European Bank For Reconstruction And Development Essay ⋆ Business Essay Examples ⋆ EssayEmpire

The European Bank for Reconstruction and Development (EBRD) was founded in May 1990, and inaugurated in April 1991, and works in the economies of 27 countries in central and eastern Europe and central Asia with a view to ensuring them a stronger economic outlook and strengthening democracy. Its stated objectives are

to contribute to the progress and the economic reconstruction of the countries of central and eastern Europe which undertake to respect and put into practice the principles of multi-party democracy, pluralism, the rule of law, respect for human rights and a market economy.

The EBRD draws financial support from some of the members of the European Union and the European Free Trade Area, and also other countries, specifically Australia, Austria, Belgium, Canada, Cyprus, Czech Republic, Denmark, Egypt, Finland, France, Germany, Greece, Iceland, Ireland, Israel, Italy, Japan, Luxembourg, Malta, Mexico, Morocco, the Netherlands, New Zealand, Norway, Portugal, South Korea, Spain, Sweden, Switzerland, Turkey, the United Kingdom, and the United States. In addition, the European Community and the European Investment Bank were also shareholders in their own right. The funds and resources are used to help 26 countries: Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Estonia, Georgia, Hungary, Kazakhstan, Kyrgyzstan, the Former Yugoslav Republic of Macedonia, Moldova, Mongolia, Montenegro, Poland, Romania, Russia, Serbia, Slovakia, Slovenia, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan.

The foundation of the EBRD was intended to help the former communist countries of eastern Europe and the Soviet Union adapt their economies and political systems and to integrate them into the world economy. To do this, projects were raised with the EBRD, which has its headquarters in London. All projects had to be located in one of the target countries, have “strong commercial prospects,” involve the host country’s government or other agencies also contributing, and benefit the economy of the host country with a view to developing the private sector. In addition, accountancy and banking standards had to be maintained and the overall project had to abide by strict environmental standards. Initially all payments were made in ECUs, the European Currency Unit used for denoting European Union transactions. However these were later denoted in euros.

The projects that were supported by the EBRD included those in agribusiness, manufacturing, natural resources, power and energy, property and tourism, telecommunications, information technology and media, transport, and also in dealing with the establishment of financial institutions, introducing energy efficiency standards, and projects to deal with governmental, municipal, and environmental infrastructure.

The initial problems facing many of the host countries were large, and there were many complications that followed the collapse of Yugoslavia and the subsequent fighting in the region. International politics proved to be important in the allocation of funds, and there were some early notable successes including the Czech Republic moving from being a recipient to a donor. It is expected that Bulgaria, Estonia, Hungary, Poland, Romania, Slovakia, and Slovenia—all now members of the European Union—will also see an end to operations, and possibly become donor countries by 2010. The problems faced by the EBRD were further exacerbated in August 1998 when Russia faced a major economic crisis. However, in the calendar year 1999, the EBRD was able to approve 88 operations for which funds totaling €2,162 million were involved.

The first president of the EBRD was the Algerian-born French economist Jacques Attali (b. 1943) who held the position from April 1991 until June 1993. After Attali had to resign in the wake of several scandals, he was succeeded by Jacques de Larosière (b. 1929), the French civil servant who had been managing director of the International Monetary Fund from 1978–87. He was EBRD president from September 1993 until January 1998, and restored confidence in the bank. The third president, Horst Kohler (b. 1943), a German economist, held the position from September 1998 until April 2000, and on July 1, 2004, became the president of Germany. He was succeeded by a French economist, Jean Lemierre (b. 1950), who had been director of the French Treasury from 1995 and a member of the European Monetary Committee from 1995 until 1998. He was the EBRD’s president from July 3, 2000, until July 2008, and then the German politician Thomas Mirow (b. 1953) was appointed in July 2008. He had been the chef de cabinet of Willy Brandt, and then held senior positions in the Hamburg government.

Bibliography:

Byfield, “Banking on Collaboration In a Bid to Encourage Knowledge Sharing, the European Bank for Reconstruction and Development Created an Online Tool to Collect and Disseminate Legal Information,” Inside Knowledge (v.9/5, 2006);
European Bank for Reconstruction and Development (EBRD) Handbook (International Business Publications, 2007);
Rainer Grote and Thilo Marauhn, The Regulation of International Financial Markets: Perspectives for Reform (Cambridge University Press, 2006);
Jan-Hendrik Röver, Secured Lending in Eastern Europe: Comparative Law of Secured Transactions and the EBRD Model Law (Oxford University Press, 2007);
United States, European Bank for Reconstruction and Development (EBRD), London: A Report to Members of the Committee on Foreign Relations, United States Senate, One Hundred Ninth Congress, Second Session, June 16, 2006. S. prt, 109-75 (U.S. G.P.O., 2007);
Verville, “The European Bank for Reconstruction and Development’s Experience of Contract Enforcement,” European Business Law Review (v.17/2, 2006).

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