“Is there a CEE bonus?”
In 2009, the spectre of Austrian and CEE bankruptcy was raised at the height of the international financial crisis. This viewpoint was spread by the media, economists, rating agencies and even the International Monetary Fund (IMF). This was based on the incorrect assumption that the total loan exposure of Austrian banks (incl. CEE) was too high compared to Austrian gross domestic product.
Austrian financial institutions do, of course, have a large exposure to CEE. However, the economic output of the CEE countries concerned had not been included when estimating the loan volume. In addition, loans were and continue to be covered not only by Austrian savings deposits (which would have been too little), but also by local deposits in the CEE countries. It was a gross miscalculation that was later shown to be flawed. The IMF apologised, but the damage was enormous. What had been a CEE bonus for the Austrian economy became a serious Eastern European malus.
“Once a reputation is ruined… ” – this saying definitely does not apply to the CEE region. However, it took years of presenting facts before investors were convinced and lost confidence was restored. Naturally, growth rates are also at a moderate level here, but on average the CEE region is growing twice as fast as the Eurozone. In addition, growth rates like those before the crisis could not have been sustained over the long term. From this point of view, the crisis had a cleansing effect.
However, the fact is that the current situation should benefit Austria and the CEE region over the long term. This view is supported by the fact that they have practically no direct relationships with emerging markets that have run into difficulties, such as China and Brazil, and weak oil and commodity prices benefit industrial production. The small economic revival in Western Europe and weaker euro should also have further positive effects on the export industry.
All in all, the CEE bonus can be seen not only in an expansion of the business base, but also in greater economic diversification as a consequence of the variety of different countries involved and in a higher average growth rate for the region as a whole due to the sound catch-up potential.