Eurozone Exposure Haunts Credit Outlook

Emerging Europe is the most highly exposed emerging market region in the world to the rapidly escalating sovereign debt crisis and increasing risks of economic stagnation (if not recession) in the eurozone. Central Europe in particular stands out, while we also highlight that political risk in Ukraine and Turkey point to deteriorating sovereign risk profiles. Our ratings suggest that several states identified in our latest sovereign risk rating update, are likely to see considerable further widening of credit default spreads.

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