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Money and credit - Ivanov VM

20.5. The International Monetary Fund and the European Bank for Reconstruction and Development

The International Monetary Fund was created directly by governments wishing to join it UN States to mutual support in order to stabilize the balance of payments and improve the global monetary system. As a government entity, it lends to its shareholders on a preferential basis. IMF's objective is to promote the integration of countries into the global economic community. The ability to provide loans to former Soviet republics depends on many factors, primarily on the conformity of their economic reform programs with international standards and progress in implementing these programs. International assistance while playing an important role, but it can only be complementary to the efforts of these countries, investment in infrastructure, the expansion of the productive sectors of the economy, reduction of non-productive budget expenses.

The unit of account of the IMF is SDR. Entry fee can be paid in SDRs or in the currency to be determined by the fund and partly in national currency. Voices in the Board of Governors of the IMF distributed between countries, depending on the size of their quotas. From the quota depends on the maximum amount of credits, which can expect the fund member.

Ukraine has repeatedly used the loans provided by the IMF. In this case, the recipient country was obliged to ensure the stability of certain IMF macroeconomic indicators through internal and external loans. Loans have a dollar value that the rapid growth of the dollar exchange rate is proportional to the increase in debt. Thus, only during the years 1998-1999. Ukraine has lost about 12 billion UAH for the maintenance of external and internal debt. On 1 January 2000, the external debt of Ukraine has reached 12.5 billion dollars. And $ 13.2 billion. At the end of the year. By the end of 2001, debt was already $ 14.3 billion. In 2002, economists predict a slight decrease in the amount of external debt to the figure at the end of the year to $ 13.5 billion..

European Bank for Reconstruction and Development (EBRD) was established in 1990 to assist reforms in Central and Eastern Europe aimed at the transition to a market economy. Among the founding members were of the USSR; the headquarters of the bank in London.

The founders of a new international institution were 40 countries in Europe, USA, Canada, Mexico, Venezuela, Morocco, Egypt, Israel, Japan, South Korea, Australia, New Zealand, as well as two international organizations - the European Economic Community and the European Investment Bank.

Financial support for the Bank economic reforms carried out by:

• provision of direct loans, as well as participation in joint financing with other creditors;

• equity investment enterprises in the private and public sectors;

• underwriting produced both by the private sector and government;

• facilitate access of these enterprises to the domestic and international capital markets through the provision of guarantees as well as of financial advice;

• providing or participating in loans and providing technical assistance for the reconstruction or development of infrastructure.

The initial capital of the bank was determined to 10 billion ECU.

The European Bank for Reconstruction and Development focuses on the promotion of technical cooperation. As the implementation of government programs will increase the bank's role in the project financing.

The European Bank for assisting countries in the implementation of reforms, in particular the privatization process, conversion, improvement in the financial sector, as well as in the implementation of sectoral programs. The Bank provides support to agriculture: introduction of modern technologies, the development of agricultural machinery, fertilizer, seed, feed. In the energy sector EBRD provides assistance and investment advice, which will reduce the shortage of energy, move to more diverse sources of its receipt. Bank pays special attention to providing financial and other assistance in the development of international telecommunications networks, modernization of highways, the production of trucks and creating database of railway transport in accordance with international standards for the long haul.