2005 Annual Meeting press conference

Transcript of EBRD President Jean Lemierre's press conference at the Annual Meeting in Belgrade, Monday 23 May 2005

JEFF HIDAY, Head of Media Relations: Welcome to the closing press conference. Please identify yourself when asking a question. And just to note you’ll find interpretation in Russian as well as in Serbian. Mr. Lemierre?

JEAN LEMIERRE, President: Good afternoon. I do not know when you arrived, but you probably know more than I do because you have been able to attend many panels and many meetings, and seen many people. I have been very much focused on the institutional part of the Annual Meeting, of course.

I will say a few words about the meeting itself and what has happened here, and then it is best to leave time for questions.

It has been – and it is not totally over – a good meeting for the region, for the Bank and for the Balkans. There have been 2,500 participants, including more than 1,000 businessmen, which is a real success from the business point of view, the grass roots point of view and investment point of view.

There were many panels dealing with many questions, and the discussions have been very lively. We have taken some new initiatives this year. Yesterday we organised a lunch with political leaders of the region, business people and some journalists, in order to have a good exchange of views about region and to increase policy dialogue in the region. It was very interesting. They were very clear among themselves about what should be done to improve the business climate and the investment climate. There were questions about the institutional framework; cooperation between countries; opening borders; implementing free trade agreements, which is still a very important question for business people in the region; developing access to credit for small and medium size companies to enable them to grow; and questions related to the rule of law and the implementation of the rule of law. 

There was a frank debate between political leaders and business people. They were not long speeches, but the debate was launched by the business people.  They asked very concrete questions, challenging the achievements and showing what could be done. It was a good debate. In the same way, for the first time we organised a round table for mayors from cities all across the region to state their needs, their wishes and any difficulties they may have. That too was a very good discussion.

Through this meeting, not only the understanding of the region, the potential and challenges of the region – and there are still many difficulties, of which you are aware – but the possibilities and opportunities in the region are better known. Policy dialogue has increased, and people have been brought together in a broader way. Even though sometimes we may have wished for more people and more engagement, that is normal for an institution such as ours, but it is a real success for the region, and I think that all the political leaders see it in this way.

That is the first part, the panels and the meetings. I would now like to make a short report to you about the institutional part and the comments made by the Governors of the Bank. It is very simple. The first point is that they have warmly welcomed the strong results of the Bank in its capacity to deliver the transition mandate in 2004 and now. You know the results of last year, in volume and even more in quality. 

The second point concerns change. If you listened to or read my speech yesterday you will know that I have put change at the forefront of the discussion here. We need to change because needs are changing. Why? Eight countries have been very successful and joined the EU in a very positive and successful way a year ago, and they have achieved progress in transition. It is normal for us to think about shifting even more towards the east and the south east, which presents a few challenges. I explained this to you yesterday; they mainly involve changing the business model of the Bank and moving east and south east. This will have an impact on the way we do business, on the allocation of resources and on policy dialogue.

It is clear that there is strong unanimity in relation to this move, and Governors have given guidance that this is exactly the strategy the Bank has to implement. I will propose the strategy and the ways and means of implementing it to the Governors in London at the Capital Resources Review.  They have provided strong guidance and approved this vision for the Bank.

There was a normal debate about central Europe. The point is very clear: Governors have said that progress has been achieved in central Europe; there is less need for intervention by the Bank in the coming years; nevertheless there are still transition challenges. There is strong agreement on the fact that there are transition challenges, for example equity investments, venture capital, SMEs, and financing municipalities in, for instance, PPPs. There are a few strong challenges that we have to address, and there has been a strong view on this.

Points have been made about the timetable. One shareholder mentioned a short-term timetable in which to achieve this, and all the other Governors mentioned a longer timetable. This is clear. There is a strong view that there are still some needs in central Europe. Most of those will be fulfilled by the market, but if the EBRD can help it will do so. We will work on this in preparing the Capital Resources Review, and I am quite confident that this whole process will be very clear and well explained. Following the discussion and the speeches made by the Governors I have no doubt about the direction of the Bank in central Europe.

We will do less but we will stay committed on focused activities where we add value and we will re-allocate our capacity to invest east and south east. The situation is very clear, and I have received very strong views on this during this meeting.

The second most important part of the meeting has to do with Article 1 of the Bank. Governors have reminded us - and each other - that Article 1 is an important element of the institution. You may have heard that many of them have expressed serious concerns about the situation in Uzbekistan.

