Twenty years after the fall of Communism, 2009 should have been a year to celebrate in Eastern Europe. Instead, it looks like a year to forget. The region was hit harder than any other by the turmoil that followed the collapse of Lehman’s last autumn and GDP probably contracted by around 8% over this year as a whole. And while most economies in Emerging Europe are now recovering, growth next year is likely to disappoint. Yet history may judge 2009 to be a turning point – will policymakers in the region respond to the crisis by embracing reforms or will they resort to populism? We remain hopeful. Elections are due in a number of countries next year and, so far at least, populist rhetoric has been limited. More generally, emerging market crises have often proved the trigger for reform. But the stakes are high and developments in 2010 will play an important role in determining the region’s long-run growth prospects.