In response to the 2011 events in Southern Neighbourhood the European Commission has put forward a Proposal to extend European Bank for Reconstruction and Development operations to the Southern and Eastern Mediterranean. This proposal is based in the Bank's experience in delivering support to the countries of Central and Eastern Europe after the fall of Communism whose main challenges were similar to those now faced by Southern Mediterranean countries.

In March 2011, the European Commission and the High Representative presented a Joint Communication highlighting the strong commitment of the European Union in support to the Southern Mediterranean region. This support included an option for extending the European Bank for Reconstruction and Development (EBRD) mandate to cover the countries of the Southern Neighbourhood, building on EBRD experience fostering transition towards open market-oriented economies over the last 20 years.

Based on the EBRD's unique experience in supporting public and financial sector reform, promoting small and medium sized enterprises, and the privatisation of state companies in its current countries of operations, the Bank should be one key actor in delivering support to the countries in the Southern and Eastern Mediterranean region. These countries face similar challenges of economic modernisation, growth and job creation as did the countries of Central and Eastern Europe after the fall of Communism. Support for investments in infrastructure and for the private sector is badly needed, and the EBRD can use and deploy its expertise in these and other areas to help bring economic benefits in this new region of operations.

The Proposal follows Resolutions 137 and 138 of the Board of Governors of the EBRD adopted September 2011, where they voted in favour of the necessary amendments to the Agreement Establishing the EBRD. All EU Governors of the EBRD voted in favour of these amendments, including the Governor representing the European Union. Furthermore, the EU Member States as well as the EU institutions have shown their support to the expansion of EBRD activities to Southern and Eastern Mediterranean region.

According to the Proposal, in carrying out its activities in the Southern and Eastern Mediterranean region, the EBRD should be encouraged to continue its close engagement with the EU and to develop a close cooperation with the EIB and other European and international public financing institutions.