The Treaty created the foundations of the EU we know today
Tomorrow, 25 March, people across Europe are celebrating the 60th anniversary of the Treaty of Rome, which set out a vision for the European Union (EU) much as we know it today, namely, an EU with an open market for goods, services, capital and people. The Treaty also led to 60 years of peace among EU Member States, progressively enlarged in number from 6 to current 28.
The EU is one of the EBRD’s founding members, along with the European Investment Bank which was created under the Treaty of Rome. In addition, all EU Member States are shareholders of a growing EBRD family that now extends to 67 members.
The EBRD was established in 1991 to support market-oriented economies and to promote entrepreneurial initiative in central and eastern Europe. Over the years the geographical mandate of the Bank was extended and today includes the south and eastern Mediterranean region, where successful operations have been launched following the 2010/11 events.
This goal complements the EU’s aim of promoting peace, stability and prosperity. Consequently, the Bank has enjoyed very close ties with the EU since our foundation in 1991.
Bringing East and West together and promoting stability in EU neighbouring regions
For decades, the people of central and eastern Europe had been isolated behind the Iron Curtain. They were now free to travel, free to trade, free to determine their own success. After the fall of communism the prospect of EU membership provided a clear perspective. Alongside the EU, the EBRD offered support: investing in businesses, addressing the legacy of energy-intensive economies and building new links between East and West.
Given the EBRD’s mandate and presence in the countries where it invests, the Bank was uniquely positioned to build a dynamic small and medium-sized enterprise (SME) sector. We supported businesses through direct loans, credit lines to local partner banks and concrete, hands-on advice – and we have done this continuously across the region. For example, in Croatia, the newest EU Member State, our EU-funded Advice for Small Businesses helped hundreds of enterprises to take full advantage of the opportunities arising from EU accession.
Europe is a transformed continent today, but the EU’s pull factor remains potent. EU approximation is a major driver for change in many countries where we invest. In the Western Balkans, for example, we help SMEs to invest in improving their production facilities so they can achieve EU standards. We also work closely with our partners to upgrade and build vital transport arteries across the region, so that entrepreneurs can export to new markets and citizens can travel more easily and safely abroad.
The EU also binds countries in its neighbourhood to democratic values and helps them build sustainable economies through Association Agreements and access to the Single Market. In Georgia, Moldova and Ukraine the EBRD prepares businesses for trade opportunities through investment and advice. This makes firms more competitive in their home markets and beyond.
The Bank supports economic integration as a key element of well-functioning market economies. This approach benefits everyone – our countries of operations, the EU and people across the globe – as it offers consumers affordable, high-quality goods and develops strong, sustainable economies worldwide.
Effective long-term support
The EBRD has provided effective solutions time and again and, most importantly, it has made a tangible difference to millions of people. This impact would have been impossible without the EU’s political and financial support. It is the largest donor to our projects, contributing €289 million in 2016 alone for activities that, for example, support SMEs, finance vital infrastructure improvements and build green economies.
Climate change is the most pressing challenge of our generation and we work closely with the EU to address it. For example, our activities help households and businesses to invest in energy-efficient equipment – with concrete results. In more than 1,000 projects we have helped people to save money on their energy bills, businesses to become more competitive and we have contributed to a cleaner environment. This work has reduced CO2 emissions by over 80 million tonnes each year, equivalent to the annual emissions of Romania.
Nowhere else has the legacy of the Soviet era left a deeper and longer-lasting mark than in Chernobyl, the site of the 1986 nuclear accident. In 2016, the EBRD’s work as fund manager of the New Safe Confinement project has helped to place a 36,000-tonne protective shelter over the site of the destroyed reactor. The project would not have been possible without the political and financial commitment of donors, including the European Commission and the G7 countries.
In total, the EBRD has invested more than €117 billion in more than 35 countries and has offered donors such as the EU an efficient way to maximise their funds by mobilising additional investment from other sources. Reacting rapidly to pressing political needs the Bank last year launched a refugee crisis response, with EU support, which is supporting countries exposed to this huge humanitarian, economic and social challenge.
In parallel, the EBRD increasingly shares its experience when there is a need to define reform objectives and to see how our financial tools can be used for the implementation of reforms.
International solutions in a fast-paced, interconnected world
The EBRD has helped to take urgent action when it was needed over the past decade. It was a founder of the Vienna Initiative, which coordinated actions between international financial institutions, governments, banks and regulators in the immediate aftermath of the 2008 financial crisis. And it helped to prevent the threat of an uncoordinated withdrawal of international banks from central and eastern Europe. In 2015, the Bank started operations in Greece to support the country’s economy and has invested more than €800 million there to date.
In addition to these efforts, we must address the challenges of globalisation. Some segments of society feel that they have fallen by the wayside of economic progress. This is why the EBRD has made inclusion a strategic priority and is stepping up its drive to offer new opportunities, in particular, for young people and women. The solution cannot be to deny businesses opportunities to trade their goods abroad or to close our economies to the outside world and propose protectionist measures. A fast-changing, connected world needs international solutions – now more than ever.
The EU has been an anchor of peace, prosperity and democracy and continues to fulfil this role. It has been a strong partner for us, for the governments in our region and has helped to change the lives of millions of people. This should be remembered on the anniversary of the Treaty of Rome, as the EU has provided a vision of how to catalyse political leadership and overcome difficulties as we build and preserve our European and democratic values.
Pierre Heilbronn is the EBRD’s Vice President, Policy and Partnerships