COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 03.07.1998 
COM(1998) 409 final 
ANNUAL REPORT FROM THE COMMISSION TO THE COUNCIL 
AND TO THE EUROPEAN PARLIAMENT ON THE BORROWING 
AND LENDING ACTIVITIES OF THE COMMUNITY IN 1997 

TABLE OF CONTENTS 
INTRODUCTION 4 
1. BORROWING AND LENDING ACTIVITIES 5 
1.1 BORROWING 5 
1.1.1 International financial situation 5 
1.1.2 Ceilings on Community issues 5 
1.1.3 Borrowing trends 6 
1.2 LENDING WITHIN THE EUROPEAN UNION 6 
1.2.1 Investment demand in Europe 6 
1.2.2 European Investment Bank (E1B) 7 
1.2.3 European Investment Fund (EIF) 8 
1.2.4 ECSC 10 
1.2.5 New Community Instrument (NCI) // 
1.2.6 Euratom // 
1.2.7 Community medium-term financing 12 
2. LENDING IN THIRD COUNTRIES 13 
2.1 OVERVIEW 13 
2.2 THE COMMUNITY'S MACROFINANCIAL ACTIVITY 14 
2.2.1 Balance-of-payments support 14 
2.2.2 Credit facility for the CIS 14 
2.3 LOANS COVERED BY DECISION 97/256/EC: Central and Eastern European 
countries, Mediterranean countries, Latin American and Asian countries, and South 
Africa ! 14 
2.3.1 EIB objectives and priorities 15 
2.3.2 Lending activity 15 
2.3.3 Risk sharing IS 
2.3.4 Cooperation with other institutions 19 
2.4 SIGNATARIES TO THE LOMÉ CONVENTION 25 
2.4.1 Lending trends for each major area 25 
2.4.2 EIB risk-capital operations 26 
2.5 OTHER COMMUNITY INSTRUMENTS 26 
2.5.1 Euratom 26 
2.5.2 European Bank for Reconstruction and Development (EBRD) 26 
3. BUDGETARY IMPACT OF LENDING 27 
3.1 INTEREST SUBSIDIES 27 
3.2 BUDGET GUARANTEES 28 
3.2.1 Coverage 2S 
3.2.2 Outstanding guarantees at 31 December 1997 29 
4. STATISTICAL ANNEX 31 
i LIST OF TABLES 
1-1 Capital borrowed on the international markets ....5 
1-2 Structure of EÏB lending (loan contracts signed) -Geographical distribution 8 
1-3 EIF activity since its establishment - Breakdown by country ........9 
1-4 ECSC loans in 1997 ,...10 
1-5 NCI loans as at 31 December 1997 ,A\ 
2-1 Financing outside the Community in 1997 13 
2-2 Breakdown by country and sector of EIB lending in Central and Eastern Europe , 16 
2-3 Breakdown by country and sector of EIB lending in the Mediterranean countries , 17 
2-4 Breakdown by country and sector of EIB lending in Latin America and Asia 18 
2-5 Share of PHARE and IFIs in projects financed by EIB in Central and Eastern Europe 20 
2-6 Share of IFIs in projects financed by EIB in the Mediterranean countries ..21 
2-7 Mutual interest of projects signed in 1997 in Latin America and Asia 22 
2-8 EIB loans signed in 1997 in Central and Eastern Europe (CD 97/256/EC) ...23 
2-9 EIB loans signed in 1997 in the Mediterranean countries (CD 97/256/EC) 24 
2-10 EIB loans signed in 1997 in Latin America and Asia (CD 97/256/EC) 25 
3-1 Capital outstanding on guaranteed operations (at 31.12.1997) 30 
4-1 Trend of borrowing and lending in the Community 32 
4-2 Community borrowings outstanding 33 
4-3 Community borrowings in 1997, by currency 34 
4-4 Lending in the Community in 1996 and 1997, by sector and instrument 34 
4-5 Financing in the Community by the EIB in 1996 and 1997 by economic objective 35 
4-6 Geographical breakdown of lending (signatures) in the Community in 1996 and 1997 36 
4-7 Breakdown of NCI loans, by country at 31.12.1997 37 
4-8 Breakdown of NCI loans, by currency: amounts outstanding as at 31.12.1997 37 
4-9 Interest subsidies paid out in the Community by the various Community mechanisms 1977-97 38 
4-10 Financial assistance outside the Community in force or under negotiation at 31.12.1997 39 
-J-
INTRODUCTION 
1. The Council decisions establishing the New Community Instrument (NCI)1 and the 
lending instruments for research and Euratom activities2 provide for the Commission to 
inform the Council and Parliament each year of the use made of these instruments. In 
addition, Parliament, in its resolution on improving political monitoring of the 
Community's borrowing and lending activities,3 called for the activities of the ECSC and 
the EIB to be included. Decisions 83/200/EEC (NCI III) and 87/182/EEC (NCI IV) 
stipulate that information must be provided on a six-monthly basis on the rate of utilisation 
of the authorised ceilings. 
These activities for 1997, including the second half of the same year for the NCI, are 
described in Chapter 1 of this report. 
2. Since 1997 the Commission has been required pursuant to a Council Decision4 to 
inform the Council and Parliament on an annual and a six-monthly basis of the situation 
regarding EIB loans guaranteed by the Community budget in Central and Eastern Europe, 
in the Mediterranean countries, in the Latin American and Asian countries and in South 
Africa. With a view to providing an overview of the EU's external activities, this report 
also gives a brief summary of macrofinancial assistance given by the Community to third 
countries, of the EIB's activities in the ACP states and of the EBRD's activities. 
These activities are described in Chapter 2 of this report. 
3. With a view to complying with the information and monitoring requirements 
imposed by the Council and Parliament regarding utilisation of the Community budget for 
the Community's borrowing and lending activities, Chapter 3 of this report provides details 
of the budgetary impact of interest subsidies paid and of the outstanding amount of 
guarantees granted in connection with the various financial instruments mentioned above. 
' Decision 78/870/EEC (OJ L 298, 25.10.1978). 
Decision 81/19/EEC (OJ L37, 10.2.1981). 
Decision 81/1013/EEC (OJ L 367, 23.12.1981). 
Decision 82/169/EEC (OJ L 78, 24.3.1982). 
Decision 83/200/EEC (OJ L 112, 28.4.1983). 
Decision 87/182/EEC (OJ L 71, 14.3.1987). 
2 Decision 77/270/Euratom (OJ L 88, 6.4.1977). 
3 Doc. PE/67134 (OJ C 287, 9.11.1981 ). 
4 Decision 97/256/EC (OJ L 102, 19.4.1997). 
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1. BORROWING AND LENDING ACTIVITIES 
1.1 BORROWING 
7. 7. J International financial situation 
The volume of international financing continued to increase substantially in 1997 
following the considerable expansion recorded in 1996 and notwithstanding the financial 
crisis which developed in South-East Asia in July. This sustained activity is generally 
attributed to the low level of long-term interest rates and inflation, a US economy which 
remained buoyant and the better outlook for Europe, coupled with positive decisions about 
the introduction of the euro. These factors favoured bond issues, which increased in the 
OECD area by 31% following a rise of 56% the previous year. Eurobonds also remained 
attractive, expanding by 40% in the wake of growth in excess of 64% in 1996. 
International loans also increased in 1997 (up 26%) after contracting in 1996 (see Table 
1-1). 
The sounder economic environment and the low level of nominal long-term interest rates 
gave a boost to fixed-rate issues floated at attractive rates and to subscriptions of shares 
convertible into bonds. 
1-1 Capital borrowed on the international markets 
(ECU billion) 
1. European Institutions 
of which: 
1.1 ECSC 
1.2 EC(1) 
1.3 Euratom 
1.4 EJB 
2, OECD countries (2) 
(by instrument) 
2.1 Bond issues 
of which: Eurobonds 
2.2 Loans 
3. Bond issues by the 
European Institutions 
as a % of OECD 1990 
12,5 
1,1 
0,4 
-
11,0 
283,8 
180,5 
141,4 
103,3 
6,9 1991 
16,9 
1,4 
1,7 
-
13,7 
340,1 
240,2 
200,5 
99,9 
7,0 1992 
15,7 
1,5 
1,2 
-
13,0 
353,1 
257,1 
212,7 
96,0 
6,1 1993 
20,1 
0,9 
5,0 
-
14,2 
534,5 
410,8 
337,0 
123,7 
4,9 1994 
15,2 
0,6 
0,3 
0,1 
14,2 
563,0 
360,3 
309,7 
202,7 
4,2 
(1) NCI + balance of payments. 
(2) Calculations based on yearly average exchange rate of the Ecu. 
Source: OECD and EU 1995 
13,2 
0,4 
0,4 
_ 
12,4 
643,2 
357,3 
283,9 
285,9 
3,7 1996 
18,0 
0,3 
0,1 
--
17,6 
833,6 
558,2 
464,5 
275,4 
3,2 ^m 
23,7 
0.5 
0,2 
_ 
23.0 
1080,0 
733,3 
648,2 
346,7 
3,2 
7.7.2 Ceilings on Community issues 
In order to attain the objectives of the Treaty covering the territory of the 
Community, the Commission has been empowered to borrow funds on the capital market. 
These borrowings must finance the construction of, and improvements to, nuclear power 
stations (current Euratom ceiling of ECU 4 billion) and investment in the Community under 
the NCI (current ceiling of ECU 6,8 billion) and must, under the ECSC Treaty, promote 
-5-
productive capacity or conversion projects in the coal and steel industries and, where 
appropriate, loans for Member States with balance-of-payments difficulties (ceiling of 
ECU 14 billion). The amounts still available for these borrowing authorisations are 
indicated in the paragraphs corresponding to each instrument. 
On the basis of agreements concluded with non-Community countries, the Commission 
is empowered to borrow in order to finance programmes of financial assistance for the 
countries of Central and Eastern Europe, for the African, Caribbean and Pacific (ACP) 
countries and for measures adopted pursuant to the Mediterranean protocols. 
Within and outside the Union, the European Investment Bank has been closely involved in 
the financing of common policies and priorities, to the point where its borrowings account 
for most Community issues. 
/. 7.3 Borrowing trends 
Against a background of very dynamic financial markets, issues by the Community 
institutions continued to grow in 1997 by 31,7%, following an increase of 36,4% in 1996. 
This increase is due to issues made both by the EIB and by the ECSC, bringing total issues 
to ECU 23,7 billion. Overall, the share of Community issues remained unchanged in 
relation to that of bonds issued in the OECD area. Demand for currency arbitrage declined 
as monetary convergence gathered pace; as a result, the currencies in which borrowings 
were effected reflect more closely the volume of loans contracted in the corresponding 
countries (see breakdown in Table 4-3). 
The amount of borrowings outstanding as at 31 December 1997 was ECU 120,22 billion, 
10% up on 1996. This increase was due entirely to EIB activity; the other Community 
instruments continued to follow the disengagement guidelines laid down by the Council a 
few years previously. 
