Proposal for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on amendments to the Agreement Establishing the European Bank for Reconstruction and Development (EBRD) extending the geographic scope of EBRD operations to the Southern and Eastern Mediterranean
Date: 2011-12-21
Institutions: European Commission
Subjects: EBRD, Egypt, European neighbourhood policy, Jordan, Morocco, Tunisia, Union for the Mediterranean, economic development, market economy, regional aid

EUROPEAN COMMISSION 

Brussels, 21.12.2011 
COM(2011) 905 final 

2011/0442 (COD) 

Proposal for a 

DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on amendments to the Agreement Establishing the European Bank for Reconstruction 
and Development (EBRD) extending the geographic scope of EBRD operations to the 
Southern and Eastern Mediterranean 

 
 
  
 
EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

Introduction 

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  all  EU  Member  states  at  that  time  were  founding 
members.  The  EBRD  is  currently  owned  by  61  countries,  the  EU  and  the  EIB.  The  EBRD 
supports projects in 29 countries of operations, primarily in the private sector, that cannot be 
fully  financed  by  the  market.  The  EBRD  promotes  entrepreneurship  and  fosters  transition 
towards open and democratic market economies.  

The 2011 events in our partner Mediterranean countries call for a robust policy response from 
the  EU.  In  March,  the  Commission  and  the  High  Representative  presented  a  Joint 
Communication1 signalling the strong political and economic support of the EU to the region 
that  included  an  option  for  extending  the  EBRD's  mandate  to  cover  the  countries  of  the 
Southern Neighbourhood, building on its experience fostering transition towards open market-
oriented  economies  over  the  last  20  years.  The  European  Council  of  24/25  March  2011 
broadly endorsed the contents of this Joint Communication. In its Resolution of 7 April 2011 
on  the  review  of  the  European  Neighbourhood  Policy  –  Southern  Dimension,  the  European 
Parliament  invited  the  EBRD  to  change  its  statute  in  order  to  participate  in  the  financial 
assistance  process.  At  their  May  2011  meeting  in  Deauville,  G8  leaders  also  called  on  the 
EBRD  to  extend  its  geographic  scope  in  order  to  leverage  its  experience  and  support  the 
transition  of  the  Southern  and  Eastern  Mediterranean  countries  to  embrace  the  principles  of 
multiparty democracy, pluralism and market economies.  

In  response  to  fast  moving  events,  EBRD’s  Governors  called  on  the  EBRD  to  examine  the 
case  for  a  regional  extension  of  the  geographic  scope  of  its  mandate.  Governors  set  the 
parameters for this work at the EBRD’s Annual Meeting in May 2011. The EBRD Board of 
Directors submitted to the Governors a report on the Geographic Expansion of the EBRD’s 
operations to the Southern and Eastern Mediterranean, notably proposing two Resolutions:  

(a) 

(b) 

Resolution  137  which  proposes  amendments  to  Article  1  of  the  Agreement 
Establishing  the  Bank  (AEB)  to  extend  the  region  of  EBRD’s  operations  to  the 
Southern and Eastern Mediterranean, and  

Resolution 138 which proposes amendments to Article 18 of the AEB to allow the 
use of Special Funds in potential recipient countries. 

EBRD's calibrated approach in the new region 

The  proposal  for  two  resolutions  to  change  these  two  Articles  was  to  allow  the  EBRD  to 
engage in the Southern and Eastern Mediterranean region in three phases:  

1 

Joint  Communication  "A  Partnership  for  Democracy  and  Shared  Prosperity  with  the  Southern 
Mediterranean",  COM(2011)200  of  8  March  2011.  The  extension  of  the  EBRD  mandate  to  Southern 
Eastern Neighbours was also supported by the Commission and the EEAS in the Joint Communication 
"A new response to a changing Neighbourhood", COM(2011)303 of 25 May 2011. 

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– 

– 

– 

Under the first phase, following the request of the international community to quick 
start operations in the Mediterranean region, the EBRD will use Cooperation Funds, 
which will focus on technical cooperation and project preparation. 

Under the second phase, the EBRD will allocate its own resources to Special Funds, 
which can deliver a full range of EBRD investment operations in the Southern and 
Eastern Mediterranean region. This phase will start once the amendments to Article 
18  of  the  AEB  have  been  ratified  by  a  sufficient  number  of  EBRD  members,  in 
accordance with Article 56 of the AEB. 

Under  the  final  phase,  the  Southern  and  Eastern  Mediterranean  countries  will 
become  fully  fledged  countries  of  operations.  This  phase  will  commence  once  the 
amendments to Article 1 of the AEB have been ratified by the EBRD members, in 
accordance with Article 56 of the AEB. 

