* EBRD holds annual meeting May 18-19
* Bank will seek new president, vote on N.Africa fund
* Emerging Europe a worry, as euro zone crisis rages
By Carolyn Cohn
LONDON, May 11 (Reuters) - Facing a possible change at its helm, emerging Europe's development bank risks stretching itself thinly as mission creep into North Africa eats up resources while the bank's core charges feel the heat from raging euro zone financial fires.
The European Bank for Reconstruction and Development, set up in 1991 to enable the former communist economies of the Soviet Union make the transition to market economies, hosts its annual meeting for its 65 country and multilateral shareholders at its London headquarters on May 18-19.
As well as choosing a president for the next four years, the bank will be voting on a 1 billion-euro fund for North Africa as one of the first projects in its new push into a region experiencing vast political upheaval.
Shareholders are also likely to discuss the spillover from banking and growth problems into the EBRD's original region of central and eastern Europe and some analysts say the Bank may be in danger of overstretching itself.
"When you think of the EBRD's original mandate, it was quite a different region and set of problems from the issues it is facing with North Africa," said Vanessa Rossi, global economics adviser for Oxford Analytica.
Emerging Europe, with its close proximity to the troubled euro zone, is still struggling to recover from the 2008/09 crisis.
"The EBRD has not finished with that problem when it has to get started with another quite different set of circumstances," Rossi said.
The EBRD extended its mandate last year to North Africa due to requests from its shareholders and the international community, and has the expertise to carry out the job, an EBRD spokesman said.
The bank, which will issue revised growth forecasts at its meeting, is predicting growth of 3.2 percent for emerging Europe this year, though only 1.7 percent for the richer central European economies, such as Poland and Hungary and euro zone countries Slovakia and Slovenia.
President Thomas Mirow and other EBRD officials are worried about the threat posed to emerging Europe from deleveraging by Western European banks.
"We will see continual efforts to deleverage, to shrink balance sheets," Mirow told Reuters Insider television in a recent interview.
"What (banks) should avoid is to reduce the support and lending to the real economy, to SMEs (small and medium enterprises), and rather sell assets which have been bought on a more speculative basis."
Where EBRD member countries in central Europe were once looking to "graduate" from being a recipient of EBRD funds and in many cases join the euro zone, those bets are off with the whole euro zone project looking creaky.
The EBRD will also next week publish growth forecasts for the first time for the North African countries in which it is starting to invest -- Egypt, Jordan, Morocco and Tunisia.
Egypt and Tunisia overthrew their presidents last year but are struggling to get back on a firm financial footing, and political instability remains a concern for the region.
The meeting marks the end of German Mirow's four-year term as president. Mirow is standing for a second term, but his campaign lacks Germany's backing, and the contest has turned into a five-horse race, widely seen as part of a tussle for other top European jobs.
When Mirow joined the EBRD in 2008, Lehman Brothers was still a going concern, the Bank was predicting growth above 5 percent in emerging Europe and the full impact of the sub-prime crisis had not yet been felt.
The EBRD was facing calls to be closed down, merged with the European Investment Bank or to pay its shareholders a dividend from the profits made from its largely private sector investments.
The global financial crisis gave the EBRD a new lease of life. Shareholders agreed to increase the bank's capital to 30 billion euros ($38.98 billion) from 20 billion and the EBRD spearheaded the Vienna Initiative which provided 33 billion euros to support banking sector stability in the region.
The EBRD added Turkey to the portfolio of countries in which it invests, and following the Arab Spring uprisings last year, extended its mandate to include North Africa.
The Bank is now involved with the so-called Vienna 2.0 agreement, to prevent another banking crisis, as well as its traditional investments such as a recent 135 million euro loan to Turkish company Enerjisa to construct a wind farm.
Mirow is up against four other candidates for his job, after European Union finance ministers, who hold a decisive vote in the process, failed to agree a candidate. Russia and Bulgaria have proposed his candidacy.
The president has to be elected by a simple majority of at least 33 shareholders and by a majority weighted according to the size of shareholding. The United States has the largest shareholding by capital weighting at 10 percent, but France, Germany and Italy each have more than 8 percent.
Britain is fielding a candidate for the first time -- civil servant Suma Chakrabarti -- despite an unwritten rule that the job will never go to someone from the UK as it houses the EBRD's headquarters.
The UK government considers Chakrabarti a "unity" candidate who would sidestep Franco-German squabbles -- previous presidents have all been French or German -- and keep the EBRD position outside a carousel of EU jobs up for grabs to ensure a balance of power in the European Union.
Euro zone sources say the French candidate, European Investment Bank vice president Philippe de Fontaine Vive Curtaz, is by no means a shoo-in but the French would like to see their candidate installed as they are unlikely to get one of the other jobs.
Those jobs are the chairmanship of the Eurogroup, the policy-setting forum of euro zone finance ministers, a seat on the European Central Bank's executive board and head of the euro zone's permanent bail-out fund.
German Finance Minister Wolfgang Schaeuble is in the running for the Eurogroup chair, while Luxembourg's Yves Mersch is expected to get the ECB job and Spain could get the bail-out fund.
The other two candidates for the EBRD presidency -- Poland's Jan Krzysztof Bielecki and Serbia's Bozidar Djelic -- are considered outsiders because of a conflict of interest, as their countries are recipients of EBRD funds.
But if Mirow doesn't keep the presidency, there is life after the EBRD -- his predecessor Jean Lemierre was a key negotiator in Greece's recent debt restructuring.