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The Low-Debt Era for Eastern Europe May Be Ending on Covid and 2008 Fallout

  • EBRD says ex-communist region ‘is facing a new paradigm’
  • The shift contrasts with a previous aversion to borrowing
Portuguese Economy as Curbs Extended to Contain Virus
Photographer: Jose Sarmento Matos/Bloomberg

There’s a shift taking place in the low-debt economies that joined the European Union after the collapse of the Berlin Wall.

An aversion to borrowing that once characterized much of the bloc’s ex-communist contingent is being jettisoned following the 2008 global crash and the Covid-19 pandemic in little over a decade. Much of the region, which has led the continent’s economic growth for years and counts five euro-area members among its ranks, is now set to endure higher indebtedness for some time.