Article 1 of the AEB currently defines the region in which the Bank is to pursue its purpose as 
the  countries  of  Central  and  Eastern  Europe  as  well  as  Mongolia.  As  the  prospective  new 
recipient  countries  are  outside  that  region,  Article  1  of  the  AEB  will  need  to  be  amended 
before the EBRD is entitled to carry out full operations there using its ordinary resources. The 
text of the amendment is attached to the legislative proposal. Article 1 of the AEB needs to be 
amended to extend the scope of the Bank's operations to include the member countries of the 
Southern  and  Eastern  Mediterranean,  and  to  provide  that  a  member  can  become  a  recipient 
country  with  the  approval  of  a  qualified  majority  of  no  less  than  2/3  of  Governors, 
representing no less than 75% of the total voting power. 

The  EBRD's  Board  of  Directors  Report  stated  that  the  Southern  and  Eastern  Mediterranean 
region "comprises the countries that have a shoreline on the Mediterranean as well as Jordan 
which  is  closely  integrated  into  this  region"  which  are  considered  to  be  the  EU  Southern 
Neighbourhood  countries.  Egypt  and  Morocco  are  already  EBRD's  members.  Tunisia's  and 
Jordan's memberships have been approved by the EBRD Board of Governors respectively in 
September 2011 and in November 20112. 

Whilst  awaiting  the  entry  into  force  of  Article  1  of  the  AEB  (as  amended),  and  in  order  to 
allow for an earlier involvement of the EBRD in the Southern and Eastern Mediterranean, the 
proposed amendment of Article 18 of the AEB would allow the EBRD to carry out operations 
financed from Special Fund resources in selected member countries of the extended region.  

Article 18 of the AEB needs to be amended to permit Special Funds to be used in the EBRD's 
potential recipient countries and to provide that a member of the EBRD should be designated 
as a potential recipient country with the approval of a qualified majority of no less than 2/3 of 
Governors,  representing  no  less  than  75%  of  the  total  voting  power.  In  addition,  when  the 
Board of Governors decides that a member should be a potential recipient country, it should 
also  decide  the  length  of  time  for  which  that  member  may  be  able  to  have  access  to  the 
relevant Special Funds.  

The  EU  Governor  of  the  EBRD  and  all  EU  Member  States'  Governors  voted  in  favour  of 
Resolutions  137  and  138  at  the  Board  of  Governors  on  30  September  2011  approving  the 
necessary amendments to Articles 1 and 18 of the AEB. According to Article 56 of the AEB, 
thereafter  the  members  of  the  EBRD  need  to  accept  them.  Therefore,  a  Decision  of  the 

2 

Israel is also a member of the EBRD but it is not expected to become an EBRD country of operations. 

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European Parliament and of the Council is necessary to allow these amendments to enter into 
force  thereby  enabling  the  EBRD  to  operate  in  countries  of  the  Southern  and  Eastern 
Mediterranean  and  in  order  to  allow  the  use  of  special  funds  in  recipient  countries  and 
potential recipient countries. 

The amendments will enter into force seven days after the date of formal communication by 
the EBRD when the requirements for accepting the amendments have been met in accordance 
with Article 56 of the AEB.  

2. 

RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND 
IMPACT ASSESSMENTS 

The international community, including all Member States, the Commission and the other EU 
institutions,  has  urged  the  EBRD  to  become  part  of  the  economic  response  to  the  political 
events  in  the  Southern  and  Eastern  Mediterranean  region  building  on  its  experience  in 
supporting the economic transformation of countries in Central and Eastern Europe, as well as 
Central Asia, after the collapse of communism. 

The  EU  and  the  G8  also  encouraged  the  EBRD  to  support  engagement  in  the  region  and 
pledged  to  work  with  the  Bank  towards  the  creation  of  a  'dedicated  transitional  facility',  to 
allow the Bank's operations in countries of the extended region to start as early as possible. 

The EBRD Board of Governors observed the historic and dynamic changes occurring in the 
extended region and considered the urgent need to express support to those countries of the 
region determined to build a new and democratic order. The amendments to the AEB reflect 
the  need  for  the  EBRD  to  expand  its  operations  to  the  Southern  and  Eastern  Mediterranean 
countries by supporting effectively the political and economic changes in the region. EBRD's 
shareholders (which include all EU Member States, the EIB and the Commission representing 
the EU) were actively involved in the process. 

