The economic slowdown in western Europe, together with concerns about the strength of Eurozone parent banks, poses the double threat of damaging export-driven economies and creating a new regional credit squeeze, according to the President of the European Bank for Reconstruction and Development, Thomas Mirow.
Mr Mirow was speaking in Belgrade at the Central Europe Initiative (CEI) Summit, 4 November 2011.
In his opening remarks, he stated: ''The global financial crisis of 2008 has exposed a number of flaws in the economies of the CEI region, in particular the persistent reliance on external capital and the weakness of local capital markets. Adjustments have taken place since then, often at the cost of considerable sacrifices for the populations as austerity measures were imposed to restore economic stability. Thanks to these efforts, the fundamentals of many of your economies are in a much better shape now than they were before the crisis.
However, the region is today facing a new set of challenges. Slow growth prospects in western Europe pose a threat to the most export-driven economies, and the fragility of a number of Eurozone parent banks could potentially lead to a new credit squeeze in the region.
Against this background, the reform agenda needs to be further intensified. The EBRD, through its investments and policy dialogue, is ready to assist the countries of the region in achieving sustainable long-term growth, based on a strengthened export capacity, the development of a knowledge-based economy and innovation, and an improved business environment.
The Central Europe Initiative was established in November 1989 as the first forum to promote regional cooperation among the countries of central and eastern Europe.