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11.05.2017 - 10: 05

EBRD is ready to ignore its charter, if only harm Russia

Russian Ministry of Economic Development has criticized the European Bank for Reconstruction and Development (EBRD), which is to 2014 years refuses to lend to Russian projects. Although the Bank is trying to defend himself, there is all that is called "Russian ethnic discrimination" in the Russian government. This is especially evident in the Bank's relations with Ukraine.

Russia has stepped up the proceedings with the European Bank for Reconstruction and Development (EBRD) on the right to receive credit funds.

Moscow believes that the decision of the EBRD for the complete cessation of July 2014, the new investment in Russia is, in fact, discrimination based on ethnicity. This is unacceptable in the work of multilateral development institution, said Economic Development Minister Maxim Oreshkin. Such an approach would lead to negative consequences in the form of arbitrary interpretation of the bank's articles of association and its members in prison shareholder rights, which contradicts the objectives and principles of the EBRD, said Oreshkin. This statement was made Minister in writing, and it shall enter into the materials of the annual meeting of the EBRD, according to TASS.

In response, the head of EBRD Suma Chakrabarti accused Russia of speculation. European Bank does not believe that violated the rules of engagement with Russia. "The Bank has fulfilled its internal rules in its relations with the Russian Federation. For me, the Russian Federation has a very high value, but with 2014, we can not start new projects. We have a great portfolio in Russia. We will continue to work with the Russian authorities, it is important for us, "- quoted him as saying TASS.

At the same time, he confirmed that the bank and on the "no plans to finance new projects in Russia." The vast majority of Board of Governors of the organization at the meeting in Cyprus agreed that the bank has fulfilled its obligations to Russia, Chakrabarti said.

MED did not leave it unattended. Following Oreshkin said bluntly that the EBRD has become a tool of foreign policy, and not a development institution. Russia has warned the bank about the threat of a significant deterioration in financial performance of the Bank in the next few years. "Always, when the political motivation is facing economic, profit and loss account and balance sheet are deteriorating rapidly. Therefore, we expect that within a few years, the financial situation of a bank deteriorates considerably both from the quality of assets, and by the ability to generate revenue, "- said Oreshkin. Moreover, the Minister assured that the financial results and the current status of the Bank give grounds for doubting the conformity of the bank is estimated higher AAA rating agencies.

Moscow pointed directly at the bank that it violates its own charter. According to the minister, Russia was surprised that most of the Bank's shareholders voted against the first part of the Russian draft resolution, which states: "No right of any participant in accordance with the agreement on establishment of the bank may not be suspended or otherwise restricted for any reason or in any way not specified in the agreement establishing the Bank. "

"This has created a very dangerous precedent in international financial relations and is actually a new standard by which international financial institution may restrict the rights of members, without taking into account the statutory documents", - the minister added.

Russia is the seventh largest shareholder of the European Bank for Reconstruction and Development, which was established in 1991, after the collapse of the USSR in order to help the countries of Central and Eastern Europe in the development of a market economy. However, 2014, the bank stopped issuing loans in Russia for new projects. We are talking about a loss of 1,5-2 billion euros that the EBRD gave earlier. At the same time, the Bank has become one of the main international creditors to Ukraine. Almost three years Russia has focused attention on the problem. But this year, Moscow has decided to finally act more actively.

Literally, in late April, Deputy Finance Minister Sergei Storchak said that Moscow wants to transfer the issue of relations with the bank in the legal plane, and is preparing a lawsuit regarding the freezing of financing projects in Russia. However, its essence is unknown. Perhaps MAYOR just opened the essence of the action - in ethnic discrimination, politicization bank's decision in violation of the statute.

However, lawyers believe that is legally impossible to change the situation. "Russia will not be able to file a lawsuit against the Bank because the bank gives him the status of protection against this type of procedure - it is an international organization which does not have a higher profile, or the court," - said the lawyer office "Business fairway" Anton Sonich.

And the grounds for complaints from the legal point of view is difficult to find. For example, a bank can not be accused of violating the investment cooperation, because investdogovora with the bank there. Cause of action would be if the Bank, for example, cut funding under the loan agreement, but the bank acted legally calibrated: all valid for the summer 2014, the credit agreement continues to operate, but that's new since then has not been signed.

Accused the bank of ethnic discrimination is legally too difficult. "Technically, you can challenge the restrictions imposed on Russia as discriminatory on political grounds, but the real result it will bring. Most likely, Russia will get new projects when the mend relations with Europe, "- says the founder of the marketing group" Alekhine and Partners "Roman Alekhin.

"I would not talk about discrimination, but these actions do not conform to the charter of the bank", - said Bogdan Zvarych from CC "Finam".

EBRD politicized, as well as the IMF and the World Bank. Therefore, the organization attempts to prove the stability of the Russian economy are useless. And in the bank itself perfectly see that the Russian economy is growing again, and no doubt that will continue to grow. In the May report, the EBRD forecasted economic growth in Russia year 2017 1,2%, and 2018-m - to 1,4%. There are, however, stipulates that the investment activity "remains constrained by economic uncertainty and relatively high funding costs". However, this is unlikely to be the main reason for the neglect Russian projects - where higher risks do not prevent the Bank to lend to Ukrainian projects. Perhaps hinting Oreshkin just that. Bank lending of default in Ukraine - it is a huge risk to spoil the EBRD's financial performance.

It is known that Ukraine should Moscow 3 billion dollars of Eurobonds and claim Gazprom to Naftogaz constitute 37 billion dollars. Despite this, in 2014, the EBRD Ukraine issued a record amount of loans - 1,2 billion euros, 2015-m - on 1 billion euros, the same had to give in 2016 year. Significant amounts of loans were given Kiev for the purchase of reverse gas from Europe, the rest - on the IT-projects, agriculture and the construction of apartment buildings.

"In such circumstances, really weird to give preference to projects in Ukraine compared with stable economically Russia. Commercial risks of projects in Russia is much lower, "- agrees Roman Tkachuk from" Alpari ".

So far, in his opinion, the position of the Bank is stable. However, from time to time to the Bank, as the IMF or the World Bank, there are questions about the selection of projects for investment.

It is no accident in the summer of 2014, Russia, China, Brazil and India, as opposed to Western institutions have launched their own new BRICS development bank to finance its infrastructure projects.

Why the mayor gets involved in the conflict, in which Russia is doomed to failure? Office began to fight for every opportunity to encourage the growth of the Russian economy. Investment - is something that is not enough because of the Russian sanctions restrictions on Western capital.

"Any inflow of investment has a positive impact on the economy. EBRD loans would help in the development of individual projects and directions. Plus, the investment has a multiplier effect - investment of one ruble in the project through the development of accompanying him can increase investment and overall project's contribution to the economy of the country ", - Zvarych said.

In addition, the Bank actually does not have the right to follow the sanctions and not to refuse because of their Russian credits. And in general, the cooperation with the bank more profitable compared with other investors, since it grants loans on lower rates for a longer repayment period and gives ample opportunity to restructure the loan.

A source: LOOK

Author: Olga Samofalova

Tags: EBRD, Economics, Banking, Russia, Europe, Analytics, Credit, Ukraine