December 22, 2004
Christmas in the red for Eastern Europe
Now that so many formerly communist nations have joined the EU and embraced consumerism, many of these households are finding out what Christmas in capitalist countries is all about: accumulating debt. While credit card companies describe eastern and central Europe as "virgin territory with a large potential for growth", Hungary's largest bank expects that household debt as a percentage of GDP could double in the next 5 years across the region.
Stores in Poland and Romania liberally offer shoppers personal credit, charging hefty commissions on their loans. The Czech Republic calls their popular new gigantic new supermarkets "hypermarkets", perhaps a reflection of the frenzied state of shoppers, free to borrow and spend like they yearned to do while under communist oppression. The article reports, "The new mores are light years from the philosophy prevailing under the communist system -- when consumption was constrained by the scarcity of products, meager salaries and a lack of loans."
So enjoy your portable DVD players and new leather furniture sets this Christmas, eastern Europe! While you're reveling in the holiday spirit, remember the true meaning of capitalism: a 21.99% APR.
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