The deepening euro zone crisis is threatening the integration of Eastern European nations into the single currency area, the Chief Economist at the European Bank for Reconstruction and Development (EBRD) told CNBC’s “Worldwide Exchange”.
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Budapest, Hungary
“The euro zone is still a meaningful concept for these countries but if it was to disappear it would have a very negative impact on these countries' political momentum.
We hope that [Greece leaving] doesn’t happen but Greece is important as a trading partner, its remittances payment of workers and its banking links in South East Europe,” Erik Berglöf said.
He added the big danger to Central and Eastern Europe was for the disintegration of the entire bloc which could not be “completely ruled out.” “The real threat is if it would undermine the whole euro zone.
The economic consequences would be recession in the euro zone dragging down central Europe and some undoing of trade links potentially," he added.
He added that Eastern Europe had built on its strong global export reputation and was now a major source of exports globally.
“Eastern Europe has become a major source of global exports and Eastern European countries have been very successful at taking market share of exports globally," he said.
Berglöf added that even Hungary, which has deep macro-economic problems, has still managed to gain market share in its exports globally.