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ThankyouMaria,forthatkindwelcome.IamdelightedtobehereattheEBRD’s21stAnnualBoardofGovernorsmeeting.I’mherealongsidefellowshareholdersfromMexicotoJapan,fromEgypttotheNetherlands–justameasureoftheinternationalcommunity’scommitmenttotheEBRD.I’msureIspeakonbehalfofalltheGovernorswhenIpaytributetothePresident,ThomasMirow,andhisteamforwhattheyhaveachievedoverthelastfouryears.Thomas,underyourleadership,theBankhassecureda50%increaseinitscapital,returnedtorecordprofitabilitydespiteachallengingeconomicclimate,andincreaseditslendingby80%.Perhapsmostimportantly,youwereoneofthefirstpeopletorecognisetheroletheBankcouldplayinsupportingSouthernandMiddleEasternMediterraneancountriesinthewakeoftheArabSpring.YouhavemanagedtheexpansionoftheBankwhilemaintainingitsfocusonitstraditionalregionofoperation.Thomas–theinternationalcommunityowesyouahugedebtofgratitude.Onbehalfofeveryonehere,thankyou.TheEBRDwasfoundedinresponsetosomeofthemostimportanteventsinourmodernhistory–thefalloftheBerlinWall,andthesuddenandtotalcollapseofCommunistRegimesacrossEasternEuropeandtheFormerSovietUnion.Butinmanyways,theconceptbehindtheEBRDbegandecadesearlier.AftertheravagesofWorldWarII,theworldunderstoodthatinsteadofleavingthecountriesofEuropetofendforthemselves,itwasintheinternationalcommunity’sintereststohelpthosecountriesrebuildtheireconomies.AsGeorgeMarshallputit,theworld“shoulddowhateveritisabletodotoassistinthereturnofnormaleconomichealthintheworld,withoutwhichtherecanbenopoliticalstabilityandnoassuredpeace”.Thesamelessonswerelearntintheearly1990s,whentheleadersofEuropeandtheWorlddecidedtoextendthehandoffriendshiptoEasternEuropeandtheformersovietbloc,astheyrecoveredfromdecadesofCommunisttyranny.TheEBRDwassetuptohelpthesecountriesbegintheslowanddifficulttaskofbuildingmultipartydemocracyandmarketeconomieswheretherewerenone.Sinceitsformation21yearsago,theEBRDhasinvestedfiftybillioneurosinaregionthatstretchesfromPolandintheWest,toMongoliaandRussiaintheEast;theBalticintheNorth,andTurkeyintheSouth.ButthevaluetheEBRDbringsgoesfarbeyondsimplythemoneyitinvests.Notonlybecauseforeveryeuroitinvests,itleveragesanotherthroughprivatesectorinvestment.Itisbecausewiththatinvestment,theEBRD’sbringsin-depthknowledgeofthecountriesinwhichitworksandrealexpertiseabouthowtoputthatinvestmenttomaximumeffect.
 
