2011/0014(COD)

European Bank for Reconstruction and Development (EBRD): subscription by the EU to additional shares in the capital

Procedure completed

2011/0014(COD) European Bank for Reconstruction and Development (EBRD): subscription by the EU to additional shares in the capital
RoleCommitteeRapporteurShadows
Opinion BUDG KALFIN Ivailo (S&D)
Lead ECON BOWLES Sharon (ALDE)
Lead committee dossier: ECON/7/05289
Legal Basis TFEU TFEU 212
Subjects
Links

Activites

  • 2011/11/26 Final act published in Official Journal
  • 2011/11/16 Final act signed
  • 2011/11/16 End of procedure in Parliament
  • 2011/11/08 Act adopted by Council after Parliament's 1st reading
  • #3122
  • 2011/11/08 Council Meeting
  • 2011/10/17 CSL Final Agreement
  • 2011/10/13 Text adopted by Parliament, 1st reading/single reading
    • T7-0439/2011 summary
    • Results of vote in Parliament
  • 2011/10/13 Commission response to text adopted in plenary
  • 2011/10/12 Debate in Parliament
  • 2011/06/14 Committee report tabled for plenary, 1st reading/single reading
  • 2011/06/06 Vote in committee, 1st reading/single reading
  • 2011/04/19 Deadline Amendments
  • 2011/03/30 Committee draft report
  • 2011/02/14 Committee referral announced in Parliament, 1st reading/single reading
  • 2011/02/02 EP officialisation
  • 2011/02/02 Legislative proposal
    • COM(2011)0034 summary
    • DG Economic and Financial Affairs, REHN Olli

Documents

AmendmentsDossier
25 2011/0014(COD) European Bank for Reconstruction and Development (EBRD): subscription by the EU to additional shares in the capital
2011/03/18 BUDG 3 amendments...
source: PE-460.940
2011/04/20 ECON 20 amendments...
source: PE-462.914
2011/05/04 BUDG 2 amendments...
source: PE-462.763

History

(these mark the time of scraping, not the official date of the change)

2012-02-09
activities added
  • body
    EP
    date
    2011-02-02
    type
    EP officialisation
  • date
    2011-02-02
    docs
    • url
      http://eur-lex.europa.eu/smartapi/cgi/sga_doc?smartapi!celexapi!prod!DocNumber&lg=EN&type_doc=COMfinal&an_doc=2011&nu_doc=0034&model=guicheti
      text
      • PURPOSE: to permit the European Union to subscribe for additional callable shares in the EBRD in the framework of the capital increase decided by the EBRD Board of Governor on 14/15 May 2010.

        PROPOSED ACT: Decision of the European Parliament and of the Council.

        BACKGROUND: the European Bank for Reconstruction and Development (EBRD) was established in 1990 to support the development of market economies from central Europe to central Asia following

        the widespread collapse of communist regimes. The European Union, together with the European Investment Bank (EIB) and 40 countries (including all EU Member states at that time), were founding members. The EBRD is currently owned by 61 countries, the EU and the EIB. The initial capital of the EBRD was fixed at ECU 10 billion, of which the EU subscribed 3%.

        In 1996, the Governors of the EBRD decided to double the authorised capital of the EBRD for which the EU subscribed an additional 30 000 shares of EUR 10 000 each, bringing the EU subscribed capital at EUR 600 million. The EU share in the EBRD total authorised capital was maintained unchanged.

        At the Annual Meeting of the Governors of the EBRD on 14/15 May 2010, the Board of Governors adopted Resolutions 126 and 128 providing for an increase in the authorised capital stock of the Bank of 50% from EUR 20 billion to EUR 30 billion. The capital increase comprises EUR 1 billion paid-in capital and EUR 9 billion of new callable capital.

        For the EU, it means that the EU shall subscribe up to an additional 27 013 callable shares (each worth EUR 10 000 each) amounting to EUR 270.13 million taking into account the EU proportion of 3.031% in the subscribed capital.

        The subscription of callable shares amounting to a total of EUR 9 billion will become effective as soon as the individual shareholders have completed their internal procedures and deposited their instruments of subscription, as it was the case for the 1996 capital increase. The Bank would expect that the callable capital increase will become effective at the end of April 2011, but in any event not later than 31 December 2011.

        IMPACT ASSESSMENT: the EBRD fourth Capital Resources Review (CRR4) for the period 2011-2015, which was undertaken during the past year, reflected the need for the Bank to respond effectively to the crisis and to redirect its medium term strategy taking account of the significant impact the crisis is having on its region of operations. In this framework, the EBRD carried out an analysis of capital enhancement options, based on the need to comply with the Bank's statutory 'gearing ratio' and economic capital requirements, the maintenance of the Bank's Triple-A credit rating, as well as the effective and efficient use of shareholders' capital.

