on the European Bank for Reconstruction and Development (EBRD)

The European Parliament,

-having regard to the first annual meeting of the EBRD held on 13-14 April 1992 in Budapest,

-having regard to the 1991 annual report of the EBRD,

-having regard to its earlier resolutions on the EBRD,

A.having regard to the enormous need for restructuring and investment in the countries of Central and Eastern Europe both from domestic and foreign resources, and the need to develop private and public sectors compatible with competition-oriented market structures;

B.whereas the success of this transformation is crucially dependent on an influx of investment capital to improve infrastructure and the manufacturing base,

C.whereas the western industrialized countries, particularly the Member States of the EC, have a vital interest in the success of the economic changes taking place in these countries, since any failure would mean that they would be directly affected by the adverse effects of instability in Central and Eastern Europe and the CIS,

D.noting the proposal by the EBRD Board of Directors that the limitation on financing and activities applying to the USSR will no longer apply to the CIS and other former USSR states; instead of this it has been proposed that the commitments in the CIS may not exceed 40% of the bank's total portfolio of operations;

E.having regard to the increase in the number of countries in which the bank operates, which may limit the financing of key projects;

F.disturbed by public reaction to the bank's recent activities and its role in the coordination of Western aid to Eastern Europe;

G.whereas the Community, its Member States and the EIB together hold a majority of the shares in the EBRD (51 per cent),

1.Welcomes the relative speed with which the bank has been able to set up its operations and an operational structure enabling it to contribute to the financial needs of the relevant countries however great they are, but notes also the slowness with which funds are allocated;

2.Stresses that the rate of commitment of equity and loans should continue to increase progressively and that this may require more imaginative and procedurally more flexible consideration of possible projects;

3.Points out the need for a clear definition of specific European tasks on which the EBRD may focus its activities to avoid unproductive competition with commercial banks and between international financial institutions and to allow complementary efforts to help the countries of Central and Eastern Europe with their economic transformation;

4.Underlines the need for closer coordination of the instruments for EC aid to Eastern Europe with the aim of introducing a specifically European range of activities;

5.Requests that the rule limiting EBRD lending to the successor states of the USSR to the level of capital invested should be abolished and calls on the Board of Governors to make sure that the increase in operations proposed in the CIS will not limit the operations in other Central and Eastern European countries, possibly by increasing the capital of the bank;

6.Stresses the importance of supporting a general strategy of regional cooperation with the countries of Central and Eastern Europe and the republics of the ex-USSR;

7.Welcomes the establishment of local offices acting as branches in the countries of operation as a way to transfer expertise and take advantage of local knowledge;

8.Feels that the distinction between public and private sector investment needs to be more flexible; in particular stresses the need for the bank to participate with equity capital in joint ventures in order to promote and attract financing from other sources including commercial banks;

9.Believes that within the funds available there is a special need for support for projects in investment-orientated infrastructure including telecommunications and financial services;

10.Calls, however, on the EBRD to make the procedures for granting loans much less time-consuming and to remove bureaucratic obstacles, thereby enhancing the efficiency of borrowers' restructuring,

11.Considers that the transformation of the economies of the countries in Central and Eastern Europe must be fully consistent with the principles of a social Europe;

12.Believes, furthermore, that the specific need for environmentally sensitive investment, especially financing urgent safety work, for example in the nuclear reactors of Eastern Europe, could be a task of the EBRD;

13.Asks the Commission to inform it on a regular basis of its coordinating activities designed to achieve complementarity between PHARE, the EBRD, the EIB and other financial resources;

14.Instructs its President to forward this resolution to the Council, the Commission, the governments of the Member States, the European Bank for Reconstruction and Development and the European Investment Bank.