Proposal for a Council Decision on the provision of loan guarantees for investments carried out by SMEs creating employment
Date: 1996-04-24
Institutions: European Commission
Subjects: European Investment Fund, credit guarantee, job creation, loan, small and medium-sized enterprises

COMMISSION  OF THE EUROPEAN  COMMUNITIES 

it 
* 

it 
it 

Brussels,  10.04.1996 
COM(96)  155 final 

96/0107  (CNS) 

ELISE 

(European  Loan  Insurance  Scheme  for  Employment) 

Reinforcing  confidence  through 
renewed  investment  and employment  creation 

Proposal  for  a 
COUNCIL  DECISION 

on  the provision  of  loan  guarantees  for  investments  carried out 
by  SMEs  creating  employment 

(presented  by  the  Commission) 

EXJHLÂN ATGRMïMfiMORANDII M 

A 

INTRODUCTION 

In  its report  presented  to  the  Madrid  European  Council0',  the  Commission  referred  to  the 
widespread  recognition  within  the  EU that small  and  medium-sized  enterprises  are one  of 
the  key  sectors 
the 
European  Union.  Both  the  Community  and  the  Member  States  at  national,  regional  and 
local  level,  already  try  to  unlock  the  potential  of  SMEs  through  an  array  of  policy 
measures  and  support  schemes. 

for  generating  employment  opportunities  and  growth 

in 

Available  evidence  clearly  shows  that  SMEs, particularly  at  the  smaller  end,  now  play  a 
key  role  in  terms  of  growth  and  that  these  firms  moreover  generate  an  above  average 
share  of  new  jobs.  Due  to  a  number  of  basic  market  and  policy  imperfections  in  a 
number  of  areas  (regulatory  environment,  labour  market,  access  to  new  technologies, 
product  and  services  market,  access to  financing,  etc.), their  full  potential  for  growth  and 
employment  creation  is  however  not  properly  realized. 

B 

ACCESS  TO  THE  FINANCIAL  MARKET 

SMEs  are  much  more  dependent  on  internal  sources  of  funds  (e.g.  own  capital,  retained 
profits,  etc.)  than  the  larger  ones,  and  typically  face  a  difficult  financial  environment. 
Bank  lending  constitutes  the  predominant  form  of  external  funding  for  these  firms. 
However,  many  firms  experience  serious  difficulties  in getting  access to  sources of  long-
term  lending  in  order  to  finance  their  investments  and  to  expand  their  activities. 

This  problem  is of particular  relevance  for  small  and  medium-sized  enterprises,  as  banks 
consider  that  the  credit  risks  applying  to  these  companies  are  high  (failure  rates  indeed 
exceed  those  applying  to  larger  companies),  notably  also  because  these  enterprises  are 
often  under-capitalized  They  are, moreover,  often  unable  to provide  adequate  collateral 
or  other  forms  of  loan  security  required  by  banks.  This  situation  is  exacerbated  in  the 
case of transnational  investments, as banks are reluctant for  a variety  of reasons to  finance 
cross-border  operations. 

The  small  and  medium-sized  firms,  which  manage  to  get  access  to  sources  of  loan 
funding,  will  generally  end  up  paying  higher  interest  rates than  the ones  charged  to  large 
companies.  These  impediments  have  a significant  adverse  impact  on  their  development 
and  thus  on  their  potential  for  growth  and  for  job  creation. 

C 

RELEVANCE  OF  LOAN  GU AR AN TEES 

Loan  guarantees  constitute  a  powerful  and  cost-effective  tool  to  help  overcome  these 
obstacles,  both  by  facilitating  the  access  to  sources  of  lending  and  by  bringing  down  the 
level  of  borrowing  costs.  Following  the  establishment  of the  European  Investment  Fund 
(EIF)  on  14  June  1994  (see  section  D  below),  the  Community  is  endowed  with  a 
specialized  institution  for  the  extension  of  loan  guarantees,  notably  in  favour  of  SMEs. 
For  operations  involving  SMEs,  the  Fund  operates  in  an  indirect  manner  i.e.  through 
financial  intermediaries,  while  the  loan  guarantees  are  not  extended  on  an  individual 
basis,  but  to  portfolios  of  loans.  The  appraisal  of  the  individual  loan  applications  h 
carried out by financial  intermediaries; these institutions remain  exposed to a certain  share 
of  the  credit  risk  of  the  loan  (in  general  50%)  in  order  to  ensure  the  quality  of  their 
appraisal  work. 

