The European Investment Bank and the Stabilisation of the Eastern Mediterranean. The Financial Assistance in Greece and Turkey (1959-63)

This article intends to illustrate the European Investment Bank (EIB) involvement within the issue of an Eastern Mediterranean economic and geopolitical stabilisation during the late 1950s-early 1960s. Created with the Treaties of Rome in 1957, with the aim of supporting a harmonious development of the European Common Market, the EIB had very soon to intervene even outside its boundaries, namely in Greece and Turkey. As a matter of fact, throughout the second post-war period, although these countries were part of the Western bloc, they experienced monetary and financial instability, high pre-war public debt, serious economic backwardness, conditions which risked calling their Western positioning into question. In 1959, Greece and Turkey asked for an association with the European Economic Community (EEC), definitively realized in 1962-63, which finally resulted in the involvement of the EIB and in a demanding transformation of the mandate of this Bank. The attempt of this article is precisely to analyse the EIB’s role in the Eastern Mediterranean stabilisation during a delicate moment for the economic and geopolitical relations within Western capitalism, when United States, afflicted by growing shortages in their balance of payments, began both to push for a different organization of the international monetary and financial architecture and to lessen development aid in the area, in order to promote a burden-sharing logic towards their European allies, called upon to contribute to defence and financial assistance. The EIB therefore had to negotiate with the Member States, the EEC Council and Commission, other international institutions, bondholders’ organizations as well as with the Greek and Turkish authorities, new methods of intervention, suitable for those new scenarios that had not been fully envisaged by the early statutory framework. This ‘extension’ of the EIB’s credit policy, from the development issue to debt recovery and sustainability, radically changed the Bank’s mission, its identity and profile, contributing to that process of convergence in the MDBs intervention models, as well as of assimilation to the World Bank’s archetype, registered over the following decades.