U.S. urges Ukraine, Belarus to avoid 'backsliding' on open markets, democracy

The top U.S. Treasury official reaffirmed Washington's continued commitment to the bank, which was set up in 1991 to invest in ex-communist economies of eastern Europe and now operates in 38 economies. He expressed particular concern about the challenges facing small- and medium-sized businesses in sectors such as tourism.

U.S. Treasury Secretary Steven Mnuchin on Wednesday said it was crucial that Ukraine, Belarus and other countries covered by the European Bank for Reconstruction and Development (EBRD) remain committed to open market, multiparty democracy and pluralism.

Mnuchin told the annual meeting of EBRD governors the full economic impact of the COVID-19 pandemic was still unknown, but countries that had made less progress in transition to market economies would likely bear much of the brunt of the crisis given smaller fiscal buffers, less favorable investment climates and greater reliance on remittances from abroad. "It is crucial for the EBRD's countries of operation, including Ukraine and Belarus, to avoid backsliding during this time," he said in a statement.

Mnuchin said Ukraine needed EBRD advisory support to promote meaningful economic and governance reforms, while EBRD dialogue could help promote a legitimate democratic process in Belarus. The top U.S. Treasury official reaffirmed Washington's continued commitment to the bank, which was set up in 1991 to invest in ex-communist economies of eastern Europe and now operates in 38 economies.

He expressed particular concern about the challenges facing small- and medium-sized businesses in sectors such as tourism. Mnuchin said Washington had provided support for EBRD programs to promote development of small- and medium-sized enterprises across the region, as well as governance reform in Ukraine through supplemental bilateral resources.

Mnuchin also underscored the EBRD's importance in providing alternatives to "the debt trap diplomacy and authoritarian, mercantilist policies of malign actors that seek to expand their influence over the EBRD's countries of operations." Mnuchin did not name those "actors" and Treasury officials were not immediately available to comment.

Germany and other European Union states have recalled their ambassadors to Belarus in solidarity with Lithuania and Poland, amid continued tensions with Minsk over its crackdown on protesters following a disputed presidential election in August.

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