The ruble’s decline is reviving memories of the 1998 default. Moscow’s former satellites have tied their economic fortunes to western Europe and the proportion of exports to Russia is less than 5 percent, yet the financial turmoil is aggravating the pain caused by the trade confrontation between the 28-member EU bloc and Russia.
“A successful year is becoming unsuccessful,” said Miroslav Student, the commercial director at Abovalve, a Czech producer of butterfly and check valves for industrial applications. “The weak ruble is a headache for us. It’s causing financial problems, since our branch there has to pay more rubles for euros, and it’s also complicating trade.”
While the effect on stocks and bonds can’t compare with 16 years ago, industries from appliance makers to drug producers to machinery factories across the region are hurting.
Shares of Gorenje d.d. and Krka Group d.d., Slovenia’s biggest exporters, plunged this quarter on concern the ruble’s weakening may erode revenue by as much as 50 percent. Sopharma AD, Bulgaria’s largest publicly traded pharmaceutical company, expects sales to drop. Gedeon Richter Nyrt., Hungary’s largest drugmaker, last week warned of a drop in sales and operating profit and a one-time financial loss.
