Montenegro is an upper-middle-income country with enormous growth potential. Montenegro became a member of the World Bank Group in 2007. Montenegro’s economy has huge potential, but is hindered by significant structural, economic, and fiscal risks.
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Financing in 2013-2014 reached EUR 42.7 billion, exceeding the original commitment of EUR 30 billionMore than 770 projects supportedSubstantial impact on Central and South Eastern Europe (CESEE)Instit... Show More +utions present final report on “Joint IFI Action Plan for Growth”BRUSSELS, June 2, 2015—The European Investment Bank Group (EIB), the World Bank Group*, and the European Bank for Reconstruction and Development (EBRD) have met and even exceeded their commitments to make available at least EUR 30 billion in 2013 and 2014 to sustain growth and investment in Central and South Eastern Europe (CESEE)** following the global financial crisis. Actual assistance provided under the second “Joint IFI Action Plan for Growth” (JIAP) during these two years totalled EUR 42.7 billion.This JIAP financing – supplied through more than 770 individual projects – had a substantial impact on the region. Gross financial inflows under the Action Plan accounted for about 6 percent of annual investment into Central and South Eastern Europe, and were equivalent to about 1.5 percent of the region’s total Gross Domestic Product. Up to a third of the financing went to funding local commercial banks, allowing them to maintain their provision of credit to small- and medium-size enterprises, and supporting a rebalancing of the local banking sector.Another third of JIAP assistance went to strengthening the region’s infrastructure, particularly for transport, energy, and communications, and helping to integrate the countries into Trans European Networks. JIAP also financed investments to raise energy efficiency and help develop and promote the use of renewables, reducing the impact of climate change. Other projects strengthened the capital positions of banks; promoted the development of local capital markets; and improved the productivity, innovation, and export orientation of firms in the region.In addition, JIAP assistance facilitated the effective use of EU Structural and Cohesion funds.The Joint IFI Action Plan underscored the very close cooperation among the three IFIs within the region, and they will continue to build on this productive collaboration in the future.The final report on JIAP was presented today at an event held at the Brussels-based think tank Bruegel.Wilhelm Molterer, Vice President of the European Investment Bank, stated: “We have delivered on our commitments, and with nearly 800 projects and loans financed by all institutions in the framework of the JIAP, the results on the ground are tangible. The success of this plan will spur tighter co-operation among our three institutions. From providing a lifeline with our credits and helping to prevent a systemic failure, we now need to focus on promoting competitiveness and providing innovative ways of support including risk-bearing capacity. One important vehicle for the EU Member States covered by the JIAP will be the ‘Investment Plan for Europe,’ which is designed to stimulate investments of EUR 315 billion and which will be implemented by the EIB, in cooperation with other IFIs.”Philippe Le Houérou, Vice President of the European Bank for Reconstruction and Development, commented: The Joint IFI Action Plan for Growth has confirmed the major impact that our institutions have. Our funding has been the equivalent of about 1.5 percent of total GDP a year across Central and South Eastern Europe at a time when there is still significant cross-border deleveraging. Our enhanced coordination under the Action Plan has also created special synergies and efficiencies benefitting our countries. Going forward, we see opportunities for working together in the implementation of the Investment Plan for Europe in the CESEE region. In addition, the EBRD plans to significantly step up its policy advice to complement and reinforce the impact of its investments.” Laura Tuck, Vice President of the World Bank’s Europe and Central Asia region, emphasized: “The Joint IFI Action Plan helped the region in its time of need following the global financial crisis. For its part, the World Bank Group mobilized the IFC, MIGA, as well as IBRD support – it was a true Group effort. Going forward, the World Bank, IFC and MIGA will step up their support to the countries in the region by financing the needed structural reforms that are critical to ensure social, economic, and environmental sustainability, continue to support private sector investments in key sectors and help them mitigate the political risks. The agenda that was big before is now even bigger.”EIB, World Bank Group, and EBRD had decided to support CESEE through joint forces after the region had been severely affected by the 2008-09 crisis, as capital inflows through local banking systems came to a sudden stop, and export markets dried up. The region rebounded from this slump in 2010-11, in part thanks to external support under the first Joint IFI Action Plan and the coordination of cross-border banking under the Vienna Initiative.But growth was again interrupted in 2012 over much of the region, as the faltering activity in the euro area affected the region’s exports, and a renewal of cross-border bank deleveraging threatened to deprive local economies of credit. In light of these prospects, and to support sustainable growth, the three IFIs launched the second JIAP in November 2012 under which the EIB Group provided EUR 28.3 billion (commitment: EUR 20 billion), the World Bank Group EUR 7.4 billion (EUR 6 billion), and the EBRD EUR 7 billion (EUR 4 billion).Going forward, the three institutions will build on the successful record of the Joint IFI Action Plan for Growth and continue tackling in close coordination key challenges in emerging Europe and possibly other regions they collectively operate. This can include support for raising potential output through higher competitiveness, innovation, and infrastructure investment.* The World Bank Group comprises five institutions, including the International Bank for Reconstruction and Development (IBRD) and International Development Association (IDA), which together make up the World Bank; International Finance Corporation (IFC); and the Multilateral Investment Guarantee Agency (MIGA); and the International Centre for Settlement of Investment Disputes (ICSID).** The seventeen countries benefitting from the initiative consist of certain European Union member states (Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia) and EU candidate and potential candidate countries in the West Balkans (Albania, Bosnia and Herzegovina, Kosovo, FYR Macedonia, Montenegro and Serbia). Show Less -