The Bank is in the process of reviewing its Strategy on Uzbekistan. We shall do that at the end of June or beginning of July in the normal way. I will have discussions with the members of the Board to reach a conclusion on what we say. Of course, we are monitoring the situation very closely and many Governors have once again provided very strong views during this meeting about what has happened and what is happening in Uzbekistan. It would be premature of me to tell you today the decision the Board of the Bank is going to take in July. We need further discussion.

The third item mentioned during the Governors’ meeting is very warm approval for the continuing process in the Bank to improve our own governance. This is a long process. Of course, year after year we do move. You may remember decisions taken a few years ago about the creation of an independent recourse mechanism and the better disclosure of information for public consultation.  Last year and this year we have moved to different matters like implementing a very strong certification process of the financial statements. It may be slightly bureaucratic, but it is a state-of-the-art process to make sure that all the financial statements of the Bank are well done, well controlled and well implemented. We are certainly at the leading edge of this in the market and certainly among international financial institutions. We have created independence of the Evaluation Department of the Bank. We have reviewed a few other matters and we have opened discussion on the Code of Conduct for the Bank. Many steps have been achieved and the Governors, of course, have approved all of this.

At the same time, we need to continue because the world is changing.  Corporate governance is improving year on year in the private sector. The EBRD has always had a very clear policy, which is to be the benchmark among public institutions. We have had many discussions and I hope that in a year I will be able to report to you further progress we have achieved on a few well known questions concerning the independence of some internal processes and disclosure of documents and information. This is an important point. We are a bank; the Governors are the shareholders. We have moved forward in this process to be the benchmark on corporate governance in our sector.

I would like to add two remarks and then stop because this is very important.  I think all Governors have been highly appreciative of the management of the Bank, the strong achievements of the staff of the Bank, their skills and their capacity to deliver. I want to say that this is a strong element in enabling us to change and to adapt what we are doing. We are going to prepare this and report on it at the meeting in London next year.

May I return to the beginning? We are in Belgrade. May I express my gratitude to the authorities of Serbia and Montenegro and Belgrade for the very warm welcome they have given to all the participants of the Bank, for the efficient organisation of the meeting, the whole atmosphere and willingness to move forward and to demonstrate that there is a bright future in this region.  The participation of the EU Commission, the EU feasibility study, the whole process is a very important signal to investors. I met some of them yesterday. Clearly from my point of view they are more confident and understand better what is happening and we shall see a change in this region.

I will stop here because I am sure you have questions. I would be delighted to try to answer them.

MR HIDAY: Jim?

MR JIM THORNHILL (Reuters): Given the importance of Russia to the EBRD as a destination for lending, how do you explain the relatively junior level of the delegation that Russia has sent to the Annual Meeting? What would you say to foreign investors who are becoming increasingly nervous about the degree of state intervention they are seeing in the Russian economy?

MR LEMIERRE: I am not used to making judgments on whether these people representing Governors are junior or senior. Mr Storchak is a very distinguished representative of Russia. It is up to each country to make a decision about who can come. They make their own choices. He spoke with a very strong voice at the Annual Meeting and in a friendly, open-minded way in discussion with me during the meeting. We have addressed many questions. I think the commitment of Russia to the EBRD and a willingness to operate together is very high. I have no doubt about this. If you remember the first words of his speech yesterday, you will understand what I mean.

Outside oil and gas, we are the largest financial investor in Russia. We have a very diversified portfolio and we are now mainly investing in the private sector. We fully support the strategy of the authorities to improve diversification of the Russian economy and the development of all the regions in Russia. We have a very good understanding about what should be done.

As for your second point on nervousness, I can understand that, and you have made a fair point. Investors do raise the question. You know better than I do that there is a debate in Moscow. Investors try to understand. They see various elements coming to the surface. There is a trial, and all this is very well known. At the same time, President Putin a few days ago made a clear speech about the importance of investment and the necessity to reform the tax administration. These are questions by investors. Investors will monitor very closely the implementation of the commitments he has made on all these points.

Russia is a very diversified country. There are many stories from Russia.  There are some stories with difficulties and some success stories. We are a large operator in Russia and we see all this. There is something else that is part of what the EBRD does. Last week we issued rouble bonds in Russia and that was a success. That is certainly a success for the EBRD but even more so for Russia. The fact that we are operating in the capital market with our signature creating a benchmark with the support of the Russian banks is a clear indication of the willingness of the operators in the capital market to bring more transparency. That is the beginning of an improvement. We still have to work very hard on this but after many years of discussions and a change in regulations and administrative processes, this has been delivered and it is an important step. Moreover, it will enable us to finance operations more and more in roubles, reducing the exchange rate risk for borrowers or investors, SMEs, municipalities or larger investors. 