1.2 LENDING WITHIN THE EUROPEAN UNION 
1.2.1 Investment demand in Europe 
After the downturn in activity recorded in 1996, the efforts made to improve the 
fundamentals by all the Member States began to bear fruit. The Community's real GDP is 
estimated to have grown by 2,7% in 1997, as against 1,8% the previous year. Economic 
activity was underpinned by an upturn in real investment of 4,5%, as opposed to 3% in 
1996. The total value of fixed investments at current prices in the EU thus amounted to 
some ECU 1 300 billion. Total employment also began to rise again, with a concomitant 
downturn in unemployment (from 10,9% to 10,7% of the labour force). 
The financial crisis in Asia, which hit European exports, has only had a limited impact on 
economic activity in the Community. Concern about European claims on the region, which 
surfaced when stock market prices slumped by 15% in October/November, was short-lived 
as prices have since shown an increasing trend. 
1.2.2 European Investment Bank (EIB) 
In 1997, in a macroeconomic climate more favourable to growth, the EIB granted 
loans in the European Union to the tune of ECU 23 billion, 10% up on 1996. The funding 
contributed to investment estimated at 4,7% of gross fixed capital formation (GFCF) in the 
Union. Loans were signed in all fifteen Member States of the Union. Loans in the three 
new Member States once again increased significantly (15%). 
In reply to the Amsterdam European Council's resolution of June 1997 (cf. OJC 10, 
15.1.98), the EIB and its Management Committee drew up the Amsterdam special action 
programme (ASAP), which comprises a series of innovations, in particular acceptance of 
risk by the EIB for innovative SMEs with high growth potential. The programme is 
designed to channel some of the Bank's funding to investments which are labour-intensive, 
such as health projects or urban renewal schemes, or future-oriented, such as educational 
and environmental projects and trans-European networks. It aims to increase the foreseeable 
volume of funding granted to these sectors by some ECU 10 billion over the period 
1997-2000. 
As at 31 December, contracts totalling ECU 880 million had already been signed, of which 
730 million for projects in the education and healthcare sectors and 150 million for the 
special window for SMEs. 
As regards the Bank's normal activities, assistance towards regional development 
amounted to ECU 14,6 billion, or 67% of financing, and was heavily concentrated in areas 
qualifying for support under the Structural Funds. The "cohesion" countries (Portugal. 
Spain, Greece, Ireland) mobilised ECU 4 billion. Since the reform of the Funds in 1989, 
loans for regional development have totalled 100 billion, helping to finance investment 
estimated at some 300 billion. 
Financing for communications infrastructures increased by 35%, to ECU 8,8 billion as 
against 6,5 billion in 1996. Financing for the transport sector totalled 6,9 billion (railways, 
motorways, air transport and major one-off public works, in particular the Grand Belt and 
Ôresund fixed links). 
Lending for telecommunications networks, in particular mobile telephones, remained high 
(ECU 1,9 billion). 
Financing for trans-European networks in transport, energy transfers and 
telecommunications continued. In the last five years, the EIB has made a total of 
ECU 42 billion available for the establishment of trans-European networks and their 
extension to neighbouring countries. At the end of 1997 lending to nine of the fourteen 
priority trans-European networks in the transport sector amounted to 6,9 billion. Signed 
projects for six out of ten priority trans-European networks in the energy sector totalled 
2 billion. 
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1-2 Structure of EIB lending (loan contracts signed) -Geographical distribution 
Belgium 
Denmark 
Germany 
Greece 
Spain 
France 
Ireland 
Italy 
Luxembourg 
Netherlands 
Austria 
Portugal 
Finland 
Sweden 
United Kingdom 
Other (Article 18) 
Community total 
Non-Community total 
TOTAL LOANS SIGNED 1994 
ECU million % 
615 3,1 
850 4,3 
2408 12,1 
535 2,7 
3 012 15,1 
2477 12,4 
291 1,5 
3100 15,6 
5 0,0 
400 2,0 
90 0,4 
1 110 5,6 
60 0,3 
15 0,1 
2455 12,3 
261 1,3 
17682 88,7 
2246 11,3 
19 928 100,0 1995 
ECU million % 
665 3,1 
825 3,9 
2 715 12,7 
525 2,5 
2 818 13,2 
2 207 10,3 
327 1,5 
3435 16,0 
79 0,4 
319 1,5 
242 1,1 
1232 5,8 
179 0,8 
273 1,3 
2 244 10,5 
519 2,4 
18604 86,9 
2 806 13,1 
21410 100,0 1996 
ECU million % 
657 2,8 
688 3,0 
3022 13,0 
721 3,1 
2553 11,0 
2 509 10,8 
189 0,8 
4121 17,7 
0 0,0 
766 3,3 
490 2,1 
1294 5,6 
302 1,3 
846 3,6 
2 386 10,3 
402 1,7 
20946 90,1 
2 294 9,9 
23240 100,0 1997 
ECU million 
1 140 
737 
3518 
730 
2 716 
2 721 
207 
• 3 517 
96 
398 
555 
1350 
401 
925 
3 765 
184 
22 958 
3 244 
26202 % 
4,4 
2,8 
13,4 
2,8 
10,4 
10,4 
0,8 
13,4 
0,4 
1,5 
2,1 
5,2 
1.5 
3,5 
14,4 
0,7 
87,6 
12,4 
100,0 
Financing for environmental protection projects was up by 23% on 1996. These loans, 
which totalled ECU 7,2 billion, were earmarked primarily for water and waste management 
projects (3,1 billion) and urban renewal schemes (2,4 billion). 
Financing for energy objectives was, to a very large extent (1,6 billion out of a total of 
ECU 2,6 billion), channelled towards promoting efficient use of energy, both in the 
transport and distribution of electricity and heat and in the industrial sector. 
The year 1997 was also marked by a pronounced pick-up in loans for industrial projects 
and SMEs (ECU 4,6 billion), 2,5 billion of which went to individual projects to boost the 
international competitiveness of Community industry. Global loans allowed funding to be 
provided to about 13 000 SMEs, two thirds of which were located in assisted regions (see 
Table 4-5). 
1.2.3 European Investment Fund (EIF) 
A) EIF's private/public partnership activities. 
The EIF is an international institution which operates in a private/public partnership 
with three groups of shareholders: the EIB, the European Commission and 76 financial 
institutions from all the Member States of the European Union. It operates under market 
conditions in cooperation with banks and other financial institutions. It is not a credit 
institution but guarantees loans made among other things as part of the trans-European 
Networks (TEN) programme and for financing SMEs. The TENS programme consists of 
infrastructure projects of European interest in the transport, energy and telecommunications 
sectors. The EIF may give guarantees to financial intermediaries to cover loans to SMEs in 
all sectors without restriction. It has also been authorised to become involved in equity 
participations in risk-capital companies since 1996. In 1997, three years after the EIF was 
set up, there was a marked upturn in the volume of contracts signed (50%) and the Fund 
acquired its first equity participations. 
B) EIF guarantee activities 
In 1997 the EIF gave guarantees for an amount of ECU 769 million to TENs and 
SME projects, bringing the overall volume of operations signed since it was set up in 
June 1994 to 2,3 billion. A breakdown of this total by country is given in the following 
table. 
1-3 EIF activity since its establishment - Breakdown by country 
The sectoral 
ECU m illion 
I [ Equity 
Guarantees participations 
(1) 
Belgium 60 2 
Danmark 2 
Germany 98 3 
Greece 142 
Spain 128 
France 331 6 
Ireland 66 
Italy 499 
Luxemburg 4 
Netherlands 35 
Austria 59 
Portugal 204 
Finland 30 
Sweden 9 3 
UK 400 12 
Outside EU 232 
Total 2 300 26 
(1) Country in which the fund is based. breakdown of 
contracts is as follows: 24,7% 
for TENs transport projects, 
22,3% for TENs energy 
projects, 20% for TENs 
telecommunications projects 
(total for TENs projects: 67%) 
and 33% for SMEs. 
Although the EIF operates 
mainly within the Union, 
operations outside the 
Community are not ruled out. 
In 1997 two operations were 
signed in Eastern Europe: the 
SPP gas pipeline project in 
Slovakia and a major 
telecommunications project in 
Hungary. 
"Growth and environment " programme 
Since the launch in 1996 at Parliament's initiative of a pilot project known as the "Growth 
and environment" programme, the EIF has signed agreements with financial partners in all 
the Member States. 
Under this arrangement, the EIF provides partial cover for bank loans granted to SMEs 
investing in projects of potential benefit to the environment. The cost of guaranteeing the 
loans taken out by the SMEs is borne by the Community budget. In 1997 this mechanism 
accounted for about 84% of all guarantees concluded with SMEs. 
C) Equity participations 
At the end of 1997 the Fund's commitments from its own resources amounted to 
ECU 26 million. The total amount of the individual funds in which the EIF has acquired 
participations was 413 million as at 31 December 1997. 
At the European Summit of Heads of State and Government devoted to employment, which 
was held in Luxembourg on 20-21 November 1997, the EIB and EIF signed an agreement 
-9 
to establish a European Technology Facility (ETF) to fund SMEs with strong growth 
potential in the high-tech sector. In this connection, the EIF received a mandate from the 
EIB to manage on its behalf an amount of ECU 125 million drawn from its reserves in 
order to support investments in a risk capital pool intended for SMEs using state-of-the-art 
technology. By the end of 1997 an amount of 6,49 million had been committed for that 
purpose. 
1.2.4 ECSC 
As part of the arrangements for the ECSC s borrowing and lending activities 
decided on by the Commission in June 1994 (OJ C 175, 28 June 1994) ahead of the expiry 
of the ECSC Treaty on 23 July 2002, the payment of new loans within the Community 
increased sharply in relation to the previous year (see Table 4-6). This increase was due to 
the fact that 1997, and in particular the first half of the year, was the last period during 
which ECSC loans could be concluded, except in certain exceptional cases. The guidelines 
approved by the Commission in 1994 concerning the arrangements for the ECSC's 
borrowing and lending activities in the run-up to 2002 had the effect of mobilising potential 
borrowers and giving a (final) boost to this activity. It is no longer possible to obtain 
long-term loans, i.e. loans falling due after 2002, except for certain large infrastructure 
projects of Community interest for which state guarantees can be obtained. 
1-4 ECSC loans in 1997 
(ECU thousand) 
Belgium 
Danmark 
Germany 
Greece 
Spain 
France 
Ireland 
Italy 
Luxembourg 
Netherlands 
Austria 
Portugal 
United Kingdom 
Non-EU 
Total Article 54 
-
-
49 508 
-
-
-
-
4 048 
68 682 
-
71 851 
122 442 
-
-
316 530 Article 56 
20 078 
-
44 606 
-
2 898 
22 090 
-
33 610 
6 746 
-
3 562 
-
73 211 
-
206 800 Article 95 
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0 Housing 
369 
3 
8 205 
31 
1 589 
1 894 
19 
1 809 
27 
204 
897 
-
2 863 
-
17911 Total 
20 447 
3 
102 318 
31 
4 487 
23 985 
19 
39 467 
75 455 
204 
76 310 
122 442 
76 074 
0 
541 241 
Accordingly, ECSC loans in 1997 were almost double the figure for 1996. Demand for 
loans was particularly strong as regards the consumption of ECSC products (Art. 54), 
especially in Portugal, Austria, Luxembourg and Germany. Conversion of declining 
coal/steel areas (Art. 56) has also made rapid progress, particularly in Belgium, Germany 
and Austria. 