The EBRD has assessed the impact on its capital adequacy of expanding its activities into the 
new region of operations. During the first two phases of intervention identified in section (1) 
of this explanatory memorandum, the EBRD activity will be carried out through the allocation 
of part of the Bank’s net income. During the first phase, EUR 20 million will be allocated by 
the EBRD to the Cooperation Funds, and a further EUR 1 billion is expected to be allocated 
by the EBRD to the Special Fund set up during the second phase. The assessment concluded 
that, on the basis of the current level of financial risk and economic capital, the EBRD will be 
able  to  stay  within  its  statutory  and  economic  capital  requirements  during  the  Capital 
Resources Review (CRR) period 2011-2015  without any further  capital increase. Moreover, 
the EBRD has confirmed that the extension will have no impact on the activities in the current 
countries of operations.  

A  wide  range  of  donors  are  being  approached  by  the  Bank  to  supplement  both  the 
Cooperation Funds and Special Funds. Cooperation Funds are targeted to reach a total volume 
of EUR 100 million, with monies likely to come from both current donors (including the EU 
through  the  Neighbourhood  Investment  Facility)  and  possibly  non-traditional  contributors, 
such  as  from  the  Arab  world.  No  figure  is  presently  anticipated  to  be  set  for  donor 
contributions  to  Special  Funds.  Before  the  EBRD  engages  in  any  of  its  potential  new 
countries  of  operations,  it  performs  a  detailed  technical  assessment  of  the  economic  and 

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political  conditions  existing  in  the  country,  including  an  assessment  of  that  country’s 
commitment to the Article 1 of the AEB principles of multi-party democracy, pluralism and 
market  economics,  an  assessment  of  transition  gaps,  what  other  International  Financial 
Institutions are doing in the country, and the priorities where the EBRD can best make use of 
its unique knowledge and skills. In preparing these assessments, the EBRD will fully take into 
account the views of the EU and the wider international community.  

Assessments  have  recently  been  carried  out  for  Egypt,  Tunisia,  Morocco  and  Jordan.  These 
assessments  will  be  updated  at  each  phase  of  EBRD  engagement,  and  the  requirements  get 
progressively  more  demanding.  In  addition,  the  EBRD  has  committed  to  monitor  economic 
and  political  developments  in  each  country  closely,  in  order  to  calibrate  the  EBRD's 
engagement  in  line  with  the  direction  and  pace  of  developments,  whilst  ensuring  that  the 
views of the EU and the wider international community are fully taken into account. 

3. 

LEGAL ELEMENTS OF THE PROPOSAL 

The  proposed  Decision  relates  to  the  geographic  expansion  of  the  EBRD's  region  of 
operations to the Southern and Eastern Mediterranean region. Since the entry into force of the 
Treaty on the Functioning of the European Union, Article 212 provides the legal basis to the 
EU  for  carrying  out  economic,  financial  and  technical  cooperation  measures,  in  particular 
assistance  to  third  countries  and  is  proposed  as  the  legal  basis  for  the  present  legislative 
proposal.  

4. 

BUDGETARY IMPLICATION  

By its nature, the present proposal has no direct financial impact on the budget of the Union. 

5. 

DETAILED EXPLANATION OF THE PROPOSAL  

Article 1  

This Article concerns the approval by the EU of the amendments to Articles 1 and 18 of the 
AEB which extend the scope of the EBRD's operations to the countries of the Southern and 
Eastern Mediterranean region.  

Article 2 

This  Article  will  allow  the  Governor  of  the  EBRD  representing  the  EU  to  communicate 
formally to the Bank the instrument of acceptance of the above amendments.  

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2011/0442 (COD) 

Proposal for a 

DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on amendments to the Agreement Establishing the European Bank for Reconstruction 
and Development (EBRD) extending the geographic scope of EBRD operations to the 
Southern and Eastern Mediterranean 

THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 212 thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national Parliaments, 

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

(3) 

3 

In response to the 2011 events in the Southern and Eastern Mediterranean region, in 
March  2011,  the  Commission  and  the  High  Representative  presented  a  Joint 
Communication3 signalling the strong political and economic support of the EU to the 
region  that  included  an  option  for  extending  the  EBRD's  mandate  to  cover  the 
countries of the Southern Neighbourhood, building on its experience over the last 20 
years. The European Council of 24/25 March 2011 broadly endorsed the contents of 
this  Joint  Communication.  In  its  Resolution  of  7  April  2011  on  the  review  of  the 
European  Neighbourhood  Policy  –  Southern  Dimension,  the  European  Parliament 
invited the EBRD to change its statute in order to participate in the financial assistance 
process. 

