EBRD Annual Meeting 2014: key economies face new pressures

By Anthony Williams

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The European Bank for Reconstruction and Development will hold its Annual Meeting in Warsaw on 14-15 May, just as geopolitical tensions are threatening the recovery in some of the larger economies where the Bank invests.

On the 25th anniversary of the collapse of communist rule in central Europe and a decade after eight former eastern bloc countries joined the European Union, the Annual Meeting and Business Forum – under the banner “Changing Economies, Changing Lives” – will take stock of lessons learnt and assess future challenges.

The EBRD’s Board of Governors, representing the Bank’s 66 shareholders, will discuss proposals to “re-energise” the reform process.

They will also decide whether Cyprus should temporarily become a recipient of EBRD financing and whether Libya should be admitted as a member of the Bank.

In addition to the formal discussions, policy-makers and leading experts will hold high-level panel discussions at the Business Forum, addressing issues that are key to the future economic and social well-being of the countries where the EBRD works.

The EBRD’s Transition Report 2013 – “Stuck in Transition?” – has provided pointers to help overcome the reform gridlock that threatens the process of convergence with more advanced economies.

Building on that Report, the management’s ‘Medium Term Directions” that will be presented to the Annual Meeting aim to make market reforms more resilient, to promote greater regional and international integration and to provide an effective response to global and regional challenges such as climate change and food security.

Promoting reforms that can lay the ground for sustained, robust growth has assumed an even greater urgency following a downturn in economic prospects since the Bank’s previous assessment in January 2014.

New forecasts published in Warsaw will reveal a significant deterioration in the outlook for Russia and Ukraine as well as a worsening picture for some other countries such as Turkey.

The Warsaw decision on whether to provide finance for founding EBRD shareholder Cyprus follows a formal request from the government made in February 2014. In asking for a change in its status, the authorities said a temporary engagement by the Bank would be a positive contribution to efforts “to reform and restructure the Cyprus economy”.

The Libyan authorities lodged a request in December 2013 for the country to become a shareholder of the EBRD with a view to becoming a recipient of EBRD finance. Any process to establish recipient status would start following a decision in Warsaw on membership.

This year’s Annual Meeting follows a very active period of investment by the EBRD so far this year.

The Bank signed 97 projects in the first 4 months, compared with 72 in the same period in 2013. The total value of our investments reached €2.3 billion up until end-April, compared with a previous €1.4 billion.

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