The European Union's eastern wing faces a long slog out of the economic crisis and the jury is still out on how it will negotiate the minefield of fiscal, banking, and markets challenges ahead.
The worst is probably over for a region once dubbed "the sub-prime of Europe," where a boom driven by western bank loans, exports, investment, and consumer spending slammed to a halt and caused steep contractions in almost every country.
The region has been pulled back from the brink by global policymakers' success in beating back the worst of the financial crisis and restoring liquidity to markets.
Following a surge in global risk appetite, investors have poured back into emerging EU markets. But factors that drove the region's pre-crisis boom may be dead for years to come and the question is which, if any, of a number of potential time bombs could prompt further convulsions and which will prove duds.
"It may well be that we are entering a period of low or zero growth, a state that may qualify as a 'prolonged recession'," Thomas Mirow, the president of the European Bank for Reconstruction and Development, said on Wednesday.
Full text from Reuters here: http://www.reuters.com/article/CentralEuropeanInvestment09/idUSTRE58O4QS20090925
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