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Eastern European countries will face credit crunch

In Eastern Europe, many countries have an emerging, strong economy. All of the turmoil from the financial market strain around the world is likely to be a factor here, soon. In many of these markets, there will be an economic slowdown that will trigger even further slowdowns in countries that have large stakes here.

One of the areas where there may be trouble is within the country's banks, which have already begun to take the hit. More so, trouble like that of the Societe Generale could be a lurking problem in other banks.

According to the World Bank's chief economist, Pradeep Mitra, as reported by the Financial Times, "These countries will be hit. There is no way out of it." He did note that most of these emerging economies were strong enough to hold off an economic slowdown of large proportion but that many others are vulnerable.

When considered as a whole, investors are looking for those markets where there is less risk and moving funds away from those that are risky. In a closer look, though, investors seem to be moving funds from more advanced countries and looking for lesser developed one such as the Balkans as well as the former Soviet Union.

Defining what an emerging country is can be difficult though, as reports are often different from one area to the next. Most consider Cyprus, Turkey, Ireland, Spain, Greece and Portugal to still be developing countries.

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