Convergence between eastern and western Europe fraying as EBRD leaders meet

Mon May 9, 2016 1:50pm EDT
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* European Bank for Reconstruction and Development marks 25 years

* Anti-establishment feeling hurting cohesion sought by EBRD

* Annual meeting to tackle change in EBRD's heartland

* EBRD extension beyond ex-Soviet bloc region under scrutiny

By Marc Jones

LONDON, May 9 (Reuters) - Twenty-five years after the European Bank for Reconstruction and Development was set up to integrate ex-Soviet bloc states into the world economy, the EBRD is finding its core region pulled apart by a wave of anti-establishment, anti-migrant sentiment.

The bank, which has invested around 100 billion euros ($113.89 billion) since its creation in 1991, holds its annual meeting this week at a time of increasingly fenced-off European borders, sluggish economies, a possible British exit from the European Union and discord between governments over sheltering over 1.2 million migrants camped out across the continent.

Coupled with Cold War-style tensions between the West and Russia, there are signs of divergence in the bank's traditional heartland for the first time since the fall of the Berlin Wall - an erosion of the cohesion the EBRD had set out to promote.

"I think we are really at a turning point in European history," Commerzbank's chief emerging market strategist Simon Quijano-Evans said. "Are we going to see a reversal of the convergence story between east and west Europe of the last 10, 15, 25 years? And how are leaders, wherever they are from, going to deal with that?"   Continued...