Turkey to receive $2.8 billion from European emergency aid package

The European Bank for Reconstruction and Development, the European Investment Bank and the World Bank pledged to invest 24.5 billion euros to fight the financial crisis in central and eastern Europe. Â

 

The two-year joint initiative, worth the equivalent of $31 billion, will include equity and debt financing, credit lines and risk insurance, the three groups said in a joint statement.

 

"The largest multilateral investors and lenders in Central and Eastern Europe ... have pledged to provide up to 24.5 billion euros to support the banking sectors in the region and to fund lending to businesses hit by the global economic crisis," they said.
  Â
"This initiative complements national crisis responses and will deploy rapid, large-scale and coordinated financial assistance from the International Financial Institutions to support lending to the real economy through private banking groups, in particular to small- and medium-sized enterprises."
  Â
The banks also said "the response takes into account the different macroeconomic circumstances in and financial pressures on countries in eastern Europe, acknowledging the diversity of challenges stemming from the global financial retrenchment."
  Â
The EBRD will provide up to 6 billion euros for the financial sector in the region for debt and equity financing for banks and businesses, and trade finance.
  Â
The statement said the EIB will provide 11 billion euros of lending facilities while the World Bank will provide support totalling about 7.5 billion euros.
  Â
"This is a time for Europe to come together to ensure that the achievements of the last 20 years are not lost because of an economic crisis that is rapidly turning into a human crisis," said World Bank President Robert Zoellick, AFP reported.
  Â
"I welcome the close cooperation among the EBRD, the EIB and the World Bank Group, and am committed to making this partnership work as we move forward to address the risk of a crisis of the banking sector in eastern Europe."
  Â
EIB President Philippe Maystadt added that the two-year action plan would give crucial support to the region.
  Â
"This joint action plan will help speed up the delivery of vital finance through the banks to support the real economy of hard-hit countries in Central, Eastern and Southern Europe, and particularly to help small businesses survive in these turbulent times," Maystadt said.
  Â
News of the initiative came days after the EBRD had warned the global financial crisis threatened economic reforms in Eastern Europe as it posted a record loss of 602 million euros ($769 million) for 2008.