In  May  2011,  G8  leaders  launched  the  Deauville  Partnership  to  help  Southern  and 
Eastern  Mediterranean  countries  in  their  transition  towards  free,  democratic  and 
tolerant societies and called on the EBRD to extend its geographic scope in order to 
leverage  its  experience  and  support  the  transition  of  these  countries  to  embrace  the 
principles of multiparty democracy, pluralism and market economies. 

By Resolutions 137 and 138 adopted on 30 September 2011, the Board of Governors 
of  the  EBRD  voted  in  favour  of  the  necessary  amendments  to  the  Agreement 
Establishing the EBRD, enabling it to expand the EBRD’s region of operations to the 

Joint  Communication  "A  Partnership  for  Democracy  and  Shared  Prosperity  with  the  Southern 
Mediterranean",  COM(2011)200  of  8  March  2011.  The  extension  of  the  EBRD  mandate  to  Southern 
Eastern Neighbours was also supported by the Commission and the EEAS in the Joint Communication 
"A new response to a changing Neighbourhood", COM(2011)303 of 25 May 2011. 

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(4) 

(5) 

Southern and Eastern Mediterranean. All EU Governors of the EBRD voted in favour 
of these amendments, including the Governor representing the European Union. 

According to Article 56 of the Agreement Establishing the EBRD, the EBRD shall ask 
all  members  whether  they  accept  the  proposed  amendments.  This  acceptance  should 
be given on behalf of the EU. 

In  carrying  out  its  activities  in  the  Southern  and  Eastern  Mediterranean  region,  the 
EBRD  should  be  encouraged  to  continue  its  close  engagement  with  the  EU  and  to 
develop a close cooperation with the EIB and other European and international public 
financing institutions. 

HAVE ADOPTED THIS DECISION:  

Article 1 

The amendments  to  Articles 1 and 18 of the Agreement Establishing the EBRD attached to 
this Decision are hereby approved on behalf of the European Union. 

The Governor of the EBRD representing the European Union shall communicate to the EBRD 
the Declaration of Acceptance of the amendments on behalf of the European Union. 

Article 2 

Article 3 

This  Decision  shall  enter  into  force  on  the  third  day  following  that  of  its  publication  in  the 
Official Journal of the European Union. 

Done at Brussels, 

For the European Parliament 
The President 

For the Council 
The President 

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ANNEX: Amendments to the Agreement Establishing the European Bank for 
Reconstruction and Development 

Article 1 of the Agreement Establishing the Bank shall be replaced by the following:  

"Article 1 

PURPOSE 

In contributing to economic progress and reconstruction, the purpose of the Bank shall be to 
foster  the  transition  towards  open  market-oriented  economies  and  to  promote  private  and 
entrepreneurial  initiative  in  the  Central  and  Eastern  European  countries  committed  to  and 
applying the principles of multiparty democracy, pluralism and market economics. Subject to 
the  same  conditions,  the  purpose  of  the  Bank  may  also  be  carried  out  in  Mongolia  and  in 
member countries of the Southern and Eastern Mediterranean as determined by the Bank upon 
the  affirmative  vote  of  not  less  than  two-thirds  of  the  Governors,  representing  not  less  than 
three-fourths  of  the  total  voting  power  of  the  members.  Accordingly,  any  reference  in  this 
Agreement  and  its  annexes  to  "Central  and  Eastern  European  countries",  "countries  from 
Central and Eastern Europe", "recipient country (or countries)" or "recipient member country 
(or countries)" shall refer to Mongolia and each of such countries of the Southern and Eastern 
Mediterranean as well." 

Article 18 of the Agreement Establishing the Bank shall be replaced by the following:  

