From Wall Street Journal (Blog)

By Joe Parkinson

Hit harder in GDP terms by the financial crisis than any region on earth, citizens from across Central and Eastern Europe can, and often do, regale you with tales of economic woe.

But a new index published Wednesday says financial misery will be spread as unevenly across the ex-communist states this year as it was in 2009 — while optimism will be found in some surprising places.

According to Moody’ s ‘Misery Index,’ which adds projections of fiscal deficits to unemployment numbers as a measure of economic gloom, the least miserable of the 23 states ranked will be (drum roll)… Bulgaria.

Slammed by the financial crisis and enduring spending cuts from a center-right government determined to balance 2010’s budget, this may come as a surprise for many in the EU’s poorest member state. But Moody’s says expectations of a negligible 2010 budget deficit combined with predictions of a jobless rate below 10% will see the EU newcomer even less downbeat than super-rich Switzerland next year, where real economy indicators have fared far better than the European average.

Less curious is the plight of Baltic economies Latvia and Lithuania. Suffering from emergency budget cuts and double-digit GDP contractions their citizens are tipped to be almost three times as miserable the Bulgarians - and were only pipped to the inglorious title ‘most miserable’ by fallen-star Spain, where mushrooming dole queues are making it all but impossible to crack a smile.

The report, which is published in an appendix of Moody’s closely-watched Sovereign Risk report, ranks Slovakia, Estonia, Poland and Hungary towards the middle of the table — less miserable than the UK, US and crisis-ridden Greece but more downbeat than the Bulgaria, Switzerland and the Czech Republic, central Europe’s most upbeat performer.

The prediction that Ukraine — propped up by emergency IMF money and facing a potentially destabilizing national election later this month — will see a less miserable 2010 than any CEE economy bar Bulgaria appears to show a weakness in Moody’s methodology.

But the index also reinforces how varied the experience of the region has been, despite some analysts’ insistence of bundling together economies from the Baltics to the Black Sea under the label Eastern Europe.

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