2010 has been a year of recovery for Emerging Europe. This process should continue in 2011 but there are at least three important points for investors to bear in mind. First, growth is unlikely to return to the rates seen during the credit-fuelled boom years prior to the 2008-09 crisis. Second, while the region’s recovery should continue, some economies will fare much better than others. And finally, the global environment remains highly uncertain and several significant risks to the outlook exist. For Turkey, the biggest threat is perhaps over-exuberance. For Central Europe, the biggest risk is that the German export machine, with which it is closely intertwined, starts to slow. And for the Balkans and Hungary, fragile banking systems, political uncertainty and, in some cases, high exposure to the euro-zone’s periphery, could prove to be a toxic combination.