10-28-2008, 01:14 PM
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Confirmed User
Industry Role:
Join Date: Apr 2005
Location: Vegas
Posts: 4,499
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Quote:
Originally Posted by DamianJ
Get some links from The Guardian that agree with it, and I might listen.
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Here you go:
http://www.guardian.co.uk/business/2...globaleconomy1
Quote:
......Iceland, already bailed out with a $2bn loan but facing a 10% decline in national output, indicated it would need a further $4bn as it turned to its Nordic neighbours, Norway and Sweden, for aid. With global financial turmoil sweeping central and eastern Europe, experts pointed to a likely wave of falling dominos as countries living way beyond their means succumbed to frozen global credit.
Emerging economies in central and eastern Europe within the EU for the past four-and-a-half years have enjoyed powerful economic growth fuelled by excessive lending from western banks which have taken over local institutions. The result has been soaring inflation and trade deficits.
Andreas Wörgötter, a senior OECD economist in Paris, said: "A common aspect of their problems is an over-expansion of domestic demand, particularly in areas like real estate, which helped create the property bubble - and this was loan-financed. If the loans were in foreign currencies then the wind is blowing on these countries from all four directions."
Gros calculates EU banks have ?1,500bn in outstanding loans to these countries and "you need only a small percentage of these to go bad and you can imagine the scale of the recapitalisation required".
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бабки, шлюхи, сила
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