Where next for the EBRD?
As the role of the European Bank for Reconstruction and Development comes under scrutiny in Brussels, president Sir Suma Chakrabarti mounts a vigorous defence of the bank’s unique business model and sets out his vision for its future.
EBRD president Suma Chakrabarti
The European Bank for Reconstruction and Development is a curious beast. Founded to help former communist countries make the transition from state planning to market economics, it now covers a clutch of markets around the Mediterranean from Greece to Morocco.
It is part of the European development architecture, but has a global shareholding, including – since January 2016 and July 2018 respectively – China and India.
It has a mandate to support private enterprise, but in nearly a third of its 37 countries of operation the public sector accounts for more than half of its portfolio. In Bosnia, Moldova and North Macedonia, less than a fifth of the bank’s investment is in the private sector.
These anomalies have prompted questions about the EBRD’s development role. Last year, some members of the European Commission revived suggestions of merging it with the European Investment Bank.
A joint Franco-German declaration, published in June 2018, called for the establishment of a “wise persons” group to examine the European financial development architecture, “especially regarding the roles of the EIB and EBRD”.
This was duly set up in April and will report in October.