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1.2.5 New Community Instrument (NCI) 
A) Overall view 
As regards the NCI, no new lending operations have been undertaken since 1991. 
Repayments have continued and, in some countries, loans have been repaid virtually in full. 
The degree of utilisation of loan ceilings is given in Table 1-5. 
1-5 NCI loans as at 31 December 1997 
(ECU million) 
Financial agreements 
Global loans (1) 
Productive sector (1) 
Infrastructure 
Energy 
Total contracts signed, net (2) 
EIB loans (own resources) 
Authorised ceilings 
Balance NCI I 
5,4 
538,5 
446,7 
990,5 
1 000,0 
9,5 Reconstr. 
ITALY 
598,7 
598,7 
351,6 
1 000,0 
49,7 Reconstr. 
GREECE 
80,0 
80,0 
80,0 
0,0 NCI II 
406,8 
10,6 
279.4 
300,8 
997,5 
1 000.0 
2,5 NCI III 
2 138,0 
465.3 
258.3 
2 861.5 
3 000.0 
138,5 NCI IV 
668,8 
668,8 
750,0 
81,2 TOTAL 
3 213.5 
15.9 
1 961.9 
1 005.8 
6 197.1 
351.6 
6 830,0 
281,3 
(1) Industry and agriculture. 
(2) Contracts signed less cancellations. 
NCI IV is of interest because of its special features, such as the options of converting loans 
into risk capital, using loans to finance the purchase of intangible assets, deferring interest 
payments, etc. 
B) Six-monthly rate of utilisation of the NCI 
Council Decisions 83/200/EEC (Article 6) and 87/182/EEC (Article 8) on the 
financing of the NCI require the Commission to draw up a six-monthly report on the rate of 
utilisation of the tranches of NCI III and IV. Given that the ceilings have been practically 
exhausted (up to 96%), the six-monthly development in question does not alter the 
consolidated situation described in Table 1-5. 
However, the amount outstanding of loans issued for that purpose varies every six months 
in the light of debt repayments and the exchange rate of the currencies borrowed. The 
situation for the six-month period from 1 July to 31 December 1997 is set out in Table 4-8. 
1.2.6 Euratom 
In recent years no financing applications for nuclear projects within the Community have 
been made under the remaining ECU 1,1 billion Euratom ceiling. However, a number of 
projects outside the Community are currently being examined (see point 2.5.1). 
11-
1.2.7 Community medium-term financing 
No financing applications were made last year under the facility providing 
medium-term financial assistance for Member States' balances of payments. Taking 
account of amounts disbursed in the past to Greece (1 billion - first tranche of the 1991 
ECU 2,2 billion loan) and to Italy, (4 billion - first two tranches of the 1993 ECU 8 billion 
loan) and repayments made in 1997, the total amount of loans outstanding under this 
facility was 4 billion at 31 December 1997. The available margin to be financed by 
Community loans on capital markets therefore amounted to 10 billion. 
12-
2. LENDING IN THIRD COUNTRIES 
2.1 OVERVIEW 
Financial support to third countries that have concluded cooperation agreements with 
the Community takes a variety of forms depending on the geographical areas concerned and 
the objectives pursued. State-to-State loans are used when the Community wishes to help 
place the macroeconomic fundamentals of these countries on a sounder footing; individual 
loans are used where the aim is to develop infrastructure and carry out major improvement 
projects; global loans to local banks are used to develop the productive network of SMEs 
and stimulate the market economy. In addition, the EIB has also devised financial 
instruments other than traditional loans in the African, Caribbean and Pacific countries and 
in the Mediterranean countries, in particular equity participations in SMEs with 
development potential. These instruments are laid down in Council regulations or decisions 
spelling out the implementing arrangements applicable to each geographical area 
concerned. 
The mandates vested in the EIB as regards Central and Eastern European countries 
(CEECs), Mediterranean countries, Latin American and Asian countries, and South Africa 
were renewed on 14 April 1997 by Decision 97/256/EC, which approved the amounts of the 
new mandates for a three-year period. The amounts are: ECU 3 520 million for the CEECs, 
2 310 million for the Mediterranean countries, 900 million for Latin American and Asian 
countries and 375 million for South Africa. 
The same decision set up new guarantee arrangements with a view to ensuring that the EIB 
shoulders a greater share of the risks associated with cooperation with third countries. In 
line with the arrangements for operations within the Union, the EIB will henceforth bear the 
financial and economic risks associated with projects covered by individual, non-sovereign 
guarantees, while the Community budget will cover the political risk. 
2-1 Financing outside the Community in 1997 
(ECU million) 
ACP-OCT 
Mediterranean basin 
CEEC 
CIS 
Latin America, Asia 
South Africa 
Total Balance-of-
payments 
support (1) 
-
-
95 
100 
-
-
195 E I B 
EC and EDF 
budget 
resources (2) 
19 
36 
-
-
-
-
55 Own 
resources 
41 
1 086 
1 486 
-
378 
199 
3 190 (3) 
(1) Disbursements. 
(2) Granted and administered by the EIB out of the budgetary resoun 
or the European Development Fund (EDF). 
(3) Loans signed, of which ECU 2 562,5 million were signed under C 
Decision 97/256/EC (cf. Tables 2-2 to 2-4) Total 
60 
1 122 
1 581 
100 
378 
199 
3 440 
:es of the EC 
ouncil 
- 13 
2.2 THE COMMUNITY'S MACROFINANCIAL ACTIVITY 
2.2.1 Balance-of-payments support 
Macrofinancial assistance in the form of loans is, by its very nature, exceptional and 
forms part of the efforts of the international community to provide, in conjunction with the 
Bretton Woods institutions, balance-of-payments support to certain countries grappling 
with transitional difficulties. In the case of the Community, such assistance focuses on the 
neighbouring regions, such as Central and Eastern Europe, the new European states of the 
former USSR and the countries of the southern Mediterranean. Disbursements for this 
purpose are contingent on the beneficiary countries achieving predetermined targets. In 
these circumstances, the number of operations effected each year is limited, and valid 
comparisons cannot be made for the assistance given from one year to the next. 
In 1997 the Council decided to provide macrofinancial assistance in the form of loans to 
Bulgaria (ECU 250 million) and to the Former Yugoslav Republic of Macedonia (FYROM) 
(40 million). It also decided to grant extraordinary aid to Armenia and Georgia for a total 
amount of 170 million. 
As regards disbursements, aid paid out in 1997 amounted to ECU 195 million. 
Disbursements corresponding to loans approved in previous years amounted to 
ECU 170 million, of which 70 million was allocated to Romania and 100 million to 
Ukraine. In addition, under new loans approved in 1997, 25 million was disbursed to 
FYROM. 
2.2.2 Credit facility for the CIS 
No new disbursements were made in 1997 under the Council Decision of December 
1991 relating to the commercial credit facility of ECU 1 250 million in favour of the new 
independent states of the former USSR (CIS). In addition, the drawdown period for this 
credit facility has now terminated and, accordingly, no new disbursements will be made. 
Most of the disbursements have already been repaid, with the exception of the late 
payments owed by Armenia, Georgia and Tadzhikistan and totalling 234 million inclusive 
of principal and interest. 
2.3 LOANS COVERED BY DECISION 97/256/EC: Central and Eastern 
European countries, Mediterranean countries, Latin American and Asian 
countries, and South Africa 
Section 2.3 constitutes the report to be submitted to the European Parliament and the 
Council in accordance with Articles 2 and 3 of the above-mentioned Council Decision, i.e. 
it comprises the six-monthly report for the second half of 1997 and the annual report for 
1997. 
Additionally, the report also covers the last year of the EIB activities in South Africa under 
Council Decision 95/207/EC of 1 June 1995 (OJ L 131 of 15 June 1995). 
14-
2.3.1 EIB objectives and priorities 
The Bank assists those Central and Eastern European countries whose long-term 
goal is to prepare themselves for EU membership by helping them to create the economic 
framework to qualify5, and also provides assistance to Albania. 
The EIB gives priority to upgrading, modernising and developing the transport, 
telecommunications and energy sectors, with particular emphasis on Trans-European 
Networks (TENs) on the basis of the road and rail corridors defined by the Pan-European 
Conference of Transport Ministers as development priorities for the medium term. 
Environmental issues related to EIB projects are given priority in the framework of the 
gradual adaptation of the legislation of the countries concerned with that of the EU. The 
Bank also supports SMEs and other industrial initiatives, in particular when involving EU 
partners either directly or through its global loan instrument. 
In the Mediterranean region, in addition to the continued commitment of funds still 
available under the 1992-96 bilateral Financial Protocols with certain countries in the 
region, the Bank's lending since 1997 has taken place mainly within the framework of the 
Euro-Mediterranean Partnership, in support of the economic development of the countries 
concerned. Bank lending supports individual investment projects and, through the global 
loan mechanism, smaller projects and SMEs, while at the same time strengthening the 
financial sector in the various countries. 
Under the terms of the Euro-Mediterranean Partnership, EIB own resources lending is 
complemented by interest subsidies (for loans in the environmental sector) and risk capital 
from EU budgetary sources, managed by the Bank. 
In Latin America and Asia, the Bank finances projects which are of mutual interest to 
the countries concerned and the European Union - cofinancing with EU promoters, transfer 
of technology, cooperation in the fields of energy and environmental protection. Details of 
the mutual interest of the projects concerned are included in Table 2-7. 
In South Africa, the Bank's objective is to assist the transition to democratic rule initiated 
by South Africa and contribute to the successful completion of the country's reconstruction 
and development programme. 
2.3.2 Lending activity 
During the reference period the Bank signed 22 loan contracts in Central and 
Eastern Europe for an aggregate amount of ECU 1 466 million (not including a final loan 
contract, signed in March 1997 under a previous lending authorisation, for 20 million). 
In addition to its activity pursuant to the Council Decision, the Bank has set up a substantial Pre-
Accession Facility for lending from its own resources without budgetary guarantee to help those 
countries which have applied for EU membership. 
-15 
Loans in Poland, Hungary, the Czech Republic and the Slovak Republic accounted for more 
than 80% of EIB lending in the region. The Bank also signed loans pursuant to the Council 
Decision in all of the other CEEC, except Albania (see Table 2-2). 
• Bank activity continues to support the economic development of the countries 
concerned, principally by financing strategic infrastructure. One-third of the total 
financing, ECU 502 million, was allocated to transport infrastructure projects, 
including the upgrading of the Czech section of the Berlin-Vienna rail corridor, TEN 
roads development in the Slovak Republic, the modernisation of the airports of Sofia 
and Tallinn, together with a major emergency programme to repair flood damage to 
railway infrastructure in Poland. 
