One week before last Christmas, the U.S. State Department fast-tracked four European Bank for Reconstruction and Development (EBRD) projects in Serbia, which consisted of a loan to HVB Banka Serbia; an equity investment in Syntaxis Mezzanine Fund I; an equity investment in South Eastern Energy Capital; and a loan to Danube Group Holding of Serbia, which holds a stake in JKR Natural Resource B.V.
The State Department claims that these particular investments “will contribute to a stronger and more integrated economy in the Balkans.” Therefore, Section 561 of the Foreign Operations Appropriations Act (FOAA) was suspended. Section 561 would have prevented U.S. executive directors of the EBRD from voting in favor of these initiatives because of the Serbian government’s noncompliance with the Hague Tribunal.
Why is the United States so eager to fund these projects?
The EBRD is effectively the same as the World Bank, the International Monetary Fund (IMF), or the International Finance Corporation (IFC). All are majority owned and controlled by the governments of five countries, of which the United States is the major player.
The reason for calling the EBRD “European” and not simply the “World Bank” is that the “European” title gives the organization a veneer of being “local” rather than a tool of foreign powers. In reality,...