Mr Chairman, Fellow Governors, Mr President, Ladies and Gentlemen,

First of all I would like to thank Latvia, and Riga in particular, for hosting this EBRD Annual Meeting. As we have witnessed, all efforts are made to make this a successful Annual Meeting, and I hope the Meeting and related arrangements will promote business activities in Latvia and the Baltic region as a whole.

I would also like to thank former president, Mr Horst Köhler, for his impressive work for the Bank. He took over the helm in a challenging period, just after the financial crisis in Russia in August 1998.

EBRD has returned to profitability during 1999 and it is reassuring that the Bank seems to be back on the track to commercial viability. Experiences from the financial crisis have proved that monitoring and control of the existing portfolio must remain a high priority for the Bank.

The economic challenges of changing the Central and Eastern European countries to market economies have been considerably more complex and lengthy than anticipated. The pace of enterprise restructuring has remained slow in most transition countries. Although the progress in privatisation differs significantly among the Countries of Operation, EBRD has an important role to play in each of these countries. However, the Bank should continue to give priority to those countries in the early and medium stages of transition.

Policies for promoting SMEs are central to a successful transition. Providing access to investment finance to SMEs is crucial for private sector development and to stimulate enterprise competition. The Norwegian authorities welcome the efforts made by the Bank to mobilise funding to small and medium-sized enterprises. In that respect, more local presence by the EBRD could strengthen the provision of financial guidance these enterprises need.

The Northern part of Russia has an especially large unrealised potential. For many years Norway, Sweden and Finland have focused on this region through bilateral and Inter-Nordic programmes, such as the Barents Programme. EBRD is active in this northernmost region through the North West Russia and Mid Russia Regional Venture Fund. However, the region has a potential for further new comprehensive initiatives, in which EBRD could and should take a leading role.

The Baltic Sea area has become a dynamic region in Europe. Since their independence in 1991, Estonia, Latvia and Lithuania have an impressive record of carrying through economic reforms and development. The Nordic countries have developed close contacts and economic cooperation with this region.

EBRD had an important role in implementing the Baltic Investment Programme. The programme was supported by substantial grants and loans from the Nordic countries. Within this programme, the Turn Around Management Programme and Business Advisory Services was successful to an extent that similar programmes have been launched in North West Russia. Norway strongly supports this approach. Although the Baltic Investment Programme came to an end in 1999, resources from the programme have been allocated to support micro enterprises in the Baltic countries, and will be matched by EBRD with a similar amount.

Finland's EU initiative "The Northern Dimension" is inspiring and a necessary follow-up of earlier initiatives from the international community. The programme will contribute to an enhanced attention to this region. EBRD should give its wholehearted support to this initiative.

Mr Chairman,

EBRD is confronted with great challenges in the Balkan region. The Bank has taken important initiatives in the huge task of reconstructing the war-damages to this region. These initiatives deserve full support from member countries. Norway has announced a contribution of one million euro to EBRD's Trade Facilitation Programme and one million euro to Micro Enterprise Banks in Bosnia and Kosovo. More countries should join the programmes to enable EBRD to increase its contribution to the reconstruction process in this war-stricken region. Disbursements should not be delayed by slow bureaucratic procedures. A rapid improvement in living conditions and economic activities will greatly assist in the creating of a sustainable stability in the Balkan region.

In conclusion: EBRD's role in Central and Eastern Europe is just as important today as it was ten years ago. New tasks emerge as old ones are completed. With the support from the member countries, EBRD will continue to be an important player in the work of fostering the economic transition process.

Thank you, Mr Chairman.