EBRD annual meeting under way in Zagreb
PanARMENIAN.Net
May 14, 2010 – 11:52 AMT 06:52 GMT
The European Bank for Reconstruction and Development (EBRD) will seek
a big capital increase at its annual meeting this week to strengthen
the ex-Soviet bloc after the global recession and prevent Greek
debt contagion.
The bank’s board endorsed in March a proposal to increase its capital
by 50 percent to 30 billion euros (38 billion dollars) and it is
expected to be approved at a two-day governors meeting starting Friday
in Zagreb, Croatia.
The EBRD, set up in 1991 to help former communist nations make the
transition to market economies, operates in 29 countries and usually
invests in private enterprises together with commercial partners.
Only two years ago the bank’s mere existence was questioned as it
had successfully carried out its initial mission of ushering in
market economies, but EBRD officials believe the global downturn
proved otherwise.
To ease the fallout from the recession, and to counter the drying up of
private investment sources, the bank brought its investment to record
levels, with eight billion euros planned for this year. The global
financial crisis ravaged economies in central and eastern Europe,
largely because many of them were heavily reliant on foreign capital
or high commodity prices.
The economy in the EBRD area – stretching from central Europe to
central Asia — is expected to grow 3.3 percent this year after a
contraction of six percent in 2009.
But the bank says the hard work is not over and that now is the
time to tackle lasting imbalances that risk to halt the recovery,
especially as the Greek debt crisis threatens to affect the region.
Earlier this month, EBRD president Thomas Mirow said he expects the
annual meeting to hear "very intense and lively debates on the economic
situation in the southeast of Europe and the potential impact of the
situation in Greece."
At the Zagreb meeting, Mirow will ask the representatives of some 60
states and organizations which are bank shareholders to approve the
50-percent capital increase. The request is expected to be honored.
This increase should allow to the bank to deliver between 8.5 and 9.0
billion euros each year between 2011 and 2015 instead of the current
5.0 to 6.0 billion euros, AFP reported.
From: Emil Lazarian | Ararat NewsPress
