Sunday

19th Nov 2017

Brics to open alternatives to World Bank, IMF

  • Shanghai: China, Russia and Brazil want to set up their own 'world' bank (Photo: stuck_in_customs)

Brazil, Russia, India, China, and South Africa (the so-called Brics) are to establish alternatives to the World Bank and the International Monetary Fund, which they find too biased towards Europe and the US.

The "New Development Bank" to rival the World Bank will be launched at a Brics summit in the Brazilian city of Fortaleza next week, with all agreed except where to put the main headquarters, Russian finance minister Anton Siluanov said Wednesday (9 July).

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

The two options currently being considered are Shanghai or New Delhi, Siluanov said. Russia didn’t push to get the bank in Moscow, but will seek management posts instead, he said.

The project will see each of the Brics contribute €1.4 billion to the bank’s funds over the next seven years, with the bank’s maximum capital set at €73 billion. The bank will fund mainly infrastructure projects.

Other countries that want to join will be able to do so once the new bank opens for lending, in 2016, the minister added.

It will be a small rival to the €163 billion-strong World Bank, but it marks the departure of a US and Europe-dominated international financial system.

Siluanov also confirmed plans for a separate Brics project: an alternative to the International Monetary Fund (IMF).

This would be set up as a joint contingency pool between the five Brics countries to the tune of €73 billion.

"We have reached an agreement that, in the current conditions of capital volatility, it is important for our countries to have this buffer a so-called “mini-IMF” - a financial organisation which could quickly react to capital outflow, providing liquidity in hard currency, in particular in US dollars,” Siluanov said.

The pool will become available in 2015 and will see each of the Brics countries putting in as much of a proportion of the total capital as it would be allowed to withdraw, except for China (the largest donor) and South Africa (the smallest), which will be allowed to withdraw half and double their contributions, respectively.

Brics nations have grown increasingly frustrated at the priorities of the IMF, particularly during the euro-crisis, where a disproportionate amount of the fund's money went to bailouts in southern Europe.

MEPs ponder how to fight tax havens

After the Paradise Papers brought new revelations about tax dodging across the globe, including in the EU, the European Parliament wonders how to step up the fight.

MEPs ponder how to fight tax havens

After the Paradise Papers brought new revelations about tax dodging across the globe, including in the EU, the European Parliament wonders how to step up the fight.

News in Brief

  1. Bonn climate talks extend into Friday evening
  2. UK needs to move on Brexit by early December, Tusk says
  3. Puigdemont extradition decision postponed to December
  4. Ireland wants written UK guarantees to avoid hard border
  5. US did not obstruct climate talks, says German minister
  6. EU signs social declaration
  7. Puigdemont to be heard by Belgian judges
  8. Steep fall in migrants reaching EU

Stakeholders' Highlights

  1. European Jewish CongressAntisemitism in Europe Today: Is It Still a Threat to Free and Open Society?
  2. Counter BalanceNew Report: Juncker Plan Backs Billions in Fossil Fuels and Carbon-Heavy Infrastructure
  3. Nordic Council of MinistersNordic countries prioritise fossil fuel subsidy reform
  4. Mission of China to the EUNew era for China brings new opportunities to all
  5. ACCASmall and Medium Sized Practices Must 'Offer the Whole Package'
  6. UNICEFAhead of the African Union - EU Summit, Survey Highlights Impact of Conflict on Education
  7. Nordic Council of MinistersNordic Council Calls for Closer Co-Operation on Foreign Policy
  8. Swedish EnterprisesTrilogue Negotiations - Striking the Balance Between Transparency and Efficiency
  9. Access EuropeProspects for US-EU Relations Under the Trump Administration - 28 November 2017
  10. World Vision20 November: Exchange of Views at the EP on Children Affected by the Syria Crisis
  11. Nordic Council of MinistersSustainable Growth the Nordic Way: Climate Solutions for a Sustainable Future
  12. EU2017EEHow Data Fuels Estonia's Economy

Latest News

  1. EU keeps former Soviet states at arm's length
  2. EU leaders make pledge on social issues after populist backlash
  3. EU agencies and eastern neighbours This WEEK
  4. Germany slams Dutch call for more ambitious EU climate goal
  5. Mind the gap: inequality in our cities
  6. Climate activists 'disappointed' with EU at climate talks
  7. Davis outlines UK vision on Brexit in Berlin
  8. German coalition talks in near collapse