The European Bank for Reconstruction and Development has answered a call from its shareholders and taken a major step forward in responding to the historic changes brought about by the Arab spring. The Bank's Board of Directors has made a recommendation to extend the geographic scope of the EBRD's operations to the countries of the southern and eastern Mediterranean. This follows requests from Egypt and Morocco, both founding members of the EBRD, to become recipient countries of the Bank. The Board of Directors has also recommended that Tunisia become a member of the Bank, following the country's application at the end of last month. Furthermore, a letter of interest has been received from Jordan.
The Board of Directors' recommendations will now go to the Bank's Board of Governors, along with several other resolutions which are aimed at ensuring a swift start to activities in the extended region. The Governors will have two months to decide whether to adopt them and after that some of the proposals will need to be ratified by shareholders.
The international community has urged the EBRD to become part of the economic response to the southern and eastern Mediterranean region - asking it to use its 20 years of experience in supporting the economic transformation of countries in central and eastern Europe, as well as Central Asia, after the collapse of communism.
If shareholders (61 countries and two international organisations) agree to an extension of the EBRD’s geographic mandate, the Bank would aim, especially, to help promote the development of the private sector.
The EBRD has calculated that it would be in a position, eventually, to invest up to €2.5 billion a year in the region without seeking additional funds from shareholders.
It has also stressed that any investment undertaken in a new region would not detract from its commitments to its 29 existing countries of operations and would be done in close cooperation with other international financial institutions.