The European Bank for Reconstruction and Development, or EBRD, is an international bureaucracy set up in 1991 after the collapse of the Soviet empire, ostensibly for the purpose of promoting capitalism in the post-communist world, and the United States is its largest financial supporter. Not surprisingly, its mission has since expanded to cover many other countries, as well as various noble-sounding causes.
But as Veronique de Rugy explains, there are countless flaws with the EBRD. Among them: It is cronyism, plain and simple. The bank picks winners and losers in the marketplace. The winners—often better-connected firms—benefit from an unfair advantage over their competition in the form of subsidies, lower borrowing costs, and other perks. Tough luck if you’re an unsubsidized firm competing in that market.
It’s time for the U.S. to pull out of the EBRD.
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