fh 

Small  and  mediurn-si/ed  enterprises,  a dynamic  source  of  employment,  growth  and 
the 
the  European  Union.  Report 
competitiveness  m 
European  Commission  to  the  Madrid  European  Council.  Brussels,  December  1995. 

presented 

by 

2 

As  the  EIF  operates  on  a  commercial  basis,  it  charges  guarantee  premiums  in  order  to 
cover  the  risks taken  on,  as well  as  its operational  costs.  By  covering  the  cost  of the  EIF 
guarantee  premiums through  the budget, the Community  will  ensure that these  guarantees 
are  provided  to  the  beneficiaries  at  no  cost.  As  the  budgetary  cost  of  the  guarantee 
premiums  is  relatively  modest  in  comparison  with  the  corresponding  volume  of 
guaranteed  loans  (which  themselves  cover  part of the cost of the  associated  investments), 
a  significant  leverage  effect  can  be  obtained  with  limited  budgetary  resources.  These 
financial  interventions  benefiting  enterprises  must  be  coherent  with  the  principles  of 
Community  State  aid policy.  Eligibility  criteria  regarding  beneficiary  enterprises  will  be 
in  compliance  with  Commission  Recommendation  C(96)  261  final. 

This  guarantee  approach  has  also  been  adopted  in  the  framework  of  the  "Growth  and 
Environment"  pilot  project,  where  enterprises  carrying  out  investments  producing 
environmental  benefits  get  access  to  EIF  loan  guarantees  at  no  cost.  It  should  be  noted 
that  the  loan  guarantees  extended  by  the  Fund  do  not  create  any  contingent  liabilities 
upon  the  Community  budget,  as  any  claims  resulting  from  calls  being  made  upon  the 
guarantees  will  be  honoured  by  the  Fund. 

D. 

SUMMARY  DESCRIPTION  OF  THE  EIF 

The  creation  of  the  EIF  was  decided  at  the  European  Council  in  Edinburgh.  The  Fund 
has  an  authorized  capital  of  ECU  2  billion,  of  which  30%  has  been  subscribed  by  the 
Community  and  40%  by  the  LIB  An  important  number  of  financial 
institutions 
(currently  78),  representing  all  Member  States  of  the  European  Union,  constitute  the 
third  part  of  the  Fund's  shareholder  base.  The  Fund  has  been  formally  established  on 
14 June  1994  and  is  located  in  Luxembourg. 

The  activities  of  the EIF  are  focused  on  two  target  areas  of  Community  interest,  namely 
trans-European  networks  (TENs)  and  small  and  medium-sized  enterprises  (SMEs).  The 
Fund  is  currently  providing  loan  guarantees  in  both  areas  of  activity,  while  its  Statute 
also  allows  for  the  provision  of  equity,  subject  to  a  favourable  decision  by  the  Fund's 
General  Meeting  in  June  1996. 

The  total  amount  of  operations  approved  by  the  EIF  since  inauguration  amounts  to 
approximately  ECU  1.5  billion,  of  which  about  10% concerns  SMEs;  a  further  amount 
of  SME  operations  is  under  appraisal.  In  addition,  the  Fund  is  currently  preparing  the 
signature  of  contracts  corresponding  to  about  ECU  0.5  billion  in  the  framework  of  the 
"Growth  and  Environment"  scheme. 

E 

DESCRIPTION  OF  THE  PROPOSED  COMMUNITY  SCHEME 

While  SMEs,  and  particularly  small  firms,  are  at  a disadvantage  to  obtain  bank  funding, 
they  are  also the  biggest  creators  of jobs.  The  annexed  Decision  on  the  establishment  of 
a  guarantee  scheme,  which  the  Council  is  invited  to  adopt,  will  effectively  encourage 
investment  programmes  by  these  companies  when  linked  to  employment  creation  The 
scheme will  have  a double  impact  as it will  not only  facilitate  access to bank  funding,  but 
also  reduce  the  interest  rates  charged  to  the  borrowers. 

The  benefit  of  the  loan  guarantee  scheme  will  be  restricted  to  SMEs,  and  particularly 
small  enterprises,  while  only  investment  projects  involving  the  creation  of  employment 
will  be  eligible.  The  guarantees  provided  by  the  EIF  will  in  general  cover  50%  of  the 
amount  of the loan,  while transnational  investments  (such  as the creation  of  a production, 
research  or  distribution  facility 
in  another  Member  State,  or  the  creation  of  a 
joint  venture)  will  enjoy  priority  access  to  the  scheme  and  benefit  from  guarantee  cover 
up  to  75% of  the  loan  size. 

