I’ve always thought that it would be the East European banks that fold first: perhaps Slovenia with sovereign default (the hunger for Western living standards after long years of Soviet rule). I noticed it in Hungary in the early 1950s. In combination with the EU Council prioritising mortgage subsidies over rental subsidies, and, of course, the subprime mortgages, plus the wide difference in cultures within the bloated EU. It’s all a cocktail that makes a potential bomb to go of, the next time we are on the downslope of the neoliberal roller coaster.
IMF uses Erste results to remind the taxpayers of their responsibilities
It seems highly unlikely that Erste (the biggest banking group in central and eastern Europe) chose late Thursday – just prior to a national holiday in the US – by accident as the time aperture in which to tell everyone it was facing a whopping bad debt provision in Hungary and Romania. The loss is understood to be in the region of €3 billion. Even by contemporary banking standards, that is a rather large amount of money.
This is a multi-layered case, being unique…and yet in some ways absolutely classic in terms of the reaction to it.
For starters, Viktor Orban’s government in Budapest has had the audacity to actually take on a large Austrian banking institution and give it a hard time about unfair business terms: its new law will force Erste to repay rip-off fees involved in…
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