ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(80)670
Vol.1980/0214

Disclaimer
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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(80)670final
Brussels,30thOctober1980
PROPOSAL FORACOUNCILDECISION -
empoweringtheCommissiontocontractloansfor
thepurposeofpromotinginvestmentwiththe
Community
(PresentedbytheCommissiontotheCouncil)
C0M(80)670final

Introduction .
1.Theorigin oftheNC*
2.Theoperations carried out
S
3.Theexperience gained . _
> - >
4.The outlook
\
Proposai
Table 1:Borrowings
Table 2:Breakdown oflending contracts signed
Annex :Draft decision

SUMMARY
Article 6ofthe Council decision establishing theNew Community
Instrument (NCI )provided for areport bytheCommission tothe Council
and tothe Parliament ontheexperience gained during itsoperation .
This report fulfills this requirement bydescribing the loans raised
andmade ,upuntil 1.10,80 .
Seventeen months' experience are then summarised and achievements
highlighted -thediversification ofCommunity borrowers thesignificant
financial support given energy and infrastructure investment -together
with thedifficulties encountered .Inthe light ofthis information ,it
isproposed tocontinue theNCIoperations bymaintaining thetranche ,
system and lifting theoverall ceiling .
Theattached draft Council decision incoporates theduly amended
original decision (78/870/CEE).

Introduction
AsrequiredunderArticle6oftheCouncilDecisionestablishing the
(1)NewCommunityInstrument (NCI),theCommission herebypresents areport
totheCouncilandtotheParliament ontheexperience gainedduringthe
operationofthatDecision.
!
Thereportisaccompanied byaproposalthattheschemeshouldberenewed.
1.TheoriginoftheNCI- .
TheCommission proposedl-hJune1977thattheNewCommunityInstrument
forborrowing andlendingbeestablished asameansofbackingupCommunity
measuresattacking unemployment ,thelowlevelofinvestment andthelackof
convergence inMemberStates'economicperformances ..
Thenewmechanism wasbasedontheideathatitisintheinterestsofthe
EuropeanEconomicCommunitytouseitscreditworthiness ontheinternational
marketstoraisecapital,inadditiontothatprovidedfromotherCommunity
sourcesoffinancing,forinvestmentincertainkeyareas.
TheCommission'sproposalwasendorsedbyParliament andtheEconomicand
SocialCommittee,andtheCouncilapprovedtheprincipleoftheNewCommunity
Instrument byempowering theCommissiontoborrowtheequivalentofupto1,000
millionEUAinprinciple onbehalfoftheEEC.Theloansweretobeactivated /
tranchebytrancheandweretobeusedtofinanceinvestmentprojectswhich
wouldservetheCommunity'spriorityobjectivesintheenergy,industryand
infrastructure sectors. *
On14May1979,theCouncilauthorized afirsttrancheofborrowingsfor
anamountnotexceedingtheequivalent ofacapitalsumof500millionEUAto
beusedforinvestmentprojectsintheinfrastructure andenergysectors
(1)Decisión78/870/EEC,16October1978.
(2)CouncilDecision 79/486/EEC.

/ ,
-2-
Infrastructure investment wastocover transport telecommunications ,
agricultural improvements ,water supply works andenvironmental protection .
Energy investment wastocontribute togreater self-sufficiency ,security
anddiversification ofCommunity energy supplies ,with particular attention
-being paid toenergy conservation andtothedevelopment ofalternative energy
sources .
(1)TheBalance of500M'of ECUwasauthorized bytheCounci lon22.7.80
which has now also decided that itshould beused for the same sectors and-
according tothesame guidelines asforthefirst tranche butthat exceptionally
among certain infrastructure projects certain "projects which concern housing
andadvance factories inpriority regions canbeconsidered for upto20Xof \
the tranche . . \
•2.Theoperations carried out-situation at1October 1980
Since theCouncil Decision of14May 1979 ,theNCI hasbeen inoperation
for 17months .During this period ,despite thedelays inapproving thesecond
tranche ,which interrupted thecourse ofoperations ,contracts forthegranting
ofloans totalling 391.9 million EUAhave been signed andprojects involving
anadditional total of336,1 million EUAare atanadvanced stage ofpreparation .
Theoperations carried out in1979 (atotal of277million EUA incontracts
signed )aredescribed inanannual -report presented totheCouncil andParliament
(2)
vinApril' .Tables 1,and 2appended hereto show allthese operations together
with those carried outbetween 1January 1980 and30September 1980 ,giving a
total of391.9 million EUA inlending contracts signed .Thesectors areshown
below . ' . ■* • ■ -
•••/»••
(1)Council Decision 80/739/EEC .
(2)"First report ontheborrowing and lending activities oftheNewCommunity
Instrument (NCI )-financial year 1979",which theCommission transmitted
totheCouncil andtoParliament on16April 1980 (Doc.C0M(80 )192final ,
16April 1980 ).

