EBRD investments in Greece to depend on talks with creditors

The terms of investments pledged to Greece by the European Bank of Reconstruction and Development will depend on the outcome of Athens’ talks with its creditors, the bank said on Friday.

“How much we can do, how many projects, what sectors we can operate in” would depend on the economic policy agreed to between the Prime Minister Alexis Tsipras’s radical leftist government and creditor countries, EBRD’s President Suma Chakrabarti said during the bank’s annual meeting held in the Georgian capital Tbilisi.

“The need (for investments) is there and that is why Greece became a country of operations for the EBRD this year,” he said, adding that the bank has so far “started in a very small way.”

At Athens’ request, the London-based institution announced in March the launch of a five-year investment programme in Greece, without specifying the volume of funds pledged.

On Thursday, the EBRD issued its first ever economic forecast for Greece, warning the country of another “major recession” if talks fail with the International Monetary Fund and the European Union on a minimum set of reforms required to unlock the bailout loan’s last tranche of 7.2 billion euros ($8.2 billion).

It said that the Greek economy, which grew by 0.8 percent in 2014, would post zero growth this year and expand by two percent in 2016, provided the negotiations prove successful.

Founded in 1991, the EBRD is an international financial institution owned by 64 countries, the European Union and the European Investment Bank.

It was initially focused on building market economies in the former communist states in Central and Eastern Europe, and currently supports development in 30 countries in Central Europe and Central Asia as well as in five countries in the Middle East and North Africa. [AFP]

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