Small businesses are an economic cornerstone in the Western Balkans*. They represent a main source of economic growth and employment in the region, and support to SMEs is a key factor to achieve econo... Show More +mic recovery at the local, national, and regional levels. At the heart of providing support is corporate financial reporting which helps provide transparent and reliable financial information. This is critical in building trust in the private sector and has been shown to expand access to credit at reduced cost – a vital component in helping small companies develop and grow. If businesses are able to access affordable credit and receive competent advice and high-quality services from well trained professionals including accountants, they are better placed to grow and prosper - providing jobs and contributing to the public purse through taxes.Since 2009, the Vienna based World Bank Centre for Financial Reporting Reform (CFRR) has worked with counterparts and stakeholders throughout the region to strengthen the corporate financial reporting frameworks. Initiatives such as the Road to Europe: Program of Accounting Reform and Institutional Strengthening (REPARIS) support countries to adopt good international practices as well as closer alignment with European Union (EU) requirements. Particularly the latter is an important pillar in the countries' ambitions to better integrate with the EU and participate in the larger European economic market.Recognizing that the creation of such an environment is a longer-term process, CFRR is now working to build on this progress through the introduction of a successor program, EU-REPARIS. This program, financed by the European Union (EU) and part of the EU-led Western Balkans Enterprise Development and Innovation Facility Western Balkans Enterprise Development and Innovation Facility (WB EDIF), will engage with businesses, accountants, and the wider public to increase knowledge around the importance of corporate financial reporting and help countries complete the alignment process with EU requirements. SMEs are the core of this new program, which emphasizes the importance of financial reporting in gaining access to finance. Activities implemented during this phase will focus on reform implementation - wider engagement with stakeholders, and building the skills and knowledge of the accountancy profession, including improving modern accountancy education and training.“We know what to expect and understand the advantages of financial reporting,” noted one stakeholder during the recent launch of the program in Vienna, “but there is not yet enough awareness of those benefits.”As a regional program, EU-REPARIS allows participants from different countries to share and benefit from each other’s knowledge and experience as their enterprises strive to produce meaningful and comparable financial information, which investors and creditors can then use to make informed decisions. Collectively, these participants are working to strengthen corporate financial reporting by implementing effective legal frameworks and by broadcasting the message that these reforms support businesses in becoming more transparent, and, more generally, create an environment conducive to investment and growth.Further information on the launch of the program and program background information can be found here. * Albania, Bosnia and Herzegovina, Kosovo, the Former Yugoslav Republic (FYR) of Macedonia, Montenegro, and Serbia Show Less -
VIENNA, May 27, 2015 ― Senior officials including deputy ministers of finance of six South East European countries* and senior representatives of the World Bank and the European Commission are meeting... Show More + today and tomorrow in Vienna to take stock of financial reporting progress and to launch a new program. The Road to Europe: Program of Accounting Reform and Institutional Strengthening (EU-REPARIS) will support participating countries’ efforts to modernize their financial reporting systems and align them with the EU acquis communautaire.“Restoring economic growth--and making that growth more inclusive by creating jobs and eliminating barriers to labor market participation--are the top priorities for the countries of the Western Balkans” said Ellen Goldstein, World Bank Country Director for South East Europe “Governments have a shared understanding that this requires a business environment conducive to investment. Transparent and accurate financial reporting is a pre-requisite for serious investors and improves access to credit for expansion and job creation.”The EU has developed over the years a comprehensive legislative framework to protect investors and ensure adequate levels of transparency in the market. Corporate financial reporting is one element of this framework, and a building block of a well-functioning market economy. Trust in financial information can especially improve access to finance for small- and medium-enterprises (SMEs).“As candidates or potential candidates for EU enlargement, the REPARIS countries have made significant progress in aligning their financial reporting frameworks with that of the EU.”said Henri Fortin, Head of the World Bank’s Centre for Financial Reporting Reform (CFRR). “The new program will help them complete this process with a focus on SMEs which represent more than 99 percent of businesses in the region. We look forward to supporting countries in developing their accountancy professions and creating regulatory systems conducive to SME growth,"EU-REPARIS is funded by the EU, managed by the CFFR, and implemented as part of the EU’s Western Balkans Enterprise Development and Innovation Facility (WB EDIF). It offers participating countries analysis and advice, learning and skill development, know-how and knowledge transfer, and technical assistance and institutional strengthening to help them effectively implement financial reporting reform.Morten Jung, Head of Unit, Western Balkans Regional Cooperation and Programmes, DG Neighbourhood and Enlargement Negotiations at the European Commission, offered participants his encouragement, “Your commitment to developing high quality corporate reporting systems contributes to ongoing closer association and economic integration with the EU, encourages private sector growth and SME development, and offers opportunities for investment and job creation.”* Albania, Bosnia and Herzegovina, Kosovo, the FYR Macedonia, Montenegro, and Serbia. Show Less -