Annual status report by the Commission on the Guarantee Fund and its management in 1996
Date: 1997-05-13
Institutions: European Commission
Subjects: Community loan, European Investment Bank, budgetary reserve (EU), credit guarantee, financial management

COMMISSION OF THE EUROPEAN  COMMUNITIES 

Brussels, 13.05.1997 
COM(97)  208 final 

ANNUAL STATUS REPORT BY THE COMMISSION 
ON THE GUARANTEE FUND AND ITS MANAGEMENT IN 1996 

CONTENTS 

1. LEGAL BASES 

2. POSITION  OF THE FUND AT 31 DECEMBER  1996 

3. PAYMENTS  INTO THE FUND 
3 . 1.  PAYMENTS FROM THE GENERAL BUDGET 
3.2.  INTEREST FROM FINANCIAL INVESTMENT OF THE FUND'S  LIQUID  ASSETS 
3.3.  RECOVERY FROM DEFAULTING DEBTORS 

4. THE FUND'S LIABILITIES 
4.1.  DEFAULT  PAYMENTS 

4.2.  EEB REMUNERATION 

^ 

ANNEXES 

ANNEX I: 

LEGAL BASES FOR PAYMENTS FROM THE  GENERAL BUDGET 

1. DECISIONS  COVERED BY TRANSFER 5/96 

2. DECISIONS  COVERED BY TRANSFER 42/96 

3. DECISION  COVERED  BY TRANSFER 52/96 

ANNEX U:  EIB  STATUS REPORT ON THE  FUND AND ITS MANAGEMENT -  REVENUE 

1 ct 

\cu 

2 
2 
3 
4 

4 
4 

4 

6 

6 

7 

7 

AND EXPENDITURE ACCOUNT AND BALANCE SHEET AT 31  DECEMBER 
1996 

1. DEVELOPMENT  OF THE FUND IN 1996 

2. THE FUND'S  RESOURCES 
2.1.  THE  FUND'S  ACCOUNT 

2.1.1 Payments  made by the Fund from  1 January  to 31 December  1996. 
2.1.2 Amounts  recovered from  defaulting  debtors from  1 January  to 31 December  1996 

2.2.  THE  FUND'S  .ASSETS 

2.3.  LIQUIDITY  RISK 

3.  INVESTMENTS  MADE DURING  1996 
3.1.  TREASURY OPERATIONS 
3.2.  INVESTMENT  PORTFOLIO 

8 

8 

8 
8 
9 
9 
10 

10 

11 
11 
13 

ANNEX III:  CONSOLIDATED FINANCIAL BALANCE-SHEET AT 31  DECEMBER  1996  16 

i  CL  -

ANNUAL  STATUS REPORT  BY THE  COMMISSION 
ON THE GUARANTEE FUND AND ITS MANAGEMENT  IN  1996 

1. 

LEGAL  BASES 

Council Regulation  (EC, Euratom)  No  2728/94  of 31 October  1994  set up  a  Guarantee 
Fund  for  external  actions to  repay  the  Community's  creditors  in the  event  of  default  by 
beneficiaries  of loans granted  or guaranteed  by the Community. 

In  accordance  with  Article  6  of  the  Regulation  the  Commission  entrusted  financial 
management  of the  Fund  to  the  European  Investment  Bank  (EIB)  under  an  agreement 
signed  between  the  Community  and  the  ELB on  23 November  1994  in  Brussels  and  on 
25 November  1994 in Luxembourg. 

Under  Article  8.2  of  the  agreement,  by  1  March  each  year  the  Bank  must  send  the 
Commission  a  status  report  on  the  Fund  and  its  management,  the  revenue  and 
expenditure  account  and the financial  statement  for  the Fund  for  the preceding  year.  An 
extract from  the report covering  1996 is in Annex II. 

In addition, Article 7 of the Regulation establishing the Fund requires the Commission to 
send  the  European  Parliament,  the  Council  and  the  Court  of  Auditors  a  report  on  the 
situation  of  the  Fund  and  its  management  for  each financial year  by  31  March  of  the 
following  year. 

2. 

