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EBRD chief says economic crisis not over

The economic crisis is not over and the problems that companies face in obtaining credit are a source of concern, the head of the European Bank for Reconstruction and Development (EBRD) told a German magazine.

“No the crisis is not over,” EBRD President Thomas Mirow told German weekly Wirtschaftswoche, released on Saturday, when asked whether he shared the view that the global economy would enjoy a broad recovery next year.

“We could see some stabilization this year and then a period of weak growth in 2010. But it is too early to sound the all-clear - especially because of growing problems that companies have obtaining credit for investments.”

Within the European Union, Mirow said he was most concerned about the economies of the Baltic states of Latvia, Lithuania and Estonia, in that order, followed by Hungary.

Outside the European Union, he described the situation in Ukraine as “particularly critical.”

“We want to help, but Ukraine must show it is ready to reform,” Mirow said.

“Two issues worry us,” he added, referring to Ukraine's role as a transit country for Russian gas flowing to Europe.

“The first is that Ukraine is providing under-priced gas to its own clients, creating new structural deficits. And even today we do not know exactly how much gas is being fed in at one end and how much gas, and for what purposes, is being pulled out at the other end.”

Russia provides about 25% of Europe's gas requirements and pumps 80% of this via Ukraine.

Europe saw its supplies cut in January amid a payment row between Kiev and Moscow in which the Russians accused Ukraine of siphoning off gas intended for export - an allegation it denied.

Russia's gas export monopoly Gazprom has warned that Europe may face further disruptions this winter if Ukraine is unable to pay its gas debts. (Reuters)