Eastern Partnership (EaP) countries - Armenia, Azerbaijan, Belarus, Georgia, Moldova, and Ukraine – are facing significant economic and geopolitical challenges.
The EBRD, the largest institutional investor in those countries, remains a committed and reliable partner in the region, Philippe Le Houérou, EBRD Vice President for Policy and Partnerships, said today.
He was addressing governments of the EU Member States and the EaPs at the 4th Eastern Partnership Summit in Riga.
The EBRD’s investments in the region will be underpinned by stronger support for reforms aimed at improving the investment climate by combatting corruption and increasing economic transparency.
The EBRD will also be a key partner for Georgia, Moldova and Ukraine as they implement EU Association Agreements and move forward with the creation of Deep and Comprehensive Free Trade Areas that are important anchors for reforms.
EBRD Address to the Eastern Partnership Summit
Philippe Le Houérou
Riga, Latvia, 22 May, 2015
The Eastern Partnership countries are at the very heart of the EBRD region and the core of our activities. For the past twenty years EBRD has been one of the largest sources of external finance across the six economies and a strong, reliable partner in the region. Indeed, just last week we held a very successful Annual Meeting in Tbilisi – a testament to our deep commitment and longstanding ties to this region.
These countries now need the support of the international community – including the EBRD – more than ever.
Already badly hit by the global economic crisis and weakness in western Europe, they are now being severely affected by damaging spill-overs from Russia, a deeper recession in Ukraine, and increasing geopolitical risk-aversion affecting existing and potential investors.
In our latest forecasts, the Eastern Partnership countries showed the sharpest downward revisions of any of the EBRD regions, with four out of six economies expected to shrink in 2015, and a generally weak recovery in 2016.
Nevertheless, EBRD is leaning forward. Half of our €8 billion portfolio in the Eastern Partnership countries is in infrastructure and energy projects – demonstrating our commitment to connectivity and network modernisation. We had a record year of lending in Ukraine last year, we signed new investment climate and anti-corruption agreements with Moldova and Ukraine, and we signed a Memorandum of Understanding on the privatisation of Belinvestbank with Belarus. If successful, this could mark a turning point in the development of the Belarusian private sector.
And in Tbilisi last week, we received the very strong support of our shareholders to step up our engagement in recipient countries over the coming years.
At the heart of this new strategic framework is a focus on re-energising transition, to rekindle the reform process that has slowed down, stalled or even swung into reverse in many of the EBRD’s countries. To respond to this challenge, our shareholders gave us a clear mandate to take on a significantly stronger role in advocating policy reform, alongside our investments.
We know that there is no more powerful reform anchor for countries in this region than that of deep integration with the EU. For the three countries that are going forward with Association Agreements and Deep and Comprehensive Free Trade Areas, these agreements provide a critical path for policy reform, and in turn the context for the EBRD’s activities. We are committed to promoting economic reform across the Eastern Partnership countries, working hand-in-hand with our partners. And we are specifically intensifying our partnership with the EU to support the implementation of these agreements in Moldova, Georgia and Ukraine.
With our own strong focus on promoting the private sector, we have, together with the Commission and the European Investment Bank, developed a programme that combines finance, technical assistance, and policy advice in order to help these countries develop their small and medium sized enterprises.
In Tbilisi last week, we were very happy to sign our first project under the EBRD-EU DCFTA Direct Support Facility for SMEs. The facility will help small companies gain access to new markets by improving their product quality and raising their standards to EU levels.
This was just the first of what will certainly be many more activities in support of the goals of the DCFTA that will help raise standards of living for people across the countries that we serve.
I enjoyed the very successful Business Forum yesterday, and the strong show of support for this region today. The path ahead for the Eastern Partnership will be demanding, but the potential is tremendous. We in EBRD are delighted to play our part.