Miroslav Singer (Financial Times 6.10.2009)
Sir, I take issue with Stefan Wagstyl's column "The long and winding road to recovery in eastern Europe" (Global Insight, September 29), which in my view is exaggerating the magnitude of central and eastern Europe's dependence on foreign financing, despite acknowledging there is "little risk of a repeat of the scares of seven months ago".
Mr Wagstyl supports his assertion that "these difficulties are especially acute in central and eastern Europe (CEE) because of its dependence on external finance, particularly debt" by quoting figures on foreign investment inflows to the region. However, not only are the Czech and Slovenian banking sectors net external creditors of other countries and of the banking groups they belong to, but according to 2008 figures the general debt position of the CEE countries relative to their gross domestic product is much less dramatic than assumed.
Only two CEE countries (Lithuania and Estonia), out of 10 European Union members in the region, have cross-border claims higher than the EU average of 53 per cent of GDP. The claims of only one CEE country (Estonia) exceed the relative weight of such claims for the UK, Denmark or Belgium. The gross external debt of all the CEE countries' banking sectors is lower than the EU average of an equivalent of 92 per cent of GDP.
Of course, some countries face serious cash-flow problems caused by the problems in the financial markets, but given the absolute size of these economies the solution lies safely within the means of international institutions.
Some countries, such as the Czech Republic, have, unlike their western European peers, never had any need to help out their robust financial sectors.
Mr Wagstyl's column offers yet more proof that any press report treating the new EU members from CEE as a single entity tends to come to misleading conclusions.