        The efforts undertaken by the EBRD to mitigate the impact of the crisis in all its countries of operations through the proposed capital increase will allow the Bank to sustain a high level of activity and accompany the recovery in its region of operations, in cooperation with the EIB and other International Financial Institutions. It is expected that the capital increase would enable the EBRD to have an annual business volume of about EUR 9 billion for 2011 and 2012, and about EUR 8.5 billion until 2015.

        LEGAL BASIS: Article 212 of the Treaty on the Functioning of the European Union (TFEU).

        CONTENT: under the terms and conditions of Resolution 128 on capital increase in the form of additional subscription of callable capital, the authorised capital stock of the Bank shall be increased by 900 000 callable shares, each share having a par value of EUR 10 000 which shall be subject to redemption in accordance with the provisions of the above Resolution. The EU is entitled to subscribe up to 27 013 callable shares.

        The proposed Decision aims at authorising the EU to take part in the callable part of the EBRD capital increase by subscribing to the shares it is allowed to.

        According to the terms of the Resolution 128, each member of the EBRD shall deposit with the Bank an instrument of subscription whereby the member subscribes to the number of callable shares specified in such instrument. In addition, the member shall deposit a representation that the member has duly taken all legal and other internal action necessary to enable it to make such subscription.

        BUDGETARY IMPLICATION: as regards the callable part of the capital increase, its budgetary impact will be catered for by the budget line 01 03 01 02 "European Bank for Reconstruction and Development - Callable portion of subscribed capital", which has been established in the 2011 budget, so as to reflect the EU budget's liability deriving from the callable part of the EU participation in the EBRD's capital. The budget line should be endowed with a 'p.m.' reflecting the contingent nature of the call and a budgetary comment defining the size of the contingent liability.

        Although a call is considered to be highly unlikely, the budgetary line and its comment will reflect the financing needs which could arise in the event of a payment request by the EBRD relating to the callable part of the capital subscribed by the EU.

        The modalities of the EU participation in the capital increase of the EBRD do not foresee any operational expenditure. The amount for human resources amounts to EUR 135 million for 2010 to 2013.

      celexid
      CELEX:52011PC0034:EN
      type
      Legislative proposal published
      title
      COM(2011)0034
    body
    EC
    commission
    • DG
      Economic and Financial Affairs
      Commissioner
      REHN Olli
    type
    Legislative proposal
  • date
    2011-02-14
    body
    EP
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    Committee referral announced in Parliament, 1st reading/single reading
    committees
  • date
    2011-03-30
    docs
    • url
      http://www.europarl.europa.eu/sides/getDoc.do?type=COMPARL&mode=XML&language=EN&reference=PE462.517
      type
      Committee draft report
      title
      PE462.517
    body
    EP
    type
    Committee draft report
  • body
    EP
    date
    2011-04-19
    type
    Deadline Amendments
  • date
    2011-06-06
    text
    • The Committee on Economic and Monetary Affairs adopted the report drafted by Sharon BOWLES (ALDE, UK) on the proposal for a decision of the European Parliament and of the Council concerning the subscription by the European Union to additional shares in the capital of the European Bank for Reconstruction and Development (EBRD) as a result of the decision to increase this capital.

      It recommends that the European Parliament's position adopted at first reading, under the ordinary legislative procedure, should amend the Commission proposal as follows:

      - In the context of the Memorandum of Understanding signed between the Commission, the EIB together with the EIF and the EBRD in respect of their cooperation outside of the Union, Members consider that a thorough oversight of the EBRD's business model is needed, in particular with respect to high-risk taking and effectiveness in leveraging additional financing from the private sector.

      The Governor of the EBRD for the Union shall:

      • request the EBRD Board of Governors: (i) to provide on its website information about the beneficiaries and impacts of its financial intermediary operations; (ii) that the use of Union funds in EBRD interventions complies with the key objectives of the Europe 2020 strategy, in order to enhance overall policy coherence of the Union's external action;
      • report annually to the competent committee of the European Parliament and to the European Systemic Risk Board (ESRB) on: (i) the use of callable capital;  (ii) on measures to ensure transparency of its operations through financial intermediaries; (iii) on how the EBRD has contributed to the Union's objectives; (iv) on EIB-EBRD cooperation outside Union, in particular with respect to the typology of jointly funded projects and the amount of funds made available.

