(Updates with U.S. Treasury comment.)
According to persons familiar with the situation, a document circulated amongE.U. finance ministers at their regular monthly meeting Tuesday listed themerger as one of a number of options for the EBRD. The document was prepared byItalian Finance Minister Tommaso Padoa-Schioppa, Slovenian Finance MinisterAndre Bajuk and the European Commission, according to these sources.
Besides a merger, another plan includes maintaining it as a stand-aloneinstitution that invests in eastern
The EIB confirmed reports earlier Wednesday that EIB Vice-President MatthiasKollatz-Ahnen said the EIB was seeking to take a majority stake in EBRD. But thebank said that these were his personal views and not those of the bank.
"The Ministers of Finance have decided to review these issues in 2010, at thetime of the next capital review of the EBRD and the mid-term review of the EIB'sexternal mandates," the EIB said in a statement.
In order to merge the two institutions, the E.U. would have to persuade theEBRD's non-E.U. shareholders to give up their stakes. These include the U.S.,
None of them have indicated a desire to withdraw from the EBRD. The document'sauthors note that their presence as shareholders has been "instrumental" to theEBRD's success.
The U.S. Treasury didn't venture an opinion on the EBRD's future. For
"The U.S. has been a key supporter of the EBRD since its inception," said RobSaliterman, a Treasury spokesman. "I am unable comment on this specific reporthowever, without having seen an actual proposal."
Some E.U. members that have reservations about the EIB, but are supportive ofthe EBRD, are likely to be uncomfortable with enlarging the EIB's role.
According to a person familiar with the situation, finance ministers didn'thave time to discuss the document at their meeting Tuesday, instead devotingtheir efforts to agreeing on a candidate to lead the EBRD when current presidentJean Lemierre's second term ends in July. They are backing German Deputy FinanceMinister Thomas Mirow.
Padoa-Schioppa is the current chairman of the EBRD's board of governors. Thatbody represents its 63 government and government-backed shareholders. Bajuk ischairman of the grouping of E.U. finance ministers known as Ecofin, since
The EBRD's future is under examination because by 2010 it will stop investingin all eight of the eastern European countries that joined the European Union in2004.
When the development bank was first conceived in 1990, it was intended to helpthose same countries make the transition from Communist-run, centrally plannedto democratically-governed market economies.
So it will have completed its original mission by the end of this decade. Butas the
The fourth, five-yearly review of the EBRD's financial needs and strategy isdue to be completed in 2010.
The European Investment Bank is the E.U.'s long-term lending arm, created in1958 to finance the infrastructure development needed to knit the separatenational economies together into a more integrated whole.
But it has since taken on a role as the E.U.'s development arm, financingprojects not just in
In 2007, it made total loans of
The EIB's investments dwarf those of the EBRD, which invested roughly
However, the EBRD has a great deal of expertise in areas in which the EIB isless experienced, such as financing small and medium-sized companies, developingbanks and other financial institutions, and helping city governments upgradetheir infrastructure with the help of private sector partners.
According to the document, under a merger the EBRD's expertise would beextended to countries that it doesn't now operate in, beginning with
The E.U. document also considers an option that would see the creation of aninstitution that would hold all of the shares in the EBRD now owned by itsindividual members, and which would oversee coordination between the EBRD andthe EIB to ensure that the E.U.'s overall objectives were being pursued. Underthis arrangement, there would be a redistribution of tasks between the EIB andthe EBRD.
-By Paul Hannon, Dow Jones Newswires, +44-20-7842-9491, paul.hannon@dowjones.com (Jeff Bater contributed to this report)
(END) Dow Jones Newswires