Finance

Finance

EBRD invested record $1.5 billion in the first quarter

08 April 2009 09:03 (UTC +04:00)

Bakuâ€“ APA-Economics. The European Bank for Reconstruction and Development said Tuesday it invested a record 1.1 billion euros (1.5 billion dollars) in eastern Europe in the first quarter to fight the financial crisis.
"The EBRD has responded to the impact of the global economic crisis on the countries of eastern Europe with a strong rise in investments in the first quarter of this year," the London-based bank said in a statement.
"The bank’s financing totalled a record 1.1 billion euros in the first three months, compared with 678 million euros in the same period of 2008, a rise of 64 percent."
Last month, the EBRD, the European Investment Bank and the World Bank had together pledged to invest 24.5 billion euros to fight the financial crisis in central and eastern Europe in a two-year initiative.
"As part of a package of measures to alleviate the effects of the crisis, the EBRD has already said it plans to invest 7.0 billion euros this year, compared with 5.1 billion euros in 2008," the bank added Tuesday.
The EBRD, which was created in 1991 to assist the transition of former communist nations to market economies, invests across 30 countries including Ukraine, Moldova, Russia and Tajikistan.
"The EBRD is equipped, willing and ready to stand by eastern Europe during this crisis and well into the future," added President Thomas Mirow in the statement.
"Our investments so far this year underscore that commitment," he added.
Struggling nations in central and eastern Europe are currently buckling under the weight of the sharp global economic downturn and the credit crunch.
"The overall increase in EBRD investments is aimed at ensuring the availability of finance to help fund the goals of transition and economic transformation at a time when other sources of capital have all but dried up," the EBRD said Tuesday.
In recent weeks, Romania, Hungary, Latvia, Serbia and Ukraine are among countries to have sought emergency funds from the International Monetary Fund due to the global recession.
Last week, Group of 20 world leaders agreed at a key London summit to provide a trillion-dollar funding boost for the IMF and World Bank to help battle the vicious spreading recession.
IHS Global Insight economist Ralf Wiegert told AFP that more cash should be diverted to the EBRD to firefight the crisis in the Central and Eastern European (CEE) area.
"It would be good if a bigger share of the money for the IMF, which was agreed upon at the G20 summit in London, would be directed to the EBRD and further to the CEE region," he said.
Wiegert added that the EBRD’s 1.1-billion-euro investment in the first quarter should be "helpful" for the embattled region.
"I regard the EBRD as a key actor and vehicle to stem the crisis," Wiegert said.
"It has the ability to re-capitalize ailing banks and thus treat the problem at the root." Source: AFP