Central and eastern Europe was only just beginning to recover from its 2008 crash earlier this year. Now the eurozone crisis threatens to be even more damaging to the region.
Foreign-owned banks – mostly from the eurozone – control about 80% of banking assets in central and southeastern Europe (excluding Turkey). The average loan-to-deposit ratio, although slightly lower than in 2008, is still dangerously high in these countries, as well as in parts of the former Soviet Union.
Emerging Europe’s public debt ratios in most cases are well above 2008 levels, leaving finance ministries even less room for manoeuvre. Poland and Serbia, for example, almost reached self-imposed public debt caps this autumn. Such states are more dependent than ever on the decisions of bankers such as Gianni Papa, head of central and eastern Europe at UniCredit.
"Central and eastern Europe will remain UniCredit’s biggest growth engine," Papa tells Euromoney. He forecasts medium-term average GDP growth two percentage points higher than Western Europe.
Andreas Treichl, chief executive of Erste Bank, has stated Erste’s continued focus on retail and corporate banking in what he calls "the eastern part of the European Union". Announcing a €1.5