• Loans in support of telecommunications projects in five countries accounted for ECU 
357 million, or one-quarter of overall activity. The projects included mobile telephone 
(GSM) investments in Lithuania, the Slovak Republic and Slovenia. 
• Loans in the energy sector totalled ECU 70 million and were allocated to power station 
development in Hungary and the rehabilitation of a district heating system in the city of 
Bucharest. 
• Support for industry, at ECU 112 million, included global loans for smaller projects in 
Poland and Estonia and support for a fibreboard plant in Romania. 
• Support for general infrastructure accounted for ECU 425 million, including substantial 
assistance for emergency flood damage reconstruction in Poland and the Czech 
Republic. 
2-2 Breakdown by country and sector of EIB lending in Central and Eastern Europe 
Country 
Bulgaria 
Czech Rep. 
Estonia 
Hungary 
Latvia 
Lithuania 
Poland 
Romania 
Slovak Rep. 
Slovenia 
Total No. of 
loans 
1 
4 
2 
1 
1 
1 
4 
3 
4 
1 
22 Total loan 
signatures 
(ECUm) 
60 
540 
20 
35 
20 
7 
355 
122 
262 
45 
1466 
(100%) Transport 
60 
240 
10 
20 
75 
97 
502 
(34,2%) Telecoms 
100 
7 
40 
165 
45 
357 
(24,4%) Energy 
35 
35 
70 
(4,8%) Industry 
10 
55 
47 
112 
(7,6%) General 
infrastructure 
200 
225 
425 
(29%) 
The loans signed in the Mediterranean region show a good spread over nine 
countries. During the reference period, the Bank signed loans for an aggregate amount of 
16 
ECU 934 million pursuant to the Council Decision in all of the Mediterranean countries 
except Malta6, Israel and Syria (see Table 2-3). 
• Transport infrastructure investments accounted for almost one-third 
(ECU 300 million) of overall lending, including the renewal of Egypt Air's fleet, marine 
port infrastructure in Jordan, road infrastructure in Lebanon and Tunisia, and railway 
infrastructure in Morocco and Tunisia. 
• More than 28% of total financing (ECU 265 million) was allocated to water and 
sewerage investments in Lebanon, Morocco, Turkey, Tunisia and Cyprus. 
• A large gasline project in Algeria accounted for more than 23% of overall lending 
which, together with support for an electricity control centre in Lebanon, brought 
support for the energy sector to almost one-quarter of overall lending 
(ECU 229 million). 
• 15% of total financing (ECU 140 million) was allocated to individual industrial 
projects, involving some joint ventures with EU investors including, for example, a 
cement plant in Egypt; to assisting SMEs in Jordan and Turkey through the global loan 
mechanism; and to an industrial estate in Gaza-West Bank. 
2-3 Breakdown by country and sector of EIB lending in the Mediterranean countries 
Country 
Algeria 
Cyprus 
Egypt 
Jordan 
Lebanon 
Morocco 
Tunisia 
Turkey 
Gaza-West Bank 
Total No. of 
loans 
1 
1 
3 
2 
3 
2 
3 
2 
1 
18 Total loan 
signatures 
(ECUm) 
218 
30 
121 
60 
131 
135 
130 
95 
14 
934 
(100%) Transport 
75 
30 
20 
85 
90 
300 
(32,1%) Energy 
218 
11 
229 
(24,5%) Environment, 
Water and 
Sewerage 
30 
100 
50 
40 
45 
265 
(28,4%) Industry, 
other, 
mixed 
46 
30 
50 
14 
140 
(15%) 
During the reference period, the Bank signed 6 loans in Latin America and Asia 
for an aggregate amount of ECU 214,5 million, including two loans totalling 52 million 
signed in the framework of the interim mandate 1996-97 (see Table 2-4). Loans were 
signed in Indonesia, the Philippines, Brazil and Peru, together with one project of regional 
interest (Andean Pact). 
Loans were signed in Malta within the framework of the Fourth Financial Protocol 
17 
Lending was in support of economic infrastructure (water supply, airport infrastructure, 
communications), energy, an industrial project (cement), together with support for small 
and medium-sized projects through a global loan. 
2-4 Breakdown 
Country 
Indonesia 
Philippines 
Brazil 
Peru 
Regional 
Total by country and sector of LIB lending in Latin America and Asia 
No. of 
loans 
1 
2 
1 
1 
1 
6 Total loan 
signatures 
(ECUm) 
55 
377 
32,5 
50 
407 
214,5 
(100%) Transport 
25 
25 
(11,7%) Telecoms 
50 
50 
(23,3%) Energy 
12 
12 
(5,6%) Industry, 
other, 
mixed 
55 
32,5 
40 
127,5 
(59,4%) 
Tables 2-8 to 2-10 at the end of section 2.3 give more details of the loan contracts signed in 
the above regions under Council Decision 97/256/EC. 
In 1997, the Bank signed loan contracts in South Africa for an aggregate amount of 
ECU 199 million, thus attaining the ceiling of 300 million granted under the first mandate 
(Council Decision 95/207/EC). Loans for a total amount of 104 million were allocated to 
water and sewerage investments and a loan of 45 million financed the cost of exploiting 
adjacent gas deposits and the installation of associated compression facilities of Mossgas. A 
global loan of 50 million was also granted for the financing of small or medium-scale 
investments. 
During the reference period the Bank did not sign any finance contracts in South Africa 
pursuant to Council Decision 97/256/EC. 
2.3.3 Risk sharing* 
During the reference period, risk sharing in respect of EIB lending pursuant to 
Council Decision 97/256/EC reached an overall total of ECU 639,5 million9, or 8,8% of the 
overall lending ceiling and 24,5% of lending to date under the new guarantee scheme. 
Including one loan signed in the framework of the interim mandate but covered by the guarantee 
arrangements laid down in Council Decision 97/256/EC. 
Council Decision 97/256/EC of 14 April 1997 invites the Bank "to aim to cover the commercial risk 
on 25% of its lending under this decision from non-sovereign guarantees to be expanded upon 
whenever possible insofar as the market permits on an individual mandate basis". 
Taking account of an amount of ECU 122 million of lending in Latin America and Asia under the 
interim mandate, which amount is also covered by the guarantee arrangements laid down in the 
Council Decision . 
- 18 
Details per region are as follows: 
- In Central and Eastern Europe, risk sharing in respect of EIB lending reached an overall 
total of ECU 444 million, or 12,6% of the lending ceiling for those countries and 30,3% 
of lending to date. 
- In accordance with the programming procedures inherent in the Euro-Med Partnership, 
all but two projects have been signed with governments or public bodies. It is thus not 
surprising to note that, during the reference period, risk sharing in respect of EIB lending 
in the Mediterranean countries reached an overall total of ECU 46 million, or 2% of the 
lending ceiling for those countries and 4,9% of lending to date. 
- As stated in the last report on EIB operations in Latin America and Asia (COM( 1998)1 ), 
the new guarantee system defined by Council Decision 97/256/EC applies also to the 
interim mandate for lending in this region in respect of loans approved by the Bank but 
not signed by the date of entry into force of the Decision. This concerns loans totalling 
ECU 122 million. Of this total, loans amounting to 52 million were signed during the 
reference period, of which a loan of 12 million was in respect of a risk sharing project. 
During the reference period, risk sharing in respect of EIB lending in Latin America and 
Asia (taking account of the amount of ECU 12 million mentioned above) reached an 
overall total of ECU 149,5 million, or 14,6% of the lending ceiling for those countries 
and 69,7% of lending to date in the region under the new guarantee scheme. 
The regional tables at the end of section 2.3 (Tables 2-8 to 2-10) identify the loans for 
which lending is covered by non-sovereign guarantees as stipulated in Council Decision 
97/256/EC. 
2.3.4 Cooperation with other institutions 
The Bank's activities in the countries of Central and Eastern Europe are 
conducted within the framework of the EU programme, in particular by financing 
investment aimed at integrating the infrastructure of the countries concerned with that of the 
EU and by assisting SMEs, and also provide assistance to Albania. Whenever possible, 
cofinancing is established with other institutions, in particular to meet the above objectives. 
The Bank's activities thus form part of a concerted approach that is being pursued in close 
cooperation with the Commission and, as appropriate, with the international financial 
institutions (IFI) working in the region. 
The Bank cooperates closely with the PHARE Programme, with which it has developed a 
close and fruitful relationship, much appreciated by the beneficiary countries. This 
relationship is being reinforced in the context of the onset of the accession process. 
In addition to frequent PHARE assistance during the pre-investment phase to ensure that 
the necessary studies and technical assistance are implemented in support of EIB projects, 
the Bank also cooperates with PHARE in cofinancing infrastructure projects, to which up to 
25% of PHARE resources may be allocated. During the reference period, the Bank and 
PHARE cofinanced a rail project in the Czech Republic and PHARE is considering 
-19 
cofinancing an airport project in Bulgaria and has reallocated funds for the flood damage 
reconstruction programme in Poland. 
Cooperation between the Bank and other international financial institutions will continue to 
be close and systematic, as appropriate, although their lending activity in the region is 
declining, in line with their graduation policy and market developments. During the 
reference period, the EBRD has contributed to a rail project in the Czech Republic and an 
airport project in Estonia, while the World Bank (IBRD) has approved a contribution to the 
flood damage reconstruction programme in Poland. 
The contributions of PHARE and the other IFIs to projects financed by the EIB are shown 
in the table below (figures in ECU million). 
2-5 Share of PHARE and IFIs in projects financed by EIB in Central and Eastern 
Europe 
Country 
Bulgaria 
Czech Rep 
Estonia 
Poland 
Total EIB 
60 
75 
10 
300 
445 PHARE 
10-1510 
50 
0 
65'2 
125 -130 EBRD 
0 
50M 
8,5 
0 
58,5 IBRD 
0 
0 
0 
18513 
185 TOTAL 
70 - 75 
175 
18,5 
550 
813,5-818,5 
In the Mediterranean region the Bank also cooperates with other international 
financial institutions and investors/donors whenever possible. In many of the operations 
concluded in 1997, the Bank either cofinanced directly with other multilateral/bilateral 
institutions or international investors, or played a key role in catalysing additional financial 
resources. For example, the global loans in Jordan and the project in Gaza-West Bank are 
being implemented in tandem with conditional global loans from risk capital resources, 
under the MEDA Regulation; the latter project is being cofinanced with the International 
Finance Corporation (IFC). The project in Cyprus is cofinanced with the Social 
Development Fund of the Council of Europe; the project in the energy sector in Lebanon is 
being cofinanced with the IBRD while the transport project is being cofinanced with the 
Saudi Fund. 
Table 2-6 gives details of cofinancing in projects financed by the EIB (figures in ECU 
million). 
10 
il 
12 
13 Definitive amount to be decided by PHARE. 
USD 53,6 million. 
Funds reallocated from other PHARE projects. 
A contribution of USD 200 million to the flood reconstruction effort in Poland. 
