LONDON -- The first international bank of the post-Cold War era opened here yesterday to funnel Western help to Eastern European countries converting to free-market democracies.
British Prime Minister John Major said the European Bank for Reconstruction and Development marked "a new beginning" for the former Communist bloc and was a monument to European cooperation.
"We should not pretend for one moment that moving to a free-market economy will be easy or painless. It will not. But what we in the West can do is to help to make that transition a little easier and a little less painful," he said.
The bank, initially proposed by French President Francois Mitterrand in 1989, will deploy its capital to promote free enterprise, service industries and improvements in the infrastructure and environment in the Eastern bloc.
Forty countries, including the United States, have contributed the bank's initial $12 billion in capital, but doubts linger about whether it will be enough to be effective. The United States has contributed the largest single share of the bank's capital stock at 10 percent.
Jacques Attali, 47, the bank's president and a former adviser to President Mitterrand, said the bank united former political, economic and ideological adversaries to promote democracy and market economies. "It will finance basic infrastructures and the conversion of their military-industrial complexes, and it will create among them the instruments of a market economy that are needed in order to develop a competitive private sector that will respect both the environment and social justice," he said.
The bank could help create a Europe united geographically, politically and culturally, he said. . But he warned: "Unless we take great care, unemployment, recession, xenophobia and intolerance will loom."
U.S. Treasury Secretary Nicholas F. Brady expressed concern over how the burden of helping Eastern Europe and rebuilding the Persian Gulf economies will be shared. He told BBC radio that the leading industrial nations should "come to a coherent statement on how we're going to handle those problems. What we have to drive for is that we have enough energy and sources of funds in the world economy to deal with the Eastern bloc's emergence, the reunification of Germany, [the] rebuilding of the Middle East."