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January 16, 2022

East Europe investment may be hurt by euro debt woes, EBRD says

Eastern Europe’s ability to attract investment may be hurt by the euro region’s debt crisis, said Erik Berglof, the chief economist at the European Bank for Reconstruction and Development (EBRD), Mediafax informs. “As long as we don’t have a more long-term solution to the euro-zone problem, there is an uncertainty about investment in western Europe and western European companies wanting to invest in our region,” he said at a conference in Warsaw yesterday. Former communist countries from Poland to Romania are counting on a west European recovery to boost demand for their exports and accelerate economic growth. Concerns that Europe’s crisis will be prolonged mounted after Ireland last month became the second euro-area nation after Greece to take a bailout, obtaining an 85 billion-euro package. The Czech koruna declined 4.2 percent against the dollar and the Polish zloty fell 2.1 percent this quarter. The euro weakened 1.9 percent in the period.

In Romania, the EBRD is further increasing the availability of financing to private businesses in Romania, with a EUR 10 M loan equivalent to Patria Credit IFN S.A. for on-lending to micro and small enterprises (MSEs), a press release informs. Out of the total loan, EUR 3 M will be extended in Romanian Leu, reflecting the EBRD’s focus on increasing local currency lending in its countries of operations. The EBRD loan will address the limited access to finance for Romanian entrepreneurs in Romania, especially in remote and rural areas. Patria Credit is operating since 1996 and is one of the most important financial intermediaries for low-income micro and small borrowers in Romania, servicing over 9,000 clients.

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