20-
2-6 Share of IFIs in projects financed by EIB in the Mediterranean countries 
Country 
Cyprus 
Lebanon 
Morocco 
Gaza-West Bank 
Total EIB 
30 
31 
131 
14 
206 IBRD 
0 
8,2 
5 
0 
13,2 IFC 
0 
0 
0 
7,6 
7,6 Other14 
40,7 
31,2 
45 
12 
128,9 Total 
70,7 
70,4 
181 
33,6 
355,7 
In addition, cooperation has been active with other institutions which contributed to other 
investments promoted by the Bank during the same period : 
• Morocco : ONCF Modernisation Project (railway) - with IBRD, BAD15, CFD16 ; 
• Tunisia : SNCFT II Project (railway)- with IBRD, CFD ; 
• Turkey : ADANA Wastewater Project - with German cooperation ; 
• Egypt : ECC Grey Cement Project - with IFC and European (BelgjaivSwiss) cofinanciers ; 
LECICO Ceramics Project - cofinanced with Finnish Group ; 
• Lebanon : The Tripoli Wastewater Project is being cofinanced also with IBRD, as part 
of a Sectoral Investment Programme. 
Cooperation with multilateral and bilateral financial institutions in Latin America 
and Asia continues to be good. The airports project in the Philippines was appraised 
jointly with the Asian Development Bank, which also contributed to its financing and will 
participate in the monitoring of its execution and of the sector's financial and institutional 
development. The energy project in the Philippines was cofinanced with Kreditanstalt fîir 
Wiederaufbau (KFW) and Commonwealth Development Corporation (CDC), among 
others. The Bank is increasingly centring its operations on private projects involving 
European companies as partners in joint ventures or shareholders. As mentioned in section 
2.3.1, the Bank finances projects which are of mutual interest to the countries in Latin 
America and Asia and to the Community (see table below). 
14 
15 
16 EIB risk capital, states, public bodies or other financial sources, including own funds of 
borrower/prom oter. 
Banque Africaine de Développement. 
Caisse Française de Développement. 
-21 
2-7 Mutual interest of projects signed in 1997 in Latin America and Asia 
Country Project Mutual interest 
Indonesia WATER The borrower is a joint venture between French and Indonesian private-sector 
SUPPLY interests. In addition, the project involves the transfer of European technology 
JAKARTA in the field of water supply operation and management and substantial 
WEST environmental benefits. 
The project guarantee will be provided by a European-led syndicate of 
commercial banks. 
Philippines SECOND The project's mutual interest is based on the required development of these 
AIRPORTS airports, particularly Puerto Princesa, as part of the country's contribution to an 
important regional development plan (the East ASEAN Growth Area -
EAGA). The project will also effectively increase the capacity of Manila 
International Airport for international flights. 
Support to the EAGA, of which the project is a good example, is particularly 
encouraged in the Cooperation Agreement between the EU and the ASEAN 
countries. 
BATANGAS The borrower is a 100% subsidiary of a British/Philippine joint venture. In 
POWER -B addition, the gas field which is likely to provide future fuel for the plant is a 
joint development of Shell and Occidental Petroleum, while the turnkey 
contract for the plant has been won by a major European group. 
In a wider context, the project will promote the aims of the EU-ASEAN 
Cooperation Agreement, which includes particular reference to cooperation in 
the fields of energy and improvement of the environment. 
Brazil LAFARGE The borrower is a joint venture between French and Brazilian private-sector 
ARCOS interests. The project will strengthen the promoter's position in a leading 
CEMENT emerging market. 
Peru TELEFONICA Development of telecommunications in Peru will bring important economic 
DEL PERU benefits. The provision of sufficient modern telecommunications services is 
recognised as a major element for economic development. 
The Peruvian borrower is a subsidiary of a Spanish telecommunications 
company. The involvement of an efficient European enterprise in the 
completion of Peru's telecommunications development programme gives 
additional benefits, in terms of transfer of technology to Peru and increased 
activity for European telecoms. 
Regional CORPORACION The projects financed will be of mutual interest and thus support closer 
ANDDMA DE cooperation between the EU and the Andean Group, in private ventures in 
FOMENTO eligible sectors. 
Global Loan 
The EIB and the Commission activities in South Africa complement each other. 
For example, the Commission provides assistance for water supply programmes whereas 
the EIB grants loans for water and wastewater treatment and purification; the Commission 
assists in guarantee programmes for small and medium-sized enterprises financed through 
the commercial sector, whereas the EIB finances loans through the commercial banks and 
SMEs through the Industrial Development Corporation. 
The EIB maintains close contact with the World Bank and with national organisations 
operating in South Africa, among others the Société de Promotion et de Participation pour 
la Coopération Economique (PROPARCO) in France and the Commonwealth Development 
Corporation in the United Kingdom. 
22-
2-8 EIB loans signed in 1997 in Central and Eastern Europe (CD 97/256/EC) 
COUNTRY 
Bulgaria 
Czech Rep. 
Estonia 
Hungary 
Latvia 
Lithuania 
Poland 
Romania 
Slovak Rep. 
Slovenia 
Total PROJECT 
SOFIA AIRPORT 
RAIL CORRIDOR BERUN-
VENNA-B 
SPTTE1HXMVIUNICATJON 
n-A 
D5 MOTORWAY PRAHA-
NURNBERG 
FLOODDAMAGE 
RECONDUCTION 
TALUNNAIRPORT 
UNION BANK OF ESTONIA 
Global I juon 
MVMLORINQ POWI3lI5LANT 
VENTSP1LSPORT 
TE1.ECOMMUNICATION n 
VERBNSBANK POLSKA Global 
Loan 
FLOODDAMAGE 
REOONSTRUCnON-A 
FLOODDAMAGE 
RECONSTRUCTION-B 
KATOWICE MUNICIPAL 
lNFRASTRUCrUI<E 
THECOMMUNICATIONS 
BUCHAREST DISTRICT 
HEATING REHABIUTATION 
MTJFFRQDUCTIONPLANT 
EUROPEAN ROADS II 
GIJOBIEL 
TTiLECOMMUNICATIONS II 
EUROPEAN ROADS III 
MOBITELGSM DESCRIPTION 
Modernisation and upgrading of Sofia 
Airport 
Upgrading of the Czech section of the Berlin-
Prague-Vienna railway line 
Modernisation of the telecommunications 
network 
Construction of the section Plzen-Rozvadov 
of the D5 Prague-Niirnberg Motorway 
Emergency programme for reconstruction 
and restoration of basic infrastructure 
following flood damage 
Upgrading of Tallinn International Airport 
For financing small and medium-scale 
environmental, energy saving, infrastructure, 
industrial and tourism projects, and SMF 
projects in general 
Construction and operation of a gasoil-fired 
open-cycle combustion turbine to supply 
peak load power and increase Hungary's 
secondary reserve capacity 
Improving port channel access, 
reconstruction, strengthening of quays 
Development of second phase of mobile 
(GSM) telecommunications network 
For financing small and medium-scale 
environmental, energy saving, infrastructure, 
industrial and tourism projects, and SME 
projects in general 
Emergency programme for reconstruction 
and restoration of basic infrastructure 
following flood damage 
Emergency programme for reconstruction 
and restoration of railway infrastructure 
following Hood damage 
Improvements to the urban infrastructure 
(roads, sewage and municipal landfill) of 
Katowice 
Expansion and modernisation of the 
Romanian telecommunications network 
Rehabilitation of district heating transmission 
and distribution facilities 
Construction of a medium density 
fibreboards (MDF) and special resins plant 
facility in the city of Sebes 
Construction of 18 km of trunk roads 
(D2/D61) from Bratislava to the Austrian and 
Hungarian border 
Development of a mobile (GSM) 
telecommunications network 
Modernisation of the Slovakian 
telecommunications network 
Construction of a new by-pass extension of 
the D61 motorway around the centre of 
Bratislava 
Construction of the first GSM network in 
Slovenia LOAN 
AMOUNT 
(ECUm) 
60 
60 
540 
75 
100 
165 
200 
20 
10 
10 
35 
35 
20 
20 
7 
7 
355 
35 
225 
75 
20 
122 
40 
35 
47 
262 
25 
65 
100 
72 
45 
45 
1466 RISK 
SHARING 
No 
No 
Yes 
No 
No 
No 
Yes 
Yes 
No 
Yes 
Yes 
No 
No 
No 
No 
No 
Yes 
No 
Yes 
Yes 
No 
Yes 
23 
2-9 EIB loans signed in 1997 in the Mediterranean countries (CD 97/256/EC) 
COUNTRY 
Algeria 
Cyprus 
Egypt 
Jordan 
Lebanon 
Morocco 
Tunisia 
Turkey 
Gaza-West 
Bank 
Total PROJECT 
SONATRACH GR2 - B 
PAFOS SEWERAGE 
EGYPT AIR 
ECC GREY CEMENT 
LECICO CERAMICS 
INDUSTRIAL 
DEVELOPMENT 
BANK VI Global Loan 
AQABA PORT 
TRIPOLI 
WASTEWATER 
AUTOROUTE 
COTIERE DU NORD 
CENTRE NATIONAL 
DE CONTROLE 
ELECTRIQUE 
ONCF 
MODERNISATION 
ONEP EAU POTABLE 
II 
SNCFTII 
ASSAINISSEMENT DU 
LAC SUD DE TUNIS 
VOIRIES 
PRIORITAIRES 
ADANA 
WASTEWATER 
TURKEY Global Loan 
GAZA INDUSTRIAL 
ESTATE DESCRIPTION 
Construction of a gas pipeline between 
Alrar and Hassi R'Mel 
Construction of a sewage collection and 
treatment system and a stormwater 
drainage system 
Modernisation of the Egyptair fleet 
Construction of a plant for the 
production of grey cement 
Construction of a new plant for 
production of sanitary ware and 
modernisation of an existing tile 
manufacturing factory 
For financing small and medium-sized 
enterprises in the productive sectors of 
the Jordanian economy 
Construction of two-berth industrial jetty 
and purchase of container handling 
equipment 
Upgrading of storm and wastewater 
drainage, construction of a sewage 
treatment plant for the Greater Tripoli 
area 
Renovation and extension of the 
Northern coastal motorway between 
Beirut and Tripoli 
Construction of the national electricity 
control centre in Beirut 
Rehabilitation and increase in the 
capacity of sections of the main axes of 
the Moroccan railway network 
Drinking water supplies for urban 
communities in Morocco 
Rehabilitation of the Tunis-Sfax-Gabes 
railway line 
Dredging and backfill of the "Lac Sud de 
Tunis" 
Improvement of the road networks of 
Greater Tunis and other major cities 
Extension of sewer network and 
construction of two wastewater treatment 
plants in Adana (South-East of Turkey) 
For financing small and medium-scale 
enterprises 
Development of an industrial estate in 
the Gaza Strip LOAN 
AMOUNT 
(ECUm) 
218 
218 
30 
30 
121 
75 
30 
16 
60 
30 
30 
131 
100 
20 
11 
135 
85 
50 
130 
25 
40 
65 
95 
45 
50 
14 
14 
934 RKK 
SHARING 
No 
No 
No 
Yes 
Yes 
No 
No 
No 
No 
No 
No 
No 
No 
No 
No 
No 
No 
No 
-24 
2-10 EIB loans signed in 1997 in Latin America and Asia (CD 97/256/EC) 
COUNTRY 
Indonesia 
Philippines 
Brazil 
Peru 
Regional 
Total PROJECT 
WATER SUPPLY 
JAKARTA WEST 
SECOND AIRPORTS 
BATANGAS POWER -
B17 
LAFARGE ARCOS 
CEMENT 
TELEFONICA DEL 
PERU 
CORPORACION 
ANDINA DE 
FOMENTO Global 
Loan17 DESCRIPTION 
Upgrading and extension of the water 
supply transmission and distribution 
system 
Upgrading, improving and extension of 
two airports in the Southern part of the 
Philippines 
Construction of a combined cycle power 
plant 
Construction of a cement plant in the 
State of Minas Gerais 
Modernisation and extension of the 
Peruvian telecommunications network 
For financing medium-sized projects in 
the five member countries of the Andean 
Pact LOAN 
AMOUNT 
(ECUnt) 
55 
55 
37 
25 
12 
32,5 
32,5 
50 
50 
40 
40 
214,5 RISK 
SHARING 
Yes 
No 
Yes 
Yes 
Yes 
No 
2.4 SIGNATORIES TO THE LOME CONVENTION 
2.4.1 Lending trends for each major area 
Given the economic situation of these countries, Community aid is of crucial 
importance. In Africa, for instance, EDF aid amounts on average to ECU 1 100 million a 
year. If horizontal aid (food aid, NGOs, rain forests, democracies, etc.) is also taken into 
account, together with humanitarian aid and bilateral aid from the Member States, the figure 
rises to about USD 7 800 million, i.e. between six and seven times more than the aid 
provided by the other major Western powers. 
