FACTBOX-Key 2010 emerging Europe political risks

LONDON Jan 4 (Reuters) - Ukraine's economic and political problems, a string of elections, civil unrest, the impact of oil prices on Russia and two high profile court cases in Turkey could all hit emerging European markets in 2010.

For the key political risks in other regions, please click on [ID:nLDE5BK0X2]

UKRAINE -- ELECTIONS, BAILOUT

Mainland Europe's most heavily damaged economy limps into the New Year having avoided outright default on its sovereign debt obligations.

Ahead of a Jan. 17 presidential election, however, it is plagued by political paralysis that has blocked the budget and an IMF rescue package. State companies have defaulted and a sovereign default from Ukraine could spark wider global market jitters.

Opinion polls predict President Viktor Yushchenko will lose heavily and cede his post to Prime Minister Yulia Tymoshenko or rival Viktor Yanukovich. Investors hope either outcome would help Ukraine back towards stability. For stories, click here [ID:nGEE5B9114]

Tymoshenko says the 2010 budget is likely to be adopted by parliament after the election [ID:nLDE5BF0Y0]. But some analysts expect Yanukovich to call new parliamentary elections if he wins, potentially prolonging instability until September.

What to watch:

-- Ukraine's debt repayments, both sovereign and from state companies. [ID:nGEE5AN110]

-- Opinion polls ahead of the election. The most recent showed Yanukovich ahead, but with a third of the electorate still undecided. [ID:nGEE5B9266]

-- Any sign the IMF might release a delayed $3.8 billion tranche. Ukraine had said it expected the money by the end of 2009 [ID:nGEE5BA1QX] but it remains outstanding [ID:nN30231318]

-- Ukraine's credit ratings and the cost of insuring its debt in the credit default swaps market. The country is currently priced as the second riskiest in the world after Venezuela, with a more than 50 percent chance of default [ID:nLDE5BE1Q6]

EASTERN EUROPEAN ELECTIONS, REFORMS

In addition to Ukraine, Hungary, Latvia, the Czech Republic, Slovakia and Poland have elections coming up in 2010, making politics a key theme as investors increasingly differentiate between individual emerging markets [ID:nGEE5B70ZL].

Those in Hungary and Latvia in particular have the potential to make local policy-making more difficult and endanger IMF deals, while Romania remains in a state of political uncertainty after its presidential election [ID:nGEE5B71QW]

Several economies need to address structural reforms swiftly to avoid undermining their growth or potentially risking a Greek-style debt trap, and any election-driven return to populism would be negative for markets [ID:nLDE5BE0UL]

For a factbox on the elections click on [ID:nGEE5B70YK]

What to watch:

-- Does Hungarian centre-right opposition party Fidesz -- which polls suggest will win parliamentary elections in April or May -- renegotiate an IMF deal or rewrite the budget?

-- Does Polish Prime Minister Donald Tusk challenge for the Polish presidency in autumn 2010? Investors would probably welcome him replacing conservative incumbent Lech Kaczynski.

-- Does Latvia's ruling coalition collapse in the run-up to parliamentary elections in October. A failure of the IMF deal there could potentially cause its currency peg to collapse, sparking a wider crisis [ID:nGEE5B20I0].

SOCIAL UNREST, XENOPHOBIA

Many analysts predicted a rise in social unrest and xenophobic attacks as a consequence of rising unemployment and economic pain from the crisis but so far the reality has proved less serious. [ID:nLDE5BH0LM]

A string of riots in the early part of 2009 from Vladivostok to Reykjavik petered out later in the year, although not before contributing to the collapse of governments in Iceland and Latvia.

Newspapers have also been keen to tie any apparent rise in attacks on foreigners to the crisis, but the European Union Fundamental Rights Agency says its data shows no rise directly related to the crisis. Nevertheless, they expressed concern over an ongoing rise in attacks on the Roma minority in Hungary as well as the rise of the far-right Jobbik party.

What to watch:

-- Do populations in the most affected countries -- particularly in the Baltics -- continue to stay at home in apathy or does unrest rise?

-- How well does Jobbik do in the Hungarian election? Some analysts suggest a particularly strong performance could deter foreign investors.

RUSSIA -- ALL ABOUT THE OIL PRICE

Russia, currently the biggest oil and gas producer in the world, is heavily dependent on energy exports so a fall in prices would likely lead to a sell off in the equity and bond markets and undermine recovery after the worst annual GDP contraction since 1994. [ID:nLDE5BH16S]

The economy is forecast to contract by 8.5 percent in 2009 and an extended economic slump could undermine the popularity of Prime Minister Vladimir Putin, who is still considered by most Russians to be the country's paramount leader.

Putin, who as Kremlin chief presided over the longest Russian boom in a generation, has promised a return growth in 2010. But a sharp decline in oil prices would limit the Kremlin's ability to pump money into Soviet-era factories, a step that has prevented tens of thousands of redundancies.

What to watch:

-- A short-term oil price rise would drive investment and Russian securities could quickly soar on a relatively small inflow of foreign capital, cutting the need for foreign borrowing, pulling Russia out of recession faster than expected and driving new oil and gas investment. [ID:nLDE5BK1L2]

-- Russia's sale of up to $18 billion in Eurobonds, its first major sovereign issuance in a decade. Russia should have relatively little problem with the sale, but officials recognise large external borrowing is only a short-term solution to the budget deficit. [ID:nGEE5B90E9]

-- Putin's popularity. Polls show a drop in the popularity of Putin and President Dmitry Medvedev in recent months [ID:nGEE5B809N]. Both have hinted they could run for president in 2012 [ID:nGEE5B2237]

TURKEY PRE-ELECTION RISKS, COURT CASES

European Union candidate Turkey enters a tricky period in 2010 as the Islamist-rooted AK Party government eyes a general election the following year.

Prime Minister Tayyip Erdogan has seen his popularity ratings ebb due to high unemployment and opposition to his initiative to widen Kurdish rights, and some analysts say the AK Party might be tempted to shift from a policy of fiscal prudence to win votes.

The trial of alleged coup plotters the "Ergenekon" group could test relations between the secular military and a government with its roots in political Islam, while a tax row involving the country's largest media group Dogan Yayin (DYHOL.IS) is seen by some as a test of media freedom.

Things to watch:

-- does the government clinch a new standby loan with the IMF? Failure might prompt the government to loosen its purse strings [ID:nLDE5BU037].

-- does the "Ergenekon" case implicate the military top brass, which would dramatically increase its political ramifications? [ID:nGEE5B40AG]

-- is the Dogan Yayin row -- over a mammoth $3.3 billion tax bill -- seen as a politically motivated witch hunt? The EU says pushing a media company into extinction augurs poorly for Turkey's democratic credentials. For stories, click on [ID:nL3409365]

-- Who wins a Turkish Cypriot presidential poll? If hardliners who won parliamentary elections in April emerge victorious, that could hinder reunification talks which could be a further stumbling block to Turkey's EU membership. (Additional reporting by Simon Cameron-Moore and Guy Faulconbridge; Editing by Noah Barkin)