According to information gleaned by "N", a standing and inexorable condition before any substantive talks can proceed on possible WB funding is a conclusion to the now year-long delayed second review of the Greek program. Another condition is for a clear picture of Greece's fiscal “envelop” to emerge, given that any new loan would ostensibly be tacked on to the crisis-bedeviled country's debt load.
The Greek government's efforts boost employment in the recession-battered EU and Eurozone member-state country have reportedly included the possibility of securing World Bank lending in order to continue and expand training programs that will improve employment opportunities.
According to information gleaned by "N", a standing and inexorable condition before any substantive talks can proceed on possible WB funding is a conclusion to the now year-long delayed second review of the Greek program. Another condition is for a clear picture of Greece's fiscal “envelop” to emerge, given that any new loan would ostensibly be tacked on to the crisis-bedeviled country's debt load.
Given the World Bank's close cooperation with other international financial institutions, especially the International Monetary Fund (IMF), the development bank's leadership will surely request information and a "green light" from the country's institutional creditors for any new lending towards Greece. "Institutional creditors" in this case are the EU Commission, European Central Bank, European Stability Mechanism (ESM) and the IMF. According to the latest estimates, the most likely scenario is for whatever WB lending to be in the millions instead of billions, and funneled towards employment-training schemes. However, at last word, the WB has not touched on exact figures, as discussions would follow completion of an arrangement between Greece and the institutions.
In any case, the World Bank is already providing know-how to Greek authorities to improve social protection, along with the often-depressed business and investor climate in the east Mediterranean country.
Dirk Reinermann, World Bank Manager for Southern Europe
“The Greek government has asked for World Bank technical assistance and financing to make progress in the area of employment. As part of our ongoing technical assistance a World Bank team is working with the Government on the technical design of a program that would improve the chances for employment of the long term unemployed, especially young people. Before we can discuss World Bank financial support the Greek Government is aware that it needs to reach agreement with its creditors on the fiscal envelope in the context of the second review. Also, as per regular World Bank procedure, any possible financing would be subject to approval by the Board of Executive Directors."
Generally speaking, the World Bank examines parameters such as the poverty index, which in Greece has increased between 2007 and 2014. However, the primary criterion before a decision is taken to extend lending to countries that have “graduated” from previous WB programs, is the difficulty, by the latter, in accessing markets.
At present, the World Bank is implementing programs in no less than 10 EU member-states, but is extending a credit line to only four EU members: Bulgaria, Croatia, Poland and Romania.
Beyond sovereign lending, however, the World Bank has been adept at funding private sector investment schemes, with a characteristic example being the IFC's decision to participate in the financing of a German-Greek consortium (Fraport Greece) that will soon assume a concession to manage 14 regional airports around Greece, including ones that serve the top tourist destinations in the country.
The financing is comprised of two loans with a maturity of 18 years, extended to Fraport for the upgrading and modernization of the 14 airports, one of the landmark privatization deals in the country. The first loan is worth 92 million euros and deals with infrastructure improvement and services at the airports of Thessaloniki, Corfu, Hania (Chania), Cephallonia, Zakynthos, Aktio (Preveza) and Kavala. A second loan, worth 62 million euros, deals with upgrades and terminal expansion at the airports on the islands of Rhodes, Kos, Samos, Mytilene (Lesvos), Mykonos, Santorini and Skiathos.
The World Bank has also recently participated in the recapitalization of Greece's four systemic banks to the tune of 150 million euros. As such, the Washington D.C.-based institution is a keen observer of developments regarding the issue of non-performing loans (NPLs) and non-performing exposures (NPEs) plaguing Greece's credit system, as well as the issue of financing "liquidity-starved" SMEs in the country.