A3-0410/93

Resolution on the European Bank for Reconstruction and Development - EBRD

The European Parliament,

-having regard to the 1992 annual report by the EBRD, as well as to the 1992 and 1993 budgets of the EBRD,

-having regard to the motion for a resolution by Mrs Peijs and Mrs Oomen-Ruijten on the EBRD (B3-0617/92),

-having regard to Rule 45 of its Rules of Procedures,

-having regard to the report of the Committee on Economic External Relations (A3-0410/93),

A.whereas the EBRD ("the Bank") was established by the agreement signed on 29 May 1990 in order to "foster the transition towards open market economies and to promote private and entrepreneurial initiative in the Central and Eastern European countries committed to and applying the principles of multiparty democracy, pluralism and market economies",

B.whereas it appears that, in its first period of activity, the Bank has experienced serious start-up difficulties leading to low levels of funds being committed and disbursed,

C.whereas recent difficulties, involving the public image of the Bank and its former president, have slowed down the necessary reorientations in the Bank's priorities and adjustments to its procedures; whereas the new president has, however, since his arrival, made some useful changes to priorities and procedures,

D.whereas, given the serious situation in Central and Eastern Europe, it is especially urgent that the Bank should exert a catalytic role in mobilizing capital and in assisting economic restructuring in those regions,

E.mindful of the EBRD's plans for organizational and personnel restructuring as decided by the Board of Directors on 8 November 1993 with a view to improving efficiency and intensifying the Bank's investment policy,

The Bank's internal organisation

1.Endorses the conclusions of the Bank's audit committee report "on the headquarters expenses and other issues related to expenditure and control"; agrees in particular that "proper expenditure control requires more than simply sound procedures, but a general ethos of prudence and probity throughout the organisation" and that "responsibility for establishing this ethos rests with the President and the Board of Directors";

2.Notes the serious shortcomings in internal controls at the Bank, in particular with regard to:

-the division of responsibilities between the different sections

-internal procurement rules

-budgetary procedures and controls

-travel policy

-office facilities outside countries of operations

-expenditure by the President;

3.Considers that the Board of Directors has not carried out promptly and efficiently its supervisory duties with respect to this situation; that its composition, role, and cost of operation should be reconsidered in the future;

4.Remarks that some progress has been made recently, in particular with regard to budgetary procedures and internal procurement rules;

The Bank's operations

5.Believes nonetheless that the Bank, by its special character, combining merchant banking and development banking operations, retains an important and, potentially, crucial role in favouring economic restructuring in Central and Eastern Europe;

6.Remarks the low level of commitments and disbursements in 1992, and fears that operations for 1993 will fall considerably short of forecasts;

7.Indicates that, in order to increase the level of the Bank's operations, consideration should be given to the following options:

-whether to enable the Bank to take up more commercial risks, in particular with regard to financing of SMEs and in the context of special restructuring programmes,

-whether to increase the statutory ratio between public sector and private sector support, enabling therefore more intervention in favour of infrastructures (as a means to ensure that the Bank's liquid assets are rapidly committed and disbursed);

8.Reaffirms the strategic importance of a strong activity by the Bank in particular in the following sectors:

-privatization

-financial services and the development of a functioning merchant banking system

-transports and telecommunications

-energy

-environment protection (including nuclear safety)

-human resources

-promotion of SMEs

-support for the development of efficient administration at national and above all regional level

-support for regional economic areas such as the Baltic area;

9.Considers improved coordination necessary between financial and technical aid (Phare, Tacis) and between the institutions involved in aid such as the EBRD, the EIB, the Commission and the Community Member States;

10.Considers that cooperation between the Community, the countries of Central and Eastern Europe and the Republics of the CIS in the field of transnational infrastructure projects is vital and calls for action by the EBRD in this field with a view to the creation of successful European networks in Central and Eastern Europe and the Republics of the CIS;

11.Considers that the 1993 EBRD annual report should contain in particular the following elements:

-details on the implementation of the Bank's internal rules on environmental impact evaluation

-a description of the implementation of political conditionality

-a detailed breakdown of expenditure incurred;

General

12.Welcomes the establishment of the Nuclear Safety Fund, which should help to overhaul dangerous nuclear plants; asks however that the criteria for selecting eligible nuclear plants be made public; considers that support for the introduction and development of new sources of energy (in particular renewable energies and natural gas) should not be overlooked, the aim being to help the countries of Central and Eastern Europe become less dependent on the hazardous use of nuclear power;

13.With regard to bilateral technical cooperation, considers that the high proportion of tied aid contained in the Fund agreements weakens its economic impact;

14.Stresses, in conclusion, that the Community's trade policy towards Central and Eastern Europe, by removing trade barriers to exports by these countries, may prove crucial, inter alia, for the viability of EBRD-financed projects;

15.Instructs its President to forward this resolution to the Commission, the Council, the Governments of Member States, the President and the Board of Governors of the EBRD.