The  scheme  will  be  implemented  by  the  EIF,  while  the  loans  will  be  extended  by  a 
network of financial  intermediaries throughout the European  Union.  The Commission  and 
the Fund  will  ensure that the network  of intermediaries is sufficiently  broad to ensure that 

wjvth©<seheme operates  on  a fully  competitive  basis  rn the  interest  ôf SMEs.  As  a starting 
base, this network  will  include banks operating  as intermediaries  in the framework  of the 
EIB's  global  lending  programme.  The  conditions  applying  to  the  Bank's  lending  ensure 
that the  loans  are used  for  productive  investments  and for  suitable  projects.  Within  this 
network,  priority  will,  moreover,  be  given  to  financial  institutions  with  particular 
experience  and interest  in  SME  lending.  Other  financial  institutions  with  the  necessary 
qualifications  (e.g. guarantee institutions) will also have the possibility to join the network 
and become involved in the scheme. The Fund will sign framework  agreements with these 
financial  intermediaries. 

The  detailed  terms  and  conditions  applying  to  this  new  scheme  will  be  set  out  in  a 
cooperation  agreement, to be signed between the Commission  and the EIF. The conditions 
relative  to  the  creation  of  employment  will  be  largely  inspired  by  the  ones  which  apply 
to  the  SME  facility. 

F 

FINANCING  AND  EVALUATION 

The  proposed  Council  decision  is  for  an  initial  scheme,  lasting  24  months  at most  from 
the date of its adoption, which  will  be financed  entirely  by ECU 25  million entered in the 
1996  budget  on  the  "Employment  and  Growth  for  Europe" budget  line  (B5-322).  This 
requires  the  prior  adoption  of  an  SAB  for  this  line. 

The aforementioned  amount of budgetary  support will  allow for EIF guarantees  covering 
a  total  loan  portfolio  of  ECU  1 000  million.  The  budgetary  appropriations  destined  to 
cover the cost of the guarantee premiums will be transferred  directly to the Fund and into 
a  special  Community  account.  Neither  the  financial 
intermediaries  nor  the  final 
beneficiaries  will  therefore  receive  Community  funds  in  a direct  manner. 

The Commission  will  report on the implementation of this scheme to the budget authority 
and will provide an overall  evaluation of the functioning  and impact of the scheme within 
18  months  at  most  from  the  date  of  its  adoption.  On  this  basis,  the  Commission  will 
decide  whether  to  propose  to  the  legislative  authority  an  extension  of  the  scheme. 

Proposal  for  a 
COUNCIL  DECISION 

on  the  provision  of  loan  guarantees  for  investments  carried  out 
by  SMEs  creating  employment 

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  of  the  European  Parliament^; 

Whereas  the  European  Council,  meeting  in  Brussels  on  10  and  11  December  1993, 
adopted  the  White  Paper  on  Growth,  Competitiveness  and  Employment,  as the  basis  for 
action  by  the  Community  and  its  Member  States,  supporting  the  development  of  SMEs 
the 
as  a  key  element  of 
White  Paper,  in particular  Chapter  2 thereof,  emphasized  the importance of SMEs for  the 
competitiveness  of  European  industry;  and  whereas  specific  attention  has  been  drawn  to 
the  need  to  improve  access  to  sources  of  financing  and  credit; 

in  the  Community;  whereas 

increased  competitiveness 

Whereas  the  Commission  presented  a  report  to  the  European  Council  in  Madrid  on 
15 and  16 December  1995, entitled  "SMEs: a dynamic source of employment, growth  and 
competitiveness  in  the  European  Union",  in  which  in  Chapter  HID,  the  Commission  put 
forward  a  number  of  concrete  action  proposals  as  regards  improved  access  of  SMEs  to 
appropriate  sources  of  funding; 

Whereas  the  Presidency  Conclusions  of  the  European  Council  in  Madrid  referred,  in 
relation  to  SME  policy,  to  the  need  to  "improve  the  financial  environment  for  them  by 
means  of  better  access  to  capital  markets  and  encourage  development  of  the  European 
Investment  Fund  function  with  regard  to  SMEs"; 

