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bne April 2018 Central Europe I 33
After a run on the bank’s deposits, the European Central Bank (ECB) said ABLV should be wound up and saving it was not in the public interest.
ensure the protection of its assets to settle with all customers,” the bank said.
For now, the banks’ deposits remain
around €470mn, it has been estimated. At the end of the first half of last year, ABLV’s assets were worth nearly €3.9bn, according to data from Standard & Poor’s.
The repercussions of ABLV's collapse appear to be limited at the moment and there is little to indicate other banks could be engulfed. However small ABLV is on EU scale, its demise has highlighted a gap in the ECB's supervision capacity.
"Despite persistent evidence of poor com- pliance among Baltic banks, local regula- tors and the ECB appear to have been blindsided by ABLV’s collapse," Reuters' Lisa Jucca wrote in a comment.
“Latvian banks advised customers on how to use bogus offshore companies to launder money or evade taxes”
Meanwhile, ABLV decided on self-liqui- dation on February 26, the beleaguered lender announced. “ABLV Bank believes that in this way, it will be best able to
unavailable on the orders of the FKTK. Deposits are guaranteed up to €100,000 in line with EU law and paying them back to owners could cost the Latvian budget
EBRD keeps supporting BRUA gas pipeline at a critical moment
Iulian Ernst in Bucharest
The European Bank for Reconstruc- tion and Development (EBRD) has extended a RON278mn (€60mn) loan to Romania’s natural gas transport company Transgaz for com- pleting works on the Romanian section of the Bulgaria-Romania-Hungary- Austria (BRUA) pipeline.
The deal, announced on February
23, came at a time when BRUA has increasingly been called into question. Budapest is no longer keen to extend the pipeline from Hungarian territory into Austria, while negotiations between suppliers and the governments involved appear to be deadlocked.
The planned gas pipeline from Bulgaria to Austria is one of the two routes of the European Union's Southern Gas Corri- dor (SGC) that will transport a mini- mum of 10bn cubic metres (cm) of gas a year from the Caspian region, cross- ing Georgia and Turkey and ultimately reaching EU markets through two possible routes: BRUA and the Trans- Adriatic Pipeline across the Balkans and
the Adriatic Sea to Italy, construction of which is already well underway.
The 1,318km long BRUA pipeline
is designed to have a throughput of 23bnm/year. The project is operated through inter-governmental agreements followed by the national power grid operators.
However, last July the Hungarian
grid operator abandoned plans to develop its interconnector with Austria, which is part of BRUA. Although the four participant states renewed their commitment to go ahead with the original plans two months later, the Austrian partner in the project (Gaz Connect Austria) told Ziarul Financiar in February 2018 that its Hungarian peer has no intention of building the
interconnector with Austria. Reportedly no progress has been made since the middle of last year. Instead, Hungary's FGSZ prefers diverting the gas to Slovakia and Ukraine through existing pipelines.
Further confusion was prompted
by Hungary's Prime Minister Viktor Orban announcing that some Hungarian firms have already contracted the capac- ity of the Romanian-Hungary intercon- nector for the next 15 years. Romanian daily Ziarual Financiar later quoted offi- cials from the Romanian and Austrian gas transport companies as saying that two (most likely Hungarian) companies had contracted nearly all the capacity of the Romania-Hungary interconnector in the Romania-Hungary direction.
“The point of the BRUA pipeline is to provide gas from Romania’s offshore fields to its neighbours at a fair price”
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