Emerging Europe Monitor RSS Feed

Human Rights Improving (Emerging Europe Monitor - Russia and CIS)

Tue, 27 Oct 2009 00:00 GMT

Uzbekistan was praised for its progress with human rights on September 8 by Janez Lenarcic, Director of the Office for Democratic Institutions and Human Rights (ODIHR), part of the Organization for Security and Cooperation in Europe (OSCE). Lenarcic specifically highlighted the abolition of the death penalty, the release of many political dissidents who have opposed Uzbek President Islam Karimov, and ongoing efforts to improve conditions in detention facilities. We see this as a positive sign for Uzbek-EU relations going forwards and part of President Karimov's wider attempts to diversify his foreign policy

VMRO-DPMNE Still Tops The Polls (Emerging Europe Monitor - South East Europe)

Fri, 23 Oct 2009 00:00 GMT

According to the latest data provided by the

Further Media Arrests (Emerging Europe Monitor - Russia and CIS)

Tue, 27 Oct 2009 00:00 GMT

An Azeri court of appeal on October 9 confirmed a three-month jail sentence for journalists Sardar Alibeili and Faramaz Allakhverdiyev, both convicted for slander against a high-ranking Azeri official. This comes only four months after the European Union criticised Azerbaijan for arresting bloggers Adnan Hajizade and Emin Milli on June 8. The EU and UN Human Rights Committee have both previously expressed concern over the freedom of the media in Azerbaijan, however we hold to our view that there appears limited likelihood for an improvement in their human rights policy going

Gas To Flow Again (Emerging Europe Monitor - Russia and CIS)

Tue, 20 Oct 2009 00:00 GMT

A spokeswoman for Russian President Dmitry Medvedev has stated that a deal for the renewal of gas exports from Turkmenistan has been reached. Gas exports came to a halt in April 2009 following a pipeline explosion on the Turkmen side of the border. We stress though that there has yet been no agreement on price and the Kremlin has not committed to a timeline. Nevertheless, we hold to our view that the flow of gas exports will resume by the beginning of next

Intra-Coalition Stability Still At Risk (Emerging Europe Monitor - Central Europe & Baltic States)

Mon, 26 Oct 2009 00:00 GMT

Though Latvian Prime Minister Valdis Dombrovskis suggested on October 23 that the worst of the country's recession was likely over, we caution that ongoing intra coalition ructions will continue to weigh on financial and political stability in the medium term. In particular, there remains a significant risk that parliament will fail to approve the government's proposed 2010 budget, which envisages LVL500mn in cuts next year, with opposing parties struggling to agree on the focus and magnitude of spending cuts. Even should the budget secure parliamentary approval, we believe that the government's deflationist strategy will prove disruptive to political stability, with opinion within the five-party coalition similarly likely to diverge going forward over the virtues of internal versus nominal devaluation.

Limited Deleveraging Requirement Over Medium Term (Emerging Europe Monitor - South East Europe)

Thu, 22 Oct 2009 00:00 GMT

The continued expansion of Romania's external debt pile is largely reflective of the improvement in international capital market liquidity and global risk appetite since March. Moreover, we believe that despite the marked increase in private sector liabilities, the foreign debt load does not pose a substantial risk to financial stability, owing largely to the favourable maturity structure and relatively prudent banking sector liability management

Foreign Leveraging Back On In 2010 (Emerging Europe Monitor - Russia and CIS)

Wed, 28 Oct 2009 00:00 GMT

We believe that the risks of a sharp corporate deleveraging process in Russia has been substantially mitigated in Q309. On the back of global capital market stabilisation and an improved outlook for oil prices, we have revised up our Russian external debt forecasts through the medium term. We now expect foreign liabilities to top US$500bn by end-2010, and to expand further to US$922bn by end-2014. To be sure, the pace of debt accumulation is likely to remain sharply moderated from the pre-recession period, with growth averaging 14.2% y-o-y.

