Roubini Topic Archive: Emerging Europe and CIS
From the Financial Times: Here we are again. Syria’s government has killed dozens more of its own citizens, and what does its old ally, Russia, do? It obstructs a substantive UN Security Council response. This has long since become a predictable story, but it raises a fundamental question: what is Russia’s place in today’s world? […]
Nouriel Roubini’s 2006 Speech at Davos-WEF Warning That Italy and PIGS May Experience Debt Crisis and EZ Break-Up in 5 years; and Tremonti’s Reaction to the Speech
Here is a post from my blog from January 28, 2006: On Friday I was in Davos on a panel on the “Ups and Downs of EMU” (European Monetary Union) where ECB head Trichet, Italian Economy Minister Tremonti, a few other EU officials and myself were supposed to discuss the following questions: Will EMU collapse […]
Editors Note – This Financial Times Op-Ed is drawn from a more extensive piece of research, How to Avoid a Greek Tragedy in Europe, provided earlier this week to RGE’s clients.Another Great Depression may have been averted but the crisis is far from over. Credit is tight and contagion is spreading to all highly leveraged points in the global economy: mortgage-ridden households (Iceland, the US, the UK, Spain, Ireland, central and eastern Europe); banks (Iceland, the US, the EU, Russia and the former Soviet Union); quasi-sovereign debt (Ukraine’s Naftogaz, Dubai World); and now Greece and other weak links in the eurozone.
As meetings in Davos begin, political scientist Ian Bremmer and economist Nouriel Roubini share their region-by-region political and economic expectations for the year ahead.
Today’s swollen fiscal deficits and public debt are fueling concerns about sovereign risk in many advanced economies. Traditionally, sovereign risk has been concentrated in emerging-market economies. After all, in the last decade or so, Russia, Argentina, and Ecuador defaulted on their public debts, while Pakistan, Ukraine, and Uruguay coercively restructured their public debt under the threat of default.
Today we look at some of the trends that might move global energy markets in 2010. Yesterday’s OPEC meeting, the first hosted by Angola, brought few surprises as countries pledged to maintain their current production cuts in the face of an uncertain global economic recovery. But as growth starts to pick up, could a combination of oil demand growth from emerging market economies and geopolitical supply vulnerabilities boost the oil price back to US$100 per barrel level–a level that could put the economic recovery in jeopardy?
Fears of a full-fledged regional financial crisis across Eastern Europe have eased, calmed by a strong IMF presence, hefty external assistance to those in need, and a general improvement in global risk appetite. Nevertheless, the region is not out of the woods. The specter of a Latvian devaluation still looms, banking stress continues, and rising political risk in several countries with IMF programs is a concern.
The Good: Bright Spots Have Emerged
Risks may linger, but bright spots have emerged. The second quarter upturns (q/q) in France and Germany—key export markets and important sources of foreign capital for Central and Eastern Europe—are a positive sign, but the jury is still out on the strength of the recovery. Meanwhile, the improvement in global risk appetite cannot be underestimated. As the saying goes, “A rising tide lifts all boats.” For now, investor appetite for Eastern European sovereign debt has picked up compared to earlier this year, which has alleviated external financing risks.
The Improved: Contagion Effects from a Latvian Devaluation Likely To Be Limited
From The Globe and Mail:Anthony Jenkins/The Globe and Mail
One powerhouse in the BRIC group is just hanging in there. Hint: It isn’t Brazil, India or China
Conventional wisdom rarely survives a good stress test, and few tests have been as stressful as what the global economy has endured over the past 24 months. A healthy season of reappraisal has dawned, shining a new light on boom-time notions such as the value of opaque markets, the untouchable status of the American consumer and the wisdom of deregulation.
One piece of bubble wisdom that has escaped relatively unscathed, however, is the assumption that the BRIC countries – Brazil, Russia, India and China – will increasingly call the economic tune in years to come. The BRIC notion, coined in a 2003 Goldman Sachs report, is not all bad: At 75-per-cent correct, it scores a good deal better than most economic prognostications of the day.