Energy :
Alternative sources
Transportation
Exploitation ofCommunity hydrocarb .Number of « ' .loans Amount
6 163,9-2 58,8
1 _16,7
TOTAL 9 239,4
Infrastructure :
Water
Roads
Telephones3 90,2
1 19,4
2 30,4 '
■ '1 12,5
TOTAL • 7 152,5
Thegeographical breakdown isasfollows :
Ireland 101,1
Italy 185,5
United Kingdom 105,3 "Development ' ft.
regions er
101,1 0
106,3 79,2
105,3 0
Thefinancing wasprovided outofborrowings amounting toatotal of '
399,7 million EUA.

3.Theexperience gained ,
Experience oftheoperation oftheNCI isobviously brief :butperhaps
itisnottooearly toseewhat canbelearnt from it.
The NCI oncapital markets
Firstly ,theintroduction oftheNCIasanother means bywhich the
Community raises money onthecapital markets hasproved asuccess .Community
loans floated under theNCI label have been well received ,notably byinstitu­
tions required under their ownregulations toobserve ceilings oninvestments ,
foreach category ofborrower .Thus ,despite tension and rising interest rates
onthenational market inUSdollars during the last quarter oflast year ,the
first loan inthat currency wasplaced onrelatively favourable terms .The DM
andHFL loans andthefollowing USdollar loans were placed without anyparti­
cular difficulty .
Theplacings ofNCI loans has notimpeded issues under other Community
borrowing machinery .Thevolume andfrequency ,oftheir issues ,notably those
ofthe ECSC andofthe EIBhave continued toincrease rapidly .
Ι
In1979 ,thevarious instruments borrowing inthename oftheCommunity
accounted for12%oftheinternational capital market .Clearly ,such borrowings ,
reinforced byplacings ,play animportant role inrecycling asawhole .The
growth oftheoil-producing countries' surpluses (which maybeestimated at
US2115,000 million for1980 )andtheefforts toadjust burenergy andindustrial
structures underline the usefulness ofall the financial mechanisms which can
contribute totheorderly use ofthe capital available .
The NCI lendings A
Asregards loans granted ,theeffective orprobable commitment ofalmost
three quarters ofthetotal inonly 17months isinitself sufficient indication
that real demand exists . /

Inpractice,suchdemandhasbeenmetthroughthecofinancing bytheNCI
ofprojectsalreadycoveredbytheEIB.Thisreflectsthefactthatthefields
coveredbytheNCIdeliberately coincidewiththosecoveredbytheEIB.In
otherwords,bysupporting acategoryofprojectsgivenprioritystatusforthe
purposesofadjustment andemploymentwithintheframeworkofEIBactivities,
theNCIhasincreasedtheCommunity'scontribution tosuchprojects.This
additionalsupportmaybequantified.TheEIBfinancedanaverageofsome38'%
ofthetotalcostsofalltheprojectswhichitassistedin1979.Theamount
offinancingwhichitprovidedforprojectsthatwerecofinancedslightlyexceeds
thisaverageandamountedto39%.TheNCIprovidedanadditional 14%:in
otherwords,theCommunity'ssupportrepresents 53%ofthetota.lcost.Inthe
caseofindividualprojects,Communityassistance mayamounttoasmuchassome
70%.
Thisadditional stimuluswasparticularly markedinthecaseof'investment
projectsinIrelandand,insectoralterms,inthecaseofloansgrantedinthe
energysector.Thus,theNCIincreasedtheflowofCommunitycapitaltocountries
regionsandsectorswhosegrowthanddevelopment representpriorityCommunity
objectives . , ,,
Geographical breakdown
Atotalof26%ofNCIfinancing wenttosixprojectsinIreland,alarge
shareinviewofthesizeofthecountry.IntheUnitedKingdom,asimilar
volumeoffinancing wasprovidedthroughtwoloans,oneofwhich(forthehydro­
electricpowerstationatDinorwic)aloneaccountedfor20%ofallNCI'loansso
fargranted.Theremaihderofthefinancingwenttotheloansallocatedto.
projectsinItaly,whichaccountfor47%ofthetotal.SinceItalyandIreland
havebeehdesignated aslessprosperous membercountrieseffectively andfully
participating intheEuropeanHonetarySystem,allbuttwooftheloansgranted
tothesecountriescarrya3%interestsubsidyfinancedoutoftheGeneral
BudgetoftheCommunity.Thesesubsidieshaveturnedouttohavesucha-stimu-
latingeffect,notablyinIreland,thattheprogrammeofworkandtheconclusion
ofthecontractshavebeenspeededup.

