Proposal for a COUNCIL DECISION granting a Community quarantee to the European Investment Bank against losses under loans for projects outside the Community - (Central and eastern Europe, Mediterranean countries, Latin America and Asia, and South Africa)
Date: 1996-11-13
Institutions: European Commission
Subjects: Community budget, EIB loan, credit guarantee, financial aid, third country













EUR-Lex - 51996PC0586 - EN






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51996PC0586

Proposal for a COUNCIL DECISION granting a Community quarantee to the European Investment Bank against losses under loans for projects outside the Community - (Central and eastern Europe, Mediterranean countries, Latin America and Asia, and South Africa)  /* COM/96/0586 FINAL - CNS 96/0278 */  


Official Journal C 013 , 14/01/1997 P. 0009 





Proposal for a Council Decision granting a Community guarantee to the European Investment Bank against losses under loans for projects outside the Community (Central and Eastern Europe, Mediterranean countries, Latin America and Asia, and South Africa) (97/C 13/06) COM(96) 586 final - 96/0278(CNS)(Submitted by the Commission on 29 November 1996)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 of the Commission,Having regard to the opinion of the European Parliament,Whereas the countries in Central and Eastern Europe (Albania, Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovak Republic and Slovenia) are undertaking major political and social reforms and have embarked on a fundamental restructuring of their economies;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;Whereas the European Council meeting in Essen on 9 to 10 December 1994 defined the pre-accession strategy for the associated countries in Central and Eastern Europe;Whereas the European Council in Cannes on 26 to 27 June 1995 agreed to supplement the budgetary assistance granted to the Mediterranean countries by an increase in European Investment Bank (EIB) loans to contribute to the creation of a free-trade area and to the Euro-Mediterranean partnership;Whereas the European Council meeting in Madrid on 15 to 16 December 1995 called on the Council and the Commission to implement the declaration on the Euro-Mediterranean partnership and the work programme drawn up at the Barcelona Conference with the Mediterranean countries (Algeria, Cyprus, Egypt, Israel, Jordan, Lebanon, Malta, Morocco, Syria, Tunisia, Turkey, Gaza-West Bank); whereas, at the same meeting, the Council confirmed the importance of the EIB's role as an instrument of cooperation between the Community and Latin America and called on the Bank to intensify its activities in the region; whereas the European Council also noted with respect to enlargement that the continued activities of the EIB will allow an overall increase in the input for accession preparations;Whereas the European Council meeting in Florence on 21 to 22 June 1996 welcomed the results of the Asia-Europe summit, which marked a turning-point in the relations between the two continents;Whereas the Bank is completing the current loan programmes for Central and Eastern Europe pursuant to Council Decision 93/696/EC and the lending that is governed by the fourth generation of financial protocols and horizontal financial cooperation (Regulation (EEC) No 1763/92) in the Mediterranean non-member countries;Whereas the Bank has already completed the three-year lending programme in Latin America and Asia pursuant to Council Decision 93/115/EEC; whereas in January, 1996 the Commission proposed to Council a renewal of the lending programme in Latin America and Asia for an indicative period of one year;Whereas the Bank will be completing in June 1997 the two-year lending programme in South Africa pursuant to Council Decision 95/207/EC;Whereas the Council is calling on the Bank to continue its operations in support of investment projects carried out in those countries by offering it the guarantee provided for in this Decision;Whereas this guarantee is subject to the conditions set out in Council Regulation (EC, Euratom) No 2728/94 of 31 October 1994 establishing a Guarantee Fund for the Community's external lending activities (1);Whereas, in June 1996, the Commission, in agreement with the Bank, presented to Council a proposal for a new guarantee system for EIB lending to third countries;Whereas, in October 1996, the Council concluded that the total volume of the new EIB lending mandates and of other lending needs for third countries until 1999 is expected to be met by a guarantee level for EIB loans of between 65 % and 75 %; whereas the EIB is invited to secure, on a significant proportion of its lending, adequate third-party guarantees for commercial risks, with the budget guarantee in that case covering only political risks arising from currency non-transfer, expropriation, war and civil disturbance;Whereas the Commission and the EIB should ensure appropriate coordination between EIB operations in the eligible third countries and the implementation of the Community's other financial instruments;Whereas, for the purpose of adopting this Decision, the only powers provided for by the Treaty are those set out in Article 235,HAS DECIDED AS FOLLOWS:Article 1 1. The Community shall grant the European Investment Bank a 65 % guarantee in respect of any payments not received by it but due under loans granted, in accordance with its usual criteria, for investment projects carried out in Central and Eastern Europe, in Mediterranean non-member countries, in Latin America and Asia, and in South Africa.This guarantee shall be restricted to an overall loan ceiling of ECU 6 825 million, broken down as follows:- Central and Eastern Europe: ECU 3 450 million- Mediterranean non-member countries: ECU 2 100 million- Latin America and Asia: ECU 900 million- South Africa: ECU 375 millionand shall cover a period beginning on the date that the Decision takes effect and expiring on 31 December 1999. If, on expiry of this period, the loans granted by the Bank have not attained the overall amounts referred to above, the period shall be automatically extended by six months.2. The countries included in the above regions are:- Albania, Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovak Republic and Slovenia in Central and Eastern Europe,- Algeria, Cyprus, Egypt, Israel, Jordan, Lebanon, Malta, Morocco, Syria, Tunisia, Turkey, Gaza-West Bank in the Mediterranean region,- Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Ecuador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Salvador, Uruguay and Venezuela in Latin America,- Bangladesh, Brunei, China, India, Indonesia, Macao, Malaysia, Mongolia, Pakistan, Philippines, Singapore, Sri Lanka, Thailand and Vietnam in Asia.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 loan operations and shall, at the same time, submit an assessment of the operation of the scheme and of coordination between the financial institutions operating in that area.Article 4 The Commission and the Bank shall cooperate closely to ensure overall consistency between the operations covered by the present Decision and the implementation of other Community financial instruments in favour of the countries concerned.Article 5 Detailed rules for the application of this Decision shall be laid down in an agreement to be concluded between the Commission and the Bank.Article 6 This Decision shall take effect on the day of its publication in the Official Journal of the European Communities.(1) OJ No L 293, 12. 11. 1994, p. 1.