* EIB will make EUR 8.5 billion available to CEE by April
* Bank says could be first leg of universal answer from EU
* Credit lines not emergency injection for region
* Lending for SMEs in EU newcomers, west Balkans, Turkey
By Michael Winfrey
PRAGUE, Feb 27 (Reuters) - The European Investment Bank said
on Friday it could lend 8.5 billion euros in central and Eastern
Europe by the end of April in what could be the first leg of a
universal approach towards the region from the European Union.
But EIB president Philippe Maystadt said that rather than an
emergency injection, most of the funds had already been in the
pipeline, and the loans were part of increasing regular business
with countries there.
The EIB announced the loans as part of a plan with the World
Bank and the European Bank for Reconstruction and Development,
who unveiled a joint programme on Friday to lend 24.5 billion
euros to help banks and businesses.
The region has been sucked into the global crisis, with
Hungary and Latvia having turned to the International Monetary
Fund for aid and investors dumping assets over fears of heavy
dependence on foreign lending and wide external imbalances.
EU member states including Hungary and Austria have asked
for a stabilisation fund that could exceed 100 billion euros. EU
members may discuss a proposal on Sunday at a summit, and
Maystadt said the lending package could be a first step.
"You can reasonably infer that this could be the first part
of a more global answer from the European Union," Maystadt told
Reuters in an interview. The EIB is the EU's long-term lending
bank, and is tasked with promoting development in EU members.
Maystadt said 5.7 billion euros had already been approved
for the EIB, and the bank expected to add another 2.8 billion by
the end of April. That could grow again to total around 11
billion euros by the end of 2010.
The funds would be extended to local banks to be leant to
small and medium sized businesses in the region. He said 4.4
billion would go to the EU's new eastern members, 1.9 billion to
the Western Balkans and 2.2 billion to Turkey.
"We have a good bit in Hungary, the Czech Republic and
Poland. But we also have credit lines in other countries,"
Maystadt said.
"It's not at all a kind of urgent assistance. It's clearly a
strengthening of normal business relations with these states."
He said the EIB's part of the plan would not include former
Soviet republics outside of the EU such as Ukraine, but that the
EBRD's part could.
When asked if the package was part of a proposal by some EU
members to launch a region-wide bailout platform that could also
potentially include funds from the International Monetary Fund
or the EU, Maystadt said the EIB had been in close talks with
the European Commission.
"It's part of the answer, but this concerns only the banking
sector," he said.
(Reporting by Michael Winfrey; editing by Patrick Graham)
