The head of the European Bank for Reconstruction and Development says that Eastern Europe faces a severe recession but not a collapse. Thomas Mirow told the LSE he sees no bank runs or sovereign defaults in Eastern Europe. He sees an economic recovery but not a return to former growth rates between 5-7% any time soon.
The end of Eastern Europe’s debt-fueled boom as well as busts in various Eurozone housing markets are weighing on the European banking sector, keeping risk aversion high.
The rebound in the dollar has helped cool the rally on Wall Street but shares are still up nearly 5% on average.
EUR/US trades down at 1.2630.
