Poland benefits first from G20 funding
Wednesday 15 April 2009
Poland seems set to become the first nation to take advantage of the IMF's enhanced funding, agreed at the recent G20 summit meeting in London.
Warsaw will use a $20.5bn (£13.8bn) IMF "flexible credit line" to act "proactively" with the financial crisis before any serious damage is done to the currency or Poland's creditworthiness.
The deputy finance minister, Ludwik Kotecki, told Reuters: "This is an instrument, thanks to which we are getting a priceless insurance policy in a time of global uncertainty."
Dominique Strauss-Kahn, director-general of the IMF, confirmed that the fund was looking to move quickly and approve the facility.
Most of eastern and central Europe has been in severe financial crisis because so many countries relied on private Western funding to bridge trade gaps and fund investment, money that has dried up since the credit crunch began.
Poland was one of those states thought to be less exposed to risks, however, and the IMF is not attaching any conditions to its help. Romania, Serbia, Ukraine, Hungary and Latvia have already received more substantial IMF assistance.
The IMF recently warned that Western banks, especially in Austria, Switzerland, Sweden, Belgium and the Netherlands, were particularly exposed to the failure of east and central European investments. A combination of asset price declines and currency falls represent a double risk for some west European banks.
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