The Greek Crisis Strikes Romania and Bulgaria

The impact of the problems of Greece will soon be felt in the economies of Southeast Europe warned international organizations and analysts, with Bulgaria and Romania being the most likely targets receiving the strongest pressure as Greece in the last decades has been one of the largest investors in the region. Many analysts predict that the Greek companies which are facing a difficult situation in the domestic market will avoid movements abroad for a long period of time. This would translate into a significant reduction in investment flows to the countries of Eastern Europe.
“I think the danger is real. We may not record a full withdraw from the Balkans, but certainly we will not trace increased flow towards these countries, as recorded in previous years, “says Neil Shearing analyst at Capital Economics.

A probable attack on these 2 economies and their banking system is been warned by the European Bank for Reconstruction and Development. The two poorest economies of the EU, Bulgaria and Romania are struggling to move out of a deep recession and are estimated to have the greatest exposure to the Greek crisis due to the strong presence of Greek banks in the region. Officials from these countries stress lately at every opportunity that the Greek crisis is not a threat to the financial system, while emphasizing that the subsidiaries of Greek banks in the region have high profits and strong capital base. Analysts believe however that the subsidiaries of Greek banks in the region may move forward with limiting loans.