East Europe banks set for €24.5bn loan
By Alan Beattie in Washington
Published: February 27 2009 03:06 | Last updated: February 27 2009 03:06
A group of multilateral lenders on Friday unveiled a lending package of up to €24.5bn ($31bn) to help central and eastern Europe’s battered banking systems
weather the financial crisis.
The World Bank, the European Bank for Reconstruction and Development and the European Investment Bank announced the package on Friday in London. The move follows widespread financial turmoil across the region, as the western European institutions that own large parts of eastern Europe’s banking sector pull back capital to their home bases.
Several central and eastern European countries, including Ukraine, Hungary and Latvia, have also borrowed from the International Monetary Fund, the World Bank’s sister institution, to plug the gap in their capital flows.
The European Investment Bank said it would provide €11bn for small and medium enterprise lending, of which €5.7bn is ready for immediate disbursement. The EBRD will provide up to €6bn in 2009-2010 for the financial sector in a mixture of equity and debt finance, and the World Bank group €7.5bn.
Robert Zoellick, World Bank president, said: "This is a time for Europe to come together to ensure that the achievements of the last 20 years are not lost because of an economic crisis that is rapidly turning into a human crisis."