UniCredit’s Vivaldi: Downside risks in CEE offset by strong growth outlook
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UniCredit’s Vivaldi: Downside risks in CEE offset by strong growth outlook

UniCredit regional division head says the UK crashing out of the EU is one of the main external risks to CEE this year.

A no-deal Brexit could have a negative impact on the key manufacturing economies of central and eastern Europe (CEE), according to UniCredit’s regional division head.


Carlo Vivaldi,

Carlo Vivaldi lists Britain crashing out of the EU as one of the main external risks to the region’s economies during the coming year, along with slowing growth in core Europe, potential additional sanctions on Russia and global trade wars.

“The countries that could be most affected by a disorderly Brexit are those that are closely tied into German manufacturing chains – Czech Republic, Slovakia and Hungary,” he says. “At the same time, we don’t see a very high direct immediate spill-over effect to CEE.”

In terms of internal risks, Romania tops the league table after the government’s surprise announcement in late December of a punitive tax on bank assets that came into effect on January 1.

Local lenders have estimated the initial impact of the tax, which will rise in line with the Robor interbank rate, at €1 billion a year.

“It’s a material amount,” says Vivaldi. “It will clearly reduce the ability of banks to support the real economy, which will in turn impact economic growth.”

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