I have tried to give you all these elements. We have tried to make a judgment about the situation, but there are all these elements in the picture. It is a complex country. I will stop there.

MR HIDAY: Stefan?

STEFAN WAGSTYL (Financial Times): The political change in Ukraine has brought a different climate, which many people assess positively. Are you concerned that political events in Central Asia – and I am thinking both of Kyrgyzstan and Uzbekistan – are creating an environment that will be substantially worse for investors?

MR LEMIERRE: In Ukraine?

MR WAGSTYL: No, in Central Asia; there is a contrast.

MR LEMIERRE: Your question is not about the impact of Central Asia on Ukraine.

MR WAGSTYL: No, it is about the impact of political changes on the business climate.

MR LEMIERRE: On Ukraine I share your view. What happened at the beginning of the year is important, and we all see huge potential for improvements and new investment opportunities in Ukraine.

In relation to Central Asia and the news you have mentioned in the Kyrgyz Republic, there has been a change of personnel. There are still questions about the direction that the new leadership of the Kyrgyz Republic will take, the relationship they will have with their neighbours, particularly Kazakhstan, which is a very important for the Kyrgyz Republic.

Our first assessment of the situation is that understandably after some weeks there have been some difficulties. The situation is improving and is more stable. The key question in the Kyrgyz Republic is what will happen at the time of the next elections. It is clear that investors will monitor the situation, and I hope that the elections will be run smoothly, in a fair and transparent process. That will be very important for the business climate in Ukraine.

I said a few words at the beginning of this meeting on Uzbekistan. Yesterday I expressed condemnation of the indiscriminate killings, and most Governors have done the same. There are serious concerns and everybody is watching what is happening in Uzbekistan. 

Not long ago we had exactly the same meeting in Tashkent, where we made a very strong point about the need for openness, openness to civil society, political parties, to neighbouring countries, to trade and investors. My understanding of the situation is that this is exactly the same question. We feel that progress will be made and investors will be more comfortable, only if openness is promoted. 

MR HIDAY: Klaus?

KLAUS ENGELEN (Handelsblatt): Mr President, we had a briefing from the Finance Minister of Austria at a lunch or dinner with the Prime Ministers here before the meeting, and I understood that you organised this meeting between business people, the prime ministers and politicians of the region. Can we have a short account of that meeting from you, because we received a brief account from Mr Grasser, but it would be interesting to hear the impression of the organiser.

MR LEMIERRE: As I said a few minutes ago, the meeting was lively and positive. It was open and frank; everybody put on the table all the right questions. 

The first question is whether the region is making progress. They look at Europe. It is clear that European signals are better towards this region, and the EU Feasibility Study is part of this and a very important element for Serbia and Montenegro.

The second point is that there has been a change in the mood of the investors. Look at Belgrade today: there have been many people in town over the last weeks who are considering investing in banks here, and many decisions have been taken by now. 

That is the change of mood and the changing situation. We have already seen this in other countries. As you know, Albania has decided to sell its largest savings bank to a foreign bank. 

Some questions were raised by the Prime Ministers. They say they have to move forward on some very important institutional questions. The future of Montenegro is important, and the future of Kosovo is important; but they have mentioned these questions between themselves in an open way. They also said that they have agreed in relation to free trade agreements, but they have to implement them in an efficient and transparent way. Progress must certainly take place.

The business people addressed all the questions that you know well, for example the rule of law, the importance of simple, well-implemented regulations and an efficient judicial system. They also mentioned something that is more and more important, which is that there have to be good civil servants. At the level of the prime ministers they have interlocutors and they can engage and speak; but to do business particularly at the regional level they need permits, authorisations and decisions. They advised the prime minister to pay attention to recruitment and training of civil servants, and pay attention to corruption. They mentioned cross-border issues like trade.  The main message is: “It is good that you make speeches, but we need sound implementation.”

It was a good debate, and I can tell you that some journalists took part in the meeting and were very good. They asked questions about all of this, and asked: “Do you really want to work together?” There were very good answers given, and there was a clear feeling by all of us – and I understand that Minister Grasser said this to you – that there was a strong wish to deliver together. There is a better understanding of their common challenge in the Balkans.

