"European Union leaders took an important step at their summit in Brussels yesterday, 21 July, by reaching out to support Greece and providing for the greater security of the whole eurozone area.
The stability of the eurozone is of crucial importance to the economic well-being of countries across the entire EBRD region.
Any deterioration of the crisis in the eurozone would have serious consequences for their economic prospects, particularly in south-eastern Europe.
EU leaders showed a commendable sense of collective responsibility, overcoming their differences in order to achieve a solution that involves both the public and the private sectors.
This outcome also reveals a further and welcome strengthening of the European Union.
It will be particularly important that financial markets are convinced of the viability of the EU’s decisions. So far, the market response has been positive.
However, it remains to be seen whether Greek debt will be reduced to levels that are sustainable in the longer term; whether the Greek government’s economic programmes can be successfully implemented; and whether there is scope for a long-term recovery of Greek economic competitiveness.
In terms of market response, it is also important that debt restructuring be contained to Greece, as EU leaders intend.
The recovery in eastern Europe, which has lagged behind other regions of the world, depends to an important extent on the future stability of the eurozone, with which much of the EBRD region is so deeply integrated.
Yesterday’s announcements are an important step towards ensuring that stability. Additional measures maybe needed later on. The positive sign from yesterday is that collective action is possible in Europe when critically needed.”