The Diplomat
Last Tuesday, the Council of Ministers approved the referral to the Parliament of the agreement on Immunities and Prerogatives between Spain and the Central American Bank for Economic Integration (CABEI), while authorizing the manifestation of consent to be bound by the aforementioned agreement, a decision that will allow the opening in Madrid of the first office of this entity in Europe.
CABEI is a multilateral development finance institution, with legal personality and international character, and is the main source of financing in the region. Its objective is to promote economic integration and the balanced economic and social development of the Central American region and to serve as a benchmark for sustainable development and economic integration in the region, as well as to have an effective impact on the well-being of society.
Five countries founded the institution in Managua in 1960: Guatemala, El Salvador, Honduras, Nicaragua and Costa Rica. Subsequently, the Republic of China-Taiwan, Mexico, Argentina, Colombia, Spain, the Dominican Republic, Panama, Belize, Cuba and South Korea joined CABEI (in order of membership)
CABEI has its headquarters and main office in the city of Tegucigalpa, capital of Honduras. In March 2020, the Bank’s Board of Directors renewed the institution’s expansion policy, agreeing to open offices in Europe and Asia (Republic of China-Taiwan and the Republic of Korea).
Spain is the only European economy in CABEI, where it holds 4% of the capital and has a permanent seat on the Board of Directors, the institution’s governance body. As Spain is currently the Bank’s only European member country, it has chosen Madrid as the site of its first office on the continent. In order for CABEI to develop its activities in our country, the Agreement on Immunities and Prerogatives between Spain and the Central American Bank for Economic Integration was negotiated and, following authorization by the Council of Ministers on June 27, 2022, it was signed in Madrid on July 28, 2022.
“CABEI’s decision to open an office in Madrid is considered an opportunity to consolidate our country’s leading role as a nexus between Central America and Europe,” the Council of Ministers emphasized. “The office should also make possible, in the short term, a closer relationship between Spanish companies interested in that area and the main Central American multilateral financier,” it added. The opening of the office in Madrid will not entail any expense for the Spanish government, since both the running costs and the investment will be covered by the institution’s budget.
