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Russia disappointed EBRD is involved in sanctions debate — deputy finance minister

May 14, 2015, 14:19 UTC+3 TBILISI
Russia will not support the project of the Bank’s development strategy for 2016-2020
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Russian Deputy Finance Minister Sergey Storchak

Russian Deputy Finance Minister Sergey Storchak

© ITAR-TASS/Sergey Karpov

TBILISI, May 14. /TASS/. Russia is disappointed that the European Bank for Reconstruction and Development (EBRD) is used for political pressure and will not support the project of the Bank’s development strategy for 2016-2020, because the document does not include the resuming operations in Russia, Deputy Finance Minister Sergey Storchak said Thursday at the Bank’s Board of Governors meeting.

"We are surprised and disappointed that the EBRD, being a major and reputable international organization, became involved in the sanctions debate, and was used to increase political and economic pressure on our country, which is contrary to the principles of work of the multilateral development banks and, above all, the mandate of the bank," Storchak said.

According to him, the EBRD began to actively use the principle of "managed flexibility", which ultimately worsened the Bank’s financial conditions. "This practice, in our opinion, is the main risk for the present and the future of the Bank as a successful international financial institution," Storchak said.

According to him, the Bank finished 2014 with a net loss of 568 mln euro, which is close to that of the crisis of 2008-2009.

EBRD should be apolitical, its medium-term strategy does not suit Russia

According to Storchak, Russia insists that the EBRD should remain an apolitical institution.

"It is crucial for the EBRD to remain an apolitical development Institute, as its basic nature suggests, and to continue carrying out its activities in accordance with the mandate and business model of the bank, which has long allowed it to remain an effective and stable financial institution," Storchak said.

Russia will not support the draft EBRD strategy for 2016-2020, Storchak said.

"This document bypasses the Bank’s principle issue on resuming operations within Russia. We cannot support it," he stressed.

Financing projects in Ukraine, EBRD should not violate payback requirements

Storchak also stressed that the Bank should respect the rules of financing projects in Ukraine.

"There is a shift in business activity in favor of the new area for the Bank - the South and East Mediterranean and for the financing of projects in Ukraine. At the same time the clients do not always respect stringent internal rules and policies of the Bank in terms of payback, investment priority in the private sector and transparency of transactions," Storchak said.

According to him, the Bank currently does not use all available capital resources. "Currently we see no reason for the steady increase in the volume of Bank’s business up to 10 bln - 11 bln euro per year. Thus, Russia opposes the proposal to maintain the capital size on demand. We believe that the Bank should, above all, monitor the quality of projects and ensure compliance with the requirements arising from the mission and mandate of the EBRD," Storchak said.

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