"Article 18 

SPECIAL FUNDS 

1. (i) The Bank may accept the administration of Special Funds which are designed to serve 
the purpose and come within the functions of the Bank in its recipient countries and potential 
recipient countries. The full cost of administering any such Special Fund shall be charged to 
that Special Fund. 
(ii)  For  the  purposes  of  subparagraph  (i),  the  Board  of  Governors  may,  at  the  request  of  a 
member  which  is  not  a  recipient  country,  decide  that  such  member  qualifies  as  a  potential 
recipient country for such limited period and under such terms as may seem advisable. Such 
decision shall be taken by the affirmative vote of not less than two-thirds of the Governors, 
representing not less than three-fourths of the total voting power of the members. 
(iii)  The  decision  to  allow  a  member  to  qualify  as  a  potential  recipient  country  can  only  be 
made if such member is able to meet the requirements for becoming a recipient country. Such 
requirements are those set out in Article 1 of this Agreement, as it reads at the time of such 
decision  or  as it  will read  upon the entry into force  of an amendment  that has already been 
approved by the Board of Governors at the time of such decision. 
(iv) If a potential recipient country has not become a recipient country at the end of the period 
referred to in subparagraph (ii), the Bank shall forthwith cease any special operations in that 
country, except those incident to the orderly realization, conservation and preservation of the 
assets  of  the  Special  Fund  and  settlement  of  obligations  that  have  arisen  in  connection 
therewith. 
2.  Special  Funds  accepted  by  the  Bank  may  be  used  in  its  recipient  countries  and  potential 
recipient countries in any manner and on any terms and conditions consistent with the purpose 
and functions of the Bank, with the other applicable provisions of this Agreement, and with 
the agreement or agreements relating to such Funds. 
3. The Bank shall adopt such rules and regulations as may be required for the establishment, 
administration  and  use  of  each  Special  Fund.  Such  rules  and  regulations  shall  be  consistent 

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with the provisions of this Agreement, except for those provisions expressly applicable only 
to ordinary operations of the Bank." 

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LEGISLATIVE FINANCIAL STATEMENT FOR PROPOSALS 

1. 

FRAMEWORK OF THE PROPOSAL/INITIATIVE  

1.1. 

Title of the proposal/initiative  

Proposal for Decision of the European Parliament and of the Council on amendments to the 
Agreement  Establishing  the  European  Bank  for  Reconstruction  and  Development  (EBRD) 
expanding  the  geographic  scope  of  EBRD  operations  to  the  Southern  and  Eastern 
Mediterranean. 

1.2. 

Policy area(s) concerned in the ABM/ABB structure4  

Title 01 – Economic and Financial Affairs 

1.3. 

Nature of the proposal/initiative  

(cid:133) The proposal/initiative relates to a new action  

(cid:133) The proposal/initiative relates to a new action following a pilot project/preparatory action5  

(cid:58) The proposal/initiative relates to the extension of an existing action  

(cid:133) The proposal/initiative relates to an action redirected towards a new action  

1.4. 

Objectives 

1.4.1.  The Commission's multiannual strategic objective(s) targeted by the proposal/initiative  

Objective "To promote prosperity beyond the EU" 

1.4.2. 

Specific objective(s) and ABM/ABB activity(ies) concerned  

Specific objective No. 2. "To improve the EU profile, external representation and liaison with the 
EIB  and  EBRD,  other  international  financial  institutions,  and  relevant  economic  fora  aiming  at 
strengthening convergence between their strategies and operations and EU external priorities" 

ABM/ABB activity concerned 

Title 01.03 – International Economic and Financial Affairs 

4 
5 

ABM: Activity-Based Management – ABB: Activity-Based Budgeting. 
As referred to in Article 49(6)(a) or (b) of the Financial Regulation. 

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1.4.3.  Expected result(s) and impact 

The main objective of the amendments to Articles 1 and 18 of the Agreement Establishing the 
European Bank for Reconstruction and Development (AEB) is to extend the geographic scope 
of the EBRD’s mandate in the Southern and Eastern Mediterranean region of operations and 
allow for an earlier involvement of the EBRD through Special Fund in the new countries of 
operations while awaiting the entry into force of Article 1 of the AEB.  

1.4.4. 

Indicators of results and impact  

The attainment of objectives will be measured in accordance with the EBRD's own reporting 
on financing operations in the Southern and Eastern Mediterranean region. 

1.5. 

Grounds for the proposal/initiative  

1.5.1.  Requirement(s) to be met in the short or long term 

The Board of Governors adopted Resolutions 137 and 138 on 30 September 2011 approving 
the necessary amendments to Articles 1 and 18 of the AEB with unanimous support from the 
EU Governors.  

The Resolutions as approved by EBRD's Governors need to be accepted by EBRD's members, 
including by the European Union, in accordance with Article 56 of the AEB. Each member of 
the  EBRD  shall  deposit  with  the  EBRD  an  instrument  stating  that  it  has  accepted  the 
amendments to Articles 1 and 18 of the AEB. A decision of the European Parliament and of 
the Council is necessary for the EU to state its formal acceptance of these amendments. 

1.5.2.  Added value of EU involvement 

As stated in the explanatory memorandum, the EU Member States and the EU institutions are 
supportive of the expansion of EBRD activities to Southern and Eastern Mediterranean region. 
The EU is a member of the EBRD.  