Sectoral breakdown
- ·V
Assistance intheenergy sector hasbeen particularly conspicuous ,
accounting for61%ofthetotal# ,andhasthus been inline with thepriority
which theCommunity attaches totheobjective ofachieving greater self-
sufficiency ,security anddiversification ofenergy supplies .Assistance in
financing power stations fired byfuels other than oil,theexploitation of
indigenous primary sources ofenergy such aspeat andgeothermal energy ,diver­
sification ofexternal supply byboth type andorigin -allthese involve
investment that isessential ifthepresent dependence onimported energy of
most oftheCommunity countries istobeovercome .After only afewmonths ,the
NewCommunity Instrument hasshown theimpetus itcangive toinvestment activity
inatoppriority area such astheenergy sector .Itistobehoped andindeed
(expected that themomentum will continue inthefuture .
Since priority hassofarbeen given totheinfrastructure andenergy
sectors ,noloans have yetgone toindustry ,although itisincluded inthe
basic Decision .
The Commission considers that itwould bedesirable toextend the scheme
to .include industry ,soastofacilitate thestructural adjustments atpresent
demanded ofindustry and inview ofthe scope forpermanent jobcreation offered
bysuch investment ."
Consequences onemployment
:Assistance infinancing infrastructure andenergy investment has aneffect
onemployment that issignificant buthard toquantify .Thecapital goods and
theconstruction works create jobs over relatively long periods ofbetween five
andeight years .Theshort-run employment impact oftheinvestment projects which
theNCIandtheEIBhelped tofinance in1979 maybeestimated atsome 30,000
jobs' during thefirst twoyears oftheprojects ,decreasing thereafter .

Administering the NIC '•
Experience sofarhasalso revealed some lack offlexibility inadministering
theNCI,afailing which could beserious inthefinancing ofindustrial sector
operations but .isalready damaging for asignificant number ofinfrastructure and
energy projects .Thepresent practice –followed asameans ofavoiding
operational ^deficits orsurpluses -istoprovide finance either intheform of
"back -to-back" operations fcr large scale projects oringrouping together
several projects which aretoosmall tobefinanced individually .Inthesecond
case the loan contracts areconcluded before thefunds areborrowed ,the loan
contracts fixing ,within certain limits ,thecurrencies ,andbasic conditions , -
including interest rates .Themarkets arethen approached onthebasis ofthese
terms .This means that when thecontract forthe loan tobegranted issigned ,
theborrower canbegiven noassurance astotheexact terms ofthe loans he
will receive (although hedoes know theupper limits ),orindeed astowhether
hewill beactually able toobtain the loans .
1 <
This operational problem hasnothing todowith thebasic Decision setting
uptheNCI,since theDecision does not rule out thepossibility ofborrowing
thefunds before inclusion -ofthecontracts relating totheLoans tobegranted .
Thedepartments oftheCommission and oftheBank are atpresent examining
technical procedures for .asolution that would operate more smoothly while
remaining consistent with thebasic Decision . N
The loans have been granted under themandate given totheEuropean
-V ' - '
Investment Bank pursuant toArticle 5ofthe basic Decision .Inaccordance
with this mandate ,theBank carries outtransactions onbehalf of,forand -
atthe :risk oftheCommunity .Loan applications areaddressed totheBank
either directly orthrough theCommission oraMember State .After aCommission
decision ontheeligibility ofeach project^'the Bank ,inaccordance with the
procedures laid down initsStatute anditsusual criteria ,examines these
applications ,decides whether andonwhat terms togrant'the loans aridadministers
them .Thefinancial operations areverified both by-thefinancial control bodies
under theGeneral Budget andbytheauditing bodies oftheEI8intheir ownfields
Thedivision oftasks hasstood thetest ofexperience andhasnotimpaired
theCommission 'scapacity toexercise itsresponsibilities inthepolicy guidance
ofthe NCI . -

