World Bank Pushes for Aid to Eastern Europe

The World Bank and European Bank for Reconstruction and Development have released a document written by Dominique Strauss-Kahn to try to persuade leaders of the European Union to support Eastern European countries in battling the financial crisis.

Until now, the campaign failed due to opposition coming both from Western governments, as well as those of Eastern Europe. Meanwhile, members of the euro area and the ECB are opposed to relaxing the rules for entry into monetary union.

IMF, which predicts a 2.5% contraction in the economy of the region in 2009, says that emerging Europe – including Turkey – must reimburse this year foreign loans worth 413 billion U.S. dollars (307 billion euro) and to cover a current account deficit of 84 billion U.S. dollars (62.4 billion euro).

IMF report estimates as well as gap funding – money that the region will need from the international financial institutions and the European Union – will rise to 123 billion U.S. dollars (91.4 billion euro) this year and to 63 billion U.S. dollars (46.8 billion euro) in 2010.

An important source of money that will come will be the IMF. But the report estimates that “up to 105 billion U.S. dollars”; could come from other sources, including the European Union.