Eastern Europe moves to the spotlight

Seems these days Friday equals to Red for the “Risky Assets”.Eastern Europe had moved to the periphery of world’s attention with the PIIGS in focus following the Greek Crisis.Greece came under huge pressure from the bond markets when news was revealed that it had apparently fudged government accounts to get into the European Union.The Greek Contagion took a $1 trillion bazooka by the European leaders to bring some semblance to the world markets.However the Euro is amost 6% below the level it was when the “Euro Rescue” was undertaken by Sarkozy and Merkel.

Previous Hungarian government lied and manipulated

Hungary has come under spotlight with the Prime Minister’s Office saying that the previous administration had “lied” and “manipulated” about the true state of the economy.Hungary saw its currency forint,bonds falling leading to a cascading effect on other European stock markets which are down 3-5%,a Rise in Risk Aversion and a further depreciation of the Euro which has fallen to a 4 Year Low. Don’t know how people are expected to trust governments/currencies anymore when the top levels of administration indulge in outright fraud.

Hungary Official Says Economy in Grave Situation; Forint Falls – Bloomberg

Hungary’s economy is in a “grave situation” because the previous government “manipulated” figures and “lied” about the state of the economy, said Peter Szijjarto, spokesman for Prime Minister Viktor Orban. The forint fell for a second day, dropping as much as 1.8 percent.

A fact-finding committee, headed by State Secretary Mihaly Varga, will likely present preliminary figures on the state of the economy over the weekend, Szijjarto said today at a news conference in Budapest. The government will present an action plan within 72 hours after Varga releases his findings, he said.

Europe continues to roil with bad news

The  European region had other bad news with Romania saying they will have to make drastic reductions to the government sector ( Good news long term but bad for the economy/markets in the short term) and SocGen making  headlines with rumors of large derivative losses.Note SocGen’s lax trading rules had led to massive losses of $7 billion  for the bank and a massive dive in world markets last year.

Romania expects 125,000 public sector jobs cuts – CNBC

Some 125,000 public sector jobs need to be cut in 2011 to ease pressure on the state budget as the country remains mired in a deep recession, a government official has said.

Andreea Paul-Vass, economic counselor to the prime minister said late Thursday the public sector would need to shed 250,000 jobs to return to 2007 levels, when the government started hiring more agressively thanks to a three-year economic boom.Finance Minister Sebastian Vladescu said earlier this year that 70,000 state-paid jobs should be slashed in 2010.Romania has 1.36 million public workers at a population of about 22 million. Unemployment is currently about 8 percent.