Whereas,  on  14  June  1993,  the  Council  adopted  Decision  93/379/EECw,  relative  to  a 
multi-annual  programme  of  Community  actions;  whereas,  on  20  March  1996,  the 
Commission  adopted  a  proposal  for  a  third  multi-annual  programme  for  enterprises,  in 
particular  SMEs,  in  the  European  Union(4);  and  whereas  this  Decision  should  be 
complementary  with  these  programmes,  and  should  constitute  part  of  the  Integrated 
Programme  in  favour  of  SMEs  and  craftsmanship; 

Whereas,  on  22  November  1993,  the  Council  adopted  a  resolution  on  the  reinforcement 
of  the  competitiveness  of  enterprises,  notably  small  and  medium-sized  enterprises  and 
craftmanship,  and  the  development  of  employment^; 

Whereas 
the  present 
Recommendation  [C(96)  261  final]; 

initiative 

should  be 

in  compliance  with  Commission 

( i) 

(2) 

O) 

M) 

(?) 

O J No 
OJNo 
0.1 No  L  161,  2.7.1993,  p.  68 
OJ No 
OJ  No  C  326,  3.12.1993,  p.  1. 

Whereas  bank  lending  constitutes  an  important,  if  not  predominant,  form  of  external 
funding  for  small  and  medium-sized  enterprises;  whereas  such  enterprises  experience 
particular  difficulties  when  trying  to  obtain  access  to  sources  of  loan  finance,  because  of 
the  fact  that  credit  risks  are  perceived  to  be  higher  than  for  loans  granted  to  larger 
companies,  and  because  such  enterprises  are  often  unable  to  provide  sufficient  collateral 
or  other  forms  of  loan  security;  whereas  interest  rates  charged  to  such  enterprises  are 
generally  higher  than  those  applying  to  larger  borrowers;  and  whereas  the  particular 
difficulties  of  financing  innovative  and  new  technology  investments  should  be  noted; 

Whereas  loan guarantees  constitute  a cost-effective  instrument  to facilitate  access to  loans 
and  moreover  lower  the  interest  rates  applying  to  these  loans;  whereas  such  guarantees 
should  facilitate  and  stimulate  investments  by  the  beneficiary  enterprises  and  should  be 
extended  exclusively  in  those  cases  where  the  loans  and  investments  lead  to  the  creation 
of employment;  and  whereas both  material  and immaterial  investments  should  be  eligible 
under  the  scheme; 

Whereas  investments  with  a transnational  character  deserve  special  attention  in  view  of 
the  fact  that  the  impediments  towards  gaining  access  to  sources  of  loan  finance  are 
exacerbated  in  comparison  with  other  forms  of  investment; 

Whereas  the  European  Investment  Fund  (EIF)  was  set  up  in  June  1994  to  contribute  to 
the  pursuit  of  Community  objectives  by  stimulating  investment  in  trans-European 
networks  and  small  and  medium-sized  enterprises;  and  whereas  the  Community  has 
become  a  member  of  the  Fund  by  virtue  of  Council  Decision  94/375/EO"1; 

Whereas  the  Fund  is  empowered  to  issue  loan  guarantees  according  to  its  Statute;  and 
whereas  the  cost  of  the  guarantee  premiums  corresponding  to  these  loan  guarantees  can 
either  be borne by  the beneficiary  of  the loan  guarantee,  or  alternatively  by  a third  party, 
notably  by  the  Community; 

Whereas  the payment  of  the  guarantee  premium  by  the  Community  implies that  the  loan 
guarantees  are  provided  at  no  cost  to  the  final  beneficiary,  and  whereas  the  credit  risks 
associated  with  these loan  guarantees  are not borne by  the  Community  budget, but by  the 
EIF;  and  whereas  a significant  leverage  effect  can  be  achieved  with  a  limited  volume  of 
budgetary  resources; 

Whereas  the  EIF  has  indicated  its  willingness  to  participate  in  the  implementation  of 
this  Decision; 

Whereas  the  EIF  and  the  Commission  will  enter  into  a  cooperation  agreement  on  the 
implementation  of  this  Decision;  whereas  the  European  Investment  Bank  (EIB)  will  be 
closely  involved  in the implementation  of this Decision;  and  whereas the loans  guaranteed 
by  the  EIF  will  be  made  available  throughout  the  Community  by  a  network  of 
financial  intermediaries; 

Whereas the budgetary  resources  necessary  for  the payment  of the  premiums  will  be  paid 
out  directly  to  the  EIF  on  a  special  Community  account; 

Whereas  the  loan  guarantees  are to  be made  available  throughout  the Community  and  be 
implemented  as  quickly  as  possible; 

Whereas  the  Treaty  does  not  provide  powers  others  than  those  of  Article  235  for  the 
adoption  of  this  Decision, 

(6t  OJ  No  L  173, 7.7.1994,  p.  12. 

