Analysts in Washington say countries in Eastern Europe, including Russia, are being hit much harder than those in Western Europe by the global credit squeeze and economic slowdown.
Russia specialist Clifford Gaddy says Russia's economy is being severely hurt by the collapse of oil prices. He says not only has government revenue fallen sharply, the slowdown in economic activity is affecting millions of workers. Gaddy says that Russian car production in January fell 86 percent from the same month the previous year.
"It is the bust after a global boom or global bubble in which nearly everyone shared and now everyone is sharing the bust," said Clifford Gaddy.
Anders Aslund of the Peterson Institute for International Economics says the crisis is equally acute in Ukraine. He says the withdrawal of once plentiful foreign capital has been devastating. Aslund points to gloomy economic data from January.
"Steel and mining have fallen by about 50 percent," said Anders Aslund. "Also, construction has fallen by a similar scale. And the currency has depreciated by about 50 percent, but seems to have stabilized now at a lower level."
The International Monetary Fund has organized financial support for Ukraine, Latvia, Hungary and Serbia - countries that were in danger of not being able to service their foreign loans. Marek Belka, the head of the International Monetary Fund's Europe Department, says many East European nations experienced a real estate bubble that has now burst. He suggests that West European banks irresponsibly boosted their lending to the East, fueling the property price boom in the Baltic States.
"Everybody [foreign banks] was fighting for market share, basically disregarding any kind of risk," said Marek Belka.
Belka says bank lending to Eastern Europe increased by an unsustainable 600 percent earlier this decade and now exceeds one trillion dollars. Swedish, Austrian and Italian banks are particularly exposed to East European economies that have now declined as much as East Asian countries did during their debt crisis 10 years ago. All three analysts spoke at a conference at Washington's George Washington University.