Already a number of countries, including Romania and Serbia by the end of March, have sought assistance from the International Monetary Fund, and others will follow. What was taken as economic convergence with Western Europe in recent years has in many instances been revealed to be an unsustainable spending binge fueled by cheap credit and encouraged by reckless governments. In short, there was an assumption in Central and Eastern Europe (CEE) that the good times would never end, and consumers, corporates and governments behaved accordingly -- with dire results. The problems the CEE countries are facing may seem local, but the crisis afflicting the region began in the Western financial system and has been significantly aggravated by foreign-owned banks operating in CEE. While the crisis in CEE will get deeper before it improves, the prospect of further integration with the EU is an asset that cannot be underestimated.
Europe In Crisis Laurence Neville Global Finance; May 2009; 23, 5; Docstoc pg. 24 Reproduced with permission of the copyrig
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