Cyprus Woes Threaten East Europe GDP, Development Bank Says

Cyprus’s bailout threatens to slow eastern European growth through trade and banking links if it sparks capital flight from the most indebted euro-area nations, the European Bank for Reconstruction and Development said.

Another bout of uncertainty in Europe’s debt crisis may boost financing costs for banks and potentially trigger an outflow of “large” deposits and funding in countries with weaker lenders or sovereigns, EBRD Deputy Chief Economist Jeromin Zettelmeyer said in an April 5 interview in London.