The second protocol to Lomé IV, signed in 1995 and concerning the period 1995-99, 
brought Community aid to ECU 14 625 million, comprising 11 967 million in grants, 
1 000 million in aid for risk-capital transactions and 1 658 million in loans from the EIB's 
own resources. Delays in implementing the new protocol meant that it was not possible to 
deploy these resources fully. 
17 Signed within the framework of the interim mandate but covered by the guarantee arrangements laid 
down in Council Decision 97/256/EC. 
25 
In the African, Caribbean and Pacific countries and the Overseas Countries and 
Territories (OCT), EIB activity in 1997 was limited to committing the funds available 
under the first protocol to Lomé IV, i.e. ECU 60 million, of which 19 million in the form of 
risk capital. Loans were allocated mainly to the energy sector and to the financing of SMEs 
via global loans. Loans to the tune of 18 million went to the productive sector in 1997, of 
which 16 million in the form of global loans to benefit small and medium-sized 
investments. The total amount of loans signed under the first protocol is 
ECU 2 072 million, of which ECU 812 million in the form of risk capital. 
2.4.2 EIB risk-capital operations 
In addition to its lending activities, the EIB identifies opportunities for, and 
monitors, risk-capital operations via specialist public or private companies operating 
locally. In 1997 most of these operations were carried out in East Africa (ECU 10 million) 
via accredited financial intermediaries; a few operations of this kind were also effected in 
the Caribbean (ECU 4 million) and in the Pacific area (ECU 2 million). 
2.5 OTHER COMMUNITY INSTRUMENTS 
2.5.1 Euratom 
The Council decision of 21 March 1994 made Euratom loans available to the 
countries of Eastern Europe and to the CIS countries with a view to improving the safety 
and efficiency of their nuclear power stations. The amount of assistance available is some 
ECU 1.1 billion, taking into account the current ceiling fixed by the Council. 
Several projects are being appraised in Ukraine, Bulgaria and Russia but, given the political 
and technical complexity of projects of this type, no decision to provide funds was taken in 
1997. 
2.5.2 European Bank for Reconstruction and Development (EBRD) 
The Community and the EIB are both shareholders and close partners of the EBRD: 
they each hold 3% of the Bank's capital and work in close cooperation so as to ensure that 
operations are mutually complementary. 
According to the EBRD's annual report for 1997, the Board approved 143 new 
projects in the CEECs and the states of the former USSR, for a total amount of 
ECU 4 016 million (against 119 projects for a total amount of 2 855 million in 1996). 
Funds actually committed during the year totalled 2 315 million, as against 2 188 million in 
1996. Equity holdings as a proportion of the Bank's entire activities amounted to 
436 million, or about 19% of all new operations. 
-26 
3. BUDGETARY IMPACT OF LENDING 
The Community's general budget is affected by lending activities where loans are 
accompanied by interest subsidies and/or budget guarantees. 
3.1 INTEREST SUBSIDIES 
Interest subsidies were granted by the Community in the following fields (see Table 4-9): 
a) industrial conversion of coal and steel areas (Article 56 of the ECSC Treaty); 
b) reconstruction in the disaster-hit areas of Italy, Greece and Portugal (Autonomous 
Region of Madeira); 
c) the "SME facility" adopted at the Copenhagen Summit. 
No industrial loans at reduced rates for investment projects designed to promote 
consumption of Community steel (Article 54, second paragraph) have been made since 
1992. With regard to conversion loans in coal and steel areas (Article 56), interest 
subsidies amounted to only ECU 1,8 million in 1997, as against 36,8 million in 1996 and 
11,5 million in 1995. 
The Council Decision on reconstruction following the Madeira cyclone in 1993 
lays down that interest subsidies on EIB loans are to be paid by the Commission direct to 
the Autonomous Region of Madeira and no longer via the EIB, as had been the case for the 
earthquakes in Greece and Italy. 
The Copenhagen European Council in 1993 increased by ECU 3 billion the 
temporary facility agreed in Edinburgh for major infrastructure projects. Of that amount, 
ECU 1 billion is earmarked for measures to strengthen the competitiveness of small and 
medium-sized enterprises in Europe and is combined with interest subsidies linked to job 
creation. The subsidy amounts to ECU 3 000 per additional job created (equivalent on 
average to a 2% interest-rate reduction over a five-year period). The Council Decision of 
19 April 1994 allowed the EIB to sign global lending agreements for that purpose with 
financial intermediaries in all Member States. The allocation of loans ended on 
15 December 1995, the entire budget of ECU 1 billion having been used up. 
By the end of 1997, payment of interest-rate subsidies for the envisaged 
ECU 1 billion loan commitments had been finalised. An amount of ECU 93 million in 
subsidies was disbursed by that time, with more than 4 300 firms benefiting. The reported 
total job creation amounted to more than 50 000 jobs (for breakdown by country, see graph 
below). 
27-
Job creation: forecasts and outturn 
(As at 20.8.1997) ^ forecast 
m outturn 
14 OOMT 
12 00 
B DK D EL E F IRL I L NL A P FIN S UK 
Interest subsidies are also provided in connection with EIB loans outside the Community 
(see Table 4-10). 
3.2 BUDGET GUARANTEES 
3.2.1 Coverage 
All the outstanding borrowing contracted by the Community to finance loans 
managed by the Commission (Euratom, NCI, balance of payments) is guaranteed by the 
general budget. 
In this connection, the Community budget was involved in an ECU 195 million 
"balance-of-payments loan" to FYROM, Romania and Ukraine in 1997. 
EIB loans from own resources granted to third countries under the Community's policy of 
providing financial assistance for development are covered by a guarantee agreement. The 
guarantees are provided by Member States for loans in ACP countries and the OCT and by 
the Community for Mediterranean countries, Central and Eastern European countries, 
countries in Latin America and Asia with which the European Union has concluded 
cooperation agreements, and South Africa. These mandates fall into two distinct phases 
(referred to below as old mandates and new mandates), depending on the extent of coverage 
provided by the Community budget. 
A) Old mandates: 
a) EIB loans to Mediterranean countries: These loans are covered by a global 
Community guarantee in respect of 75% of the amount of loans signed. At the end of 1997 
outstanding loans totalled ECU 3 248 million, of which 212 million was accounted for by 
loans in Spain, Greece and Portugal (pre-accession) and 3 036 million by loans in 
non-member Mediterranean countries. 
b) EIB loans to the CEECs: Loans signed are covered in full by the Community 
guarantee. At 31 December 1996 the EIB had advanced ECU 4 628 million to these 
countries out of a total allocation of ECU 4,7 billion under the CEEC agreements. The total 
amount of loans outstanding at the end of 1997 was 1 889 million. 
28-
c) EIB loans to third countries in Latin America and Asia: Loans granted to 
those countries with which the Community has concluded cooperation agreements are 
guaranteed in full by the Community budget. The total amount agreed on was 
ECU 1 025 million. As at the end of 1997 loans signed stood at 810 million and the amount 
of the guarantee outstanding was 385 million. 
d) EIB loans to South Africa: The Community has provided its guarantee for 
loans granted by the EIB in South Africa up to a maximum amount of ECU 300 million. 
These loans are guaranteed in full by the Community budget. As at 31 December 1997 the 
EIB had advanced the full amount of 300 million and the amount of the guarantee 
outstanding was 100 million (see Table 3-1). 
B) New mandates18: 
On 14 April 1997, the Council, acting on a proposal from the Commission and after 
Parliament had given its opinion, decided to renew the Community's guarantee to the EIB 
in respect of the loans granted to projects outside the Community. The total ceiling for 
credits opened is equivalent to ECU 7 105 million. 
The guarantee was limited to 70% of the total amount of credits opened, plus all 
related sums19. In addition, the EIB has been asked to aim to cover the commercial risk on 
25% of its loans with non-sovereign guarantees. In that instance, the budget guarantee 
covers only political risks, namely the risks associated with the non-transfer of foreign 
currencies, expropriation, armed conflict and civil unrest. The total amount of credits 
opened as at 31 December 1997 was ECU 2 615 million, but the amount outstanding on the 
same date was only 144 million, of which 114 million was for the Mediterranean countries 
and 30 million for the CEECs. 
3.2.2 Outstanding guarantees at 31 December 1997 
At the end of 1997 outstanding guarantees under the Community budget, details of 
which are given in Table 3-1, stood at ECU 12,2 billion, more than 63% of which was for 
countries outside the Community. Compared with 1996, total outstanding guarantees were 
up by ECU 295 million. However, the proportion of commitments to non-Community 
countries has increased steadily from 37,5%» in 1992 to 63% at present. 
The annual risk covered by the general budget, which concerns the repayment of the debt 
(principal and interest), stood at ECU 3 095 million in 1997, of which 1 666 million related 
to third countries. 
18 Council Decision (97/256/EC) of 14 April 1997 granting a Community guarantee to the European 
Investment Bank against losses under loans for projects outside the Community (Central and 
Eastern European countries, Mediterranean countries, Latin American and Asian countries, and 
South Africa). 
19 The arrangements governing the guarantee are set out in the contract of guarantee signed between 
the Community and the EIB on 25 and 29 July 1997. 
