The European Investment Bank Group (EIB), the World Bank Group, and the European Bank for Reconstruction and Development (EBRD) have met and even exceeded their commitments to make available at least EUR30 billion in 2013 and 2014 to sustain growth and investment in Central and South Eastern Europe following the global financial crisis. Actual assistance provided under the second "Joint IFI Action Plan for Growth" (JIAP) during these two years totalled EUR42.7 billion.
The seventeen countries benefitting from the initiative consist of certain European Union member states (Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia) and EU candidate and potential candidate countries in the West Balkans (Albania, Bosnia and Herzegovina, Kosovo, FYR Macedonia, Montenegro and Serbia).
"This JIAP financing – supplied through more than 770 individual projects – had a substantial impact on the region. Gross financial inflows under the Action Plan accounted for about 6 percent of annual investment into Central and South Eastern Europe, and were equivalent to about 1.5 per cent of the region’s total Gross Domestic Product. Up to a third of the financing went to funding local commercial banks, allowing them to maintain their provision of credit to small- and medium-size enterprises, and supporting a rebalancing of the local banking sector," the report reads.
"Another third of JIAP assistance went to strengthening the region’s infrastructure, particularly for transport, energy, and communications, and helping to integrate the countries into Trans European Networks. JIAP also financed investments to raise energy efficiency and help develop and promote the use of renewables, reducing the impact of climate change. Other projects strengthened the capital positions of banks; promoted the development of local capital markets; and improved the productivity, innovation, and export orientation of firms in the region," said the report.
The three financial institutions launched the second JIAP in November 2012 under which the EIB Group provided EUR28.3 billion, the World Bank Group EUR7.4 billion and the EBRD EUR7 billion.
Of the countries in the region, Poland received the most -- 17.1 billion euros -- followed by Romania with 4.3 billion and Hungary with 3.4 billion. Croatia received 2.7 billion, the report said.
The final report on JIAP was presented today at an event held at the Brussels-based think tank Bruegel.
"The success of this plan will spur tighter co-operation among our three institutions. From providing a lifeline with our credits and helping to prevent a systemic failure, we now need to focus on promoting competitiveness and providing innovative ways of support including risk-bearing capacity. One important vehicle for the EU Member States covered by the JIAP will be the ‘Investment Plan for Europe,’ which is designed to stimulate investments of EUR 315 billion and which will be implemented by the EIB, in cooperation with other international financial institutions (IFIs)," an EIB official said.
Philippe Le Houerou, Vice President of the European Bank for Reconstruction and Development, commented: "The Joint IFI Action Plan for Growth has confirmed the major impact that our institutions have. Our funding has been the equivalent of about 1.5 percent of total GDP a year across Central and South Eastern Europe at a time when there is still significant cross-border deleveraging. Our enhanced coordination under the Action Plan has also created special synergies and efficiencies benefitting our countries. Going forward, we see opportunities for working together in the implementation of the Investment Plan for Europe in the CESEE region. In addition, the EBRD plans to significantly step up its policy advice to complement and reinforce the impact of its investments."
Laura Tuck, Vice President of the World Bank’s Europe and Central Asia region, emphasised: "The Joint IFI Action Plan helped the region in its time of need following the global financial crisis. For its part, the World Bank Group mobilized the IFC, MIGA, as well as IBRD support – it was a true Group effort. Going forward, the World Bank, IFC and MIGA will step up their support to the countries in the region by financing the needed structural reforms that are critical to ensure social, economic, and environmental sustainability, continue to support private sector investments in key sectors and help them mitigate the political risks. The agenda that was big before is now even bigger."