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Hi Jeff,

Thought this was interesting in a 'doom and gloom' way! It doesn't look like any of them actually have the ability to save themselves from within.

<snip>Finally, the rating agencies are seeing the light. Perhaps belatedly, Fitch has downgraded its ratings for Bulgaria, Hungary and Romania. The fact is that none of the economies of Eastern Europe (GUR, IEER.LSE) have succeeded in completing the socialism-to-free market transition. On the contrary, virtually all former Soviet Republics are well on their way to become basket cases when compared to their counterparts in Western Europe, with the possible exception of the Czech Republic and Poland.

Fitch Ratings stated that "Emerging Europe" is most vulnerable to the global recessionary environment due to high levels of debt and current account deficits. But, debt and current accounts apart, it is gradually becoming evident that the economic criteria applied to the break-up of the Soviet Union in 1990-1991 were influenced more by Cold War political considerations than by reasonable inferences governing the viability of the residual constituents as independent, modern-day nation states.

In fact, in view of the debacle in Ukraine, it was surprising that credit default swap traders were pricing the three downgrade targets below 500 basis points (5-year sovereign risk) just two weeks ago; Ukraine CDS prices, at that juncture, had moved swiftly, from 900 to 2100 basis points within days.

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