EBRD Eyes Flaws In East Europe Model
The flaws in Eastern Europe's model of growth have been exposed by the financial crisis and commodity-reliant countries like Russia must expand their industrial base to make them more resilient, the European Bank for Reconstruction and Development (EBRD) said in an annual report on Monday. The development bank, one of the biggest investors in a campaign to transform the region since the collapse of communism two decades ago, also said risks arising from financial integration must be better managed. It said countries had been over-reliant on foreign banks and inflows to drive growth in the boom years, leaving them highly vulnerable during the global credit crunch.
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