Greek crisis will not immediately affect CEEs, Erste analyst says

The Greek financial crisis will have no immediate impact on Central and Eastern European countries (CEEs), according to Erste Bank analysts.Erste chief analyst Fritz Mostböck said yesterday evening (Thurs) that the crisis might delay adoption of the Euro by CEEs, which had been expected to occur in 2015 or 2016.He noted Poland and Bulgaria had already postponed the date on which they would adopt the Euro.Mostböck also claimed that CEEs that had not yet adopted the Euro had an economic advantage in that they could devalue their currencies to make their economies more competitive by lowering their real debt through inflation.He also observed that CEEs with the exception of Hungary had state debt lower than the EU average of 80 per cent of gross domestic product (GDP) and much lower than Greece’s 115 per cent of GDP.The Czech Republic, Hungary, Romania, Croatia and Slovakia, with a total of 52 million inhabitants, had collective state debt of 200 billion Euros, lower than Greece’s state debt of 300 billion Euros, he added.Mostböck also noted that Croatia, Poland, Romania, Serbia, Slovakia, the Czech Republic, Ukraine and Hungary would have a growth rate of 1.7 per cent in 2010, higher than the growth rate of 0.7 per cent predicted for Euro-zone countries. Only Croatia among CEEs would have a negative growth rate, minus 1.1 per cent, this year.A decline in exports to CEEs had been a primary factor in the downturn in economic growth in EU member states, he said.The analyst also noted that the Greek crisis posed a special risk for Bulgaria, Romania and Serbia owing to Greek banks’ traditionally significant role in those countries.