European Bank for Reconstruction and Development: Difference between revisions

Revision as of 23:23, 5 July 2025

Revision as of 00:36, 13 July 2025

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[[File:European_Bank_for_Reconstruction_and_Development_Headquarters_(EBRD),_London,_United_Kingdom_02.jpg|thumb|175 Bishopsgate in London, the EBRD's head office between 1992 and 2022]]

Located in London, the EBRD was intended at its beginning to focus on the [[Transition economy|switch from centrally planned economy to market based economy]] in the [[Central and Eastern Europe|Central and Eastern European countries]] by investing in the private sector, mainly banks, industries and businesses, and by promoting policies that would favor them.<ref name=":0">{{Cite book |last=Lessambo |first=Felix I. |url=https://www.worldcat.org/oclc/919430034 |title=International financial institutions and their challenges : a global guide for future methods |date=2015 |isbn=978-1-137-52270-2 |___location=New York City, NY |oclc=919430034}}</ref> It was created as a result of the end of the Cold War because of particular issues regarding the international system in place, the historical and political context at the time.<ref name=":1">{{Cite journal |last1=Barria |first1=Lilian A. |last2=Roper |first2=Steven D. |year=2003 |title=Economic Transition in Latin American and Post-Communist Countries: A Comparison of Multilateral Development Banks |url=http://link.springer.com/10.1023/B:IJPS.0000031235.74193.a4 |journal=International Journal of Politics, Culture, and Society |language=en |volume=17 |issue=4 |pages=619–638 |doi=10.1023/B:IJPS.0000031235.74193.a4 |s2cid=154390301 |issn=0891-4486|url-access=subscription }}</ref> Furthermore, its recipient countries had to ensure that they would work towards "multi-party democracy and political pluralism"<ref name=":2">{{Cite journal |last=Shields |first=Stuart |date=2015 |title=Shields, S. (2015). The European Bank for Reconstruction and Development and the lessons from Eastern Central Europe for Middle East/North African Transition |url=https://dergipark.org.tr/en/download/article-file/417244 |journal=Spectrum: Journal of Global Studies}}</ref> in which was considered as one of the main particularity of the EBRD distinguishing the latter from other financial institutions.<ref name=":0" /> Firstly, notably advocated by European political actors such as the French President [[François Mitterrand|Mitterrand]] in 1989, the idea of creating this financial institution involving the European countries started before the [[fall of the Berlin Wall]]. The reception of this proposition was mitigated depending on the country, for instance it received hostility from the British whereas the French were important proponents of the project and influenced the process.<ref name=":1"/> In January 1990, negotiations about the EBRD objectives, its lending policy regarding the public and private sectors, started and involved all the EU countries at the time, as well as various other European countries, non-European countries and representatives from the [[European Union|EU]] and the [[European Investment Bank]]. The [[Soviet Union]] was represented by its own delegation in the process and thus participated in the negotiations as well as the USA. Later on, because of dissensions on the political and economic objectives of the institution, the inclusion of the Soviet Union was threatened. Considered as short negotiations, the agreement (for reasons relating to the situation in Eastern Europe and to a wave of privatization across Europe) leading to its creation was signed on 29 May 1990 by actors such as 40 states as well as two European organizations<ref name=":3">{{Cite journal |last=Weber |first=Steven |date=1994 |title=Origins of the European Bank for Reconstruction and Development |url=https://www.cambridge.org/core/product/identifier/S0020818300000801/type/journal_article |journal=International Organization |language=en |volume=48 |issue=1 |pages=01–38 |doi=10.1017/S0020818300000801 |s2cid=153997471 |issn=0020-8183|url-access=subscription }}</ref> and by March 1991 took its first effects as the bank was inaugurated. The creation of the EBRD has led to the financing of various projects in the years following its first operations, for instance there were twenty projects in 1992 in which the EBRD provided financing worth [[European Currency Unit|ECU]] 2.1 billion.<ref name=":3"/>

== Governance ==

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=== Mediation ===

More recently, other than its original lending role, the EBRD has played a [[Mediation|mediating role]] in Europe, for instance in Moldova in 2013 and even in the Central Asian region (most notably in countries such as the Kyrgyz Republic and Tajikistan for instance) by intervening as a third party in commercial disputes which has become one of its major areas of activities. As a mediating actor, the EBRD has managed to involve other actors such as businesses and Chambers of Commerce among others. Moreover, a regional forum on commercial mediation was established by the bank as part of its work, which has managed to involve various representatives from countries in Europe and Asia, such as judges and experts for instance.<ref>{{Cite book |url=https://www.worldcat.org/oclc/1120936560 |title=International organizations and the promotion of effective dispute resolution : AIIB Yearbook of International Law 2019 |date=2019 |others=Peter Quayle, Xuan Gao |isbn=978-90-04-40741-1 |___location=Leiden |oclc=1120936560}}</ref>