POSITION OF THE FUND AT 31  DECEMBER  1996 

At  the  close  of  the  1996  financial  year,  the  Fund  totalled  ECU  557 510 343 61 
(Annex II). This is the sum, since the Fund was established,  of all 

-  budget payments (ECU 779 860 000), 

- 

- 

incremental yearly net results (ECU 41 813  114.11), 

late payments from non-member countries (ECU 91 345 772.68), 

-  debts corresponding to the payments not made to the Bank (ECU  104 534.51) 

-  minus calls on the Fund's resources (ECU 355 613 077.69). 

total  amount  of 

the  consolidated  balance 

sheet 
into  ECU 330 000 000 

is 
III) 
The 
ECU 845 599-807 92,  which  breaks  down 
in  deposits, 
ECU  14 427 909.00 on current  account, ECU 204 358  136.23 in the securities  portfolio, 
ECU 8 724 298.38 
at  31 December  1996 
(ECU  1  283 620.82  in  interest  accrued  and  not  yet  due  on  fixed-term  deposits, 
interest 
ECU 7 386 889.78 
coupons  and 
and 
ECU 53 787.78 
to  be  paid)  and 
interest  on 
ECU 288 089 464.31 in receivables from the recipients of  loans  granted  or guaranteed 

yet 
due 
sight-deposits 

accrued 
accrued 

and  not  paid 

(see  Annex 

accrued 

interest 

not 

on 

in 

by  the  Community,  including  ECU 271  154 609.44  in  principal  and  interest  due  and 
ECU  16 934 854.87 in default  interest incurred but not received at 31 December  1996. 

Article  3  of  the  Regulation  establishing  the  Fund  requires  that  the  amount  of  the  Fund 
has  to  reach  an  appropriate  level  (target  amount)  set  at  10%  of  the  total  outstanding 
capital liabilities arising from  each operation,  plus unpaid  interest due. 

Outstanding  lending  and  loan  guarantee  operations  for  non-member  countries  plus 
unpaid interest due totalled ECU 6 715 million at 31 December  1996, of which ECU  194 
million was accounted  for by unpaid  interest. 

The  ratio  between  the  Fund's  resources  and  outstanding  capital  liabilities  within  the 
meaning of the Regulation was 8.3%. Since this is lower than the target  amount  of  10%, 
there  was  no  surplus  to  be  paid  back  to  the  general  budget  of  the  Communities,  as 
provided for in the third paragraph of ArticLe 3 of the Regulation. 

There was  also  no  need  to  review  the  provisioning  rate,  as  provided  in  Article  4  of  the 
Regulation. 

The  following  sections  describe  developments  affecting 
liabilities in 1996. 

the  Fund's  resources  and 

3. 

PAYMENTS  INTO THE  FUND 

3.1.  Payments  from  the general  budget 

Articles 2 and 4 of the Regulation establishing the Fund  stipulate that  it is to  be endowed 
by payments from  the general budget  equivalent to  14% of the  capital  value  of loan  and 
loan  guarantee  operations  until  the  target  amount  is  reached.  Under  Article 5  the 
provisioning rate rises to  15% for  new operations  if the Fund's resources fall  below 75% 
of the target  amount  as a result of guarantees being activated  to cover any  default. 

The legal bases for the provisioning arrangements are described  in Annex I. 

The Council Decision of 31 October  1994 concerning budgetary  discipline authorized  the 
entry  in  the  general  budget  of  a  reserve  for  loan  and  loan  guarantee  operations.  This 
item,  which  was  allocated  provisional  appropriations  of  ECU  326  million  in  1996,  is 
intended  to  endow  the  Fund  by transferring  amounts  into  the  budget  item  for  payments 
into the Fund. 

On  these  legal  bases,  three  transfers  totalling  ECU 235 390 000  were  adopted  by  the 
budgetary authority in  1996 to endow the Guarantee Fund. 

-  Transfer  5/96: ECU  191 890 000 

This first transfer  at the beginning of the year was for  payments into the Fund  under 
the  Council  Decisions  of  15 February  1993,  13 December  1993,  24 January  1994, 
21 March  1994,  1  June  1995,  10 April  1995  and  30 October  1995,  in  accordance 
with the arrangements  set  out  in the Annex to the  Regulation  establishing  the  Fund 
(see Annex I). 

3-

-  Transfer  42/96: ECU 2 250 000 

This second transfer  was for  payments into the Fund in respect of the loan operation 
adopted  by the  Council  on  25 March  1996  for  Moldova.  The  decision  covered  by 
this transfer  is given in Annex I. 

