WRITTEN QUESTION E-2003/98

by Ursula Stenzel (PPE) to the Commission

(30 June 1998)

Subject: European Investment Bank

The Finance Ministers of the European Union, in their capacity as governors of the European Investment Bank, have decided to increase its capital to ECU 100 billion.

Does the Commission regard the granting of loans on favourable terms as a possible means of easing the path to accession for the candidate countries in the context of the pre-accession strategy?

If so, what practical projects, in the Commision's view, should be supported?

Answer given by Mr de Silguy on behalf of the Commission

(17 September 1998)

The European Investment Bank (EIB), the Community's financing agency, provides banking back-up for investment projects aimed at achieving the Community's internal and external objectives. To that end, it borrows on the capital markets the funds necessary to finance its loans (ECU 26 220 million in 1997) to public or private operators.

Like any bank, the EIB is required to observe a specified ratio between the amount of its subscribed capital and the maximum outstanding amount of its loans. Its Statute sets the ratio at 1:2.5. When, on 31 December 1997, the total amount of loans outstanding reached ECU 142 700 million, i.e. close to the theoretical maximum of ECU 155 000 million, the EIB was to benefit from an increase in its capital so as to enable it to continue its lending in support of the Community's objectives. On 5 June 1998 the EIB Governors therefore raised the level of subscribed capital to ECU 100 000 million with effect from 1 January 1999, with the result that the theoretical amount of maximum loans outstanding was increased to ECU 250 000 million. That increase in the EIB's financing capacity applies to its activities both inside and outside the Community.

Regarding the pre-accession strategy, the EIB, in response to the call by the Ecofin Council in January 1997, strengthened its support for the candidate countries by setting up at the beginning of 1998 a pre-accession facility of ECU 3 500 million available until 2000. That facility is in addition to the existing Community mandate established by the EIB for a similar amount (ECU 3 520 million), thereby doubling the EIB's capacity to finance investments in candidate countries. The EIB envisages loans totalling ECU 5 500 million in the period 1998-1999. The Commission considers this sufficient to finance operations in candidate countries until January 2000.

The facility and the Community mandate will be used to support candidate countries in preparing for accession to the Community. Under the partnership agreements, priority will be given to projects promoting integration and the adoption of Community law in areas such as environmental protection, the development of transport and energy networks (especially trans-European networks), industrial competitiveness and regional development.

As part of the pre-accession strategy, the Commission and the EIB intend to adopt a pro-active stance towards the co-financing of projects, especially those concerning the environment and transport. Co-financing will take the form of aid under the Phare programme, alongside EIB loans, so that the costs to candidate countries will be further reduced. At the end of 1997 the total commitments of the EIB and of the Phare programme for projects being co-financed amounted to ECU 1 756 million and ECU 719 million respectively.