2. Focus on Texts

2.1. Read the following article and complete the exercises that follow. Growth Is Forecast in Rest of Eastern Europe

LONDON – Economies across the former Soviet Union will 5.5 percent next year, their worst performance in five years, because of Russia’s financial troubles, but the rest of Eastern Europe will show even stronger growth than this year, the European Bank for Reconstruction and Development said Monday.

Russia will lead the decline, with its gross domestic product expected to fall 7 percent, compared with an estimated 5.5. percent this year, and its inflation rate climbing to 200 percent from 150 percent.

The bank, set up to finance free-market development in former Communist countries, said the most advanced economies in Eastern Europe, including Poland and Hungary, had proven their resilience to problems in Russia, where the ruble has been devalued by more than 60 percent since mid-August.

“This year there’s been a deepening of reforms in some countries like Poland and Hungary and a backtracking in some others,” said Nick Stern, the bank’s chief economist, at a briefing ahead of the release of its annual Transition Report.

Growth in Eastern Europe is expected to climb to 3.6 percent next year from an estimated 3 percent this year, led by forecast growth of 5 percent in Poland and 4.4 percent in Hungary. The best economic performer in the region, however, is forecast to be Albania, with growth of 7 percent.

Across the former Soviet states, including Russia, Belarus and Turkmenistan, economies are expected to fall further from this year’s estimate of a 3.6 percent decline to post the biggest slowdown since 1994, when economies in the foremer Soviet Union shrank 13.8 percent.

Mr. Stern said direct foreign investment in Eastern Europe probably would total $15.4 billion this year, down from $17.1 billion last year but still ahead of $12.4 billion in 1996, Mr. Stern said foreigners were continuing to invest in the region, although on a more selective basis than before.

The pace of economic growth, while still strong, probably will be restrained throughout the region by Russia’s economic problems, the bank said. Russia defaulted on $40 billion of Treasury debt in August and abandoned efforts to protect the ruble, pushing hundreds of banks to the brink of collapse. The country was cut off from international financing because of its debt default and is negotiating to restructure a portion of its foreign debt.

“We see the position in Russia as a short-term step backward as a response to a crisis by a government that knows it is holding the fort for a short time,” Mr. Stern said.

The government of Prime Minister Yevgeni Primakov took office in Moscow in September, a few weeks after President Boris Yeltsin fired the previous government in August. Russia’s next parliamentary elections are scheduled for the end of 1999, and its next presidential election is set for 2000.

Financial Times. 1999. 3 January.

2.2. Suggest the Russian/Belarusian equivalents.

Russia’s financial troubles; the European Bank for Reconstruction and Development; gross domestic product; inflation rate; the ruble has been devaluated; direct foreign investment; to restructure the foreign debt

2.3. Replace the words in italics by their synonyms.

a deepening of reforms; to be cut off from international financing; to default on a debt

2.4. Explain in English.

advanced economies; to lead the decline; the best economic performer; to invest on a more selective basis; backtracking on reforms; push a bank to the brink of collapse

2.5. Make the following statements more factually correct.

1. All the Eastern European Countries have suffered great losses as a result of Russia’s financial troubles.

2. The European Bank for Reconstruction and Development was set up to promote laissez-faire ideas in Communist countiries.

3. The economic crisis has not stopped foreigners investing in the East European region. They take advantage of every opportunity to invest in countries like Russia, Belarus, Turkmenistan.

4. The reason why the reforms in Russia have slowed down was the decision of the international community to cut this country off from large-scale financing.

5. Poland and Hungary referred to as the most advanced economies have benefited from the Russian problems.