-  Transfer  52/96: ECU 41 250 000 

This  third  transfer  was  for  payments  into  the  Fund  in respect  of  loan  guarantee 
operations  adopted  by  the  Council  on  12 December  1996  for  projects  in  Latin 
American  and  Asian  countries.  The  decision  covered  by this  transfer  is  listed  in 
Annex I. 

The three transfers  to the Fund were made in two payments in May and December  1996. 

3.2.  Interest from financial  investment  of the Fund's liquid  assets 

The Fund's  liquid  assets  are invested  in accordance withthe  management  principles  laid 
down in the Annex to the Community/EEB Agreement. 

These principles state that during the Fund's first years of operation it will be treated  as a 
money-market  investment  fund  dealing  solely  in  short-term  instruments  up  to  one  year, 
as long as the total amount invested  does not exceed ECU 300 million. As the amount of 
the Fund  exceeded  this ECU 300 million threshold  in  1995, the Commission  agreed  with 
the EEB to amend the investment principles early in 1996. 

The  list  of  banks  authorized  to  receive  deposits  is  agreed  by  the  Commission  and  the 
EIB.  The  original list  has been revised  several times in the  light  of  the  latest  changes in 
bank ratings. Most of the banks are members of the ecu  clearing system.  They  all have a 
Moody's  rating of at least Al  for  long-term investments  and PI  for  short-term  ones  and 
investments  made  with  them  are  governed  by  rules  to  ensure  a  good  spread  and  avoid 
risk exposure. 

In  1996 interest on deposits, the Guarantee Fund  current account,  and  securities,  totalled 
ECU  19 834 606.07, broken down as follows: 

-  deposits:  ECU  13 598  452.62.  This  represents  the  situation  at  31 December 
including  interest  received  on  bank  deposits  (ECU  14 120 687.93)  and  interest 
incurred  (ECU  1  283 620.82)  in  1996.  The  interest  incurred  corresponds  to 
interest  which  has not been  received  by the Fund  at the  end  of  the  year  but  will 
be paid  at  the  dates fixed for  maturity  of  the investments.  The  interest  accrued, 
as shown  in the  end-1995  situation  but  received  in  1996  (ECU  1 805 856.13)  is 
deducted  from the interest  entered  in the accounts during  1996. 

-  current  account:  ECU  522 831.55,  comprising  interest  recorded  on  the  current 

account. 

» -  securities portfolio: ECU 5 713 321.90. The interest on securities is generated by 
investments  placed  in the form  of securities  in accordance  with  the  principles  of 
investment  laid down in the Agreement  giving the EIB  the task  of managing  the 
Fund's liquid assets. 

- 4-

The interest received is entered in the results for the financial  year. 

3.3.  Recovery  from defaulting  debtors 

Any late repayments by defaulting  countries on operations where the Fund  has  honoured 
the  guarantee  are  paid  into  the  Fund.  The  amount  recovered  in  1996  totalled  ECU 
55 715 204.14 (see point 2.1.2 cf Annex II). 

4. 

T HE  FUND'S  LIABILITIES 

4.1.  Default  payments 

The  Fund's  guarantee  was  called  in  on  five  occasions  in  1996,  involving  a  total  of 
ECU  52 540 496.79 (see point 2.1.1  of Annex II). 

4.2.  EIB  remuneration 

Article  6  of  the  management  agreement  between  the  Commission  and  the  EIB  sets  an 
annual  commission  of  0.125%)  calculated  on  the  Fund's  average  monthly  balances.  The 
figure  is  to  be  reviewed  at  the  end  of  any year  in which  the  Fund's  liquid  assets  reach 
ECU  300  million  and  no  later  than  three  years  following  the  date  of  the  first  payment 
into the Fund, taking into account  such things as the growth of the Fund's activities. 

As the  Fund  had  reached  ECU 300 million  at  the  end  of  1995,  the  EEB's  remuneration 
was reviewed.  Taking into account the Bank's experience of the workload  involved  in its 
management,  a supplementary agreement  dated  17 September  and 23 September  1996 to 
the  Agreement  on  the  financial  management  of  the  Fund  took  the  annual  payment  to 
0.05%) of the Fund's  assets; this rate was applied  retrospectively  on 31 December  1994. 

