Friday

26th Feb 2021

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).

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

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.

Luxembourg tax scandal may prompt EU action

An investigation into Luxembourg's tax regime has uncovered how the Italian mafia, the Russian underworld, and billionaires attempt to stash away their wealth. The European Commission has put itself on standby amid suggestions changes to EU law may be needed.

Investigation

Portugal vs Germany clash on EU corporate tax avoidance

Portugal's taking over the EU presidency puts the tax transparency law for corporations - which has been fought over for years - to a vote in the Council of Ministers. The resistance of the German government has failed.

News in Brief

  1. EU leaders restate defence 'autonomy' plan
  2. Rights group exposes Ethiopia massacre
  3. US carried out airstrikes against Iran-backed militia in Syria
  4. Malta closes investigation into journalist murder
  5. Dutch parliament calls China treatment of Uighurs genocide
  6. Spain fined €15m by ECJ over data failures
  7. Belarus: Anti-government protester jailed for 10 years
  8. German charged with spying for Russia in Bundestag

Vietnam jails journalist critical of EU trade deal

A journalist who had demanded the EU postpone its trade deal with Vietnam until human rights improved has been sentenced to 15 years in jail. The EU Commission says it first needs to conduct a detailed analysis before responding.

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic Council to host EU webinars on energy, digitalisation and antibiotic resistance
  2. UNESDAEU Code of Conduct can showcase PPPs delivering healthier more sustainable society
  3. CESIKlaus Heeger and Romain Wolff re-elected Secretary General and President of independent trade unions in Europe (CESI)
  4. Nordic Council of MinistersWomen benefit in the digitalised labour market
  5. Nordic Council of MinistersReport: The prevalence of men who use internet forums characterised by misogyny
  6. Nordic Council of MinistersJoin the Nordic climate debate on 17 November!

Latest News

  1. Armenia 'coup' shows waning of EU star in South Caucasus
  2. 'Difficult weeks' ahead, as variants spread across EU
  3. EU top court advised to strike down Hungary's asylum policy
  4. Frontex chief: 'about time' MEPs probe his agency
  5. Is EU poised to solve child labour in 'green' batteries?
  6. The trap of spreading ideas while attacking them
  7. Who are the EU's new Russian deplorables?
  8. Afghan asylum family beaten in Greece, set adrift at sea

Join EUobserver

Support quality EU news

Join us