      - Lastly in a new recital, the report stresses that the increase in callable capital provided for in this Decision contributes to the maintenance of the AAA rating. The use of callable capital to support the rating and the EBRD's investments should be monitored with a view to reviewing the option of callable capital at the end of the fourth Capital Resources Review in 2015.

    body
    EP
    committees
    type
    Vote in committee, 1st reading/single reading
  • date
    2011-06-14
    docs
    • url
      http://www.europarl.europa.eu/sides/getDoc.do?type=REPORT&mode=XML&reference=A7-2011-0227&language=EN
      type
      Committee report tabled for plenary, 1st reading/single reading
      title
      A7-0227/2011
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    EP
    committees
    type
    Committee report tabled for plenary, 1st reading/single reading
  • date
    2011-10-12
    body
    EP
    type
    Debate in Parliament
  • date
    2011-10-13
    docs
    body
    EP
    type
    Text adopted by Parliament, 1st reading/single reading
  • date
    2011-10-13
    docs
    • url
      http://www.europarl.europa.eu/oeil/spdoc.do?i=20274&j=0&l=en
      type
      Commission response to text adopted in plenary
      title
      SP(2011)8697
    body
    EC
    commission
    • DG
      Economic and Financial Affairs
      Commissioner
      REHN Olli
    type
    Commission response to text adopted in plenary
  • body
    CSL
    date
    2011-10-17
    type
    CSL Final Agreement
  • date
    2011-11-08
    body
    type
    Act adopted by Council after Parliament's 1st reading
  • date
    2011-11-08
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    CSL
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    Council Meeting
    council
    Economic and Financial Affairs ECOFIN
    meeting_id
    3122
  • date
    2011-11-16
    body
    type
    Final act signed
  • date
    2011-11-16
    body
    EP
    type
    End of procedure in Parliament
  • date
    2011-11-26
    text
    • PURPOSE: to allow the European Union to subscribe to additional callable shares in the European Bank for Reconstruction and Development, following the decision of the Governors of the EBRDon 14 and 15 May 2010 to increase the authorised capital stock. 

      LEGISLATIVE ACT:  Decision No 1219/2011/EU of the European Parliament and of the Council of 16 November 2011 concerning the subscription by the European Union to additional shares in the capital of the European Bank for Reconstruction and Development (EBRD) as a result of the decision to increase this capital.

      CONTENT: following an agreement in first reading with the European Parliament, the Council adopted a decision authorising the EU to subscribe to additional callable shares in the EBRD following the decision of the latter to increase its capital.

      At the Annual Meeting of the Governors of the EBRD on 14/15 May 2010, the Board of Governors decided, in view of the financial crisis, on an increase in the authorised capital stock of the Bank of 50% from EUR 20 billion to EUR 30 billion, in order to maintain enough capital to sustain, over the medium term, a reasonable level of activity in the EBRD countries of operation.

      The capital increase comprises EUR 1 billion paid-in capital and EUR 9 billion of new callable capital.

      This Council Decision provides that the EU subscribe to 27 013 additional callable shares of EUR 10 000 each in the EBRD.

      The Governor of the EBRD for the Union shall report annually to the European Parliament on the use of capital, on measures to ensure transparency of operations of the EBRD through financial intermediaries, on how the EBRD has contributed to the Union’s objectives, on risk-taking and effectiveness in leveraging additional financing from the private sector, and on cooperation between the European Investment Bank and the EBRD outside the Union.

      ENTRY INTO FORCE : 29/11/2011.

    type
    Final act published in Official Journal
    docs
committees added
  • body
    EP
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    False
    committee
    BUDG
    date
    2011-02-07
    committee_full
    Budgets
    rapporteur
    • group
      S&D
      name
      KALFIN Ivailo
  • body
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    True
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    ECON
    date
    2011-02-15
    committee_full
    Economic and Monetary Affairs
    rapporteur
    • group
      ALDE
      name
      BOWLES Sharon
links added
National parliaments
European Commission
other added
  • body
    EC
    dg
    Economic and Financial Affairs
    commissioner
    REHN Olli
procedure added
dossier_of_the_committee
ECON/7/05289
reference
2011/0014(COD)
subtype
Legislation
legal_basis
  • Treaty on the Functioning of the EU TFEU 212
stage_reached
Procedure completed
instrument
Decision
title
European Bank for Reconstruction and Development (EBRD): subscription by the EU to additional shares in the capital
type
COD - Ordinary legislative procedure (ex-codecision)
final
subject

code AGPLv3.0+, data ODBLv1.0, site-content CC-By-Sa-3.0
© European Union, 2011 – Source: European Parliament