In  1996  the  remuneration  paid  to  the  Bank  was  ECU  205 638.05  entered  in  the  profit 
and  loss  account,  including  ECU  104 534.51  entered  as  accruals  (liabilities)  on  the 
balance sheet. This payment will be made to the EIB at the beginning of January  1997. 

- 5-

ANNEXES 

ANNEX I: 

LEGAL BASES FOR PAYMENTS FROM THE  GENERAL BUDGET 

1. DECISIONS  COVERED  BY TRANSFER 5/96 

2. DECISIONS  COVERED  BY TRANSFER 42/96 

3. DECISION  COVERED  BY TRANSFER 52/96 

6 

6 

7 

7 

ANNEX U:  EIB  STATUS REPORT ON THE  FUND AND ITS MANAGEMENT -  REVENUE 

AND EXPENDITURE ACCOUNT AND BALANCE SHEET AT 31  DECEMBER 
1996 

1. DEVELOPMENT  OF THE FUND IN 1996 

2. THE FUND'S RESOURCES 
2.1.  THE  FUND'S  ACCOUNT 

2.1.1 Payments  made by the Fund from  1 January  to 31 December  1996 
2.1.2 Amounts  recovered from  defaulting  debtors from  1 January  to 31 December  1996 

2.2.  THE  FUND'S  ASSETS 

2.3.  LIQUIDITY  RISK 

3. INVESTMENTS  MADE DURING  1996 
3.1.  TREASURY  OPERATIONS 
3.2.  INVESTMENT  PORTFOLIO 

8 

8 

8 
8 
9 
9 
10 

10 

11 
11 
13 

ANNEX LTJ:  CONSOLIDATED  FINANCIAL BALANCE-SHEET AT 31  DECEMBER  1996..  16 

-6 

ANNEX  I 

LEGAL  BASES FOR PAYMENTS TO THE GUARANTEE FUND FROM THE GENERAL 
BUDGET 

The  Annex  to  the  Regulation  concerning  arrangements  for  payments  under  the 
Guarantee  Fund  stipulates  that  for  borrowing/lending  operations  or  guarantees  to 
financial  bodies under  a framework  facility  spread  over  several  years  and  with  a micro-
economic and structural purpose, payments will be made in annual tranches calculated  on 
the  basis  of  the  annual  amounts, indicated  in  the  financial  statement  attached  to  the 
Commission proposal, adapted, where appropriate, in the light of the Council decision. 

In the case  of other borrowing/lending  operations  such  as balance  of payments  loans  to 
non-member  countries,  irrespective  of whether  they  are  made  in  one  or  more  than  one 
tranche, the  amount  to  be paid  into the Fund will be calculated  on the  basis  of the  total 
amount for the operation decided on by the Council. 

Three transfers were made under this procedure in 1996. 

1.  DECISIONS COVERED BY TRANSFER  5/96 

-  Council  Decision  of  15  February  1993  calling  on  the  ELB  to  grant  loans  for 
projects  of  mutual  interest  in  certain  non-member  countries  with  which  the 
Community  has  cooperation 
fixed  ceiling  of 
ECU 250 million a year for a period  of three years. 

agreements,  within  a 

-  Council  Decision  of  13 December  1993  renewing  the  Community  guarantee  of 
EIB  loans  in  the  countries  of  Central  and  Eastern  Europe,  with  a  ceiling  of 
ECU 3 billion over three years. 

-  As part of the financial cooperation with the Mediterranean countries: 

-  Council  Decision  of  24  January  1994  for  a  three-year 

loan  of 

ECU  115 million for  Syria. 

-  Council  Decisions  of  30 October  1995 

for 

three-year 

loans  of 

ECU 30 million for Malta and ECU 50 million for  Cyprus. 

-  Council Decision of  10 April  1995 concerning the granting of macro-financial  aid 

of ECU 75 million to Belarus. 

-  Council  Decision  of  1  June  1995  granting  a  Community  guarantee  to  the  EIB 
against  losses  under  loans  for  projects  in  South  Africa,  with  an  overall  loans 
ceiling of ECU 300 million over two years. 

