COMMISSION OF THE EUROPEAN COMMUNITIES 
C0M(92) 401 final 
Brussels, , 23 October 1992 
COMMIS* InN COMMIT|r,^T^M_ 
r'^fesv-; Extending EIB operations 
to Estonia, Latvia and Lithuania 
Proposal for a 
COUNCIL DECISION 
extending a Community guarantee 
to the European Investment Bank 
in case of losses on loans in Estonia, Latvia and Lithuania 
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The Central and East European countries are in the process of 
transition from centrally-planned economies to ones based on 
market forces. In addition, this is being accompanied by 
political reforms tending towards the creation of genuine 
pluraI ist societ ies. 
In October 1989 the Council decided that the European Investment 
Bank should help this process by making loans in Poland and 
Hungary^1), and on 14 May 1991 the Council extended these loans 
to the Czech and Slovak Federal Republic, Bulgaria and 
Rumania^2). 
At their meeting on 11 November 1991 Ministers of the Group of 24 
countries welcomed the fact that since their last meeting, Albania 
and the newly independent Baltic countries, Estonia, Latvia and 
Lithuania, have also committed themselves to respect human rights 
and to undertake democratic and market-oriented reform. They 
confirmed the extension of G-24 coordinated economic assistance to 
these countries and agreed on a common approach to supporting 
their reform programmes. 
Given the decisions of the G-24 and the signature on 11 May 1992 
by the Community of cooperation agreements with the Baltic States, 
it would be appropriate for the Council to invite the Board of 
Governors of the EIB to extend loans to Estonia, Latvia and 
L i thuania. 
These countries will be eligible for EIB finance on a similar 
basis to other Central and Eastern European countries. The loans 
should benefit from Community budget guarantees. Furthermore, 
these guarantees should be treated in accordance with what will be 
agreed as to the future treatment of Community guarantees. The 
loans should be destined, in particular, for infrastructure 
projects and will be coordinated with other financial 
institutions. Following the same criteria used for Central and 
Eastern European countries, loans of up to 200 MECU provided over 
a three-year period seem appropriate. 
I. The Commission therefore requests the Council to : 
1. decide that, subject to the approval of the ElB's Board of 
Governors, EIB loans of up to 200 MECU should be made available 
to Estonia, Latvia and Lithuania, to be guaranteed by the 
Commun i ty budget ; 
2. adopt the attached Decision; 
3. invite the EIB to extend its lending operations to projects in 
Estonia, Latvia and Lithuania; 
4. note that the Commission will, within the framework of the 
budgetary procedure, propose the appropriate budgetary cover. 
(1) Taken on 3.10.1989 as regards an invitation to the EIB to make 
finance available for projects in these countries, and on 
12.2.1990 (90/62/EEC) regarding a Community budgetary guarantee for 
such loans. 
(2) Council Decision 91/252/EEC of 14 May 1991. 
II/337/92-EN 
Proposal for a 
COUNCIL DECISION 
granting a Community guarantee to the European Investment Bank 
against losses under loans for projects in 
Estonia, Latvia and Lithuania 
TNE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European Economic 
Community, and In particular Article 235 thereof, 
Having regard to the proposal from the CommunIty*1), 
Having regard to the opinion of the European Parliament*2), 
Whereas the peoples of Estonia, Latvia and Lithuania (hereinafter 
referred to as "the three countries") have close historic relationships 
with the peoples of the Community; whereas these relations have been 
strengthened by the recent trade and cooperation agreements; whereas 
these three countries are undertaking major political and social 
reforms; 
Whereas the three countries have embarked upon a fundamental economic 
reform; and whereas the ministers of the Group of 24 welcomed this at 
their meeting of 11 November 1991 and decided to extend G-24 
coordinated economic assistance to them; 
Whereas these economic reforms will significantly contribute to a 
strong development of mutually beneficial economic and commercial 
relationships between the three countries and the Community; 
Whereas there is a great need for capital investment in the three 
countries; whereas this capital investment requires external finance-, 
whereas the Community has agreed to cooperate with a view to aiding the 
three countries-, whereas the European Investment Bank (hereinafter 
called "the Bank") could make an important contribution; 
Whereas the Council has invited the Bank, and the Bank has agreed, to 
make loans for capital investment projects carried out in the three 
countries under the guarantee provided in this Decision; 
Whereas the Bank and the Commission should fix the terms on which this 
guarantee is to be given, 
(1) OJ No 
(2) OJ No 
HAS DECIDED AS FOLLOWS 
Sole Art icle 
The Community shall fully guarantee the European Investment Bank in 
case the Bank does not receive the payments due under any loan granted 
in accordance with its usual criteria in Estonia, Latvia and Lithuania. 
An overall limit of ECU 200 million shall be set for a three-year 
per iod. 
To this end, the Bank and the Commission shall fix the terms on which 
the guarantee shall be given. 
Done at Brussels, 
For the CounciI 
The President 
FINANCIAL RECORD 
1• Budget line concerned 
Article 0-212: 
Guarantee of the European Economic Comunity to the European 
Investment Bank for loans In third countries in Central and Eastern 
Europe. 
2. Reference (legal base) 
To be extended by the proposed decision, on the basis of 
Article 235 of the Treaty. 
3. Classification of the expenditure 
Obi igator y 
4. Description and justification for the action 
The budget entry is intended to provide a budgetary support for 
guarantees offered by the European Community to the European 
Investment Bank to cover loans which the Bank has been asked to 
extend to finance projects in Latvia, Estonia and Lithuania. 
5. Nature of the expenditure and method of calculation 
a) Nature of the expenditure 
A guarantee to the European Investment Bank. 
b) Method of calculât ion 
A token entry is proposed, given that the amount and timing of 
any call on this budget line cannot be calculated in advance 
and furthermore it is to be hoped that this entry will not be 
caI led on. 
6. Effect of the action on intervention credits 
Only in case of a call upon the guarantee 
7. Financing of intervention expenditure 
In case of need the article will be endowed with funds by 
transfers, by réutilisation of amounts reimbursed (under 
Article 27 para. 3 of the Financial Regulation) or by a 
supplementary and/or amending budget. 
In order to meet its obligations, the Commission may undertake 
debt service provisionally by drawing on its liquid assets. In 
this case Article 12 of Council Regulation (EEC, Euratom) 
n" 1552/89 of 29.5.1989 is applicable. 
8. Financial Impact on staff cost and operations 
Not appl icable. 
1-
ISSN 0254-1475 
COM(92) 401 final 
DOCUMENTS 
EN oi il 
Catalogue number : CB-CO-92-421-EN-C 
ISBN 92-77-47681-8 
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