The World Bank Group announced on Wednesday that it is making USD 27 billion in funding available over the next two years for countries of Emerging Europe and Central Asia (ECA) impacted by the Eurozone crisis, a release from the World Bank informs.
“While the effects of the Eurozone crisis on the largest economies of Western Europe receive most of the world’s attention, the crisis is also hurting people in emerging Eastern European countries, particularly the poorest in Central and Southeastern Europe,” said World Bank President Robert B. Zoellick. “The World Bank Group is expanding funding available to the region so that those countries can rely on these resources to weather the crisis.”
“Because of their close links with the Eurozone, countries in Central and Southeastern Europe are likely to face an economic slowdown in 2012,” said in his turn Philippe Le Houérou, Vice President for Emerging Europe and Central Asia at the World Bank. “The Bank’s additional assistance will help countries maintain a sound macro-fiscal framework, pursue needed structural reforms, ensure flow of credit to small- and medium-enterprises, and protect the most vulnerable parts of the population through stronger and better targeted social safety nets.”
The World Bank Group response in the ECA region will focus on: 1. structural reforms and support for the private sector to keep investment, incomes, and jobs growing; 2. advisory and financial support to countries with fragile banking systems; and 3. protection of the most vulnerable through strengthening social safety nets.
The communiqué further reads that the World Bank and International Development Association (IDA) can increase lending in ECA to around USD16 billion in fiscal years 2012-2013 – an increase of USD 4 billion over two years relative to lending last year.
The International Finance Corporation (IFC) investment and advisory program could reach USD 10 billion of commitments including mobilization in FY12-13.
In parallel, the World Bank Group is also partnering with other multilateral development banks to encourage Western European banks to stay in Eastern Europe and not deleverage from the region. The World Bank Group, along with other public sector officials from within the European Bank Coordination “Vienna” Initiative, met in Vienna on January 16th with the aim to enhance the coordination of national policies that could impact the economies of emerging Europe.