7-

Council  Decision  of  21  March  1994  empowering  the  Commission  to  contract 
Euratom  loans  to  contribute  to  financing  improvements  in  the  safety  and 
efficiency  levels  of the nuclear  capacity  of  certain  non-member  countries  for  an 
amount of ECU  1 100 million. 

DECISIONS  COVERED  BY TRANSFER 42/96 

-  Council  Decision  of 25 March  1996 providing  further  macro-financial  assistance 

for  Moldova. 

3.  DECISION  COVERED  BY TRANSFER 52/96 

-  Council Decision  of  12 December  1996  granting  a Community  guarantee  to  the 
European  Investment  Bank  against  losses  under  loans  for  projects  of  mutual 
interest  in  Latin  American  and  Asian  countries  with  which  the  Community  has 
concluded  cooperation agreements. An overall ceiling of ECU 275 million is set. 

A N N E XE 

EIB  STATUS REPORT ON THE  FUND AND  ITS  MANAGEMENT 

REVENUE AND  EXPENDITURE ACCOUNT AND  BALANCE  SHEET 

AT  31  DECEMBER  1996 

1. 

DEVELOPMENT OF THE FUND IN  1996 

The  total  holdings  of  the  Fund  stood  at "ECU 548.8 million  at  31 December  1996  as 
compared with 298.4 million in  1995. In view of the drop in rates on the ecu market  over 
the year, the operating result fell from ECU 23.3 million in  1995 to  18.0 million in 1996. 

In  view  of  the  level  of  liquid  assets,  part  of  the  Fund's  holdings  has  been  placed  in  an 
investment  portfolio. 

2. 

THE  FUND'S RESOURCES 

2.1.  The Fund's  account 

Resources 

at 31/12/95 

in  1996 

TOTALS 

- Provisions 

- Activation of guarantee 

- Late recovery 

Account balance 

+ 

+ 

544 470 000.00 

235 390 000.00 

779 860 000.00 

303 072 580.90 

52 540 496.79 

355 613 077.69 

35 630 568.55 

55 715 204.13 

91345 772.68 

277 027 987.65 

238 564 707.34 

.515 592 694.99 

The  activations  of  the  guarantee  were  lower  than  in  1995,  and,  in  contrast  to  1995, 
amounts recovered  exceeded payments. 

9-

2.1.1 Payments  made by the Fund from' 1 January to 31 December 1996 

VALUE DATE 

26/01/1996 

15/04/1996 

11/06/1996 

04/10/1996 

15/10/1996 

TOTAL 

AMOUNT 

5 199 025.76 

31  199 184.87 

6 387 972.88 

8 886 702.48 

867 610.80 

52 540 496.79 

2.1.2 Amounts  recovered from  defaidting debtors from  1 January  to 31 December 1996 

VALUE DATE 

26/01/1996 

15/02/1996 

17/05/1996 

21/08/1996 

22/08/1996 

30/09/1996 

10/10/1996 

17/10/1996 

21/10/1996 

31/12/1996 

TOTAL 

AMOUNT 

2 297.68 

15 239.78 

17 291251.52 

46 715.01 

11 837 400.00 

111 449.97 

6 961 662.79 

11 625 570.00 

34  126.37 

7 789 491.01 

55 715 204.14 

-10 

2.2.  The Fund's assets 

The  Fund's  assets 
totalled  ECU 548.8 million  at  31 December  1996,  of  which 
330 million is invested  in short-term  monetary  deposits,  14.4 million on  current  account 
and 204.4 million in the investment portfolio  (see table below 2.3). 

THE FUND'S ASSETS UP TO 31.12.1996 (ECU millions) 

600 T 

500 -

400 --

300 -~ 

200 -: 

