Proposal for a Council Decision granting a Community guarantee to the European Investment Bank against losses under loans for projects in South Africa (94/C 373/09) COM(94) 543 final - 94/0276(CNS)

(Submitted by the Commission on 5 December 1994)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 235 thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion from the European Parliament,

Whereas the Council approved on 4 October 1994 a Cooperation Agreement between the Community and the Republic of South Africa, that aims to promote harmonious, balanced and sustainable social and economic development and that commits the Contracting Parties to step up cooperation in all areas within their respective spheres of competence;

Whereas South Africa is undertaking major political, social and economic reforms;

Whereas these economic reforms will make a decisive contribution to the rapid establishment of mutual beneficial economic and commercial links between South Africa and the Community;

Whereas the European Investment Bank is able to grant loans out of its own resources to help achieve this objective;

Whereas, in particular, there is a great need for capital investment in this country; whereas this investment requires external finance; whereas the European Investment Bank (hereinafter referred to as 'the Bank`) could make an important contribution;

Whereas the Council on 6 December 1993 decided on a joint action concerning support for the transition towards a democratic and multiracial South Africa;

Whereas the Council adopted on 19 April 1994 a package of immediate measures to be presented to the South African government emerging from the democratic and multiracial elections of 26 to 28 April 1994;

Whereas the Council is calling on the Bank to begin its operations in support of investment projects carried out in South Africa by offering it the guarantee provided for in this Decision;

Whereas this guarantee is subject to the conditions set out in the Regulation establishing a Guarantee Fund for the Community's external lending activities;

Whereas the Bank and the Commission will adopt the procedures for granting the guarantee;

Whereas, for the purposes of adoption of this Decision, the only powers provided for by the Treaty are those given pursuant to Article 235,

HAS DECIDED AS FOLLOWS:

Article 1

The Community shall guarantee in full vis-à-vis the European Investment Bank any payments not received by it but due under loans granted, in accordance with its usual criteria, in respect of investment projects carried out in South Africa.

The guarantee shall be restricted to an overall loan ceiling of ECU 300 million over a period of two years beginning on the date this Decision takes effect. If, on expiry of this period, the loans granted by the Bank have not attained the overall amount referred to above, the two-year period shall be automatically extended by six months.

Article 2

The Commission shall inform the European Parliament and the Council every six months of the situation regarding loans signed. To that end, the Bank shall regularly transmit to the Commission the appropriate information.

Article 3

The Commission shall inform the European Parliament and the Council each year of the loans operations and shall at the same time submit an assessment of the operations of the scheme and of coordination between the financial institutions operating in that area.

Article 4

The Bank and the Commission shall fix the terms on which the guarantee is to be given.

Article 5

This Decision shall take effect on the day of its publication in the Official Journal of the European Communities.