There is no risk of a payment default in
eastern and central European countries hardest hit by the global
financial crisis, a senior International Monetary Fund official said on
Monday, Reuters reported.
Asked if there was a possibility of a default, IMF European Department Director Marek Belka said: "I don`t think so."
"This
is something that happens last. I don`t see the danger of even the
fiscally embattled (countries) not being able to make their
repayments," he told an audience at George Washington University`s
School of International Affairs.
Belka`s views were also shared by Anders Aslund,
a senior fellow for Eastern Europe, Russia and Ukraine at the Peterson
Institute. Ukraine, one of the countries hardest hit by the global
financial crisis was unlikely to default on its external debt
obligations, Aslund said.
"Defaulting is highly unlikely for
Ukraine. Ukraine is likely to weather this financial crisis as it has
taken the right steps earlier on," Aslund said, but cautioned that more
economic and social reform was needed.
Among the countries that
have sought IMF financial aid in recent months, Hungary and Latvia are
both European Union members but do not use the euro.
Belka, who
was Poland`s prime minister from 2004-05, said the European Union
should beef up its balance of payments fund to bolster fragile member
states and those outside the euro zone.
"This is the first line
of defense they should do," Belka said, adding that it was also
important to strengthen the supervisory system to identify speculative
bubbles.
Belka said the European Central Bank should make available swap lines to countries that are preparing to join the euro.
Earlier
on Monday, EU Monetary Affairs Commissioner Joaquin Almunia said the EU
may have to extend its emergency aid to more countries from central and
eastern Europe but help might be needed for countries outside the euro
area.
Some analysts and politicians are speculating that
Lithuania and Romania may be next in line for EU and IMF aid, but
Almunia refuse to discuss any names. "Right now, there are no other
candidates," he said.
Reuters