HAS  DECIDED  AS  FOLLOWS: 

Article 1 

The  Community  shall  provide  subsidies  for  the  purpose  of  paying  the  cost  of  the 
guarantee  premiums  linked  to  loan  guarantees  extended  by  the  EIF  on  a  volume  of 
ECU  1 000  million of  loans, subject to the availability  of  appropriations  written  into the 
Community  budget.  Only  loans  for  investment  projects  involving  the  creation  of 
employment,  and  extended  to  small  and  medium-sized  enterprises,  shall  be  eligible. 
Particular  priority  shall  be given  to  small  enterprises. 

The  guarantees  shall  apply  during  the  whole  life  of  the loans  and shall  in  general  cover 
50% of  the  size  of  the loans.  They  shall  be  extended  by  the  EIF  under the  usual  terms 
and conditions applying to its guarantee operations.  For investments with a transnational 
character,  the  cover  rate may  reach  up to  75% of  the  size  of  the  loans. 

Article  2 

The  scheme  shall  operate  for  an  initial  period  of  up  to  24  months  from  the  date  of  its 
adoption.  The  scheme  shall  be  administered  by  the  EIF  on  behalf  of  the  Community, 
exercising  the  same  diligence  as  for  operations  carried  out  from  its  own  resources. 

The detailed  terms and conditions  for  implementing  this Decision,  notably  as regards the 
monitoring  of  employment  creation,  shall  be  laid  down  in  a  cooperation  agreement 
between  the  Commission  and the EIF. 

Article  3 

The  Commission  shall  inform  the  European  Parliament  and  the  Council  on  the 
implementation  of  this  Decision.  The  Commission  shall,  notably  on  the  basis  of  the 
information  made  available  by  the  EIF,  and  within  18  months  at most  from  the  date  of 
its adoption, provide an evaluation  on the overall  utilization  of the scheme and its impact 
on  the  creation  of  employment  and on  investment,  notably  for  the  purpose  of  assessing 
possible  future  action  beyond  the  initial  period. 

Done  at Brussels, 

For the  Council 
The  President 

FINANCIAL  STATEMENT 

1. 

TITLE  OF  OPERATION 

ELISE (European  Loan  Insurance  Scheme  for  Employment). 

2. 

BUDGET HEADING  INVOLVED 

B 5 - 3 2 2. 

3. 

LEGAL  BASIS 

Article  235. 

4. 

DESCRIPTION  OF  OPERATION 

4.1  General  objective:  Facilitate the  access of  small  enterprises to  sources of  loan 
finance,  through  the  provision  of  loan  guarantees  extended  by  the  EIF 
(European  Investment Fund). Only enterprises creating additional  employment 
will  be  eligible. 

4.2  Period  covered:  1996. 

5. 

CLASSIFICATION  OF  EXPENDITURE 

5.1  NDC 
5.2  DA. 

6. 

TYPE  OF  EXPENDITURE  OR  REVENUES 

The  expenditure  will  take  the  form  of  subsidies  destined  to  cover  the  cost  of  the 
guarantee  premiums,  which  are  charged  by  the  EIF  for  the  extension  of  loan 
guarantees  to  the  beneficiary  enterprises  on  a  loan  volume  of  ECU  1  billion, 
extended  by  qualified  financial  intermediaries.  The  loan  guarantees  will  be  made 
available  to  the beneficiaries  at  no  cost,  as the  cost  of the guarantee  premiums  will 
be  borne  by  the  Community  budget. 

7. 

FINANCIAL  IMPACT 

7.1  Method  of  calculating  total  cost 

Total  cost  is  estimated  at ECU  25  million  (taking  account  of  the  fact  that  the 
subsidies  concerned  will  be  transferred  to  the Fund  on  a present  value  basis). 
This  cost  figure  notably 
(management, 
administration,  control,  etc.)  of  the  Fund,  promotion  costs  and  the  costs 
related  to  an  independent  evaluation  of  this  action. 

includes  all  operational  costs 

7.2  Distribution  of  costs  (in  current  appropriations) 

Budget  1996 

TOTAL 

Subsidies  (guarantee  premiums) 

\iC[l  25.0  million 

HCll  25.0  million 

7.3 

Indicative  schedule of  appropriations 

7.3.1  Schedule for  proposed  new  action 

Appropriations  for  commitments 
Appropriations  for  payments 

| 

1996 
25.0 
25.0 

TOTAL 
25.0 
25.0 

| 

(current  appropriations;  in ECU million) 

8.  ANTI-FRAUD  MEASURES 

The  appraisal,  monitoring  and  administration  of  the  loans  will  be  carried  out by 
qualified  financial  intermediaries  and  subject  to  certain  contractual  conditions 
imposed  by  the  EIF.  The  intermediaries  have  an  interest  in  the  successful 
conclusion  of  the  lending  operation  as they  will  cover  the  remaining  part  of  the 
credit  risk  on the loans. 

