Euro crisis weighing on east European growth

A major development bank sharply reduced its growth forecast for Eastern Europe on Tuesday and warned of risks to the region’s banks, another example of how the sovereign debt crisis is radiating outside the euro zone.

The European Bank for Reconstruction and Development, which lends to businesses and governments in the former Soviet bloc and is underwritten by Europe and the United States, cut its growth estimate for Central Europe and the Baltics to 1.7 percent for 2012.

Merkel Says EU Summit Will Be Important, Not Final, Crisis Step

Oct. 18 (Bloomberg) -- German Chancellor Angela Merkel said that a European Union summit in five days will mark an “important step,” though not the final one in solving the euro-area sovereign debt crisis.

“These sovereign debts have built up over decades, so they won’t be ended with one summit,” Merkel told reporters in Berlin late today. While European officials recognize their responsibility to stop the crisis, “this will require tough, long-term work.”