=== The initial focus on transition economy ===

It is notable that one of the main objectives of the European Bank for Reconstruction and Development was to become a link between the European Union, its institutions and the countries it would focus on.<ref name=":2" /> As the recipients were previously centrally planned economies, the ERBD centered through [[Transition economy|its operations]] on working with the private sector, which was the principal target of central planning.<ref>{{Cite book |last=Kilpatrick |first=Andrew |url=https://www.worldcat.org/oclc/1199584403 |title=After the Berlin Wall : a History of the EBRD, Volume 1 |date=2020 |others=Project MUSE |isbn=978-963-386-385-5 |___location=New York |oclc=1199584403}}</ref> Focusing on the integration and modernisation process, as part of its projects, the EBRD has notably invested in important sectors such as telecommunications in the Central and Eastern European countries.

=== To modern challenges ===

Since the 90s, recipients of EBRD financing have diversified, in fact, from mainly targeting EEC countries, the bank has moved to the Asian continent and increasingly focused on other countries such as China.<ref name=":4">{{Cite journal |last1=Obydenkova |first1=Anastassia |last2=Rodrigues Vieira |first2=Vinícius G. |last3=Tosun |first3=Jale |date=2021-08-17 |title=The impact of new actors in global environmental politics: the European Bank for Reconstruction and Development meets China |url=https://www.tandfonline.com/doi/full/10.1080/14631377.2021.1954825 |journal=Post-Communist Economies |volume=34 |issue=5 |language=en |pages=603–623 |doi=10.1080/14631377.2021.1954825 |s2cid=238713706 |issn=1463-1377|url-access=subscription }}</ref> More generally, Suma Chakrabarti, the EBRD president from 2012 to 2020, has pushed in the beginning of the 2010s for modernizing the bank. Reforms encompassed the bank's structure in itself, for instance by changing the management team, and its processes (for instance about policy dialogue or methodology regarding the concept of transition) in order for them to be more efficient.<ref name=":5">{{Cite book |last=Kilpatrick |first=Andrew |url=https://www.worldcat.org/oclc/1266195846 |title=Transforming markets : a development bank for the 21st century : a history of the EBRD : Volume 2 |date=2021 |isbn=978-963-386-412-8 |___location=New York, NY |oclc=1266195846}}</ref>

=== Sustainable market economies ===

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==== 2014 sanctions against Russia ====

The EBRD announced on 23 July 2014 that it would suspend new investment projects in Russia, following an earlier declaration by the [[European Council]].<ref name="web.archive.org">{{Cite web |date=2014-07-29 |title=EBRD statement on operational approach in Russia [EBRD – News and events] |url=http://www.ebrd.com/pages/news/press/2014/140723b.shtml |access-date=2022-03-29 |website= |archive-url=https://web.archive.org/web/20140729143341/http://www.ebrd.com/pages/news/press/2014/140723b.shtml |archive-date=29 July 2014 |url-status=dead}}</ref> The European Council declaration was made in the context of the [[2014 pro-Russian unrest in Ukraine]].<ref>{{Cite web |date=2014 |title=European Council conclusions on external relations |url=http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/143990.pdf |archive-url=https://ghostarchive.org/archive/20221009/http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/143990.pdf |archive-date=2022-10-09 |url-status=live}}</ref> As of 2014 [[Russia]] has been the biggest funding recipient of all countries. In 2013, the Russian Federation received €1.8 billion for investments from the EBRD and 1 billion € from the EIB. Russia employed the funds to finance a variety of projects like pipeline valves, property acquisitions, and a loan to a hypermarket chain. Two Russian projects were awaiting funding from the EBRD: a €300 million plan for promoting energy efficiency, and a $180 million loan to lease agricultural and forestry equipment.<ref>{{Cite web |date=2014-07-16 |title=EU poised to cut funding to Russia and widen sanctions over Ukraine conflict |url=http://www.theguardian.com/world/2014/jul/16/eu-cut-funding-sanction-russia-ukraine-banks-assets |access-date=2022-03-29 |website=The Guardian |language=en}}</ref> The bank stated that it will continue to manage ongoing projects in Russia.<ref name="web.archive.org"/> Despite denying Russia new funds, the EBRD continues to insist on its 6.1% of ownership in the [[Moscow Stock Exchange]], seeking profits from Russia with the [[privatisation of the Soviet economy]].<ref>{{Cite book |url=https://www.worldcat.org/oclc/988167038 |title=The unwinding of the globalist dream : EU, Russia and China |date=2018 |others=Steven Rosefielde |isbn=978-981-322-206-9 |___location=Singapore |oclc=988167038}}</ref>

==== Azerbaijan's oil and gas sector ====