MR HIDAY: Raymond?

RAYMOND LLOYD (Editor, Parity Democrat, Westminster; shequality.org): I have three questions, but I will start with one and e-mail the other two if there is no time.

In 2003 UNDP set up a high-level commission on the private sector and development. The commission included two women CEOs, Ann Lauvergeon of France, and someone who has since lost her job, Carly Fiorina of Hewlett Packard, who later in 2003 received the Seeds of Hope Humanitarian Award.

If you cannot invite Carly to be the incoming US Vice President, can you not ask her to become an EBRD goodwill ambassador, both to encourage the hundreds and thousands of aspiring business women in EBRD countries and the six women among the 30 directors on the EBRD staff? Alternatively, talking again of France, this is the 200th anniversary of a French business woman transforming the champagne industry, the 26 year old Verve Cliquot Nicole Ponsardin. Now Verve Cliquot is again headed by an outstanding woman CEO, Cecille Bonifant, who also runs Business Women of the Year in 18 countries. Could not someone of her caliber also become an EBRD goodwill ambassador?

MR LEMIERRE: I need to give some thought to your very good idea. Perhaps I can do slightly better and propose a very distinguished lady to become Vice President of the Bank who would be as efficient. I can tell you, because I know you have a keen interest in this very important question on which I fully agree with you, that I have proposed to the Board of Directors of the Bank somebody whose name I cannot give you today. They have to approve it but I hope that soon you will see a new woman in the top management of the Bank. I will speak with her about your ideas.

MR HIDAY: Carola?

CAROLA KAPS (Frankfurter Allgemeine Zeitung): Mr President, on Uzbekistan again, the Bank has reduced its activity in Uzbekistan since the meeting in Tashkent to a minimum. What might happen now? Are you willing to pull out and give up the leverage you have for perhaps better governance in the country? I am not clear what might happen in July after the review.

MR LEMIERRE: Perhaps I should come back for a minute on the present situation and our review. The decision taken more than a year ago now was about maintaining an engagement in Uzbekistan, mainly in the private sector. We have stopped investing in the public sector except for social reasons or if a neighbouring country is concerned so as not to penalise any neighbouring country. In practice, in the public sector we have done nothing. But we have maintained our commitment to finance the private sector. In practice, we have not been able to do so. From a practical point of view, the volume of investment over the last few months in Uzbekistan by the EBRD is very low, despite the engagement we have maintained. Of course, this is to do with the business climate Stephan Wagstyl mentioned.

What could happen? From a practical point of view, we are already in a low situation. What might happen is more of a political nature. We can move from the point of view of principle to more strict views and say that the Board can take the decision that we shall no longer finance the private sector except for micro-finance, for instance. We can narrow down our engagement. I do not think the Board will take the decision to re-open wider what we are doing.

My guess is that the debate will be about maintaining the engagement as it is today or moving forward to narrow this engagement. From a practical point of view, we are already at a very low level of investment. That is the translation of the situation.

MR HIDAY: Mr Sato?

YAMATO SATO (Nikkei): What is your standpoint at this moment towards the Sakhalin II project, which seems to be quite controversial? Are you ready to resume funding? If not, when do you expect that to happen?

MR LEMIERRE: We have not taken the decision to fund. The question is not whether to stop or to resume. No decision has been taken. We have now been working with many potential lenders, public and private, with the company. It is a large and complex project with many elements. There have been debates in the past about the pipeline route to the sea. Shell has taken some new decisions and reviewed their initial decisions. They have improved the route. There are other questions on which we are speaking with Shell. Today, I am not in a situation to tell you when we can make a decision. I can simply tell you that no decision has been made. There is a lot of work to be done. The answer to these questions must be made by the company. There are important questions mainly about the environment. You know that we pay a lot of attention to the environment. We have very clear policies. We do of course intend to respect those. There are clear commitments which have to be respected. We have told the company this months ago and they have taken various actions to comply with these policies. There is still a debate. This is the point we have reached today. I cannot tell you when a decision can be made but no money has been disbursed and no decision taken.

IVANA DRAGICEVIC-VELICKOVIC (Croatian Television, Belgrade bureau): May I bring this back to the region. How big is the Croatian role in stabilising the region in the sense of the Common Market here and in that way concerning the role of EBRD in Croatia also.

I hope my colleague from the Financial Times will not be cross about this. I have a comment on today’s article published in the Financial Times that a row overshadowed this regional part of the conference because the high level delegation from Croatia did not come to Belgrade this year.

