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East: New EBRD Chief Knows Russia And EU Candidates

  • Ron Synovitz

The European Bank for Reconstruction and Development, or EBRD, has French treasury official Jean Lemierre as its next president. Reporting from Riga, where the bank is holding its annual meeting, RFE/RL correspondent Ron Synovitz looks at Lemierre's experience with the economic needs of Eastern Europe and the former Soviet republics.

Riga, 22 May 2000 -- When French Treasury Director Jean Lemierre takes up his new post as president of the EBRD at the end of June, he will bring to the job little direct experience in Eastern Europe. But he does have considerable insight into the post-communist region's economic troubles -- from Russia's financial crisis to the ordeals facing European Union candidate countries.

As chairman of the Paris Club of government creditors since November, Lemierre has helped to restructure debts owed to Western states by Eastern European countries and former Soviet republics. His international experience includes work as France's representative in meetings of the Group of Seven industrial nations.

Both the G-7 and Paris Club posts have allowed Lemierre to become familiar with new Russian Prime Minister Mikhail Kasyanov, who formerly served as Russia's liaison with international financial institutions.

Lemierre also has worked on issues related to the European Union's proposed eastward expansion. That experience comes from his role as chairman of the European Economic and Financial Committee and as a member of the European Monetary Committee.

In France, Lemierre is known as a quiet man. Since being named earlier this month as the EU's candidate to the EBRD, he has made few public statements. But before his confirmation today at the EBRD's board meeting in Riga, Lemierre did name three areas that he would focus on as the bank's president.

First, he pledged to boost EBRD investments in Russia, which the United States has been calling for. In 1998, Russia's financial crisis helped cause the EBRD a net loss of more than $250 million. Last year the bank made 10 percent of its commitments in Russia -- about $217 million. EBRD shareholders, led by the United States, have agreed to increase Russian investments this year up to $500 million if Russia satisfies criteria on economic and political reforms.

The second priority named by Lemierre satisfies a key objective of Brussels -- to push projects that build infrastructure and encourage market transition in EU candidate states. The EU has increased cooperation with the EBRD in recent months, and Brussels has made no secret of its view that the bank should help prepare candidate countries for EU membership.

But Lemierre's third priority -- to support the completion of two nuclear plants in Ukraine to replace the Chornobyl reactors -- has met with less of a welcome. The environmentalist group Greenpeace said this weekend that a proposed EBRD loan of $190 million should go not toward the K2-R4 (Khmelnitsky-2 and Rivne-4) reactors, but toward modernizing existing coal-fired plants. EBRD acting President Charles Frank told RFE/RL that there has not yet been a final decision on the loan to Ukraine. He said both the nuclear and the coal plants could be pursued if both are low-cost.

French bankers familiar with Lemierre describe him as a prudent technocrat who has devoted his career to civil service. His financial posts have included heading the tax administration for about 10 years. Since becoming director of the French Treasury in October 1995, he has helped push through the privatization of France Telecom and Air France.

Lemierre replaces Horst Koehler of Germany as EBRD president. Koehler left the bank last month to become managing director of the International Monetary Fund.

EBRD officials at the Riga meeting said privately that they expect Lemierre to continue with Koehler's medium-term strategy on loans and equity investments.

The three-to-four-year strategy calls for the EBRD to increase its total annual commitment from about $2 to $3 billion. The plan calls for about 30 percent of the money to go to Russia and about 40 percent to be dispersed in the Caucasus, Central Asia, Bulgaria, and Romania. The remaining 30 percent would go to the EU candidate states (except for Romania and Bulgaria) that have been deemed "advanced transition countries" by the bank.

Those advanced transition states received 42 percent of the EBRD's commitments last year -- reflecting the geopolitical priorities of Brussels, as well as the impact of Russia's 1998 crisis. But acting President Frank, a U.S. citizen, has said EU candidates should receive less from the EBRD as their economies approach the criteria for EU membership.