ECONOMY

EBRD freezes Greece office plan

The European Bank for Reconstruction and Development (EBRD) has decided to freeze its decision to set up an office in Greece on account of the political uncertainty in the country regarding whether the election will lead to the forming of a government “that will remain focused on European commitments.”

The final decision by the EBRD’s governing board to that end was scheduled for last Wednesday, January 14, following a recommendation by the lender’s president, Suma Chakrabarti, but uncertainty in Greece has postponed its fulfillment until after the election.

EBRD activity issuing direct financing to local enterprises and participating in investment projects through the opening of an office in Greece had been expected to contribute an estimated 500 million euros per annum to the economy, with a prospect of exceeding 3 billion euros in the next five years.

Talks had started a few months ago with the Ministry of Development, which was also the recipient of the news about the postponement, given that it has a member on the EBRD governing council.

In early November minister Costas Skrekas and his deputy Notis Mitarakis had gone to London and met with the EBRD chief to request funding for the country’s enterprises. Now the ministry understands that it was the reaction of certain governing council members that forced the postponement of the EBRD’s arrival in Athens until the formation of the next government.

Nevertheless, EBRD First Vice President Phil Bennett told a conference in Vienna on Tuesday that a Greek exit from the eurozone would undermine the model of euro stability, adding that the EBRD does not expect that to happen.

“Grexit is not the EBRD’s base economic case,” Bennett stated, noting, “We would be very concerned about Grexit from the point of view of taking away the model of euro stability and euro cohesion and undermining what we think is the gravitational pull of the EU model and the anchor for the convergence.”