World Risk Guide – Central Eastern Europe (Part 2)

A number of weeks ago we had visited how the World perceived some of the countries within Central Eastern Europe, well today is the conclusion to this part which looks at how the World perceives the remaining CEE bloc Countries, as follows:

(Risk Ratings in understanding Risky Customers are between 1 and 5, with 1 being the lowest and 5 being the highest.)



Zagreb, Hvar Island and other hotspots have become a hit with this former Yugoslavian country.

Faring much better than its neighbours, but still riddled with issues, Croatia has come a long way, ever since its declare of independence led to a substantially nuclear civil war, back from 1991 – 1995.

But it had done well to apply for EU membership in 2003, getting rid of political redtapes to make way for full EU membership rights and benefits last year.  Mainstays within the shipbuilding industry, and a boom in the service and tourism industry have boosted its economy, especially with outsiders flocking to this country to appreciate its delights.  Predominately seen as one of the EU’s largest trading partners too.

What lets the Country down, are its sometimes instable and corrupt government organisations, which sometimes leads to inability to procure finance for those businesses that need it.  Still perceived as a high risk, especially as its continuing to try and recover from the global recession of 2008-2009, means that there is a significant legal and credit risk in this country.

Experience in taking legal action in this country, is that the costs to issue legal action would usually outweigh the debt.  It would therefore be better to obtain a hefty deposit up front from any Companies that are domiciled within this Country, so as to reduce your overall risk, should you wish to conduct business with the Croats.

Risk Rating = 4


A casualty of the Bosnian War from 1992 – 1995, this Country still continues to suffer from the affects today of the War that left much of the Country war-torn and unable to come to terms with the destruction that it has left behind.

With little or no stable economic and political structure in place, it is imperative to note that this region carries a significantly high credit risk and that legal action is not recommended at all in this region.

Risk Rating = 5


Unlike Bosnia, Slovenia was the most favourable country to come out of former Yugoslavia without any need for civil conflict.

Back in 2007, since its inception into the EU, it has risen with extension in exporting out to other economies.  Although, it has suffered from the global recession, and it is slowly rising through the ranks in having its credit and sovereign debts under control.  Austerity measures introduced were undoubtedly met with resistance.

It would be better placed when it ends its land-locked dispute over geographical areas.  Investment is staggered.  There is still some way before it reaches an average risk rating, and with legal action not feasible in this country, a below average credit risk rating needs to be awarded here.

Risk Rating = 4


Another casualty of the break up of former Yugoslavia, it has caused issues, notably because of its strict political regieme, leading to independence to be declared by both Montenegro and Kosovo, which led to further in fighting in the late nineties, it is only recently thanks to the current government, who have pledged to work closely with both Russia and the EU, that has seen an increase in some sort of economic stability.

Similarly,  an influx of foreign investment from global names would further give a boost to its credit credentials, they are still some way off before they can reach a satisfactory credit risk dimension.  Legal action in this country would be forbidden at this stage in time, until there is accession into the EU that would stabilise its position somewhat.

Under present circumstances a below average credit rating is afforded until such time it can reduce the local corruption that takes place internally amongst its local councils.

Risk Rating = 4


By breaking away from Serbia in a EU brokered deal, this has helped this country, especially through some direct foreign investment to pave its way into a free independent market.

As of 2009, it became a member of the World Trade Organisation, and by adhering to certain conditions imposed to it by the EU, it will quickly gain access to full EU membership, which has become indented somewhat by the country adopting the Euro as its main currency.

From a Credit Risk and Legal viewpoint, it has had little scope outside that of its neighbouring areas, but that like of its other neighbours, a below average rating is granted until such time it can gain access to better credit.

Risk Rating = 4


Still a new nation in the making, which has Nato peacekeepers in the area, until such time it becomes more of a stable region.  Commentators have not issued a Risk Rating for this area and therefore, it is recommended to obtain 100% up front until such time such a rating becomes available.  But judging by its political and economic instabliility as it stands, a low credit rating needs to be given current.

However, it has scope to be an emerging economy to watch in the future, especially considering it has a substantial allocation of raw materials in the area.

Risk Rating = 5


The 1990’s marked a major point in that many from former Yugoslavia and Kosovo alone flocked to that of Albania.  Already struggling, the extra influx of population took a further strain.  Although, unlike some of its neighbouring countries, it is better placed in providing a workforce dealing mainly in the primary sectors, its still a long way before it can come into line with that of its Western neighbours.

A lot of the Country’s population have relocated elsewhere, and this remains a primary source of income coming into the country.

Risk Rating and Legal action is not recommended in this country, and so until their economy improves, a higher deposit is suggested so as to mitigate risk.

Risk Rating = 4


Still undergoing transformation, Macedonia is better placed in understanding how SME’s operate, and there is a drive in getting this under way.  This is particularly encouraging considering it is one of Europe’s poorest nations, with high unemployment rates.

It is in dispute with Greece due to its name choice of country, and until that this is resolved, it will not be allowed to be considered for EU candidacy.  By opening these floodgates up, will give better access to finance being approved and better credit ratings to be necessitated for more trade to pass through this country.

Risk Rating = 4


A growing economy in the 2000’s, but destabilised by the global recession, leading to the real estate to crash, led to many foreign investors pulling out.  This in turn led to a turmoil in the country finances, and downgrade of credit rating.

From a economy point of view, the primary sectors have suffered, along with that of its scientific structure.  However, it is one of Eastern Europe’s successful energy providers.

With an increase of corruption and organised crime still setting the precedence, it is not prevalent to offer copious amounts of credit to this region, and legal action is definitely a no no, until such time that the country can stablise itself once again.


Please note that this Article is not designed to disturb or offend anyone, but are the views gathered from a purely economic and legal point of view in terms of the recovery of bad debt from these regions.

Risk Rating = 4

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