Proposed Election Amendments (Emerging Europe Monitor - Russia and CIS)

Tue, 27 Oct 2009 00:00 GMT

Russian President Dmitry Medvedev has stated that he would consider revising the election law after complaints from opposition parties following regional elections held on October 11. In an unprecedented move, all three major opposition parties including the Communists, Fair Russia and Liberal Democrats, staged a walkout of the State Duma after the elections, protesting that the existing system unfairly rewarded the governing United Russia Party. Opposition leaders specifically highlighted the practice of early voting, which they argued was vulnerable to manipulation. Despite the joint opposition action, we do not believe that this will result in closer cooperation among the non-government

Macroeconomic Forecast Czech Republic (Emerging Europe Monitor - Central Europe & Baltic States)

Tue, 27 Oct 2009 00:00 GMT

Consumer prices failed to expand in y-o-y terms in the Czech Republic in September, continuing an unbroken run of y-o-y disinflation since March, following on from 0.2% y-o-y inflation in August. Food prices contracted 5.8% y-o-y, whilst transport prices decreased 5.6% y-o-y. Although some members of the Czech National Bank have stated their support for further interest rate cuts in an attempt to reverse the disinflationary trend, we currently are not forecasting further monetary easing before end-year, and as such expect CPI to only recover gradually. We are forecasting CPI to come in at 1.0% by end-year, rising to 2.3%

Macroeconomic Forecast Russia (Emerging Europe Monitor - Russia and CIS)

Tue, 27 Oct 2009 00:00 GMT

While Russian headline real GDP growth data for the third quarter has yet to be released, macroeconomic conditions are showing marked signs of stabilisation. Indeed, according to latest data from the Federal State Statistics Service, Russian unemployment fell back down to 7.6% in September. This was a marked improvement from the 7.8% in the previous month and the 9.5% peaks seen in February. As a result of the improving labour market picture, we have substantially revised down our end-2009 unemployment forecast to 8.5%. We maintain that seasonal variables will push the jobless rate back up in the short term, while a weak recovery in 2010 will likely mean further increases to 11.0% by the end of that year. Beyond 2010 though, we expect a steady improvement, with unemployment falling back to 7.0% by 2013.

Macroeconomic Forecast Azerbaijan (Emerging Europe Monitor - Russia and CIS)

Tue, 27 Oct 2009 00:00 GMT

Azerbaijan posted real GDP growth of 5.0% y-o-y over the first eight months of the year, bucking the regional trend to be the only Caucasus country to avoid recession. Sustained expansion of industrial output volumes helped to lift headline growth, while the stabilisation of oil prices through Q209-Q309 has also improved the investment outlook over the medium term. We hold to our forecast for the Azeri economy to expand by 3.8% in 2009 and accelerating back to 9.0% growth in 2010.

Debt Ructions (Emerging Europe Monitor - Russia and CIS)

Tue, 27 Oct 2009 00:00 GMT

Russian Deputy Finance Minister Dmitry Pankin announced on October 6 that Moscow may report Mongolia to the Paris Club, if no progress is made on the repayment on an outstanding US$180mn loan. Russian investment in Mongolia has stalled this year, and it is unlikely to resume again until an agreement is reached on repayment. The loan was part of a joint venture between the two countries in the Mongolian mining sector. Going forward, although we note the potential for some disruption in relations between the countries, we nevertheless expect Russia to continue to invest in Mongolia over the medium

Macroeconomic Forecast Georgia (Emerging Europe Monitor - Russia and CIS)

Tue, 27 Oct 2009 00:00 GMT

According to latest data from the National Bank of Georgia (NBG), inflation in Georgia ticked back up to 0.5% y-o-y in September, from -3.1% in August. The latest data affirms our view that Georgia will be able to avoid a protracted period of deflation, with our end-year consumer price growth forecast remaining at 0.5% y-o-y. Our core view reflects our expectation that despite the sharp recession in Georgia, that inflationary pressures will remain on account of the devalued currency and rising commodity prices. In 2010, we forecast inflation to average 2.5% y-o-y.

New Missile Defence Plan (Emerging Europe Monitor - Central Europe & Baltic States)

Tue, 27 Oct 2009 00:00 GMT

Civic Democrat (ODS) leader and former prime minister Mirek Topolanek expressed his support for a new missile defence system proposed by United States Vice-President Joe Biden on October 23, during a meeting in Prague. The new US missile defence plan is intended to replace original plans for a missile defence shield at the Brdy military training ground, 90km south-west of Prague. While we expect the new plan to ensure a continuation of good relations between the two countries, we nevertheless caution that the issue of a new missile defence shield could be a source of potential conflict between the ODS

Chinese Relations To Improve (Emerging Europe Monitor - Russia and CIS)

Tue, 27 Oct 2009 00:00 GMT

Moldovan prime minister Vladimir Filat met with the Chinese Ambassador to Chisinau on October 23, to discuss the development of relations between the two countries. The talks included a confirmation of a US$1bn loan from China to Moldova for infrastructure projects, which had previously been set out in a memorandum of understanding. Improved military ties were also discussed, with further Chinese financial assistance earmarked to support reforms of Moldova's armed forces. We see the move as indicative of increased Moldovan international engagement, as the country seeks external financing to aid its economic