March 2 (SeeNews) - The Bulgarian government said it will cancel the country's membership of Hungary-based International Investment Bank (IIB) and Moscow-headquartered International Bank for Economic Cooperation (IBEC) as part of measures taken by EU members in response to the war in Ukraine.
The decision was taken at a meeting of the council of ministers on Wednesday. The withdrawal from both financial institutions has been coordinated with all EU member countries, a government spokesperson said.
The Russian Federation is a shareholder of both international lenders, whose predecessors were set up during the Cold War.
Bulgaria is among the founding members of the IIB, which also comprises Cuba, the Czech Republic, Hungary, Mongolia, Romania, Slovakia and Vietnam. The bank moved its base from Moscow to Budapest in 2019. As the end of 2021, Bulgaria was the bank's third-biggest shareholder with a stake of 10.04% which corresponds to 42.2 million euro ($47.6 million) of the paid-in capital of IIB.
In December, the Bulgarian government sought the approval of parliament to lift the country's interest in IIB's paid-in capital under the lender's Capitalisation Programme 2018-2022.
IBEC, for its part, includes also the Czech Republic, Mongolia, Poland, Romania, Slovakia and Vietnam. In September 2021, the Moscow-based bank made its debut on the European debt market by issuing a bond worth 68 million levs ($38.6 million/34.8 million euro) on the Sofia Stock Exchange. IBEC has provided financing to Doverie, part of pharmaceutical group Sopharma, and to private insurance, leasing and financial services conglomerate Eurohold.
The Czech Republic is already moving ahead with terminating its membership of both IIB and IBEC, whereas Romania announced last week that it will pull out of IIB.
(1 euro = 1.95583 levs)