If there was any doubt that Eastern Europe was in trouble, it should be slipping away by now. Years of carry-trading mortgages without hedging has left a number of borrowers on the wrong side of the Swiss Franc, and facing serious defaults. Poland has something like 60% of all residential mortgages denominated in Swiss Franc- a product of low rates and aggressive marketing through the "feeder" of Austria. Don't worry though. The IMF (read: Angela Merkel) is here to save the day.
European leaders called for doubling the International Monetary Fund's war chest to $500 billion for bailing out financially stricken nations, amid new signs that Europe's former Communist east is sliding into a full-blown crisis.
Europe's developing economies are facing their worst economic trauma since the fall of the Berlin Wall 20 years ago. Capital is fleeing Europe's east, sending currencies sliding and threatening the region with deep declines in output and employment, and a deluge of debt defaults. Poland's industrial output in January fell at a painful 15% annual rate; its currency last week hit an all-time low against the Swiss franc.
Crisis Spurs Call for Bigger Bailouts [The Wall Street Journal]