The financial perils in places like Ukraine, he said, are not inextricably linked with wealthier, better-managed economies like the Czech Republic, Slovakia or Poland, which are already in the European Union
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gamahuche
"I would rather be a square peg than fit in a pigeon hole" -
an essay which won me the "Lamb Essay Prize" at the Religious ...
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gamahuche8 months, 2 weeks ago
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There are big differences amongst the countries of Central and Eastern Europe - and there is even confusion about the delineation line between East and Central..
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Certainly its safe to say that the Czech Republic is Central and so far the crisis has not hit here to any noticeable extent - which is not to say that it won't.
In the news this week, and frequently sensationalised, was the OFFER to guest workers from countries further east - with a strong contingent from Mongolia - of a free flight home plus a 500 euro voucher.
This was in fact a realistic and reasonable strategy because these workers are the ones who are most likely to become jobless in a downturn and would have next-to-no rights of social benefits.
As a self-employed Czech citizen with relatively few years of residence I also have no rights to social benefits, apart from health care.
While the inflow of new capital into the Czech lands will probably slow down our industrialists are busy with projects in many other countries to the East and in Asia, which show no signs of slowing down. Skoda car company may be slowing down here but they have a huge new plant near Bombay and are active in China also.
The Indian restaurateur who is quoted in the story will definitely be seeing a drop in his business but he has virtually nothing to lose on the larger scale. He was here at the very beginning and all his property was acquired at knock-down prices. However I was meeting a friend in Prague a few days ago who was speaking of a new hotel which has just opened where the minimum price for a room is 400 euros a night. He asked them what their low season rate would be and they said 'the same'. We laughed in our beers! -
Valery504Comment removed: Hard Banned
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Progressive8 months, 2 weeks ago
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FTA:
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Radek Spicar, a spokesman for Skoda, the Czech automobile maker, said the company had suffered a steep decline in orders from Western Europe, in particular Germany. Skoda has reduced its temporary workers to 800, from 4,000, and has shortened its work week to four days, from five. So far, it has not dismissed any of its 25,000 full-time workers
Germany’s stimulus package includes an offer of 2,500 euros to every person who scraps a car nine years or older and buys a new one, and that is bringing more Germans to Skoda showrooms, Mr. Spicar said. The Czech government is designing its own stimulus package as well.
My understanding is that Germany is also underwriting the repatriation of Turks, its largest foreign minority, who came into the country as guest workers over the past few decades. -
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