The Treasurer today announced that Australia would not be subscribing to additional shares allocated to it in the recent general capital increase of the European Bank for Reconstruction and Development (EBRD).
When the EBRD was established in 1991, Australia was allocated 10,000 shares or 1 per cent of the Banks one million authorised share capital, at a paid-in cost of $US35 million.
In April 1996, the EBRDs Board of Governors approved a doubling of the Banks capital stock to two million shares. Australia has been allocated a further 10,000 shares at an additional paid in cost of approximately $A43 million.
Australia has not opposed a general capital increase for the Bank to enable it to increase the level of its activities. However, the Government will not purchase the further 10,000 shares given budgetary constraints, particularly when Australia has recently increased its shareholdings in other organisations of the World Bank Group and has made other large commitments to assist countries in the region.
This decision does not reflect a lack of interest in the countries in transition. We consider that the international financial institutions have a very important role to play in assisting the countries in transition overcome the significant challenges that they face. Australias ongoing commitment to the international financial institutions - both financially and through contributions to the decision making process, which has been strongly evident in the last 12 months, is indicative of our commitment to the institutions and their client countries.
Australia will continue to strongly support the activities of the EBRD through the determined efforts of our Alternate Director, the Hon. Jim Short.