40 Members also affiliated to European Union EFTAEEA

40 Members, also affiliated to: European Union EFTA/EEA EU Candidate Countries EU Neighbourhood Countries CEB Target Group Effective Support for Enlargement Donor Coordination Conference, Brussels, 19 October 2009 09/10/2009

Panel IV : Adapting Financial Instruments to Current Challenges Accelerating Public Investment Social needs in Central and Eastern Europe likely to rise Previous experience shows that the most vulnerable are the most affected during a crisis Unemployment rates will be growing, from already high levels in South Eastern Europe (Bosnia and Herzegovina >40%, "the former Yugoslav Republic of Macedonia" 34%, Serbia 18%), will lead to reduced personal income Reduced “fiscal space” for public programmes and social investments while needs are still very important or even higher due to the crisis: “a second wave of effects” Assistance /Financing needed from the international community 09/10/2009

Panel IV : Adapting Financial Instruments to Current Challenges Accelerating Public Investment CEB – a multilateral development bank with a social mandate CEB’s job is to finance “social projects”, i. e. ► investment in social infrastructure: housing and urban development, including resettlement of refugees and migrants, health and education, water and sanitation, energy conservation, disaster prevention ► job creation through providing credit access to SMEs for financing investment in productive equipment Increased activity in 2009: ► By end-September, approved loans exceeded € 2 bn. This compares to a total of € 1. 9 bn in 2008. Particular focus on “target countries”, i. e. Central and Eastern European countries, including SEE: ► By end-September, 85% of disbursements went to target countries, although this ratio may turn out be more balanced by year-end 09/10/2009

Panel IV : Adapting Financial Instruments to Current Challenges Accelerating Public Investment WBIF – accelerating or improving investment ? WBIF focuses attention on South-Eastern Europe, allows for better coordination, mobilises synergies among IFIs involved, makes grants available The antagonism of grants “vs. ” loans is misleading: the region needs precisely a combination of grants & loans. Grants improve project quality, allow for financing projects that would otherwise not be “bankable”, thus strengthen the social dimension of projects However, coordination takes time. We need to ensure that procedures are handled flexibly so that WBIF not only improves but also accelerates lending to the region 09/10/2009