1.5.3.  Lessons learned from similar experiences in the past 

The  EBRD  has  accumulated  unique  experience  in  supporting  public  and  financial  sector 
reform,  promoting  small  and  medium  sized  enterprises,  and  the  privatisation  of  state 
companies  in  its  current  countries  of  operations.  The  countries  in  the  Southern  and  Eastern 
Mediterranean  region  face  similar  challenges  of  economic  modernisation,  growth  and  job 
creation  as  did  the  countries  of  Central  and  Eastern  Europe  after  the  fall  of  Communism. 
Support  for  investments  in  infrastructure  and  for  the  private  sector  is  badly  needed,  and  the 
EBRD  can  use  and  deploy  its  expertise  in  these  and  other  areas  to  help  bring  economic 
benefits in this new region of operations.  

1.5.4.  Coherence and possible synergy with other relevant instruments 

The  Commission  systematically  promotes  close  cooperation  and  joint  initiatives  with  the 
EBRD,  the  EIB  and  other  IFIs  as  efficient  donor/IFI  concerted  actions  are  increasingly 

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necessary  to  sustain  recovery  in  a  fragile  and  fiscally  constrained  economic  environment. 
Close  cooperation  with  the  EBRD  also  underpins  the  achievement  of  EU  objectives  in  the 
field of economic external relations activities.  

in 

the  EBRD 

the  framework  of 

Investment  Framework  and 

Against this background, the Commission supports, in particular, its cooperation with the EIB 
tripartite  (EU-EIB-EBRD)  Memorandum  of 
and 
Understanding,  as  well  as  within  grant  and  loan  blending  mechanisms,  such  as  the  Western 
Balkans 
Investment  Facility.  The 
Commission, the EIB and the EBRD will extend the tripartite Memorandum of Understanding 
to  cover  the  Southern  and  Eastern  Mediterranean  region.  The  cooperation  between  the 
Commission and the EBRD, as well as between the EBRD, the EIB and other multilateral and 
bilateral  financial  institutions,  will  be  pursued  in  the  Southern  and  Eastern  Mediterranean 
region. As in its current region of operations, the EBRD activity in the Southern and Eastern 
Mediterranean can benefit from the Neighbourhood Investment Facility (NIF) support.  

the  Neighbourhood 

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1.6. 

Duration and financial impact  

(cid:133) Proposal/initiative of limited duration  

–  (cid:133)  Proposal/initiative in effect from [DD/MM]YYYY to [DD/MM]YYYY  

–  (cid:133)  Financial impact from YYYY to YYYY  

(cid:58) Proposal/initiative of unlimited duration 

1.7.  Management mode(s) envisaged6  

(cid:58)  Centralised direct management by the Commission  

(cid:133)  Centralised indirect management with the delegation of implementation tasks to: 

–  (cid:133)  executive agencies  

–  (cid:133)  bodies set up by the Communities7  

–  (cid:133)  national public-sector bodies/bodies with public-service mission  

–  (cid:133)  persons entrusted with the implementation of specific actions pursuant to Title V of the 
Treaty  on  European  Union  and  identified  in  the  relevant  basic  act  within  the  meaning  of 
Article 49 of the Financial Regulation  

(cid:133) Shared management with the Member States  

(cid:133) Decentralised management with third countries  

(cid:133) Joint management with international organisations  

Comments  

N/A 

6 

7 

Details  of  management  modes  and  references  to  the  Financial  Regulation  may  be  found  on  the  BudgWeb  site: 
http://www.cc.cec/budg/man/budgmanag/budgmanag_en.html 
As referred to in Article 185 of the Financial Regulation. 

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12 

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2. 

MANAGEMENT MEASURES  

2.1.  Monitoring and reporting rules  

EBRD Financing Operations will be managed in accordance with the EBRD's own rules and 
procedures, including appropriate audit, control and monitoring measures. As foreseen in the 
AEB, the Audit Committee of the EBRD, which is supported by external auditors, assists the 
EBRD  Board  of  Directors  and  is  responsible  for  verifying  the  regularity  of  the  EBRD 
operations  and  accounts.  The  Board  of  Directors,  where  the  EU,  represented  by  the 
Commission, has a Director, submits the audited accounts for each financial year for approval 
of the Board of Governors at each annual meeting and approves the budget of the EBRD. The 
Board  of  Governors  approves,  after  reviewing  the  auditor's  report,  the  general  balance  sheet 
and the statement of profit and loss of the EBRD.  

Furthermore, the Board of Directors establishes policies and takes decisions concerning loans, 
guarantees, investment in equity capital, borrowing by the EBRD, the furnishing of technical 
assistance and other operations of the EBRD in conformity with the general directions of the 
Board of Governors. 

