What is the rationale for an EU country to be member of the Russia’s International Investment Bank?
This article argues that several EU countries are members of Russia’s International Investment Bank (my emphasis):
At present, the IIB has nine members: Russia, Bulgaria, Hungary, the Czech Republic, Romania, Slovakia, Cuba, Mongolia, and Vietnam.
There are several details about this bank that makes me hard to understand why an EU state would be interested to be a member of:
- Soviet Union origin:
The bank was founded in 1970 with the objective of fostering trade and
other economic cooperation within the Soviet Council for Mutual
- it is part of the Russian administration:
The IIB is registered among the official state organs and governing
bodies of the Russian Federation. This means that the bank is an
integral part of the Russian state administration.
- special treatment in Hungary
(..) neither the bank nor its transactions or operations are subject
to financial or regulatory oversight. Meanwhile, the law also permits
the bank to provide investment, banking, leasing, and other financial
services. This allows the IIB to handle the assets and deposits of
even Hungarian state companies, and provide loans to pro-government
oligarchs, without official oversight.
- possible use for opaque transactions
IIB could be involved in similar transactions in future, supporting
the operations of pro-government business interests without any
transparency or public oversight.
- no ROI for Hungary
The Hungarian government argues that moving the IIB’s headquarters to
Budapest will boost the national economy. However, a closer look
reveals an imbalance between Hungary’s contribution to the IIB and the
resources it has acquired from the institution so far. Although
Hungary is the third-largest contributor to the bank by paid-in
capital, it has received only 5 percent of loans from the IIB – the
smallest proportion of any shareholder
- low capital (translated from this Romanian article)
Overall, the International Investment Bank is insignificant worldwide as a financial institution. It has a capital of only 424.87 million euros. For comparison, the share capital of the European Investment Bank is 248.8 billion euros.
BII had assets worth 1.9 billion euros in October 2021. The International Investment Bank had a net profit in 2021 of 7.9 million euros, 8% more than the same indicator last year.
From a layman's perspective, it is not clear how could an EU country benefit from such membership when there are so many EU funds available at hand. Not to mention what seems to be a Russian "trojan horse".