The difficulty of giving away 100 million euros

The 10th of July, 2019, was already the fifth date for a decision of the European Bank for Reconstruction and Development (EBRD) to provide 100 million euros to the poultry meat giant MHP. And again the bank had to take the item off the agenda at short notice – there was too much opposition. Next attempt: 30 October.

The background: MHP, a group based in Cyprus, fattens and kills more than 300 million chickens a year in Ukraine. MHP owes its market-dominating position not least to long-standing support by the EBRD and other international financial institutions. Contrary to their mandate of promoting economic development, these institutions have helped MHP to gain quasi-monopolistic market power in Ukraine.

In early 2019 MHP took over the poultry meat company Perutnina Ptuj based in Slovenia. The EBRD wanted to take this opportunity to provide MHP with another 100 million euros to “support MHP Group’s strategy to expand its operations in the EU and other countries”. For a bank operating with public funds (!), this rationale is strange enough. But the takeover had already taken place and been paid for. So what should the money be used for? No information.

The EBRD valiantly put the same unchanged project proposal on the agenda of the Board of Directors (representatives of the member states) again and again. After all, the general experience was to be able to do whatever they wanted without the public having anything to say about it or even being informed. But this time it was different – there was strong opposition, to which not least MHP itself contributed with questionable business practices in connection to meat exports to the EU. On behalf of Albert Schweitzer Stiftung für unsere Mitwelt and on the occasion of the EBRD Annual Meeting, SHIFTING VALUES summed up the arguments speaking against another capital allocation to MHP.

In June, the EU Commission announced its opposition to the EBRD project and called on the EU member states – which hold the majority of shares in the EBRD – to refuse approval of the capital allocation.

The EBRD reacted – though not by cancelling the project, but by changing the strategy to get the project through somehow. Now it is sugar-coated mercilessly. It will be interesting to see whether the EU member states will fall for this. Apart from that, the neutral observer might ask: Why is it so important for the EBRD to give MHP 100 million euros? Cui bono?

To be continued …

 

2019-07-15T11:24:05+00:00