100 -

0 -
co 
CD 
CD 

c 
CO 

\ 

1996 
1995 

CO o 

CD 

CD 
CD 
CD 

03 

2 

CO 
CD 

QL < 

»8 

CO 
CD 
CD 

CO 
CD 
CD 

3 
—i 

CO 
CD 
CD 
T-
I 
O) 
< 

CO 
o> 
CD 

i 
Q. 
d) 
CO 

CO 
CD 
CD 

O 
O 

CO 
CD 
CD 
T-

I > 
o 

CO 
CD 
CD 

Q 

2.3.  Liquidity  risk 

Investments at less 
than 3 months 

Investments at 3-6 
months 

Variable-rate 
securities 

TOTALS 

Current accounts 

14 427 909.00 

Fixed-term deposits 

310 000 000.00 

20 000 000.00 

14 427 909.00 

330 000 000.00 

Securities portfolio 

76 601318.92 

26 265 895.01 

98 490 922.30 

204 358 136.23 

TOTALS 

404 029 227.92 

46 265 895.01 

98 490 922.30 

548 786 045.23 

in percentages 

73.62 

8.43 

17.95 

100.00 

Cover  of  more  than  60%  at  less  than  three  months  is  maintained  to  correspond  to  the 
time  by which  the  Commission  must  call  on  the  Fund  in the  event  of  defaults  on  loan 
repayments. 

11 -

3. 

INVESTMENTS MADE DURING  1996 

3.1.  Treasury  operations 

The Fund operates in a single currency: the ecu. 

The yield on investments in 1996 averaged 4.5% as against 6.12% in 1995. 

The yield  obtained  is 24 basis points  above  the three-month  LEBID  rate  which  was  the 
1996 reference.  In  1995, the reference was the one-month LIB ED. 

MONTH 

YIELD 

LIBID 
three months 

MARGIN 

January - December 

4.50% 

4.26% 

0.24% 

Movements in rates over  1996 

The  table  below  shows  the  rates  obtained  for  interbank  money-market  investments  as 
compared with the three-month LIBED reference rate. 

EVOLUTION  DES TAUX  DES  DEPOTS  A  TERME 

RATE 

3-MONTH  LIBID 

CD 
C D. 

CD 
CD 
i 
jQ 
CD 

CD 
CD 
i !. 

Q. < 

CO 
CO 
I 

03 

CD 
CO 

CO 
CO 

CO 
co 

3 
< 

CD 
CO 
i 
CL 
CD 
C7> 

CO 
CO 
I 
o 
O 

CD 
CO 

I > 
o 

CD 
CO 
Ô 
CD 
Q 

6 

5  + 

4 

3  -

2 

-

1 

-

0 

CD 
CD 

C 
CD 

-  12-

Geographical breakdown of the countries with which the Fund made fixed-term deposits 
with indication of the average capital (ECU million). 

Situation at 31.12.1996 
(million) 

Average capital in 1996 
(million) 

Average capital in 1995 
(million) 

- Germany: 

- Austria: 

- Belgium: 

- Spain: 

- Denmark: 

- Finland: 

- France: 

- Ireland: 

- Italy: 

- Luxembourg: 

- Netherlands: 

- United Kingdom 

TOTALS 

45 

25 

25 

30 

80 

65 

15 

45 

330 

47,7 

5 

42,5 

8.5 

22,4 

0,9 

69,2 

13 

17.3. 

15,4 

31,8 

28,7 

302,4 

35,4 

9.4 

65,5 

0 

16,2 

0 

160,2 

0 

0 

21,9 

53,3 

11.3 

373,2 

The objective of better geographical  distribution has been pursued throughout the year, 
with the result that the  deposits  operation  could  be  extended  to  counterparts  in Spain, 
Finland, Ireland and Italy. 

GEOGRAPHICAL  DISTRIBUTION OF FIXED-TERM  INVESTMENTS 
(average  capital  in  million  ecus) 

70  y 

60  -

50 --

40 --

30  -

20 --

10 --

14, 

3 
E 
0) 

13 

3.2.  Investment  portfolio 

The securities portfolio,  seen as an investment  portfolio,  is made up  of securities in ecus 
acquired  with  the  intention  of  keeping  them  until  maturity:  the  fixed-interest  securities 
whose  residual  period  to  maturity  is less than  6  months  total  ECU  105 867 213.93  and 
the variable-rate securities total ECU 98 490 922.30. 

The  starting  value  of  the  securities  in  this  portfolio  is  the  cost  of  acquisition.  The 
difference  between the entry price and the redemption value is divided  pro rata  temporis 
over the remaining life of each of the securities. 

At  31 December  1996 
investment  portfolio  was 
ECU 203.8 million  against  a  book  value  of  204.4 million  (including  the  premium  to  be 
written  off). 

the  nominal  value  of 

the 

The portfolio  gave a result  of 4.1 million at 31 December  1996. This result breaks  down 
as follows: 

Interest  received 
Appreciation 
Depreciation 
Spread of the premium 

5 713 321.90 
7 943.70 
- 6  179.80 
-  1  625 722.05 
4 089 363.75 

Taking account of the acquisitions made in the second  half of the year, the book profit  of 
the investment portfolio  came to 4.53%. 

