As the story reaches the NY Times, prospects worsen

"In addition, Western banks could very likely suffer a further increase in nonperforming loans. “Most of the banks in this region are from the euro countries and will have to undergo further recapitalization,” Gillian Edgeworth, an economist with Deutsche Bank in London, said.
Another problem is that big institutional investors in Western Europe — banks, pension funds and insurance companies — have large holdings of East European debt. If the banks need further infusions of capital from Western governments already straining to pay for stimulus packages and to maintain their social safety nets, it could put additional pressure on the euro as well. [...]
For Mr. Johnson and other students of financial history, the latest developments in Europe — especially in Austria, whose banking industry is heavily exposed to its Eastern neighbors — raise eerie parallels with the 1930s. Mr. Johnson notes that it was the failure of a Viennese bank, Creditanstalt, in 1931 that was a turning point in what became the Great Depression.
Mr. Johnson said he did not expect a repeat of that calamity, but he does foresee a long period of minimal growth, akin to Japan’s “lost decade” of the 1990s, in both the United States and Europe."

NY Times: As It Falters, Eastern Europe Raises Risks, February 23, 2009

This is the first article that has come to my attention which actually mentions the failure of the Creditanstalt in 1931. Founded in the early 19th century, the Creditanstalt was one of the basic investors in Austrian industrialization. Following the demise of the banking system in the 1920s, the Creditanstalt actually bought insolvent banks at first, before it became insolvent itself, following the crash in 1929. At this point, it was important enough to Austrian industry that it was bailed out by the government (by a conservative Bundeskanzler), rather than nationalized as the Social Democrats demanded (actually it was nationalized in 1946 and once again privatized in the 1990s).
This is from a review of a thesis written on the subject:

"The surprise is that the internal crisis subsided after four days, as the Austrian National Bank, contrary to its statutes which allowed it to discount only commercial bills, took on a large amount of finance bills. This was an excellent example of the Bagehot-thornton rule of lending freely in crisis. The monetary expansion, however, frightened domestic and foreign depositors, driving them into capital flight, buying foreign exchange, gold and even foreign currency, but not into runs on other Austrian banks."

The Free Library: The Credit-Anstalt Crisis of 1931.

This sounds familiar, doesn't it? Yesterday, I followed an interesting discussion on 3sat's "Kulturzeit" on whether this financial crisis is going to lead to a similar crisis of the European countries as the crash of 1929 did - but then, the system is different now, the democracies are well-established, the inter-dependence between nation states is more obvious and reaches far deeper than it did in the last century. But it is obvious that nationalism does thrive now, and apart from the few examples where the crisis has actually led to the conclusion that being part of a bigger structure might help (take Iceland's desire to join the European Union), Eastern Europe seems to be going a different way. The question is: who will fill the vacuum now left by the established political parties that don't find the right answers or how to communicate them (I, for one, know more about Obama's plans to save the economy than about anybody else's).