Head of Austria’s central bank, Ewald Nowotny, says that while there will be a difficult adjustment process and a deep recession for countries in Central and Eastern Europe with large current account deficits there will be no meltdown or defaults.
He is clearly talking his book here because his countries banks are heavily exposed to the region, dangerously so, some would say. Uncertainty over CEE is a macro headache for the euro across the board.