â-
4oTheontlooic
TheNCIwassetuptoprovideadditional Communitysupportfc-refforts
beingcarriedouttocombatunemployment andraisethelevelofinvestment ™
Thedescription ofitsoperationsgivenaboveshowshowfavourablythis
initiative hasbeenreceived ^
Unfortunately ,theeconomicoutlookintheshorttermandinthemedium
termsuggeststhatinvestment ,whichisanessentialdrivingforceinresto­
ringthehes-lihoftheeconomy,mustbeenccuragedo Theprocessofadjusting
tothenewenergysituationhasbegun,butneedstobepushedfurtherand
fastero
TheCommunitycannottakeuponitselftheprincipalroleinthetaskof
carryingoutthenecessaryinvestment,Thatistheresponsibility oftheprivate
sectorandofthenationalauthorities ,thoughinanumberofareastheCommu­
nitycancontribute byactingasacoordinatingagentorevenbyproviding
budgetaryassistance o
However,theCommunitycanandmustmobiliseitsborrowingcapacityto
helpinthefinancingofessentialinvestment 0TheCommunityisabletoobtain
fundsonextremelyfavourabletermsandtopassthesetermsontothefinal
borrower,whotherebyusuallygainsaconsiderable netadvantages Whilecertain
organisations withintheCommunityareabletoborrowonexcellentterms,inter­
ventionbyCommunityauthorities oftenimprovestheoverallbalanceoftheir
financingplans#
SuchactionbytheCommunityinfactservestwoofitscurrentpriority
objectives :
-throughanappropriate geographical distribution ofthefundsraiseditcan
facilitatetheconvergence oftheeconomicperformances ofthememberstates,
andinparticularhelpnewmemberstocomplywithCommunityrequirements .

-throughajudiciousborrowingpolicyitoanenabletheCommunitytoparticipate
inrecyclingtheoil-exporting countries *surpluses.Inthiscontext,the
examinationinparticularofthepossibility ofdenominating Communityloans
inECUs,accordingtotheproposalsofthemonetarycommitteewhichwereapproved
"bytheCouncil,shouldbepursued#
Theseconsiderations demonstratetheneedfortheNCIactiontobecontinued..
Itshouldnevertheless retainoneofitsmaincharacteristics :theconcentration
onarelativelylimitednumberofprojectshavingahigheconomicpriority.This
isalreadyexemplified bytheconcentration ofNCIactioninprioritysectors,
inaccordancewiththeDecisionsapplyingthefirstandsecondtranches.While
itwouldbedesirablefortheNCItohavearoleintheindustrialsectortoo,
whereinvestmentproblemsareconsiderable ,thisshouldnotentailreducing
itsassistanceto'thesectorsinitiallychosen(energyandinfrastructure ),
notablybyincreasingitssupportfortheCommunity'sstructuralpolicies.
Forthispurpose,thetranchemechanismshouldbestrengthened byassigning
agivenvolumeofNCIactivitymorespecifically toclearlydefinedfunctional
objectives.Iftheprecisefieldofintervention remainstobedeterminedin
thecourseofthediscussions oneachtranche,itwouldbeappropriatealsoto
laydowninthebasicdecisionthepossibilityofopeningsimultaneous andsue-
mcessivetranches.,
Itisnecessary,bymeansofanannualreport,tocontinuetoprovidethe
ParliamentandtheCouncilwithregularandfullinformation ontheactivity
andthefinancialmanagementoftheinstrument.Furthermore ,theNCIisobviously
oneoftheborrowing/lendinginstrumentsfullycoveredbytheCommission'spro­
posalsthatsuchactivitiesshouldbeincludedintheBudget. '<
Inanycase,itsactivitiesaresubjecttotheusualfinancialcontrol
ofthebudgetaryauthorityandoftheCourtofAuditors,nottomentionthe
separateauditscarriedouonEIBoperations.
InthelightofexperienceandgiventheoutlookregardingtheNew
CommunityInstrument,theCommissionproposesthatthebasioDecisionof

-is-
16October1978berenewed ,inaccordancewiththedraftCouncilDecision
annexedtothisreport®Asdrafted,theDecisionwouldensurethatthe
actionalreadyinitiatedispursued,expandedandgivengreateroperational
flexibility ,,ThisistheobjectofthedraftDecisionattached.;,
ItisbasedontheinitialDecision,withthefollowingsignificant
changes:
(a)thereisnolongeranyoverallceilingontheloanswhichtheCommission
isempoweredtoraises
(b)thesystemofborrowingintranchesismadeslightlymoreflexiblesoas
toalloweventxiallysimultaneous trancheso

