Head lines are dominated by Greece and its fantasy economy.
The rest of the PIGS have their snouts firmly in the trough and at best the UK has a stay of execution until the outcome of the election is known.
This has taken the commentators eyes away from the pressure cooker in the East. The problems identified have not gone away. The East is dependent ion the West and the West is dependent on the global economy.
Containing voter over reaction seems to be a function of “it is better than it was even if it is still bad” post Communist stoicism.
But is Eastern Europe about to blow?
If it does, it could take much of the EU with it. It’s an emergency situation but there are no easy solutions. The IMF doesn’t have the resources for a bailout of this size and the recession is spreading faster than relief efforts can be organized.
This is evidenced on the ground – unemployment is increasing sharply – away from major centres. The demand to work outside of Eastern Europe has increased sharply even though employment pay rates have dropped.
Finance ministers and central bankers are running in circles trying to put out one fire after another. Its only a matter of time before they are overtaken by events. Hungry and Latvia have severe problems. Slovakia could be next as a victim of the law of unintended consequences. Car scrappage schemes in the west have boosted the economy that has high car production but with these being switched off a down turn is likely.
If one country is allowed to default, the dominoes could begin to tumble through the whole region. This could trigger dramatic changes in the political landscape.
The rise of fascism is no longer out of the question.
Not a pretty picture.
Author – Chris Slay
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