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October 16, 2021

Danske Bank says Romania is vulnerable to Greek crisis

Bulgaria, Romania and Hungary are the Eastern European countries whose economic markets are the most liable to be “contaminated” by the Greek crisis, according to Capital Economics research institute, quoted by Hotnews. “Anxieties linked with the desperate financial situation in Greece ran high these past days, and the financial markets in Eastern Europe have been affected by this,” economist Neil Shearing, Capital Economics’ specialist in emerging markets, explained. “No country is immune to problems in Greece, and financial markets in the region are likely to suffer most of the consequences, at least until the situation is stabilised,” he added.

According to the same source, the bonds and currencies of European developing countries had not been affected by the Greek crisis until this week, as investors appreciated efforts made by Hungary, Latvia and Romania, all benefiting from external aid, to reduce state expenditure and the wages of state employees. “Given the gravity of the situation, we would advise investors to avoid, for the time being, the markets of Central and Eastern Europe,” Lars Christensen, chief-economist of Danske Bank, also says.

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