From the Baltic to Turkey, fears grow of a domino effect of struggling nations• Eastern Europe feels the chill
• Hungary and Ukraine seek billions in IMF loans
• Falling oil prices raise fears for Russian economy
David Gow in Brussels
The Guardian, Tuesday October 28 2008
The spectre of a cascade of failing economies from the Baltic to Turkey was raised yesterday as a $16.5bn IMF bailout for Ukraine was mired in political infighting and Hungary sought its own $10bn rescue package.
A showdown in Kiev between Ukraine's president and prime minister threatened to torpedo the emergency loan deal secured by the beleaguered ex-communist country. With Hungary putting the finishing touches to its rescue package analysts predicted that the growing crisis could force even oil-rich Russia to seek help from the IMF and EU.
Turkey, in political crisis and financial meltdown, began talks with IMF officials on a second loan package within the past decade. Belarus and Serbia also turned to the fund for help.
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.
The immediate focus of concern was on Ukraine where a clash between President Viktor Yushchenko and his ex-Orange revolution ally, prime minister Yulia Tymoshenko, over elections next month put at risk the IMF package which includes controversial measures to shore up the banking system. .............(more)
The complete piece is at:
http://www.guardian.co.uk/business/2008/oct/28/creditcrunch-globaleconomy1
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