The European Bank for Reconstruction and Development (EBRD) will start investing in Greece on a temporary basis in response to a request from the Greek authorities for the Bank to support reforms and a return to economic growth.
The EBRD’s shareholders voted for the Bank to invest in Greece until the end of 2020.
The Bank’s investments – backed by technical assistance and policy dialogue – are intended to strengthen progress in the reform of Greece’s economy and contribute to its recovery.
The organisation will deploy its expertise in attracting and encouraging foreign and domestic investment, strengthening the role of the private sector and deepening regional integration.
Specifically, the EBRD will help address the issue of insufficient capital for Greek private companies, especially small and medium-sized enterprises. This is a key barrier to growth, where the EBRD can contribute significantly with its equity and commercial debt products.
The EBRD will also engage, where possible, in expanding the private sector’s role in infrastructure and energy. Greece is a natural trade and investment partner for many countries in south-eastern Europe where the EBRD has a strong presence. The Bank will support investments and policy measures which are conducive to integration.
EBRD President Sir Suma Chakrabarti said: “We are very happy to be able to apply our particular expertise in the private sector to the Greek economy. The EBRD will be fully engaged to make the most of its temporary mandate in the country. By concentrating on the private sector we are seeking to actively contribute to the reform and recovery of the country’s economy.
Greece is a founding member of the EBRD and to date Greek companies and banks have invested €2.3 billion in joint investments with the Bank in the EBRD’s recipient countries, with a focus on south-eastern Europe. In 2010, under the Vienna Initiative, the EBRD supported the subsidiaries of Greek banks in the region at the height of the global financial crisis.
The government of Greece requested that the country be granted EBRD recipient country status, in a letter dated 25 November 2014 which said that EBRD engagement would “provide value-added in tackling the consequences of the financial and economic crisis and addressing the structural challenges in the Greek economy that it exposed”.
The request was reconfirmed by the new government on 2 February 2015. Following the Governors’ approval the EBRD will now engage with the Greek authorities to prepare a country strategy for Greece which will provide the framework for its engagement and identify priorities.
The EBRD also intends to open an office in Athens.