Emerging Europe

The sovereign is one to watch in 2015, and not just because of the eurozone recovery, or conversely its vulnerability to Greece.

Raiffeisen insiders insist the bank’s current woes stem from circumstances beyond its control. Outsiders say the business is now paying for the sins of the past. A new leadership is desperately trying to reposition a bank whose most important markets are in turmoil, and whose ownership structure leaves it with unique capital challenges. CEO Karl Sevelda has a mountain to climb.

The banking regulator in Poland has a well-earned reputation for toughness, but it might want to try a little tenderness when it comes to Raiffeisen wanting to leave.

The rouble’s crash sent currencies tumbling across the Caucasus and Central Asia. Banks look relatively well placed to withstand an inevitable downturn. But with protracted stagnation looming, is it time for policymakers to build bridges further afield?

Funds ‘more selective’, say bankers; private equity exits boost supply.

Bulgaria sells €3.1 billion record breaker; Slovenia prices 20-year deal inside Spain.

It should be no surprise that Latvia is trading well inside Italy. The fiscally disciplined Baltic states would fare better than the eurozone’s southern periphery in the event of a Greek exit.

Emerging-market corporate debt – the fastest-growing asset class in the world – faces its first stress test, thanks to a surging dollar and rising US yields. As developing countries square up to another possible debt crisis, an increasingly inevitable round of corporate defaults threatens to swamp an illiquid market.

Successive crises have taken their toll on the private-equity industry in emerging Europe and enthusiasm for the region has waned. Nevertheless, its combination of strong growth and opportunities for convergence with western Europe continues to attract a hard core of supporters.

Belarus’s leaders are promising a dramatic package of reforms that could overhaul the country’s sclerotic command economy and reduce its dependence on Russia. The only trouble is, no one believes them. Mixed messages to the bond markets haven’t helped.

Boosted by a rich run of privatizations, the Turkish M&A market burst into life last year, hitting the highest total value of deals for close to a decade. The hope for 2015 is that the same feat can be repeated. In an election year, anything is possible.

Viktor Orban’s spat with Hungary’s banks has cost the country dear. The bank tax may be on the way out, but the financial sector’s troubles are far from over.

Hungary’s banking sector is one of the region’s most exciting and innovative, stimulated by greater competition and government moves to tackle bad debts.

Belarus’s first deputy economy minister Alexander Zaborovsky insists that policymakers are keen to boost the share of the private sector in the economy through the development of new businesses. This meets with a high degree of scepticism locally, given the government’s record on the treatment of entrepreneurs.

The majority of Central and Eastern European sovereigns have been upgraded by Euromoney's country risk survey since the third quarter of 2014. Hungary is still irking the experts with its heightened political risks, but elsewhere there are still reasons to be cheerful about the region’s prospects.

Hungary’s government commits to reduce bank taxes, while a proposed stake in Erste Bank shows ‘we’re all in the same boat’, says the minister behind the plan.

While finance ministers come and go, one man has been a figure of constancy for the nation’s economy: central banker Mugur Isarescu. He has created a fully functioning central bank in a market economy from the shell of a communist regime. With inflation under control and the exchange rate stable, what is his next challenge?

Russia has been caught in the eye of a perfect storm. Battered by falling oil prices, US and EU sanctions and a dramatic market correction as the rouble was allowed to float, the currency has been in free-fall and liquidity has largely evaporated, with many brokers ceasing rouble trading altogether.

Despite the strengthening dollar and lower oil prices, tactical opportunities in emerging market (EM) foreign exchange abound. The choice of funding currency will be crucial in driving returns in the asset class, say investors.

Basel III law opens up funding; investors bring $1 billion book.

Politicians urge ‘Hungarian’ solution; Polish, Croatian banks in firing line.

Central and Eastern Europe most affected; foreign Swiss franc bond issuance is frozen.

The crisis in Ukraine shows no sign of abating and its impact is being felt across the rest of emerging Europe. Phil Bennett, deputy head of the European Bank for Reconstruction and Development, explains why this is bad news for the region’s companies and what multilaterals can do to help.

As Europe has stagnated since the financial crisis, Russia proved an invaluable source of returns for a handful of lucky western banking groups. But with Putin on the offensive, the rouble on the slide and recession on the horizon, its days as an engine of regional growth look to be over.

The growing likelihood of an economic crisis in Russia will have a major impact on global markets in 2015.

Single currency set to cut debt costs; Diversifying trade from rampant Russia

Foreign banks are finding it hard to make their operations in Hungary pay. They say they are still committed to the country. So what will they make of the finance minister’s public call for consolidation?

BRICs hit the economic wall

Rouble brews trouble for Russia

Emerging market fixed-income and FX markets are poised for a third year of volatility thanks to a slowing China, strengthening dollar, lower oil prices, and the prospect of a US rate hike. The shortage of investable high yielders, as well as the declining creditworthiness of the likes of Russia and Venezuela, will also bedevil markets.