Finally, the Board of Directors has established three Board Committees to assist it in its work: 
the Audit Committee mentioned above, the Budget and Administrative Affairs Committee and 
the Financial  and  Operations Policies Committee.  The  EU  Director  (or  his  alternate)  attends 
all these Boards Committees. 

The Governor of the EBRD for the Union will report annually to the European Parliament on 
EBRD  related  matters  in  accordance  with  Decision  No  1219/2011/EU  of  the  European 
Parliament  and  of  the  Council  concerning  the  subscription  by  the  European  Union  to 
additional shares in the capital of the EBRD. 

2.2.  Management and control system 

2.2.1.  Risk(s) identified  

The EU risk attached to this Decision is linked to its participation in the EBRD. 

2.2.2.  Control method(s) envisaged  

EBRD operations in the Southern and Eastern region will be carried out according to EBRD 
standard rules of procedure and sound banking practice. See also 2.1. 

2.3.  Measures to prevent fraud and irregularities  

The  EBRD  has  an  independent  Office  of  the  Chief  Compliance  Officer  (OCCO),  which  is 
headed  by  a  Chief  Compliance  Officer  (CCO)  reporting  directly  to  the  President,  and 
annually, or as necessary, to the Audit Committee. The OCCO’s mandate is to promote good 
governance and to ensure the highest standards of integrity are applied throughout all of the 
activities of the EBRD in accordance with international best practice. The responsibilities of 
the OCCO include dealing with issues of integrity, due diligence, confidentiality, conflicts of 

EN 

13 

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interest, corporate governance, accountability, ethics, anti-money laundering, counter-terrorist 
financing and the prevention of fraudulent and corrupt practices. The OCCO is responsible for 
investigating  allegations  of  fraud,  corruption  and  misconduct.  It  also  trains  and  advises,  as 
necessary, EBRD staff members who are appointed as directors to the boards of companies in 
which the EBRD holds an equity interest. Financial and integrity due diligence are integrated 
into  the  Bank's  normal  approval  of  new  business  and  the  monitoring  of  its  existing 
transactions. The EBRD publishes the OCCO’s anti-corruption report on its web site.  

Moreover,  the  OCCO  has  the  specific  responsibility  for  administering  the  EBRD’s 
accountability  mechanism,  currently  the  Independent  Recourse  Mechanism  soon  to  be 
replaced with the Project Complaint Mechanism, which assesses and reviews complaints about 
projects financed by the EBRD and provides, where warranted, a determination as to whether 
in approving a particular project, the EBRD acted in compliance with its relevant policies. 

EN 

14 

   EN 

 
3. 

3.1. 

Heading of 
multiannual 
financial 
framework 

4 

ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE  

Heading(s)  of  the  multiannual  financial  framework  and  expenditure  budget  line(s) 
affected  

•  Existing expenditure budget lines  

In order of multiannual financial framework headings and budget lines. 

Budget line 

Type of  
expenditure

Contribution  

Number  
[Description………………………...……….] 

DA/NDA 
(8) 

from 
EFTA9 
countries 

from 
candidate 
countries10 

from third 
countries 

within the meaning 
of Article 18(1)(aa) 
of the Financial 
Regulation  

- 

-  

NO 

NO 

NO 

NO 

8 
9 
10 

DA= Differentiated appropriations / DNA= Non-Differentiated Appropriations 
EFTA: European Free Trade Association.  
Candidate countries and, where applicable, potential candidate countries from the Western Balkans. 

EN 

15 

   EN 

 
                                                 
3.2. 

Estimated impact on expenditure  

3.2.1. 

Summary of estimated impact on expenditure  

The acceptance by the EU of the expansion of the EBRD to the Southern and Eastern Mediterranean region does not require any 
operational expenditure. 

Heading of multiannual financial 
framework:  

5 

" Administrative expenditure " 

Year 
2011 

Year 
2012 

Year 
2013 

Year 
2014 

… enter as many years as 
necessary to show the duration 
of the impact (see point 1.6)  

TOTAL 

EUR million (to 3 decimal places) 

DG: ECFIN 

(cid:121) Human resources  
(cid:121) Other administrative expenditure  

0.127 

0.064 

TOTAL DG ECFIN 

Appropriations  

0.127 

0.064 

TOTAL appropriations 
under HEADING 5 
of the multiannual financial framework  

(Total 
= Total payments) 

commitments 

0.127 

0.064 

0.191 

0.191 

0.191 

Year 
2011 

Year 
2012 

Year 
2013 

Year 
2014 

… enter as many years as 
necessary to show the duration 
of the impact (see point 1.6) 

TOTAL 

EUR million (to 3 decimal places) 

