Prague, 12 March 1998 (RFE/RL) -- The 11 member states of the Black Sea Economic Cooperation group (BSEC) are soon to have their own regional investment bank.
The institution, called the Black Sea Trade and Development Bank, is now being formed in the northern Greek city of Thessaloniki. This week (Wed 11/3 and Thurs 12/3) the bank's governors and directors have been meeting in Thessaloniki to finalize policy issues and to prepare for the bank's first formal session. The date for the inaugural session was to be set during the meeting, and bank sources in Istanbul say it could come as early as next month.
An elaborate opening ceremony is also planned, to which leading international bankers and businessmen are to be invited, including officials from the International Monetary Fund and World Bank.
Deputy General Secretary of the BSEC, Turkey's Nurver Nuresh, told RFE/RL that member state Bulgaria is in the running for one of the envisaged posts of vice president of the new Black Sea bank.
The creation of the regional investment bank will be an important step towards further economic cooperation in the Black Sea group, which comprises Greece, Turkey, Armenia, Azerbaijan, Moldova, Romania, Georgia, Albania, Russia, Ukraine and Bulgaria. Formed in 1992, the BSEC group has been slowly groping towards increased economic cooperation, despite the major and long-standing differences between some its members.
Greece's Ambassador to the BSEC, Spyridon Bacas, told RFE/RL that the group has been able to make progress because it has stuck to purely economic issues, and not tried to venture into the volatile realm of politics. He said Greece has put much effort into the new bank's formation, having chaired the interim steering committee. The bank itself illustrates the delicate balances which have to be made within the group: it has its seat in Greece, but it's president is a Turkish banker named Ersoy Volkan.
Each of the Black Sea group countries have contributed capital to the bank, broadly in proportion to their economic weight. Greece, Turkey and Russia are each contributing 16.5 percent of the share capital, with Bulgaria, Romania and Ukraine 13.5 percent each, and Albania, Armenia, Azerbaijan, Georgia and Moldova 2 percent each. Total share capital at present is about 300 million dollars. The bank has the support of the London-based European Bank for Reconstruction and Development (EBRD), which is acting as a trustee.
The stated purpose of the Black Sea bank is to contribute to successful economic transition among member states, by financing and supporting regional projects, and by providing banking services to both public and private sectors on other projects. Under the terms of its founding charter, the bank will favour projects designed to foster economic cooperation between the BSEC members, with a particular focus on helping small and medium business.
BSEC Deputy Secretary General Nuresh said that the capital requirements of the region are huge, for instance for infrastructure projects, and he does not expect the new bank to be able to deal with projects of that size for now. He foresees a more modest role, such as the provision of export guarantee credits. Nuresh also noted that the Black Sea countries have no single bank common to the region, and that the new bank can start filling this gap by handling account transfers.
Analysts say one of the difficult tasks of the new bank will be to avoid antagonizing the various members by its choices in allocating finance. They say that the bank runs the risk of appearing to favour some members at the expense of others. More seriously, in response to such pressures, it could be tempted to support projects which are not economically viable.
Nuresh says however that problems among the member states should not be exaggerated. He says there may be some "headaches" as he put it, but that in the years since the BSEC was formed, the concept of regional inter-dependence has "permeated" the thinking of members.
Heads of state and government of the Black Sea Economic Cooperation group were to have held a summit meeting in the Ukrainian port of Odessa this month to sign a charter giving the group legal status. However, that was put off to later in the year because of scheduling difficulties. It is now likely to take place in the middle of June.