15 Jul 2009 13:54

State Duma ratifies EurAsEC anti-crisis fund agreement

MOSCOW. July 15 (Interfax) - The Russian State Duma ratified on Wednesday the Eurasian Economic Community (EurAsEC) agreement to create an anti-crisis fund and an agreement on management of the fund.

The heads of government of the EurAsEC countries, including Armenia, signed the agreement to set up the fund on June 9, 2009.

The fund will have $10 billion in charter capital. Russia will supply $7.5 billion, Kazakhstan $1 billion, Belarus - $10 million, and Kyrgyzstan, Tajikistan and Armenia - $1 million each. The charter contributions are due six months after ratification of the agreement. Payment is to be made 10% in euro or dollars and the remainder in simple, non-circulating, interest-free promissory notes (veksels).

The fund will be managed by a council made up of the finance ministers of the participating states and representatives of participating international organizations. The chairman will be elected by the council members, whose votes will carry weight in proportion to their contributions to the fund. Each vote is the equivalent of $100,000 in contributions. The Eurasian Development Bank will carry out the council's decisions concerning fund management.

Money from the fund will be provided to signatory countries as sovereign loans to respond to the crisis, stabilization loans for member states with relatively low revenue levels, and financing for interstate investment projects. Temporarily idle fund resources may be invested.

It was reported earlier that Deputy Prime Minister and Finance Minister Alexei Kudrin was appointed chairman of the board of the fund and that it ought to begin functioning in September 2009.

Russia has already revised its budget to include a $750-million allocation for the fund in the current year.

The fund will accept new member states and international organizations. New members must contribute $1 million, of which $100,000 must be provided in cash.

The EurAsEC includes Belarus, Kazakhstan, Kyrgyzstan, Russia and Tajikistan. Moldova, Ukraine and Armenia have observer status.