24.5 billion euros to banks in Central and Eastern Europe

The European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), and the World Bank intend to support banks in Central and Eastern Europe with a total of 24.5 billion euros aimed at strengthening financing for businesses affected by the global economic crisis.

The initiative is primarily focused on small and medium-sized enterprises, and the assistance will include financing through equity increases and debt financing, credit lines, and political risk insurance, according to a joint statement.  EBRD is expected to provide up to six billion euros for the financial sector for the period of 2009 and 2010 in the form of financing through equity increases and debt financing, to banks and directly to small and medium-sized enterprises, including trade financing. EIB is expected to provide 11 billion euros for lending to small and medium-sized enterprises in Central, Eastern, and Southern Europe. Of that amount, 5.7 billion euros is already available for quick disbursements, while an additional 2.8 billion euros is expected to be approved by the end of April. 

The World Bank will provide assistance of around 7.5 billion euros, and the International Bank for Reconstruction and Development (IBRD) plans to increase loans to Europe and Central Asia, up to a total of 16 billion euros for the period from 2009 to 2010, with 3.5 billion euros earmarked for addressing issues in the banking sector in Europe. The World Bank’s Investment Fund (IFC) is expected to contribute two billion euros through support to the banking sector, infrastructure, and trade, including its traditional investments in the private sector of developing countries. The affiliated member of the World Bank Group, the Multilateral Investment Guarantee Agency (MIGA), will provide two billion euros for securing bank loans. – “We act because we have a special responsibility for the region and because it makes economic sense. For years, the increasing integration of Europe has been the main driver of prosperity and mutual benefits, and we must not allow this process to be reversed,” said Thomas Mirow, head of EBRD.   (M. B.)