NCI-TrancheI:BORROWINGS
(situation ,at30.9*80)
>Ttnxhtx Maturi-NominalNoDate Nature , .,tyxnterestIssue
(years)rate%priceMillionsEUA I
Currency
(mio.)ofwhich
'USD
■ofwhich
DMofwhich
HPL
M*I22.10.79|publicissue 15I77/8{DM225I90,4 90-4
2-15.11.79 Ipublicissue 2011,60 |USS125 89/489/4
M6.2.80 Iprivateissue 158/30DM4116/2 16.2
4.
5.20.2.80
21.2.80privateissue
publicissue15
15103/8
11/75Hfl40
USS20114/415/415/414/4
21.4.80publicissue 109/45DM27,911/- 11.-M14.5.80 "publicissue 11/00US27557/657/6' ....
8-|15.5.80privateissue1014/00USS86/16/1
9.
10.3.6.80
!22.7.80'privateissue
publioissue15
15117/8
11/0Hfl40
US27014/4
48/948-9•14/4
11.15.9.80privateissue108/3/8DM228,7 8,7
15.9.80privateissue 158,3/8;DM3313,-
. 13,-
13.18.9.80privateissue 1513,00 US220
!_i_.•14,214,2
ii
TOTAL | 399,7231,6 139,3]■28,8,I
I I100%57,9 34,87,3'

■ 2·
NCI-TrancheI:Breakdownoflendingcontractssigned
(situationat3U.?.Bo)
Dateof
Project contractCostof
Project
Million
EUALoanssignedEr.:s
inte­
rest
sub­
sidyBreakdownbycountryContributiontocostin%|
I
jnational
currencymillion
EUAItalyUnited
KingdomIreland "NCIEIBNCI+
EIB
1.Aqueduct,PertusilloIII
(.CASSA) |
2»Lothian V/ater
3.Dublin V/ater 1
4*IrishTelephones
5.IrishRoads
6«Industrialestate,Syracuse
IV(CASSA)
7«SIP,Apulia17,9.79
17.9.79
17.9.79
17.9.79
17.9.79
18.7.80
19.9.80266
116
99
67
100
61
175Lit45000
I
Ë16,3
Elr16,5
Elr12,-
Elr13,-
Lit15000
Lit.15OOCj39.6
25,9
24.7
17,9
19.4
12.5
12,5X
X
X
X39,6
12,5
,12,525,9
2^,7
17,9
19,415
22
25
27
19
21
,742
44
45
41
49
29
4957
66
70
68
68
50
56
IA.Infrastructure |I884 152,5 !64,6Ii25,962,0|r–ir~i
8.Dinorwiohydroelectric I
powerstation(CEGB) !
9«Aghadapowerstation(ESB )
10.AltoGessohydroelectric
powerstation(ENEL)
11*Geothermalpowerstations
(EHEL)
12*Peatproduction(B0RD
NAMONAI)
13.Peatbriquettes (BORD
KAKONAII)
14*Systemformonitoringthe
production andtransmis­
sionofelectricity(ENEL )
15«Algeria-Italy gaspipe­
line,SicilyandCalabria
seotion(ENl)
16.AOIPHydrocarbons17.9.79
!17.9.79
I
14.12.79
14.12.79
28.4.80
28.4.80
'29.4.80
18.7.80
19.9.80669
100
336
58
71
28
149
445
90650,-
Elr16,5
Lit40000
Lit12000
:EIr3,7
Elr6,-
Lit20000
Lit50000
Lit2000079.4
24,7
34,9
10.5
5,5
8,9
17,1
41,7
16,7x
x
x
x
X
X
X34,9
10,5
17,1
41,7
16,779,4
24,7
5,5
8,912
25
10
18
8
32
11
9
1927
45
41
50
i
27
32
46
™ 138 |
I
5039
70
51
68
35
64
57
47
,69
|B.Energy 1.946 | 239,4 120,979J439,1 1
TotalsA+B |2.830j391,9 185,5105,3.|101,1143953

