GENERAL MEETING DRAFT - Bankier.pl

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In this situation for 2009, a bright spot was definitely seen in the recovery of equity markets after the
sharp declines witnessed in 2008 at the height of the financial crisis. The Austrian stock exchange posted
the greatest recovery reporting annual growth of 42.5% for all of 2009 over the year-end 2008 figure. The
German market ended the year with a gain of about 24% y/y, while the Italian equity market was up by
19.5% y/y at the end of 2009. The recovery in equity markets was accompanied by an upsurge in the
mutual fund industry after broadly based negative performance in 2008. In this context, mutual fund
assets in Italy were up by 6.8% over year-end 2008 to a level of about €430 billion; compared to year-end
2008, fund levels during the period from January to November 2009 rose by 11% in Germany and 7.7% in
Austria. Since the beginning of the year, there was a net overall inflow of funds of €2.7 billion in Germany
alone (excluding institutional funds). However, there was a net outflow of just €41 million in Austria, which
was a major improvement over the outflow of about €15 billion in December 2008; there was also a net
outflow in Italy of €3 billion in 2009, however, for the seventh month in a row, there was instead a net
inflow of €1.6 billion in December alone.
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The economies of Central and Eastern Europe (CEE) suffered significantly from the international
economic crisis in 2009. In 2009, economic activity dropped by more than 6% in CEE countries (-4% in
the Eurozone); at the same time, the differences in the economic performance of the various CEE
countries rose substantially generally as a function of the previous overheating of the economy, the state
of health of the banking industry and policies implemented to respond to the crisis. For example, the
Baltic economies suffered some of the greatest GDP declines in the world, while Poland was the only
country in the European Union to report GDP growth.
The tension in CEE economies increased till it peaked in March 2009: this was the most difficult period
(country risk at record levels, weakness in the main currencies in the region, revisions of agency ratings),
but also a significant turning point. Starting then, it appeared clear that major international institutions
would use any means to support the international economy through massive stimulus programs, and if
necessary, they would support any country in difficulty. The financial aid of the International Monetary
Fund, in some cases provided only as a precautionary measure, supported numerous CEE countries
(Ukraine, Hungary, Latvia, Bosnia, Romania, Serbia and Poland) and was in many cases combined with
support provided by major international banks present in these countries (through the so-called "Vienna
initiative"), and accordingly, international banks were committed to maintaining their exposure to certain
countries, hence avoiding the feared “credit crunch”..
Although the greatest difficulties were seen in CEE at the beginning of 2009, signs of recovery gradually
started to appear in the second half: economic activity indicators rose noticeably, initially driven by
rebuilding of inventories and bolstered by accommodating, growth-oriented monetary and fiscal policies.
The Central European countries with the strongest ties to the German economy were those that were first
to show that they were able to follow the recovery that was gaining strength in Germany and other
European countries. Toward the end of 2009, country risk returned to substantially lower levels than at
the beginning of the year, and several CEE currencies gradually strengthened.