Wednesday 25 Nov 2020 | 01:13 | SYDNEY
Wednesday 25 Nov 2020 | 01:13 | SYDNEY

Email of the day: Why are we getting out of the EBRD?


Sam Roggeveen


25 February 2008 09:52

Peter McCawley writes:

Steven Grenville's observations on the decision by the Australian Government to withdraw from the EBRD prompt the questions: why, exactly, did the Australian Government decide to withdraw?  And what will the consequences be? The answers to these questions are not clear.

In considering the idea that Australia should withdraw from the European Bank it's useful to be clear on what the bank is. The EBRD – like the World Bank and the Asian Development Bank – is an international state-owned financial enterprise. It is both a development bank, established to promote the goal of stimulating investment in poorer countries in Europe (especially eastern Europe), and also a forum where governments discuss broader issues relating to challenges of development in poorer European countries.

As to the first question of why the Australian Government chose to withdraw, presumably the decision has been in the pipeline for a while. Governments do not withdraw from international organisations lightly. The announcement probably reflects doubts about Australia's membership harboured not only by the Rudd Government but the Howard Government as well.

As to the implications, in the short-term the consequences will be insignificant. The decision will be noted, and quietly commented upon, within restricted government (mainly treasury department) circles in the UK and Europe. The main longer-term significance, perhaps, is the signal that the decision sends to interested governments in Europe. But quite what that signal is is not really clear.  Hopefully, as Steve Grenville says, the message is that the Australian Government plans to give increasing priority to Australia's interests in Asia.