Romania, And Others, Could Bankrupt AustriaPublish date: 15-02-2009
Eastern European states, including Romania, could bankrupt Austria, since Austrian banks cannot support the losses registered by branches in the region on their own, and the state will be forced to intervene, according to Austrian magazine Profil.
The publication also notes an additional risk from the instability of the Euro and asked rhetorically "the state supports the banks, who supports the state?".
The article mentions the risks between Romania and Bulgaria. Where the past several years have seen significant current account deficits, as well as high degrees of debt in the population, especially for loans in Euro.
Profil added there is the risk of more low-performance loans in the region, as unemployment is growing and the devaluation of national currencies reduced the population's capacity of paying back loans in foreign currency.
In some countries the amount of unpaid loans could even reach 10%, which spells total losses of over EUR30 billion.
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