| LONDON -- The Australian government is set to become the first shareholder to withdraw from the European Bank for Reconstruction and Development, indicating that at least one of the development bank's founders believes its mission -- to support private enterprise in post-Soviet states -- is nearing completion.
Australia aims to take back its capital in 2010, when the EBRD will stop investing in seven of the eight eastern European countries that joined the European Union in 2004. There are no indications that the U.S. or any other non-European government is planning to follow Australia's lead.
The EBRD yesterday confirmed that it has had discussions with the new Australian government of Prime Minister Kevin Rudd about bringing its financial involvement to an end.
"It's their prerogative," said Anthony Williams, the EBRD's head of media relations. He confirmed that discussions have taken place between Australian Treasurer Wayne Swan and the president of the EBRD, Jean Lemierre.
"They are positive about what the bank has done, but it's clear their priorities lie in Asia," Mr. Williams said.
Australia was one of the EBRD's founding shareholders when the bank was set up in 1991, contributing €200 million ($294.5 million) of the development bank's €20 billion in capital. The bank makes equity investments and offers low-interest loans to support the growth of private enterprise in the post-communist states of Eastern Europe and the former Soviet Union.
In 2010, the EBRD will stop investing in seven of its countries of operation, a process known as graduation. They are Estonia, Hungary, Latvia, Lithuania, Poland, the Slovak Republic and Slovenia. The Czech Republic, which also joined the EU in 2004, has already graduated itself, unilaterally electing not to take any more EBRD funds as of last year.
Australia's investment is dwarfed by the contributions made by large European nations -- the U.K., France, Germany and Italy each put in €1.7 billion.
Write to Paul Hannon at paul.hannon@dowjones.com1 and Rachel Pannett at rachel.pannett@dowjones.com2
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