Eastern Europe hit hard by downturn

The ratings company said some of Europe"s largest banks could be downgraded because of loans to eastern Europe. A "continuous downward rating pressure" in the area has led to worsening asset quality and western banks" reliance on short-term funding, the report said.

The recession in eastern Europe will reportedly be more severe on average given the region"s generally large macroeconomic imbalances, such as fiscal and current account deficits. Moody"s said the scarcity of international funding would force the deficits to "contract abruptly", resulting in more significant declines in domestic demand and overall GDP.

The report added the "vulnerability of countries with large external deficits has therefore increased substantially". Modern banking systems in eastern Europe have only emerged recently, in the past two decades.

They are therefore more vulnerable in times of financial turmoil because they do not maintain the same level of maturity as their western European counterparts. Around $52bn has been offered in aid to Latvia, Hungary, Serbia and the Ukraine by the International Monetary Fund over the last six months. According to Capital Economics research, these bailouts could extend to Bulgaria, Romania, Lithuania and Estonia. The MSCI East Europe Financials Index dropped 16% to the lowest in nearly six years following Moody"s report.

Related articles Construction firms should look to Eastern Europe Firms hit by crunch should seek PPP deals in eastern Europe KPMG finds Eastern Europe set for transport boom.

All articles

Estonian experts predict 8% economic recession in 2009

Presuming that the capacity of the global economy will remain on the level of the last quarter of 2008, the recession in Estonia could exceed 8% in 2009 and the decrease would continue until 2010, concluded Tartu University professors Raul Eamets and Urmas Varblane, Tallinn University of Technology retired professor Jaak Leimann and Estonian central bank's vice president Märten Ross, as LETA reported, referring to Postimees.

The experts have advised the government upon drawing up the negative supplementary budget.

According to the four experts, the outlook for Estonian economy for the year 2009 has thus inevitably worsened, and further development is as uncertain as in the rest of the world.

As the world economy has worsened in the past six months, the economic growth and inflation have turned out smaller than predicted in 2008 by the Ministry of Finance and the Estonian central bank.

The extent of overlooking the projections depends greatly on outer factors. The European Commissions last forecast anticipates a 4.7% decrease in 2009 for Estonia, and a small increase in 2010.

All articles

Empire Carnaval - the night of mystery

TALLINN - The winter season is usually not very generous for party people, especially the post-Christmas period, but this year is different. A new, exclusive dance-carnival event that was born on Dec. 13 is now about to enter its second phase. Everyone gets tired of night clubs every once in a while.

Everyone has at least thought about dressing up as a princess or pirate, covering their faces with masks and heading to a celebration that would be more than "just another party." The same idea has been bouncing around in the head of the "father" of the Empire Carnaval, businessman Aleksei Pankow. The idea at first was only to celebrate his birthday in a special way, but this quickly became the theme of a full-blown carnival.

That party was such a success that soon there wasn"t a single person in Tallinn who didn"t know about it and would not ask if it would happen again. This is the story of Empire Carnival. The first test in December has shown that many people were waiting for the chance to dress up and that nobody is yet tired of this special kind of fun.

On the edge of two very contradictory days - the notorious Friday the 13 and romantic Valentine"s Day - comes a fresh way of spending Friday night; Empire Carnival 2 will hit the night scene of Tallinn. Empire Carnival is a party unaffiliated with any night club, every time it is in a new place.

The opening was in the popular Venus club, while this time it will be hosted in Vertigo, a luxury restaurant. The restaurant"s location is quite promising - it is the 9th floor of a new modern building, just next to Emporio Armani, the largest such store in the Baltics. Considering that this is one of the top Estonian restaurants in terms of both design and food, it is the perfect place for a glamorous party.

Pankow has promised that this is going to be a night full of surprises and will leave lots of great memories. This time the carnival is located on two dance floors and two VIP rooms, while a secret place will be opened for the bravest guests.

It will be called the "Cold Lounge," which probably means that the restaurant is prepared to open its terrace - an absolutely amazing place in the summertime. The show program will consist of a slew of different competitions organized by well-known show man Vitali Vesterinen. Though this will likely be typical Russian style partying, it is still sure to be fresh and entertaining.

Also in the program are spectacular laser and body art shows, fortune telling and card reading, great music and Mega Drive on the dance floor. Above all, the night will be spiced up by the performance of the famous Estonian illusionist Jurgen Veber.

And at exactly half past midnight, organizers have promised to provide an enchanting sight which Tallinn has never seen before. This time the dress code themes are the Ancient Rome Empire, fairy tale heroes and erotic. It is a great opportunity to attack the costume rooms of the theaters or the specialized shops - some will even provide quite valuable discounts for those holding a ticket to the carnival.

For those who are absolutely busy, there is the possibility to buy a mask at the door - but one thing for sure: no one will be without a costume. Get ready for the night full of magic and seduction.

Source http://baltictimes.com/news/articles/22262/

All articles