Foreign News: Eurobonds and Contagion to Poland and Slovenia

My aim in these posts is to use my language skill to present you a more comprehensive European press view that you won’t get on other blogs. Hopefully, this gives you a more balanced perspective of what different European constituents are saying about the sovereign debt crisis.

I have already highlighted some of the issues being reported on Eurobonds. But I should point out that I believe the Germans are already considering Eurobonds despite official denials. The Germans want to explore all of the eventualities and will only discuss the palatable ones in public. The article in Der Standard from Austria points to this likelihood.

The other major story is contagion. The English-language press has had considerable coverage of downgrades in Portugal, France and Hungary. What they have not got a lot on is the contagion into eastern Europe. Poland’s currency is tanking as a result. Moreover, the halt of Austrian loans into central Europe is creating a credit crunch there which will negatively affect the economy irrespective of the macro fundamentals (which are poor due to real economy effects out of Euroland). Slovenia, a former model country in the east, is the other major target of contagion.

This post originally appeared at Credit Writedowns and is posted with permission.