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World Bank president: Eastern Europe must not fail (Latvia just did)

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WASHINGTON – Western nations and banks must not let the economies of Eastern Europe slip deeper into depression, World Bank President Robert Zoellick cautioned.

Eastern Europe is "probably the most exposed" to this crisis, Mr. Zoellick said Thursday to a group of journalists from the US and Germany. But Western banks are increasingly focused on their core markets at home and unwilling to extend the needed credit to the east.

"What do you think is going to happen if Eastern European economies are collapsing? It's not going to be so good for Western Europe, either."

The response of Western governments and banks in the next four weeks could have profound effects on the depth and length of the crisis, he said, adding, "2009 is going to be a very dangerous year." After a weekend meeting in Berlin, Europe's leaders are now calling for a doubling of an IMF fund meant to help nations in crisis.

Human cost of economic downturn

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