NO. 019

EMBARGO

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 Bank’s one million authorised share capital, at a paid-in cost of $US35

million.

In April 1996, the EBRD’s Board of Governors approved a doubling of the

Bank’s 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. Australia’s 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.

CANBERRA

23 February 1998

Media Contact:

Niki Savva Treasurer’s Office (03) 9650 0244