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EU: Do you want to know where your taxes go?

Editorial Staff

The European Bank of Reconstruction and Development began life as a combination lender and aid agency to help bring relatively poor areas in the EU up to standards in the more well off areas. It funded bridges and drainage, hospitals and schools and it was good. It has no money other than what it raises from "donors" which is a fictitious term meaning member states which, of course, means EU taxpayers.

What is it spending money on now? Let's just say that it's not good and if you are a taxpayer in the EU, it's your money. The EBRD itself says that 35% of the money it spends comes from EU coffers. As you will see, more comes direct from member states.

The EBRD has "backed a digital platform to boost private sector investment in Tunisia." Tunisia is an associate of the EU and is part of its free trade area but Tunisia is not a member of the EU. It signed the associateship agreement in 1995 and took until 2008 to meet the conditions. The agreement is formed with the Tunisian Investment Authority or TIA.

This is the proud announcement: "’We are very happy to help the TIA improve the business environment and provide digital tools for investors. Digitalisation is a key priority for the EBRD. With investments, policy engagement and advisory services, we want to help Tunisia become a digital champion and this project is a concrete step in that direction.”

It was needed because people couldn't go out during the pandemic. It was launched in Jan 2022. What does it do?

" The TIA is providing this strategic platform for the public and private sectors aimed at proposing policies and reforms to promote the development of the private sector. The interactive and digital guide for investors was launched in January 2022, as many businesses and investors had been adopting digital tools during the Covid-19 pandemic in order to better promote their work."

So, basically, it's a government owned website. How much is involved? No one is saying but in the past few years, the EBRD has ploughed more than euro1,400 million into Tunisia.

Moldova and the EU are members of the European Neighbourhood Policy so Moldova is not a member state. The EBRD has paid for another website. This time for a private accounting firm formed in 2016. The EBRD says " Founded by CFO Dan Dima and current CEO Andrian Dediu, DAD Accountant started operating in 2016, with a commitment to providing accountancy services adhering to the principles of safety, confidentiality and professionalism.

Recently, the business has diversified into other services, from recruitment to HR management, financial and managerial reporting, as well as specialised training. Developed to cover the array of departments that a typical SME might have, this suite of services has truly helped the business grow and fulfil its potential" and goes on "DAD Accountant is currently one of the top seven companies providing accountancy services in Moldova, with ambitions to become number one. To get there, the business continuously invests in utilising the most effective technologies available for processing requests and communications, benefiting their clients as well as their staff." The EBRD's statement is unbridled PR puff for the business. The money came from the "Small Business Impact Fund." This fund, to be fair, does not rely on EU taxpayers' funds and it does have third parties that send it money. But they seem to be states which means that it's their taxpayers that are paying. It's Italy, Japan, Korea, Luxembourg, Norway, Sweden, Switzerland, Taiwan (which the EBRD calls Taipei China) and the USA.

Think of the richest companies in the world and Coco-Cola will be in your top ten, probably. The EBRD is "investing" USD90 million in a "sustainability-linked Eurobond issued by Coca-Cola Icecek A.S. of Turkey. Turkey, you've guessed it, it not a member of the EU but it associated. The EBRD says "An EBRD partner since 2008, Coca-Cola Icecek is one of the largest independent bottlers in the Coca-Cola system, operating in Turkey, Central Asia, Pakistan and the Middle East, and listed on the Istanbul Stock Exchange." How Coke is a "partner" of the bank is unclear to this newspaper. Why does it want so much money from the EU? "The proceeds from the bond issuance will be used to refinance the company’s debt, support capex investments and meet working capital needs.... The EBRD will further support Coca-Cola Icecek in improving policies and practices to foster gender equality in recruitment, career progression and training."

So it's a combination of debt relief and money for wokeism that a US government would not give to an American group of companies. There are also objectives tied to ecology targets including improving water efficiency by 13% over seven years and to reduce its energy consumption.

These three examples were all announced within three minutes today, 21 February 2022.

Two minutes later it announced a loan of TRY100 million (don't get excited: it's less than euros 6.5) to Dünya Varlık Yonetim A.S., part of Dünya Varlık Holdings. The company is "Turkey's leading Non-Performing Loan management company." Whether this is a proper use of EU taxpayers' money is not actually the important point. This is "The loan will support the company’s operations and enable Dunya Varlik to buy new distressed portfolios from local banks and other financial institutions." Do you see why?

Further reading:

Tunisia: https://www.ebrd.com/news/2022...
Moldova: https://www.ebrd.com/news/2022...
Coca-Cola: https://www.ebrd.com/news/2022...
Turkey: https://www.ebrd.com/news/2022...

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