The International Monetary Fund (IMF) is concerned about a possible credit crunch in Central and Eastern Europe, in case Austrian banks start pulling out funds from stalling economies in the region, DPA quoted the daily Der Standard as reporting today. Austrian banks have issued around a quarter of total foreign loans in CEE countries, trailed by Germany and Italy, according to the still unpublished report by the Washington-based IMF. Should the economic situation decline in one country, the banks would be forced to reduce their financial business in the whole region, leading to a credit crunch, according to the cited study. According to the European Bank for Reconstruction and Development (EBRD), economic growth in Central Europe will slow to 1.5 per cent in 2009, from 4.3 per cent last year. In South-Eastern Europe, the London-based EBRD expects 3.1-per- cent growth, less than half of last year's rate. In addition to risks stemming from the economic environment, a recent report by the German bank Sal Oppenheim warned of the risk of foreign-currency loans issued by Austrian banks. Owing to the depreciation of local currencies, Raiffeisen International Bank-Holding AG would have to write off 516 million euros (679 million dollars) for 2008 - half of it from its operations in the Ukraine.