Propose!fora
UQUTiCILEECISÏON
empoweringtheCommission "tocontract .^cansforthepurpose
ofpromotinginvestmentwiththeCommunity
THECOUNCILOPTHEEUROPEANCOfMJKITIBS ,•
HavingregardtotheTreatyestablishing
theEuropeanEconomicCommunity,andin
particularArticle235thereof,
Havingregardtotheproposalfromthe
Commission ,
HavingregardtotheOpinionoftheEuropean
Parliament^,
HavingregardtotheOpinionof-theEconomic
2andSocialCommittee
Whereaseconomicactivity,employment ,and
investmentintheCommunityareunevenly
distributed andarealltoolowj
Whereas,inordertostimulateeconomic
activityandsupportcommonpolicies,
thefinancing'schemesetupunderCouncil
Decision78/870/EECwithaviewtomaking,
anadditionalcontribution toinvestment
promotionintheCommunityshould"be
pursuedandstrengthened ,alongsideexisting
Communityfinancialinstitutions andbodies,
xtfhosescopewhould "bewidened;
WhereasCommunityactiontothisendwould
havearealspill-overimpactandfinancialimpactfar"beyonditsappa­
rentsize,thuspromotingtheconvert
genceofmembercountries' economic
trends;
Whereasplentifulfinancecan"befound
onthecapitalmarketswhichcould "be
tappedtofinanceinvestments within
theCommunity } ."
WhereastheCommunityhasacredi-
worthinessinitsownrightwhichmust
beusedtobestadvantage --toreinforce
Europeansupportforthesaidinvest­
mentsandtosupportpoliciesdecided
onatCommunitylevel5 •
WhereastheEuropeanInvestment Bank
hassta-tedthatitiswillingto
contributetotheimplementation of
thisscheme,
HASDECIDEDASFOLLOWS'?
Article1
TheCommissionisherebyempowered
2

2
tocontract pon "behalf oftheEuropean
Sconoiaic Coieavuniiy ,loans whose proceeds
shall "belent tofinance investment
projects which contribute tothe
greater convergence and integration
ofthe economic policies oftheMember
StateSr ,
These projects shall besuch that they
serve theCommunity 'spriority objec­
tives intheenergy ,industry and in­
frastructure sectors ,taking account
inter alia ofthe regional impact
ofthe projects and the need to
combat unemployments
This mechanism may beused onitsown
orinconjunction with other Comiaunity ■
financing inst rumentso
Article 2
.■-roans shall "beactivated intranches
TheCouncil ^acting byqualified majority
onaproposal from theCommi ssionfandaf­
terconsulting European Parliament ^shall
laydown theguidelines for theglial ™
foility ofprojects .
TheCommission shall decide whether or-not
projects areeligible inaccordance "with ,
the guidelines thus laid down 0
TheCommission shall borrow onthecapital
markets within '',be limits ofthe
tranches authovipedr ,Asingle borrowing maybeused to
finance loans fordifferent objectives .
Articl e3
Connected borrowing andlending trans­
actions shall beden.oniins.ted inthe
currencies oftheborrowing transact ionsr
Lending terms as .regards thereimburse­
ment oftheprincipal andtherate and
payment ofinterest sha.ll besofixed
astocover the .costs andexpenses
incurred inconcluding andperforming
both theborrowing andlending side of
the transact ions o
Article 4
Theterms ofloans toberaised shall
benegotiated bytheCommission inthe
best interests oftheCommunity having
regard totheconditions oncapital
markets and inaccordance with the re­
quirements astoduration and' -other
financial aspects set out inthe loans
applications forloans tobegrant edo
Funds borrowed shall bedeposited with
theEuropean Investment Bank tobein­
vested onatemporary basis ifnecessary -
<1<?>«/0Oo

-3-
Article 5
Amandate shall begiven totheBank to
grant loans inpursuance ofthi& I>eoiabn «
The Bank shall carry out transactions
under this mandate on "behalf of,forand
atthe risk ofthe -Community .Loan
requests shall beforwarded totheBank
either directly orthrough theCommission -
oraMember State# After aCommission
decision ontheeligibility ofeach pro­
ject pursuant toArticle 2theBank shall ,
inaccordance with the procedures laid down
initsStatute and itsusual criteria ,
examine these requests ,decide whether
andonwhat terms togrant the loans ,
and administer them . ,Article 7
The financial control and audit of
the Commission 'saccounts shall be
carried out inaccordance with the
Financial Regulation applicable to
the General Budget oftheEuropean
Communities .
Done at
For the Council
The President
Themandate given totheBank shall be
embodied inacooperation agreement
between the Commission and the Bank -
Article 6
The Commission shall annually inform the
Council andParliament ofreceipts and
expenses resulting from borrowing ajid
lending transactions .
Inthelight ofthis information ,the
Council may carry out anassessment of
the general operation ofthemechanism
setup "bythis Decision©