TheBankhasassistedmorethan1,850companiestodeliveraverageincreasesinturnoverof20percentandincreasesinproductivityof30percent.Ithassupportedcountriestoundertakebankingreform;priceliberalisation;privatisationandsupportedthecreationoflegalframeworksforpropertyrights.Andineverycase,ithastailoreditsprojectstotheneedsofindividualcountries–beitrebuildingwaterandwastewaterinfrastructureintheKyrgyzRepublic,orlinkingisolatedpartsofthecityofBelgradeviaamajornewBridge;orUkrainianfarmerstodoubletheirstoragecapacityandraiseprofitability.PartlyduetotheworkoftheEBRD,theprospectsofmanyofthesecountrieshavebeentransformedoverthelasttwentyyears.Sowhy,then,doweneedtheEBRDtoday?Afterall,thecountriesofEasternEuropeareestablisheddemocracies,andsincethemid-1990s,theformerCommunistcountrieshavetwicegrownasfastasWesternEurope,withtradesixtimesgreaterthanatthestartofthetransition.That’strue,butitdoesn’tmeantheEBRD’sworkends.First,therearestillpartsofEasternEuropeandCentralAsiathatneedsignificantsupport.Second,eventhosecountriesthathavemadethegreatestprogressstillneedassistance-moresonowthanafewyearsago–becausethefinancialcrisishasledtosignificantinstability,astheforeignbanksthatdominateCentralandEasternEuropeanbankinghaveundergoneaggressivedeleveraging.Asthestormsoftheeurozonecrisisgather,thereisariskthatsomeofthegoodworkofthelast20yearsinbuildingastablefinancialsectorandcreatingjobsandprosperityisunwound.LiketheUK,theregion’sgrowthprospectsarecloselytiedtothoseoftheeuroarea,anddeleveragingmagnifiesthiseffect.Butwhileuncertaintycontinues,theBankisrightlydoingwhatitcantolimitthedamageoffinancialdeleveraginginitsregionsofoperations.Ithasalreadysignificantlyincreaseditsownlendingtotheregionand–throughtheViennaInitiative–hasworkedtoensurebanksmaintaintheircommitmenttotheregionanddonotcutkeycreditlines.Third,theinternationalcommunitylookedtotheEBRDtosupporttheSouthernandEasternMediterraneancountriesfollowingtheArabSpring.AMiddleEastofopenanddemocraticsocietieswouldtransformthesecurityoftheworldandbrightentheprospectsofmillionsofpeople–undoubtedlythegreatestprospectfortheenlargementofhumanfreedomanddignitysincetheColdWar.ItisatestamenttothecourageofthepeopleofTunisia,EgyptandLibya–andnowSyria–theyyearnforwhatallpeopleyearnfor–economicdevelopmentandpoliticalparticipation.Buttherearehugechallengesahead.Allofthesecountrieshavesufferedsharpreductionsingrowth–asuncertaintydetersforeigninvestmentandtourists,amainstayofsomeeconomiesintheregion,arestayingaway.
 
Manyofthemwillneedstabilisationsupportfromtheinternationalcommunity-EgyptandJordanarenegotiatingIMFprogrammes.Othersmayneedsupportthisyear.Ofcourse,thereareimportantdifferencesfromtheeconomiesofEasternEuropeaftertheColdWar,buttherearealsosimilarities:overinvolvementofthestateintheeconomy;toomuchrelianceonthepublicsectorforjobcreation;aweakbankingsector;andlack–orinsomecasesonlypartial-integrationintotheopportunitiesprovidedbyglobaleconomy.Weshouldnotbeblindtothechallenges-successisbynomeansguaranteed.Butifthereisonethingwehavelearntfromthispastexperience,itisthatthebestwaytoensuretransitionfailsandextremismflourishesistochokeoffopportunityandnotextendthehandoffriendshiptocountriesindifficulty.TherearehugechallengesthattheEBRDcanhelpwith.TheEBRDcanhelpexpandnewmarketsandleverageprivateinvestment–andwithmanyoftheBank’sshareholdersdealingwithlargebudgetdeficitsoftheirown,theBankwillneedtodemonstrateitisdeliveringmaximumvalue.Itcansupporttheregiontodealwithyouthunemploymentandlowparticipationofwomeninthelabourforce–avitalcomponentofdevelopingasuccessfuleconomy;youthunemploymentaverages25%acrosstheregionandfemaleparticipationisjust26%.Anditcansupporttosmallandmediumsizedenterprises–thedriversofjobcreation;18millionmorejobsareneededintheregionoverthenextdecadeandifnotaddressed,chronicunemploymentwillcontinuetobreedinstabilityandviolence.SothedecisiontakenlastyearthroughtheDeauvillePartnershiptoextendtheremitoftheEBRDtotheSouthernandEasternMediterraneanwasaveryimportantone.Butthetruthis,we’venotyetmobilisedourresources.It’sayearandahalfsincethepeopleofEgyptgatheredinTahrirSquare,andsevenmonthssincetheGovernorsapprovedtheuseofSpecialFundmoneyintheSouthernEasternMediterranean.Sofar27membershaveratifiedtheamendment-butnolessthan44countriesarerequired.Asaninternationalcommunityweneedtoupourgame.Whatwouldourpredecessorssaytoday?Yes,yourrhetoriccannotbefaulted.Yes,yourpromisesareimpressive.Butwhereistheactualcommitmentofresourcesthatmatchestherhetoric?Willyoubeabletodeliveronyourpromises?Canyourisetothechallenge,asyoudid21yearsago,andmakethisaprosperousworldforusall?

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