With the global economy in the grip of severe slowdown, a leading German banker warned Tuesday that parts of Central and Eastern Europe (CEE) could face a major shakeout in their economies and banking systems, according to dpa. "The economic crisis threatens to broaden out and engulf nations such as Ukraine," Juergen Fitschen, who called on the European Union (EU) and other key international groups to step up efforts to help shield more economically fragile parts of the CEE from the financial firestorm currently sweeping the world economy. "Strategies to solve the problems caused by the crisis must not stop at the EU's outer borders," said Fitschen at a meeting of the German industry's influential Central and Eastern European committee held to mark the start of the new year. Fitschen went on to say that the Central European banking system was weak and that it could not head off the fallout from the financial crisis that gained momentum in September last year following the collapse of the giant US Lehman Brothers bank. He called for the creation of a special international fund to help nations badly hit by the financial crisis to stabilize their banking sector and to assist in financing economic stimulus packages aimed at warding off the global crisis. With this in mind, Klaus Mangold, who heads up the influential Central and Eastern European committee, called for Croatia to be granted rapid EU membership. "Croatia is well on its way," Mangold told Tuesday's meeting in Berlin. Mangold also proposed the forging of a new free trade zone between the EU and countries such as Serbia, Russia and Ukraine combined with measures to abolish visa restrictions. In addition he saw growing potential for German business in Central Asia. "I am convinced that confidence-building, strategically-focused work in the crisis could pay off during the boom times," said Mangold. Germany has emerged as a major economic partner for the CEE with the region emerging as a key pillar of Germany's export machine. This follows the often solid economic growth rates that nations such as Poland, the Czech Republic, Romania, Bulgaria and Russia have chalked up in recent years. German exports to the CEE region jumped by about 10 per cent last year, the Central and Eastern European committee said. However, Mangold said, German exports to the CEE have slowed significantly since November when the world economic crisis gained momentum.