-29 
At 31 December 1997, amounts paid out by the Community and not yet repaid by 
defaulting debtors stood at ECU 309 million, of which 75 million is owed by some of the 
republics of the former Yugoslavia and 234 million by Tajikistan, Armenia and Georgia. 
All provisional drawings on the Commission's cash resources in respect of the guarantee 
have been settled from the budget up to 1994 and, since its establishment by Council 
Regulation (EC) No 2728/94 of 31 October 1994, by the Guarantee Fund. 
3-Î Capital outstanding on guaranteed operations (at 31.12.1997) 
|" (ECU million) 
Operation 
Member States 
A. Medium-term financial support 
1. Greece 
2. Italy 
B. Guaranteed loans 
3. Euratom (3) 
4. NCI 
5. EIB Mediterranean (E, EL, P) 
Non-Community countries 
A. Macrofinancial assistance 
1. Hungary 
2. Former USSR (4) 
3. Czech Republic 
4. Slovak Republic 
5. Bulgaria 
6. Romania 
7. Estonia 
8. Latvia 
9. Lithuania 
10.Israel (5) 
11 .Algeria 
12.Moldova 
13.Ukraine 
14.Belarus 
15.FYROM 
16.Georgie/Armenia 
B. Guaranteed loans 
17. Mediterranean 
18.CEECS 
19.Latin America, Asia 
20.South Africa 
GRAND TOTAL 
(i) bxcnange rate as at 31.12.1996. 
(2) Exchange rate as at 31.12.1997. 
(3) Extension of Euratom loans to certain tr 
(4) The amount outstanding of ECU 216 mi 
and not paid by 31.12.1997. 
(5) Loan repaid in full by 31.12.1997. Authorised 
ceiling 
26 330 
14 000 
4 000 
6 830 
1 500 
24 117 
4 625 
180 
1 250 
250 
125 
650 
580 
40 
80 
100 
160 
600 
60 
285 
55 
40 
170 
19 492 
8 672 
8 220 
1925 
675 
50 447 
lird countries (Co 
llion corresponds Amount 
outstanding at 
31.12.1996(1) 
5 564 
500 
3 479 
572 
748 
265 
6 312 
2 679 
180 
144 
250 
125 
400 
510 
20 
40 
75 
160 
500 
60 
185 
30 
-
-
3 634 
2 092 
1 306 
204 
32 
11876 
uncil Decision of 
to amounts in pr Amount 
outstanding at 
31.12.1997(2) 
__ —-^^ 
500 
3 448 
118 
219 
212 
7 674 
2 121 
100 
216 
123 
62 
260 
580 
15 
40 
75 
-
250 
60 
285 
30 
25 
-
5 553 
3 150 
1 919 
385 
100 
12 171 
21.3.1994). 
ncipal owed 
-30 
4. STATISTICAL ANNEX 
31-
4-1 Trend of borrowing and lending in the Community 
(ECU million; ECU rate at year-eno) 
1966 1967 1968 1969 1990 1991 1992 1963 1994 1996 1996 1997 
I. Borrowing 
ECSC 1517 1487 880 913 1086 1446 1474 906 644 306 288 474 
Balance Of paymtntS (1 862 860 -350 1696 1206 4989 246 410 156 195 
Euratom 48885393 49... 
NCI 541 611 945 522 76 49 - - 70 66 - -
Total Commission 3405 3811 1918 1435 1512 3190 2683 5877 1008 862 453 686 
BB(2) 6786 5593 7666 9034 10996 13672 12974 14224 14148 12395 17553 23026 
Total EC 10194 9404 9584 10469 12508 16862 15657 20101 15156 13257 18006 23695 
II. Lending 
ECSC 1069 969 908 700 993 1382 1486 918 674 403 280 541 
Balance of payments (1 862 860 - 350 1695 1209 4969 245 410 155 195 
Euratom 443 314 49 
NCI 393 425 357 78 24 36 9 30 
Total Commission 2767 2568 1265 778 1367 3116 2704 5917 968 813 436 736 
BB(3) 6678 6967 8844 11507 12605 14438 16066 17724 17682 18604 20946 22958 
Total EC 9445 9535 10109 12285 13972 17554 18770 23641 18650 19417 21381 23694 
Note: The cffferenoes between total borrowing and lendngbytteCamissionareclueto 
fa refinancing purposes and to changes in the balanoe of loans not assigned by the end of the year. 
The differences between borrowing and lending by the BB are clue to the fact that BBIendngcperaticjns are financed both 
from borrowings and from the Bank's own resources. 
(1) Mechanism for providing financial support for Member States, financial assistance fa non-member countries and food aid 
fathefomerUSSR 
(2) Total resources raised. 
(3) Loans signed out of own resources, noaccount being taken of the g^ararteesprc>/ided byte 
a of operations financed out of NCI resources. 
-32-
4-2 Community borrowings outstanding. 
Community borrowings outstanding (at year-end) (1) 
1982 
1983 
1984 
1985 
1986 
1987 
1988 
1989 
1990 
1991 
1992 
1993 
1994 
1995 
1996 
1997 (ECU million) 
ECSC BB(2) Euratom NCI Sub-total 
6178 16 570 1272 1747 25 767 
6 539 20749 1680 3 269 32 237 
7119 25007 1892 4432 38450 
7 034 26 736 2 013 4 960 40 743 
6761 30271 2168 5 202 44 402 
6689 31957 2 500 5 229 46 375 
6 825 36 928 2164 5 514 51431 
6 738 42 330 1945 5122 56135 
6673 48459 1687 4 542 61361 
7139 58 893 1563 3 817 71412 
7 327 67 784 1338 3 326 79775 
7 331 78 661 1018 2 202 89212 
6 548 83 673 779 1570 92 570 
5 966 87 079 720 1113 94 878 
4677 96 649 572 748 102 646 
3637 110 394 118 218 114 367 Balance-of-pay. 
borrowings 
591 
4610 
4932 
3236 
1890 
2 997 
2459 
2 075 
(3) 2 045 
3 516 
4026 
5204 
7697 
8 032 
0 000 
5 853 
(1) The conversion rates used were those obtaining on 31 December of each year. As the majority of borrowings 
are denominated in national currency, the difference between two year-ends reflects, on the one hand, changes 
in the valuation of the existing stock and, on the other, the net volume of borrowings during the year. 
Original amount of borrowings, plus or minus repayments of the principal, cancellations, annulments and 
exchange-rate adjustments. 
(2) As from 1989 including short term. 
(3) As from 1990 including financial assistance for non-member countries. Total 
borrowing 
26 358 
36 847 
43 382 
43 979 
46292 
49 372 
53 890 
58210 
63406 
74 928 
83 801 
94 416 
100267 
102 910 
109 312 
120220 
33-
4-3 Community borrowings in 1997, by currency 
(ECU million) 
ECU 
BEF 
DKK 
DEM 
GRD 
ESP 
FRF 
IEP 
ITL 
LUF 
NL6 
ATS 
PTE 
FIM 
SEK 
GBP 
Sub-total 
CHF 
JPY 
USD 
ZAR 
Sub-total 
TOTAL 
(1) 
(2) Balance of 
EIB ECSC NCI payments(1) 
1 300 (2) - - 195 
19 
134 ... 
3 437 127 
161 ... 
2 599 3 -
2 590 23 
58 ... 
5 044 23 
99 75 
17 ... 
4 
1 092 123 
45 ... 
189 ... 
2 875 77 
19 639 474 - 195 
566 ... 
541 
2211 
68 ... 
3 387 
23 026 474 - 195 Total 
Borrowing 
1495 
19 
134 
3 564 
161 
2 602 
2 613 
58 
5 067 
174 
17 
4 
1 215 
45 
189 
2 952 
20 308 
566 
541 
2211 
68 
3 387 
23 695 
Balance of payments and financial assistance for non-member countries 
Issued in euros. 1996 
% 
3,6 
0,1 
0,5 
29,7 
0,5 
11,5 
3,7 
0,6 
24,7 
0,6 
0,5 
-
2,0 
0,2 
1.1 
12,3 
91,5 
0,9 
3,2 
4,2 
0,2 
8,5 
100,0 1997 
% 
6,3 
0,1 
0,6 
15,0 
0,7 
11,0 
11,0 
0,2 
21,4 
0,7 
0,1 
0,0 
5,1 
0,2 
0,8 
12,5 
85,7 
2,4 
2,3 
9,3 
0,3 
14,3 
100.0 
4-4 Lending in the Community in 1996 and 1997, by sector and instrument 
(ECU million) 
Productive sector 
of which: allocations 
from global loans 
Infrastructure 
of which: allocations 
from global loans 
Energy 
of which: allocations 
from global loans 
TOTAL 
(1) Financing ECSC 
1996 
248 
178 
20 
12 
280 
granted (indh 1997 
400 
207 
60 
81 
541 
/idual EIB(1) 
1996 1997 
4 477 5 672 
2 630 2 545 
10 388 14 085 
1 535 2 326 
4 945 2 090 
279 206 
19 810 21 847 
loans and allocations Total 
1996 1997 
4 725 6 072 
2 808 2 752 
10 408 14 145 
1 535 2 326 
4 957 2171 
279 206 
20 090 22 388 
from global loans). % of total 
1996 
23,5 
14,0 
51,8 
7.6 
24,7 
1.4 
100,0 1997 
27,1 
12,3 
63,2 
10,4 
9,7 
0,9 
100,0 
34 
4-5 Financing in the Community by the EIB 
1. Regional development 
1.1 By country 
Belgium 
Denmark 
Germany 
Greece 
Spain 
France 
Ireland 
Italy 
Luxembourg 
Netherlands 
Austria 
Portugal 
Finland 
Sweden 
United Kingdom 
1.2 By major sector 
Energy 
Communications 
Environment and various infrastructures 
Industry, services, agriculture 
2. Communications infrastructure 
2.1 Transport 
2.2 Telecommunications 
3. Environmental protection and improvement 
3.1 Environment 
3.2 Town planning 
4. Energy 
4.1 Indigenous resources 
4.2 Import diversification 
4.3 Efficient use of energy 
5. Industrial competitiveness 
of which: small and medium-sized enterprises 
N.B. As some financing serves a number of purpo 
headings cannot be aggregated. in 1996 and 1997 by 
1996 
ECU million 
13 805 
236 
397 
2 297 
730 
2 352 
1 615 
108 
2 853 
0 
17 
254 
1288 
10 
317 
1 331 
4 076 
4 640 
1 826 
3 263 
6 506 
4 500 
2 006 
5 875 
4 209 
1 666 
4 031 
547 
2011 
1 473 
3 776 
2 594 % 
100,0 
1.7 
2,9 
16,6 
5,3 
17,0 
11,7 
0,8 
20,7 
