Proposal for a COUNCIL DECISION empowering the Commission to indemnity the European Investment Bank against losses under loans for projects in certain countries outside the Community
Date: 1992-06-03
Institutions: European Commission
Subjects: EIB loan, European Investment Bank, credit guarantee, third country

COMMISSION OF THE EUROPEAN  COMMUNITIES 

COM(92) 242  final 

Brussels,  3  June  1992 

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL 

EXTENSION OF OPERATIONS BY THE EUROPEAN  INVESTMENT 
BANK OUTSIDE THE COMMUNITY 

Proposal  for a 

COUNCIL DECISION 

empowering  the Commission  to  indemnify  the European  Investment 
Bank  against  losses under  loans for projects  in certain  countries 
outside  the Community 

(presented  by  the Commission) 

EXTENSION OF OPERATIONS BY THE EUROPEAN  INVESTMENT 

BANK OUTSIDE THE  COMMUNITY 

(Communication  by  the Commission) 

< 

EXPLANATORY  MEMORANDUM 

The  Community  has  an  extensive  network  of  relationships  with  an 
important  number  of  countries  with  the  aim  of  fostering  their 
economic  development. 

the 

Community's 

particular, 

assists 
In 
developments  towards  a  market  economy  in many  countries  ,  towards 
a  more  efficient  Insertion  In  the  International  economy  and 
fosters  the  process  of  regional  Integration.  In  recent  years  the 
Community  has  intensified  its  economic  co-operation  with  countries 
which  are  making 
economic 
development. 

efforts  for  a  sound 

sustained 

external 

policy 

II.  The  EIB  represents  an  important  element 

In  the  Community's 
external  activity.  It  not  only  contributes  to  the  economic 
co-operation  policy  of  the  Community  but  also  intensifies,  by  its 
presence,  the  historical  links  that  exist  between  Member  States 
and  the  beneficiary  countries;  the  extension  of  the  EIB  external 
activities 
to  countries  with  which  the  EEC  has  concluded 
cooperation  agreements,  will  therefore  further  enhance  the  impact 
of  the  EEC  in  the  worId. 

III.  This  extension  will  be  focused  on  projects  of  mutual  interest,  the 
financing  of  which  will  be  subject  to  the  Bank's  usual  criteria. 
Decisions  to  finance  a  specific  project  will  be  taken,  on  a 
case-by-case  basis,  by  the  Board  of  Directors  of  the  EIB. 

An  overall  limit  of  ECU  250  million,  per  year,  shall  be  set  for  a 
three-year  period;  this  limit  will  be  reviewed  at  the  end  of  the 
per iod. 

There  was  agreement  that  these  loans  should  benefit  from  Community 
be 
budget 
treated  in  accordance  with  what  will  be  agreed  as  to  the  future 
treatment  of  Community  guarantees. 

guarantees.  Furthermore, 

these  guarantees 

should 

IV.  The  Commission  therefore  asks  the  Council  to: 

1.  invite  the  EIB  to  extend  Its  lending  operations,  up  to  a  limit 
of  ECU  250 million  per  year  for  a  three-year  period,  to 
projects  of  mutual  interest  in  countries  with  which  the 
Community  has  concluded  co-operation  agreements. 

2.  adopt  the  attached  Decision  providing  a  guarantee 

in  the 

Communi ty  budget, 

note  that  the  Commission  will,  within  the  framework  of 
budgetary  procedure,  propose  the  appropriate  budgetary  cover. 

3 

Proposal  for a 

COUNCIL DECISION 

empowering  the Commission  to  Indemnify  the European  Investment  Bank 

against  losses  under  loans  for  projects  In  certain  countries 

outside  the Community. 

THE COUNCIL OF THE EUROPEAN  COMMUNITIES, 

Having  regard  to  the  Treaty  establishing  the  European  Economic 

Community,,and  in particular  Article 235 thereof, 

Having  regard  to the proposal  from  the  Commission1, 

Having  regard  to the opinion of  the European  Parliament2, 

Whereas  the  General  Affairs  Council  of  13  and  14 May  1991  agreed,  on 

the  basis  of  a  communication  from  the  Commission,  to  a  limited 

extension  of  European  Investment  Bank  operations  in  those  third 

countries  with  which  the  Community  has  concluded  co-operation 

agreements; 

Whereas  the Ecofin Council  of 8 July  1991  confirmed  the orientations of 

the General  Affairs Council; 

1 
2 

OJ No C 
OJ No C 

Whereas  the  Ecofln  Council  of  19 May  1992 decided  on  the  guidelines  to 

be  applied  for  loans  from  the  European  Investment  Bank  granted  in 

countries  with  which  the  Community  has  concluded  co-operation 

agreements; 

Whereas  the  Council  has  invited  the  Bank,  and  the  Bank  has  agreed,  to 

make  available,  in conformity  with  Its Statutes,  loans  for  projects  of 

mutual  Interest  that  meet  its  usual  criteria  in  certain  countries 

outside  the Community  under  the guarantee  provided  in this  Decision; 

HAS DECIDED AS FOLLOWS: 

Sole Art icle 

The  Community  shall  fully  guarantee  the  European  Investment  Bank  In 

cases  where  the  Bank  does  not  receive  the  payments  due  under  any  loan 

granted  in  accordance  with  Its  usual  criteria  in  those  countries 

outside  the  Community  with  which  the  Community  has  concluded  co 

operation  agreements.  An  overall  limit  of  ECU  250 million  per  year, 

shall  be  set  for  a  three-year  period;  this  limit  will  be  reviewed  at 

the end of  this  period. 

To  this  end  the  Bank  and  the  Commission  shall  agree  on  the  procedures 

for  Implementing  the guarantee. 

Done  at Brussels, 

For  the Counc 

The  President 

S 

FINANCIAL  RECORD 

1. 

Budget  line  concerned 

Article  BO-219:  EEC  guarantees  for  EIB  loans  to  other  countries 
outside  the  Community. 

2. 

Reference  (legal  base) 

To  be  created  by  the  proposed  decision,  on  the  basis  of 
Article  235  of  the  Treaty. 

3. 

Classification  of  the  expenditure 

ObiIgatory. 

4. 

Description  and  justification  for  the  action 

The  budget  entry  is  intended  to  provide  a  budgetary  support  for 
guarantees  offered  by  the  European  Community  to  the  European 
Investment  Bank  to  cover  loans  which  the  Bank  has  been  asked  to 
extend  to  finance  capital  investment  projects  In  those  countries 
outside  the  Community  with  which  the  Community  has  concluded  co 
operation  agreements. 

5. 

Nature  of  the  expendlture  and  method  of  calculation 

a)  Nature  of  the  expend! Uire 

A  guarantee  to  the  European  Investment  Bank. 

b)  Method  of  calculation 

A  token  entry  Is  proposed  given  that  the  amount  and  timing  of 
any  call  on  this  budget  line  cannot  be  calculated  In  advance 
and  furthermore  it  Is  to  be  hoped  that  this  budget  entry  will 
not  be  called  on. 

6. 

Effect  of  the  action  on  Intervention  credits 

Not  applicable. 

7. 

Financing  of  Intervention  expenditure 

Not  applIcable. 

8. 

Financial  Impact  on  staff  costs  and  pperations 

Not  applicable. 

£ 

ISSN 0254-1475 

COM (92) 242 final 

DOCUMENTS 

EN 

li 

Catalogue number: CB-CO-92-258-EN-C 

ISBN 92-77-44926-8 

Office for Official Publications of the European Communities 

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