The response: Krugman says Krugman said the obvious:
With picture & everything, via his nytimes blog:
Aha. It seems that I have reached the stage where I create a stir by saying the obvious. On Monday I held a Princeton-sponsored event at the Foreign Press Club, and was asked about Austria’s Eastern European exposure. I responded by saying what everyone knows: Austrian lending to Eastern Europe is off the charts compared with anyone else’s, and that means some serious risk given that emerging Europe is experiencing the mother of all currency crises.
Is Austria doomed? Of course not. It’s not as outrageously leveraged as Iceland, or even Ireland. But it may need a bank bailout that will seriously strain the country’s resources. So what I said at the event — that after those two, it’s probably the advanced country at most risk from the financial crisis — shouldn’t even be controversial.
Aha. It seems that I have reached the stage where I create a stir by saying the obvious. On Monday I held a Princeton-sponsored event at the Foreign Press Club, and was asked about Austria’s Eastern European exposure. I responded by saying what everyone knows: Austrian lending to Eastern Europe is off the charts compared with anyone else’s, and that means some serious risk given that emerging Europe is experiencing the mother of all currency crises.Is Austria doomed? Of course not. It’s not as outrageously leveraged as Iceland, or even Ireland. But it may need a bank bailout that will seriously strain the country’s resources. So what I said at the event — that after those two, it’s probably the advanced country at most risk from the financial crisis — shouldn’t even be controversial.
parmenides - 15. April, 18:08
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