MR LEMIERRE: I hope you are not going to ask me to comment on an article by the FT.

MS DRAGICEVIC-VELICKOVIC: No, but I would like your opinion on the fact that they did not show up, considering this is a regional conference.

MR LEMIERRE: I may be able to do that, but I will not. The answer to your question is clear. Croatia is very important to the region. There is bright development, a clear commitment toward the EU. These are good signals. There are difficulties in the process but there is a clear commitment to move towards the EU.

Croatia is a very important country in the development of the whole region.  We see many Croatian investors investing in other countries. They have skills like others who invest in Croatia. Croatia is a market and a land of opportunities but also for investment in other countries. The banking sector has moved forward. It is a very important country for the EBRD. You may know that Croatia today is the country in which investment per capita is the highest for the Bank.  We have a strong commitment.

On your last point, Croatia has taken part in this meeting. I have met with the Croatian delegation. They may have left now but they took part in the whole meeting, the meeting of the Governors and many discussions, and they have made their point. It is now up to their government to make a decision about the level at which they want to be represented. The Croatian authorities have decided not to be represented at the level of the Prime Minister or the Deputy Prime Minister or a minister, for their own reasons.  We all know this has nothing to do with the EBRD or the Annual Meeting; it is part of the history of the region. 

I will stop here because these of the facts. Each of us can take a view on this. Stefan Wagstyl of the FT may have one view, and we may have another.  These are the facts. Croatia took part at the level they felt appropriate, not because this was the EBRD or the Annual Meeting of the Bank but because of the history of the region. 

MR HIDAY (referring to speaker): He should ask the question tomorrow (at NGO meeting) because he is with CEE Bankwatch.

MR LEMIERRE: Ask the question and I will answer tomorrow.

GREIG AITKEN (CEE BankWatch): As a Frenchman, are you looking forward to working with the next President of the World Bank?

MR LEMIERRE: There is something that you should understand. Here, I am 8 per cent French and I am 10 per cent American. We are international civil servants. The new President of the World Bank has been elected by the shareholders. I will of course work with him, and he will work with me. The two institutions have very good cooperation, and that is the only way in which we need to move forward. That is all.

A SPEAKER (Interpretation): The EBRD was a shareholder in the Eximbank and sold its shares. How far have you gone in negotiations in the participation of the EBRD and other banks in Serbia? Will arrangements be concluded soon?  I suppose that you heard the second question about the movement towards the east, which may affect the inflow of private investments in the region.

MR LEMIERRE: I understand the first question is about the privatisation process of a bank. I said this to the Prime Minister, the Minister of Finance and the Deputy Prime Minister. We are ready to invest in and support the privatisation and modernisation of the banks here. We are having many discussions, and we have started our normal process of preparing this type of project. It would be premature of me to give precise information about a specific bank.

Your second question was about moving east and maintaining an engagement in the Balkans. The answer is very easy. When we talk about moving east, I usually say east and south east. This has to do with central Europe. We see a sharp increase in our commitments eastwards, meaning Russia; but this is not the big news; the big news is the sharpest increase in our commitments in the south east, in the Balkans, including Bulgaria, Romania, Ukraine and Central Asia. The big news of last year and this year is the real change of the situation in the region, and we support that a great deal. Commitments may reach close to half of the commitments of the Bank. I include a strong commitment to the Balkans in this.

ERIC JANNSON (Financial Times): You have mentioned that the Prime Ministers you met with talked about the importance of institutional change in Kosovo.  Can you comment on that in regard to investment, because Kosovo’s institutional limbo is a serious barrier to investment, clearly. Can you comment from the EBRD’s perspective? 

MR LEMIERRE: Investors need a clear institutional framework. Everybody here understands why the situation in Kosovo exists today. It comes from the not too distant past. It was a necessity. I am not dealing with the political side of it, but for investors it is crucial to get clarity about the institutional arrangements. We are operating in Kosovo. We took the decision a few years ago to invest in a bank in Kosovo. Through this bank we have already made 27,000 loans to SMES. We have just signed a new credit line for the financing of SMEs, so we have already taken steps. We do this without any guarantee from anybody, because of the institutional arrangement.

The point you have made about the institutional arrangements is very important to some lenders who need a guarantee by an entity. That is a question not so much for us but for some investors, especially in infrastructure. That is my last remark on Kosovo.

