Europe’s East Still at Risk of Loan Pinch, Development Bank Says

Eastern Europe remains at risk of a credit squeeze as western lenders cut funds to meet capital rules even after the European Central Bank’s discount loans, the European Bank for Reconstruction and Development said.

The euro region’s debt crisis spread to the continent’s east through trade and banking links, hindering the recovery of Europe’s emerging economies from a slump in 2009. While the ECB’s 489 billion euros ($656 billion) of three-year loans have helped avoid “a major disaster,” growth is slowing and credit remains scarce, said Piroska Nagy, an EBRD economist.