0,0 
0,1 
1,8 
9,3 
0,1 
2,3 
9,6 
29,5 
33,6 
13,2 
23,6 
100,0 
69.2 
30,8 
100,0 
71,6 
28,4 
100,0 
13,6 
49,9 
36,5 
-
Number 
11 034 
ses, the amounts shown i economic objective 
1997 
ECU million 
14 646 
440 
269 
1 852 
752 
1 873 
1692 
72 
2 595 
0 
16 
157 
1 352 
331 
506 
2 741 
996 
6 338 
3 037 
4 273 
8 758 
6 879 
1 879 
7 208 
4 826 
2 382 
2 597 
558 
482 
1 557 
4 556 
., 
2 486 
jnder the different % 
100,0 
3,0 
1.8 
12,6 
5,1 
12,8 
11,6 
0,5 
17,7 
0,0 
0,1 
1.1 
9.2 
2,3 
3,5 
18,7 
6,8 
43,3 
20,7 
29,2 
100,0 
78,5 
21,5 
100,0 
67,0 
33,0 
100,0 
21,5 
18,6 
60,0 
-
Number 
12 772 
-35 
4-6 Geographical breakdown of lending (signatures) in the Community in 1996 and 
1997 
1997 
Belgium 
Denmark 
Germany 
Greece 
Spain 
France 
Ireland 
Italy 
Luxembourg 
Netherlands 
Austria 
Portugal 
Finland 
Sweden 
United Kingdom 
Art. 18 (1) 
Total 
1996 
Belgium 
Denmark 
Germany 
Greece 
Spain 
France 
Ireland 
Italy 
Luxembourg 
Netherlands 
Austria 
Portugal 
Finland 
Sweden 
United Kingdom 
Art. 18(1) 
Total (ECU milli 
ECSC 
20 
-
102 
-
5 
24 
-
40 
76 
-
76 
122 
-
-
76 
-
541 EIB 
1 140 
737 
3 518 
730 
2 716 
2 721 
207 
3 517 
96 
398 
555 
1 350 
401 
925 
3 765 
184 Euratom 
_ 
-
-
-
-
-
-
-
-
-
-
-
-
-
-
22 958 NCI 
_ 
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-Balance of 
payments 
_ 
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
ECSC 
7 
-
33 
-
33 
13 
-
91 
35 
-
1 
-
-
-
51 
-
263 EIB 
658 
688 
3 022 
721 
2 553 
2 509 
189 
4 121 
-
766 
490 
1 294 
302 
847 
2 386 
403 
20 946 Euratom 
_ 
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-NCI 
_ 
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-Balance of 
payments 
_ 
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1) Community projects that cannot be located in a particular Member State ( 
telecommunication cables and satellites, North Sea Oil). on) 
Amount 
1 160 
737 
3 620 
730 
2 721 
2 745 
207 
3 557 
172 
398 
631 
1472 
401 
925 
3 841 
184 
23 499 
Amount 
665 
688 
3 054 
721 
2 585 
2 523 
189 
4 212 
35 
766 
491 
1294 
302 
847 
2 437 
403 
21 210 
eg-% 
4,9 
3,1 
15,4 
3,1 
11,6 
11,7 
0,9 
15,1 
0,7 
1.7 
2,7 
6,3 
1.7 
3,9 
16,3 
0,8 
100,0 
% 
3,1 
3,2 
14,4 
3.4 
12,2 
11.9 
0.9 
19.9 
0,2 
3.6 
2,3 
6,1 
1,4 
4,0 
11,5 
1.9 
100,0 
36 
4-7 Breakdown of NCI loans, by country at 31.12.1997 
(BXIrrOon) 
Country 
BB*gum 
Denmark 
Greece 
Spain 
France 
Ireland 
Italy 
NuthBftaiKfe 
Portugal 
UK 
Total NCM 
-
66,8 
-
-
70,0 
239,0 
479,9 
-
134,9 
990,5 Nad 
-
100,6 
114,9 
-
125,0 
116,6 
473,4 
-
67,1 
997,5 Nam 
-
303,0 
111,2 
69,2 
938,7 
68,4 
1228,5 
3,2 
29,9 
109,3 
2 861,6 Narv 
23,6 
63,2 
-
118,2 
72,3 
-
285,7 
9,9 
95,8 
668,8 NCI 
Fteccnstr. 
-
-
80,0 
-
-
-
598,7 
-
-
678,7 Total 
23,6 
533,5 
306,1 
187,4 
1206,0 
424,0 
3066,3 
3,2 
39,8 
407,1 
6 197,1 % 
0,4 
8,6 
4,9 
3,0 
19,5 
6,8 
49,5 
0,1 
0,6 
6.6 
100,0 
MB: Loans signed have been converted into "borrowing equivalents". 
ThelccreinthevariciuscurTierae^ 
working day of the quarter preceding the signing of the contract. 
4-8 Breakdown of NCI loans, by currency: amounts outstanding as at 31.12.1997 
Currency 
ECU 
BEF 
DEM 
ESP 
FRF 
ITL 
LUF 
NLG 
GBP 
CAD 
CHF 
JPY 
USD 
Total 
(1) Exchange rate a! (million) 
70,0 
-
10,0 
-
-
-
-
176,8 
11,5 
-
75,0 
-
-
5 at 31.12.1997. Equivalent in 
ECU million (1) 
70.0 
-
5,1 
-
-
-
-
79,4 
17,2 
-
46,7 
-
-
218,4 
37-
4-9 Interest subsidies paid out in the Community by the various Community 
mechanisms 1977-97 
(ECU million) 
Year 
1977 
1978 
1979 
1980 
1981 
1982 
1983 
1984 
1985 
1986 
1987 
1988 
1989 
1990 
1991 
1992 
1993 
1994 
1995 
1996 
1997 
d) 
(2) 
(3) Non-discounted systems (1) 
ECSCArt.54 ECSCArt.56 
(restruct.) (convers.) 
1,3 2,7 
9,8 16,5 
10,4 8,0 
25,7 33,4 
7,6 6,3 
10,5 19,3 
4,0 7,1 
6,2 34,0 
3,6 74,9 
5,9 33,1 
2,4 35,6 
3,0 38,6 
2,6 42,5 
1,3 40,6 
1,0 48,6 
106,0 
114,3 
51,1 
11,5 
36,8 Employment Disaster 
in Portugal reconstr. 
_ _ 
-
-
-
-
3,0 
14,4 
24,4 
28,4 
28,6 
4,0 28,6 
3,9 27,8 
26,6 
23,1 
20,1 
17,2 
12,3 
9,3 
6,1 
4,3 (3) 
1,8 - 4,0 Discounted systems (2) 
EMS ERDF SME 
facility 
- . . 
-
200,0 12,1 
197,0 
193,2 
209,8 
200,0 
-
-
-
-
-
-
-
-
-
-
65,5 
2,8 
25,3 
-
Interest subsidies spread over time and charged to the funds set aside for this purpose in the 
annual budgets. 
Interest subsidies paid by the Commission after discounting to a present value, and charged 
to the budget as a single sum in the initial year. 
As from 1996, including the interest subsidy paid direct by the Commission, to the Autonomous 
Region of Madeira (Council Decision 95/250/EC of 29 June 1995). 
38 
4-10 Financial assistance outside the Community in force or under negotiation at 
31.12.1997 
ACPStates-OCr 
ACP 
OCT 
South Africa 
Mediterranean countries^) 
Algeria, Cyprus, Egypt, 
Israel, Jordan, Lebanon, 
Malta, Morocco, Syria, 
Tunisia, Turkey, Gaza 
and Wast Bank 
Turkey 
Malta 
Cyprus 
CEECs 
Albania 
Bulgaria 
Czech Republic 
Estonia 
Hungary 
Latvia 
Lithuania 
Poland 
Romania 
Slovakia 
Slovenia 
FYROM 
CIS; Mongolia 
Former USSR 
Moldova 
Georgia, Armenia 
Ukraine 
Belarus 
Latin American and 
Asian countries 
Pre-Accession facility (lb) Agreement 
Second Financial Protocol 
Fourth Lome Convention 
Council Decision 
Council Decision (7) 
Euro-Mediterranean 
partnership (7) 
Special financial cooperation 
not yet in force 
Fourth Financial Protocol 
Fourth Financial Protocol 
Council Decision (7) 
Financial protocol 
Council Decision 
Council Decision (7) 
UBhwIity Operations from 
BB resources 
End of 
period 
2000 
2000 
2000 
2000 
2000 
1998 
1998 
2000 
2000 
1997 
2000 
2000 Celling 
d) 
1693 
1658 
35 
375 
3140 
2310 
750 
30 
50 
3520 
150 
275 
900 
3500 
(1) Loans attracting interest subsidies from the European Development Fund in the cas 
from the general budget of the European Conrrriunitiesinthecaseofenviraimental 
amounts fa the interest subsidies are charged to non-repayable aid. 
(2) Granted and managed by the EB. 
(3) Granted and managed by the Commissioi. 
(4) Cumulated amounts since 1990. These operations are granted and managed by th 
(5) Irduding amounts intended fa interest subsidies on BB loans. 
(6) The amounts available under the previous financial protocols may be used at the Sc 
earmarked a residual amounts. 
(7) Part of the rnultiannual overall mandate approved on 14 April 1997. 
(8) Main items of the financial association agreed at Cannes (1995). 
(9) Indk^ivearmjrtcrarp^totherKxw^ 
(10) Financial reference period 1996-99: Regulation (EC) No 1488/96 (including amount 
and interest subsidies fa EIB funding of environmental projects. 
(11) Algeria 
(12) Indicative programme 1996-99; main items of the financial allocation agreed at Can 
(13) Reserved fa interest subsidies fa loans granted by the EIB to infrastructure projed 
country is also eligible fa aid from the financial allocation agreed at Cannes (1995) 
(14) Financial reference period 1996-99. 
(15) Commercial credits. 
(16) Fa applicants fa EU membership:Hungary, Poland, Slovak Republic, Czech Repii 
Sovenia and Cyprus. Operati 
budget 
Risk capital 
operations 
(2) 
1030 
1000 
30 ons from 
resources 
Non-repayable 
aid 
(3) 
12102 
11967(5) 
135(5) 
204 
200(9) 
2 
2 3460(8) 
3425(10) 
13 
22 
4952(12) 
20(13) 
2224(14) 
2796(14) 
« of projects in the ACP States and the ( 
projects in certain Mediterranean counb 
B Commission. 
•ime time, viiether that involves all of the 
s reserved fa risk-capital transactions 
nes(1995). 
s of interest both to the Community and 
blic, Bulgaria, Romania, Estonia, Latvia, (ECU million) 
Balance of payments 
assistance (4) 
Ceiling 
600 
600(11) 
2005 
650 
250 
40 
180 
80 
100 
580 
125 
40 
1820 
1250(15) 
60 
170 
285 
55 
XT and 
ies. The neccessary 
sums 
FYROM. This 
Lithuania, 
-39 

ISSN 0254-1475 
COM(98) 409 final 
DOCUMENTS 
EN . 09 10 01 
Catalogue number : CB-C0-98-422-EN-C 
ISBN 92-78-37569-1 
Office for Official Publications of the European Communities 
L-2985 Luxembourg 
<H>