TOTAL appropriations  

Commitments 

0.127 

0.064 

0.191 

EN 

16 

E

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
under HEADINGS 1 to 5 
of the multiannual financial framework  

Payments 

0.127 

0.064 

0.191 

EN 

17 

E

 
  
 
 
 
 
 
3.2.2.  Estimated impact on operational appropriations  

–  (cid:58)  The proposal/initiative does not require the use of operational appropriations  

EN 

18 

E

 
  
3.2.3.  Estimated impact on appropriations of an administrative nature 

3.2.3.1.  Summary  

–  (cid:133)  The  proposal/initiative  does  not 

require 

the  use  of  administrative 

appropriations  

–  (cid:58)  The  proposal/initiative  requires  the  use  of  administrative  appropriations,  as 

explained below: 

EUR million (to 3 decimal places) 

Year 
2011 

Year 
2012 

Year 
2013 

Year 
2014 

… enter as many years as necessary 
to show the duration of the impact 
(see point 1.6) 

TOTAL 

HEADING 5 
of the multiannual 
financial framework 

Human resources  

0.127 

0.064 

0.000 

0.000 

0.127 

0.064 

0.000 

0.000 

Other administrative 
expenditure  

Subtotal HEADING 5 
of the multiannual 
financial framework  

Outside HEADING 511 
of the multiannual 
financial framework  

Human resources  

Other expenditure  
of an administrative 
nature 

Subtotal  
outside HEADING 5 
of the multiannual 
financial framework  

0.191 

0.191 

TOTAL 

0.127 

0.064 

0.000 

0.000 

0.191

11 

Technical  and/or  administrative  assistance  and  expenditure  in  support  of  the  implementation  of  EU 
programmes and/or actions (former "BA" lines), indirect research, direct research. 

EN 

19 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
3.2.3.2.   Estimated requirements of human resources  

–  (cid:133)  The proposal/initiative does not require the use of human resources  

–  (cid:58)  The  proposal/initiative  requires  the  use  of  human  resources,  as  explained 

below: 

Estimate to be expressed in full time equivalent units (or at most to one decimal place) 

Year
2011 

Year
2012 

Year 2013 

Year 2014 

… enter 
as many 
years as 
necessary 
to show 
the 
duration 
of the 
impact 
(see point 
1.6) 

(cid:121) Establishment plan posts (officials and temporary agents) 

01 01 01 01 (Headquarters and Commission’s 
Representation Offices) 

1.0 

0.5 

0 

0 

XX 01 01 02 (Delegations) 

XX 01 05 01 (Indirect research) 

10 01 05 01 (Direct research) 

(cid:121) External personnel (in Full Time Equivalent unit: FTE)12 

XX 01 02 01 (CA, INT, SNE from the 
"global envelope") 

XX 01 02 02 (CA, INT, JED, LA and SNE in 
the delegations) 

XX 01 04 yy 13 

- at Headquarters14 

- in delegations  

XX 01 05 02 (CA, INT, SNE – Indirect 
research) 

10 01 05 02 (CA, INT, SNE – Direct 
research) 

Other budget lines (specify) 

TOTAL 

1.0 

0.5 

0 

0 

The human resources required will be met by staff from the DG who are already assigned to 
management of the action and/or have been redeployed within the DG. 

Description of tasks to be carried out: 

12 

13 
14 

CA= Contract Agent; INT= agency staff ("Intérimaire"); JED= "Jeune Expert en Délégation" (Young 
Experts in Delegations); LA= Local Agent; SNE= Seconded National Expert;  
Under the ceiling for external personnel from operational appropriations (former "BA" lines). 
Essentially  for  Structural  Funds,  European  Agricultural  Fund  for  Rural  Development  (EAFRD)  and 
European Fisheries Fund (EFF). 

EN 

20 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Officials and temporary agents 

The main tasks arising from the proposal are the following: 

- Preparation of legislative proposal 

-  Follow  up  of  the  legislative  procedure  with  the  European 
Parliament and the Council; 

- Relations and communication with EBRD management. 

External personnel 

EN 

21 

   EN 

 
 
3.2.4.  Compatibility with the current multiannual financial framework  

–  (cid:58)  Proposal/initiative is compatible the current multiannual financial framework. 

–  (cid:58) The proposal is compatible with existing financial programming.  

3.2.5.  Third-party contributions  

–  (cid:58) The proposal/initiative does not provide for co-financing by third parties  

3.3. 

Estimated impact on revenue  

–  (cid:58)  Proposal/initiative has no financial impact on revenue. 

EN 

22 

   EN