I was greatly interested yesterday when a very large investor asked a question about our willingness to consider investing with them in Kosovo. That is the first time a company has spoken to us about this. I will certainly not say who they are, but it is interesting to see that people are beginning to think that perhaps there is something there. All of this is important, and that is why we have committed to financing the SMEs. We would welcome any progress in the institutional arrangement. It might take time, and it is not my responsibility, so I have no clear view on this. It is important for us to pay attention to this, and we are ready to support investments if people want to invest there.

MR LLOYD: Whatever the geographic designation of the EBRD, you are substantively the post-communist reconstruction bank. There are still five communist countries in the world, one of which may well collapse as soon as the 80-year old dictator dies. Now that the EBRD may soon withdraw from operations in the EU 8, will the Bank make its invaluable experience available to, say, a post-communist Cuba?

MR LEMIERRE: Yes, but we have to be European. Cuba is not totally European!  Mongolia is more in this tradition, if I may say so. Cuba is not. I can understand the point you make, but the Bank does deliver well, although it may not be appropriate for me to say this, for one reason. That is because the teams of the Bank have built up strong experience and knowledge in all the countries in which we operate. We have to be focused on the job we do and what we deliver, even if we adapt and focus on the regions. I am sure that my colleagues of other organisations like the World Bank and the Inter-American Development Bank could certainly bring a lot to this country and Latin America when it is needed, or the Asian Development Bank in countries in Asia when it is needed. By the way, we have a good cooperation with them, especially in the development of the private sector because this is what we know how to do best, and we have very good cooperation with them.

MR WAGSTYL: Michael O’Leary of Ryanair this morning, in a wonderfully entertaining speech, talks about the advantages of open skies. He said a huge barrier for him moving further east is the fact that there are no open skies agreements outside the EU. He said, would it not be wonderful if there were.  I know that this is not precisely the Bank’s area but would it not be wonderful if the Bank did lobby for open skies, especially in the Balkans.  The EU has pre-accession packages of various kinds, but here is something that could be developed at very little investment cost. It would bring enormous benefits to the people here.

MR LEMIERRE: That is a fair point and a good point for policy dialogue. I take it on board.

May I ask you a question? Did you enjoy Belgrade? This is all part of an Annual Meeting. I hope you have enjoyed it and seen it is a nice, lively city and the people want to deliver and prepare for the future. You have probably been too busy preparing articles but I hope you have had some time to visit the city, meet people and hopefully travel a little.

MR LLOYD: Let me say that the venue in London is such a rabbit warren that I hope you hold your next meeting in Belgrade!

MR LEMIERRE: That is a good answer. We will have to return.

MR LLOYD: In the 1970s, the Council of Europe suspended the membership of Greece when it became a military dictatorship. In English, one definition of a massacre is the murder of 10 or more people. To avoid anxious deliberations in future, could the EBRD establish a rule that as soon as a government murders ten of its citizens, it is automatically suspended from Bank membership until the bereaved families are fully compensated?

MR LEMIERRE: That is a point to consider. I am not sure it has to be a policy in itself. We are serious about these matters. I do not know if the definition of a massacre is that ten people are killed, or three people tortured; I do not care about the definition. I have made clear statements on human rights and torture in a country where we had an Annual Meeting with the President of the country. Should we have a rule about below ten or above ten? A man is a man and a woman is a woman and I would not like to have a policy that counts the number of people tortured or killed. Because we do take this seriously, we have made blunt statements. Sometimes we have been criticised for this. That is not the point. We have a clear mission which we will fulfill. The Board of the Bank will say what they have to say, what we want to say whether it is on policies concerning ten people or not. Trust the Board of the Bank. Be confident that when situations go too far, where human rights are not respected, we know how to say that.

A SPEAKER: Are there any differences in attitude to the new policy of the Bank to move eastwards? Are some states or members of the Bank against this policy or do they have other ideas?

Is there a general message to potential investors in Serbia and Montenegro at the end of this conference?

MR LEMIERRE: I understand that your first question is whether some Governors oppose the movement towards the east and south-east. The answer is “no’.  They welcome this and support it warmly. That is clear.

After the Annual Meeting, my message to Serbia and Montenegro and the region is that it is a place where there are opportunities and investment needs to be considered. There is a change taking place. Yes, there are questions but there are questions in many places. Genuinely there is a change. The proof is that investors are coming in. There are privatisations and people are investing. This is not just a wish but the reality. The region is on the investor map today.

MR HIDAY: There are no further questions. Thank you very much for coming.  It has been great in Belgrade.