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East Europe Delevarging Risks Stability, Vienna Initiative Says

The withdrawal of funding by western lenders in eastern Europe remains a “headwind” to economic growth in the region and it threatens external funding and financial stability should the euro-region debt crisis worsen, the Vienna Initiative group said in a report today.

The relief from the European Central Bank’s longer-term refinancing operations is wearing off and deleveraging pressures remain “substantial” in several countries, according to the report distributed by the International Monetary Fund.

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