EBRD extends 350 mln euro credit to SE Europe banks

The European Bank for Reconstruction and Development signed three credit lines, totalling 350 million euros ($470 million), with subsidiaries of the National Bank of Greece in Bulgaria, Romania and Serbia to support lending. United Bulgarian Bank will receive 150 million euros, Banca Romaneasca 100 million euros, and Vojvodjanska bank 100 million euros of new funding from the EBRD, it said in a statement on Monday.

The London-based lender said in October spillover risks from Greece's sovereign debt crisis had been contained thus far but warned that it still had the potential to disrupt economic activity in the region if the situation deteriorated. It expected southeastern Europe to suffer an economic contraction of 0.6 percent this year before growing 1.6 percent in 2011 as while exports are growing rapidly, domestic demand in most countries remains sluggish and many are struggling on the fiscal front.

"Support for these banks and the real economy in Bulgaria, Romania and Serbia is important to boost economic recovery," Nick Tesseyman, EBRD managing director for financial institutions, said in the statement. "The project will help to ensure a continued flow of credit to private companies operating in these countries, which is essential to foster development in difficult macroeconomic conditions."

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