"Bulgaria has a well capitalized and well regulated banking sector while the central bank holds a large amount of foreign reserves. The overall fiscal position is also sound with fiscal reserves in excess of the low level of gross public debt, and Bulgaria’s history of fiscal surpluses reflects an understanding across the political spectrum of the importance of fiscal prudence in the context of the currency board arrangement,“ the bank said.

“The fundamental growth model for the region remains intact,” commented Chief Economist Erik Berglof. “However, the crisis has highlighted weaknesses. There are lessons to be learnt,” he added.

“Unlike currencies during the Asian crisis, eastern European currencies did not go into freefall for extended periods of time,“ the report said.


---Well only the above statements should have been the report/article published by the Novinite.

Way more fair and real analysis done by the EBRD but let me give them a piece of advice. EBRD I wouldn’t worry very much about Eastern Europe, you should focus on the stalled US and Western Europe economies, which are pretty much starting to frighten me. Will they ever be able to recover? Would there be any future growth in them?

Eastern Europe, China, India, Brazil is pretty much all we have for the future!

George

" you should focus on the stalled US and Western Europe economies, which are pretty much starting to frighten me. Will they ever be able to recover?"

What are you talking about? Don't you listen to the news? The US exhibited 3.8% growth in the most current trimester.

Nellie,

First it was 3.5% and that’s only for the third quarter, the year over all will still be negative and on Friday the employment report will show you unemployment levels of 10%. This means LOW consumer confidence and possible double dip (W shape recovery).
The Western European socialists on the other side of the pond are being way to conservative in stimulating their economies and are still playing nationalistic games which doesn’t help much the EU.

Honestly with that attitude I think we should start learning Chinese, the sooner the better!

George

Don't worry, the Chinese are all learning English.

Figment (Nellie I believe)

Here is why I worry (even though we may be able to communicate in English with the Chinese)

The US is continuing to lose its competitive edge because of its unfavourable business climate and conditions.

Some of which are:
High corporation taxes (second in the world)
High expenses related to health insurance
High expenses and influence related to unions (this is pretty much what destroyed the US car and other manufacturing)
Relatively high wages
Decreasing numbers of knowledgeable and educated workforce (education is losing edge)

Western Europe’s weaknesses and competitive disadvantages:

Unfavourable business climate (harder to start and own a business)
Relatively high business taxes
Too many workers right (harder to hire and fire)
Too much government influence and control (25-30 days vacations, working rights, conditions etc.)
Relatively heavy union presence
Expensive labour force
Spoiled, low morale workforce (too many strikes, demonstrations, etc.)
Lack of fluidity between countries in business and labour transactions (some dose of old stubborn nationalism)


Well this basically summarizes all the main reasons why the emerging markets are “stealing the baton and speeding ahead”!

George,

"EBRD I wouldn’t worry very much about Eastern Europe, you should focus on the stalled US and Western Europe economies, which are pretty much starting to frighten me."

The only purpose of EBRD is to support investment and economic development in Eastern Europe and former USSR. EBRD is not entitled to act outside that region.

George,

"The Western European socialists on the other side of the pond are being way to conservative in stimulating their economies and are still playing nationalistic games which doesn’t help much the EU."

The two biggest economies in Western Europe are governed by conservatives, not by socialists. Furthermore you seem not to be informed very well about the amount of deficit spending in Western Europe. Germany alone is spending more than 500 billion Euro to support the banking sector, not to speak about the huge amount spent to revive the economy in general. The result is the biggest public debt in history and someone has to pay for it in the future. You seem to forget about that.

That the US wants Europe to pay for the mistakes in the irresonsible US policy in the past is understandable, but I don't think that the criticism you can hear and read from certain experts is in any way justified.

One more thing: Basel II was never introduced by the US, although they were the one's to impose this to Europe, making loans much more expensive for SME's. Would this system have been in place in the US, we wouldn't be in such a serious economic crisis.

Furthermore, stimulating the economy by throwing good money after bad is not going to work. You can't spend your way out of a crisis caused by irresponsible spending. The US stimulus did not work, it just plunged the US further in debt. The dollar is on a slippery slope and the Chinese own most of US debt. Soon the Chinese will stop buying bad US debt and then the US will be bankrupt. The dollar will be worthless. Then maybe the US will stop strutting around the world pretending to "help" everyone.

"Western Europe’s weaknesses and competitive disadvantages:

Unfavourable business climate (harder to start and own a business)"

George, you have obviously tried to start a business in India or China. Otherwise you wouldn't write such a nonsense.

"Relatively high business taxes"

Taxes alone are not an indicator. You forget that some of the high-tax countries are considered as the most attractive destinations for foreign investments. That's because the money raised with this taxes is spent to get an excellent infrastructure.

"

Western Europe’s weaknesses and competitive disadvantages:

Too many workers right (harder to hire and fire)"

Your ideal seems to be a worker without rights. But the 19th century is over, at least in Europe.

"Too much government influence and control (25-30 days vacations, working rights, conditions etc.)"

Agreed, there is a need for deregulation, but all the governments in Europe have made efforts in the last years to improve their competitiveness. And you should also know that e.g. in Germany the vacations are not ordered by the government. They, as labour relations in general are subject to bargaining between the Employers' Associations and the Trade Unions. The costs per unit in the German manufacturing sector have decreased dramatically in the last years, creating more than 3 million new jobs in a short time. This was a result of a bargaining process between Employers Associations and the Unions, who accepted longer working time, more flexible working time, night and weekend shifts, and many other unpleasant things. On the other hand employers gave certain employment guarantees. So far your mentioning of 'too many strikes' and demonstartions is far from reality.

It depends on what your product is. If your product is easily transportable, then you can start a business in a country with low taxes and low wages. If your product is a service that can't be transported, like infrastructure, then you are stuck with high taxes and high wages.

The only "rights" workers have is to perform their jobs and to get paid. Nothing more. And if they are producing something that no one wants to buy, then they will have no pay check.

'Western Europe’s weaknesses and competitive disadvantages:

Expensive labour force'

It is the productivity of the workforce, and not the absolute cost that is decisive. Usually European workers are well educated and work efficient. Europe's economy is based on high-tech, manual labour is much less to find than in China or developing countries. An expensive labour force makes it attractive to investment in machinery, and is so also a driving force of innovations and technical progress.


"Spoiled, low morale workforce (too many strikes, demonstrations, etc.)"

As mentioned before, I have a very different perception.

"Well this basically summarizes all the main reasons why the emerging markets are “stealing the baton and speeding ahead”!"

George, the rate of growth alone says relatively little. When you start from a very low level, it is comparatively easy to achieve 10% growth per year. But for an economy that has an average income of let's say 50000 $ it is much more difficult to achieve this.

" The costs per unit in the German manufacturing sector have decreased dramatically in the last years,"

Yeah, that's because BMW is manufacturing in South Carolina, Mercedes Benz is manufacturing in Alabama, and VW is manufacturing in Mexico. lol

"George, you have obviously tried to start a business in India or China"

ooops, I meant of course 'you have obviously NOT tried...'