TALLINN -- Marten Ross, deputy governor of the Bank of Estonia (Eesti Pank), took the opportunity of an April 18 financial seminar in Spain to point out a new role for emerging Europe's economies as stabilizing influences when the larger economies look decidedly wobbly.
"The mostpressing question of recent months has been what the extent of thefinancial turbulences stemming from the US financial markets is. Thedecrease in interbank trust has reached also the euro area and is sureto affect the financial system of developing countries. At the sametime there are speculations about the possibility that the currentglobal economic cycle allows developing countries to play a stabilisingrole. Estonia has so far been very little impacted and our financialsector remains strong, ensuring the financing of the economy," Rosssaid.
According to the Eesti Pank number two, uncertainties arising from the financial system are gradually spreading, manifested in the deteriorating economicgrowth outlooks of several countries. "If the economic activity of ourtrading partners declines, it is possible it will decrease the Estonianexports, but so far, our foreign trade situation has been good,"Ross said. He added that a much more serious problem is globalinflation, which can also be associated with the financial marketturbulences. "The impact of price growth has been large-scale and verystrong. Food and fuel prices are high in both global markets and smallcountries. This, in turn, affects people's confidence."
"Countrieslike Estonia are able to survive the recession period relativelypainlessly owing to earlier economic reforms, but we definitely have totake into account there will be some changes in the economic structure.So far, Estonia has managed them successfully."
