Bank claims ‘no pressure applied’ in Mittal loan furore

Date: 21/02/02

By Laurence Frost

THE EUROPEAN Bank for Reconstruction and Development (EBRD) has denied political pressure was responsible for its decision to lend €115 million to controversial businessman Lakshmi Mittal to buy Romania's state steel industry.

A spokesman for the bank said there had been 'no obvious pressure from any source' to award the loan to Mittal's company LNM.

UK premier Tony Blair has been heavily criticised for intervening in favour of the bid by Mittal, a major donor to the Labour Party.

Blair wrote to his Romanian counterpart, Adrian Nastase, urging him to back the deal as French

Prime Minister Lionel Jospin arrived in Romania.

He was expected to lobby for a bid from LNM's French rival Usinor.

The controversy deepened this week when it emerged Mittal had made large donations to a Washington campaign for US steel import tariffs that would damage EU firms. LNM employs less than 0.1 of its staff in the Union.

The EBRD has denied allegations by British opposition parties that UK officials under Overseas Development Minister Clare Short had lobbied for the LNM loan. The bank said the loan was to support Romania's privatisation process.

The EBRD lends money for projects across Europe, backed by its 62 international shareholders which include the US.

The European Bank for Reconstruction and Development (EBRD) has denied political pressure was responsible for its decision to lend €115 million to controversial businessman Lakshmi Mittal to buy Romania's state steel industry.