Bloomberg News

World Bank Tries to Stay Away From Greek Involvement

June 14, 2012

World Bank President Robert Zoellick said his institution has tried to keep some distance from Greece, which is receiving a bailout from countries in the euro region and the International Monetary Fund.

Zoellick, whose five-year mandate at the head of the bank ends at the end of the month, said he is more focused on any aftershocks of the European debt crisis for southeastern Europe, the Balkans as well as North and West Africa.

“These are the political judgments that you make” when you have limited resources, Zoellick said at an event in Washington today where he was asked about potential involvement of the bank to help Greece make in-depth changes to its economy. He said his concern was, “given the political tensions, that it might not be as productive for Greece as it would be harmful to the bank.”

Greece, which has struggled to meet targets for narrowing its budget deficit while receiving aid pledges of 240 billion euros ($302 billion) over the past two years, is having elections on June 17 for the second time in six weeks, after a May 6 ballot failed to result in a government.

Mexico’s Central Bank Governor Agustin Carstens in April said he was “surprised” the World Bank hasn’t sent a mission to Greece to help the government design policies to strengthen competitiveness and privatize services that are a drain on public finances.

Asked about the European debt crisis that has engulfed four countries in the monetary union, Zoellick said he still sees a set of potential solutions.

“It requires taking steps that don’t just give money away but that would show countries such as Spain and Italy that if they undertake these serious reforms, they will be backed and supported,” he said.

To contact the reporters on this story: Sandrine Rastello in Washington at srastello@bloomberg.net

To contact the editors responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net


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