The forthcoming European Union presidency has created controversy. The Czech government, the argument goes, is not ready for the job as it is politically weak and does not have the expertise to manage the financial crisis and, in any case, the Czechs are European troublemakers. The crisis is now moving east and this small country is facing too tough a task.

All this is an exaggeration. In the past two decades, the central and east European (CEE) economies have done their homework, introducing reforms and learning painful lessons, with bank bail-outs and privatisations. As a result, they have much lower subprime exposure than they might have because their banks had tighter lending criteria and employed less securitisation. Capital is almost exclusively based on shareholder equity and CEE banks display a healthy loan/deposit ratio.