Meanwhile the Wall Street Journal highlights the plight of those in east European countries who took out loans in foreign currency because the interest rates were lower, only to see their repayments soar as their domestic currency fell on international markets. And even the original repayments would be harder to keep going as domestic economic activity dried up.
In Romania, one of the European Union's poorest members, more than 60% of household borrowing is in foreign currency. In Poland, the figure is 36%. In the Baltic states, the proportion ranges from 70% to more than 90%. In Hungary, nearly 70% of the country's total household debt was borrowed in foreign currency.In time the foreign banks will want to repossess lots of assets. And what then?
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