The government has yesterday decided that the Czechia will terminate its membership in the International Investment Bank (MIB) and the International Bank for Economic Cooperation (MBHS). The reason is Russia’s attack on Ukraine and the possibility that Russia could use them to circumvent sanctions. This was stated by Prime Minister Petr Fiala (ODS) at a press conference after the government meeting.
According to the Ministry of Finance (MF), after the termination of its membership, the Czechia will strive to pay out the minimum paid-up capital and the share in the profit of both banks. Existing projects of Czech companies should not be directly affected by the termination of the Czech Republic’s membership, the Ministry of Finance added.
“These banks were established during the Mutual Economic Assistance Council (CMEA) and some run the risk that Russia could circumvent sanctions through them. Leaving as soon as possible is a must,” said Petr Fiala. He said that Bulgaria, Poland, Slovakia, Romania and Hungary had also heard the Czech Republic’s call to leave. “At the International Bank for Economic Cooperation, the departure of these countries will mean its demise,” the Prime Minister added.
“Membership in these institutions does not bring us any economic benefits, both banks are a remnant of a long time ago. The impact of termination of membership on Czech companies will be minimal. We also coordinate all steps with other EU member states that are also members of MIB or MBHS,” said Minister of Finance Zbynek Stanjura (ODS).
In connection with the plan to end membership in banks, the finance ministers of the Czech Republic, Poland, Romania, Slovakia and Bulgaria issued a joint statement today. “In accordance with our national procedures, we will take appropriate and prompt action to terminate our membership and settle the statutes of both banks in order to achieve a proper termination. We will seek to prevent these institutions from being used to circumvent the sanctions of the European Union by protecting the assets of these institutions in such a way that they are not available to the Russian Federation until a final agreement is reached on the abandonment of the two banks,” they said.
The Ministry of Finance pointed out that the termination of membership must be carried out by denunciation of the presidential treaties, which must be approved by Parliament and the instrument of denunciation must be signed by the president. Only then can the termination of the agreements be notified by both institutions and the six-month period for negotiations between the Czech Republic and the two banks regarding financial settlement begins.
The MIB was established by the governments of the CMEA member states in 1970. The shareholders are nine countries – the Russian Federation, the Czech Republic, Hungary, Bulgaria, Romania, Slovakia, Cuba, Mongolia and Vietnam. The current goal of credit policy is to support medium-sized companies with direct loans, large companies through syndicated financing and a focus on export financing. The paid-up capital of the Czech Republic in the bank amounts to EUR 37.4 million (approximately CZK 965 million).
MBHS was founded by the governments of the CMEA member states in 1963. The bank’s shareholders are eight countries – the Russian Federation, the Czech Republic, Poland, Bulgaria, Romania, Slovakia, Mongolia and Vietnam. MBHS provides all current banking services (including account management) aimed at business clients, with an emphasis on business support in the bank’s member states. The Czech Republic has a paid-up capital of EUR 26.7 million (approximately CZK 689 million).
Source: CTK
