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26 Jan 2015
Exposure to a Greek crisis - Deutsche Bank
FXStreet (Bali) - Economists at Deutsche Bank revisit the exposure of a number of emerging markets in the European region to a Greek crisis.
Key Quotes
"We find that direct exposure to Greece via the banking sector, trade linkages and FDI is important for a relatively small number of countries – only Bulgaria, FYR Macedonia, Serbia and (to a lesser extent) Romania have notable direct exposure to Greece; further, this exposure has declined somewhat in the past three years."
"Elsewhere, it will ultimately be the strength of individual country fundamentals, more than small variations in moderate direct exposures to Greece, which will determine their sensitivity to another period of broader market stress that could accompany a fresh Greek crisis."
"In this respect, while the Central European economies would inevitably be affected given their degree of integration with the euro area, we also think their economies are in much better shape than they were at the start of the European debt crisis due to substantial improvements in macroeconomic fundamentals."
Key Quotes
"We find that direct exposure to Greece via the banking sector, trade linkages and FDI is important for a relatively small number of countries – only Bulgaria, FYR Macedonia, Serbia and (to a lesser extent) Romania have notable direct exposure to Greece; further, this exposure has declined somewhat in the past three years."
"Elsewhere, it will ultimately be the strength of individual country fundamentals, more than small variations in moderate direct exposures to Greece, which will determine their sensitivity to another period of broader market stress that could accompany a fresh Greek crisis."
"In this respect, while the Central European economies would inevitably be affected given their degree of integration with the euro area, we also think their economies are in much better shape than they were at the start of the European debt crisis due to substantial improvements in macroeconomic fundamentals."