As regards the creation of employment, an administrative follow-up mechanism will 
be  implemented  by  the  Commission  and  the  EIF  in  order  to  verify  that  the 
necessary  conditions  have been  complied  with  by the  beneficiaries. 

9. 

ELEMENTS OF COST-EFFECTIVENESS  ANALYSIS 

9.1  Specific  objectives 

The proposed operation will foster and accelerate the implementation of 
investment  programmes  by  SMEs  because  the  loan  guarantees  will 
facilitate  and  enhance  the  access  of  these  companies  to  loan  finance. 
The loan guarantees will, moreover, lower the interest rates applying to 
these  loans  The  proposed  action  will  be specifically  targeted  towards 
the  creation  of  additional 
investment  programmes 
employment.  In addition, the underlying investments will strengthen the 
competitivenes  and  profitability  prospects  of  these  enterprises  and 
contribute  to economic  growth. 

leading 

to 

Target  population:  small  and  medium-sized  enterprises  creating 
employment.  Particular  priority  will  be given  to small  enterprises. 

9.2 

Justification  of  the  action 

incentive 

By  facilitating  the  access  of  SMEs,  and  particularly  small  enterprises, 
to  sources  of  bank  lending,  and by  reducing  the  cost  of  this  lending, an 
important 
to  consider 
additional  investments,  specifically  when  linked  to the  creation  of jobs. 
Renewed  impetus in the field of productive  investment, notably  by  such 
firms,  contributes to the reinforcement  of growth perspectives within the 
European  Union  and  the  creation  of  extra jobs. 

to  these  companies 

is  provided 

is  higher  and/or  available  collateral 

investments,  particularly  by  SMEs,  has  been 

Choice  of  modalities:  the  usefulness  of  loan  guarantees  as  a  stimulator 
of 
extensively 
demonstrated  in  the  past  at  various  levels.  Loan  guarantees  are 
extremely  relevant  as  such  companies  typically  face  difficulties  to 
attract  sufficient  funding  because  of  the  fact  that  the  perceived  credit 
risk 
loan 
guarantees  will  be  extended  by  the  EIF,  which  has  been  set  up  to 
further  objectives  of  Community  interest,  notably  in  the  area  of  the 
financing  of  TENs 
(trans-European  networks)  and  SMEs.  The 
Community  is  a  shareholder  of  the  Fund,  owning  30%  of  subscribed 
capital,  while  the  EIB  owns  a  further  40%  of  the  subscribed  capital. 
This  offers  the  advantage  of  channelling  Community  aid  through  a 
well-established  institution,  familiar  with  Community  rules  procedures 
and  closely  linked  to  the  European  Investment  Bank. 

insufficient.  The 

9.3  Monitoring  and  evaluation  of  the  operation 

The  following  elements  will  be  considered  when  evaluating  the  overall 
effectiveness  of  the  proposed  action: 

the  overall  amount  of  employment  created  in  the  framework  of  the 
present  initiative; 

the  overall  take-up  of  loans  under  this  initiative; 

the  aggregate  volume  of  investments  realized  in  the  context  of  the 
present  action. 

The  budget  authority  will  be  informed  of  the  impact  of  this  initiative. 
Possible  extensions  of  the  action  will  be  examined  in  the  light  of  the  results 
achieved  and the  evaluation  of the initiative, which  will be transmitted  to  the 
budgetary  authority  within  18 months  at  most  from  the  date  of  its  adoption. 

10.  ADMINISTRATIVE  EXPENDITURE 

The proposed  operation  will not involve  any  increase  in the number  of  Commission 
staff  or  administrative  expenditure. 

10 

ISSN 0254-1475 

COM(96) 155  final 

DOCUMENTS 

EN 

08  10  04 

Catalogue number  : CB-CO-96-179-EN-C 

ISBN 92-78-02845-2 

Office for Official Publications of the European Communities 

L-2985 Luxembourg 

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