KIEV (AFP) — The European Bank for Reconstruction and Development appointed Germany's Thomas Mirow as president on Monday while shareholder Australia said it would quit as the EBRD's work was nearly done.
German Deputy Finance Minister Mirow will take charge in July at a time of rapid change for the bank which was created 17 years ago to help ex-Soviet states adopt market economies but is now venturing further afield.
The EBRD, whose French chief Jean Lemierre steps down after eight years in the job, also approved plans to consider Turkey as a country of operations to rank alongside the other 28 nations in its investment zone.
Mirow, speaking to a press conference that wrapped up the EBRD's annual meeting in Kiev, said the bank would remain strong and would respond to the major financial challenges including runaway oil, gas and food prices.
"I think what we will have to do is to assess very thoroughly what is changing and we have a lot of changing (financial) conditions around us," Mirow said.
As president, that he would "orientate the bank in the years ahead to answer to these new challenges."
Prior to his appointment, Australia said it would withdraw in 2010 after judging that the market transition process was nearing completion in the former Soviet bloc.
"It is in (the) context of a job well done that the Australian government intends to withdraw from the bank from 2010," said Peter Reith, EBRD director for Australia and New Zealand.
The news came one day after the United States said the possible inclusion of Turkey showed how the EBRD was approaching important decisions about its future direction.
But US Treasury under-secretary for international affairs, David McCormick, also cautioned that the move could dilute the EBRD's central focus.
"While acknowledging the potential benefits of an expanded mandate, the United States and a number of other countries are concerned that it would dilute (the) focus from the EBRD's core mission," he wrote in an article for Britain-based "Emerging Markets" magazine.
Lemierre said Monday it was "fair and reasonable to consider in a positive way the request made by Turkey which does not seem to me a distraction from the core mandate of the institution."
He added the bank's mandate was "to promote market based solutions in the region of the bank."
The two-day annual conference in the former Soviet republic of the Ukraine has been somewhat overshadowed by warnings about soaring inflation and commodity prices even as economic growth slows.
"The region needs a strong institution, committed to being a partner when there is volatility," Lemierre said.
EBRD governors also approved the allocation of the bank's net profits that totalled 1.9 billion euros (2.9 billion dollars) last year but opted against giving out a shareholder dividend.
McCormick indicated the United States would seek a dividend next year.
This year, the bank agreed to keep 80 percent of profits for capital reserves, while ten percent would be placed in a special fund for new investments.
The remaining 135 million euros (215 million dollars) will help finance a new protective covering around the Chernobyl reactor, the scene of the world's worst nuclear accident in Ukraine.
The possible inclusion of Turkey, meanwhile, would mark the most significant change to the EBRD since it left the Czech Republic at the end of last year.
By 2010, the institution wants to depart Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia. The seven countries joined the European Union in 2004 alongside the Czech Republic.
The EBRD leaves countries when they attract a sufficient level of private sector investment.
The bank revealed Sunday that the new market economies of its region faced slower growth in 2008 but had mostly shrugged off the impact of the global credit crunch.
Growth in the EBRD zone, which includes Armenia, Poland and Russia, was forecast at 6.0 percent this year, down from a record 7.3 percent in 2007.
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