MATURITIES  OF FIXED-RATE  SECURITIES 
(THOUSANDS) 

DUE DATES 

Redemptions 

35.000 

30.000 

25.000 

20.000 

15.000 

10.000 

5.000 

0 

Jan-97 

Feb-97 

Mar-97 

Apr-97 

May-97 

Jun-97 

- 14 

MATURITIES  OF VARIABLE-RATE  SECURITIES 
(THOUSANDS) 

25000 -r 

20000 -

DUE DATES 

15000 

10000 --

5000 --

Apr-1997 

Jul-1998 

Feb-2000 

Apr-2000 

Aug-2001 

Profile  of issuers: in accordance with the agreement  between the Community and  the 
Bank on the management of the Guarantee Fund, all the securities held have a minimum 
credit rating of Al. 

PROFILE OF ISSUERS 

12%  Other 

88%  Government securities 

-  1 5-

PosrnoN OF THE GUARANTEE  FUND  AT 31  DECEMBER  1996 

ASSETS 

31 December 1996 

Receivables with credit institutions 
CURRENT ACCOUNT 
FIXED-TERM DEPOSITS 

Investment portfolio 

SECURITIES PORTFOLIO 

Other receivables 

ACCRUALS 

LIABILITIES 

Guarantee Fund 

GUARANTEE FUND 

Other liabilities 

ACCRUALS 

Result 
Result carried over 
Result for 1996 

PROFIT AND LOSS AT 31 December 1996 

1. INCOME 

Interest and similar income 
Appreciation on transfer of investment securities 
Interest on investments 
Interest on current account 

SUB-TOTAL 

2. COSTS 

Spread of premium or discount 
Commissions 
Financial charges 
Depreciation on transfer of investment securities 

SUB-TOTAL 

NET RESULT 

14 427 909.00 
330 000 000.00 
344 427 909.00 

204 358 136.23 

204 358136.23 

8 724298.38 
8 724 298.38 

TOTAL 

55751Q343 6J 

31 December 1996 

515 592 694.99 
515 592 694.99 

104534.51 
104 534 51 

23 819 842.85 
17 993 271.26 

41813114.1' 

TOTAL 

557  510  343  61 

5 713 321.90 
7 943.70 
13 598 452.62 
522 831.55 

19 842 549.77 

-1 625 722.05 
-205 638.05 
-11738.61 
-6 179.80 

1349 2n  51 

1793327125 

-  16-

ANNEXin 

CONSOLIDATED  FINANCIAL  BALANCE SHEET  OF THE  GUARANTEE  FUND  AT 
31  DECEMBER  1996 

The consolidated  financial  balance sheet at 31 December  1996 is provided  to  supplement 
the  position  of  the  Guarantee  Fund  as  set  out  in  Annex  II.  The  consolidated  balance 
sheet also includes an additional ECU 288 089 464.31 which breaks down as follows: 

-  on the  assets  side,  receivables  with  recipients  of loans  granted  or  guaranteed  by  the 
Commission  totalling  ECU 271  154 609.44  for  third  countries'  arrears  on  the 
payment of principal and interest and ECU  16 934 854.87 for  default  interest  incurred 
but not received at 31 December  1996. This default  interest has been calculated  in line 
with the penalty rates laid down in the loan contracts. 

-  on  the  liabilities  side,  the  Fund's  resources  which  still  have  to  be  replenished 
received 
interest 
(ECU 264 267 305.01), 
(ECU  16 934 854.87),  interest  received  on  late  recoveries  (ECU 6 887 304.43) 
entered in the profit  and loss account. 

incurred 

default 

but 

not 

- 1 7-

CONSOLIDATED FINANCIAL BALANCE SHEET OF THE GUARANTEE FUND AT 31  DECEMBER  1996 

ASSETS 

Receivables with credit institutions 
CURRENT ACCOUNT 
FIXED-TERM DEPOSITS 

Investment portfolio 

SECURITIES PORTFOLIO 

Receivables with recipients of loans granted or guaranteed by the Community 

ARREARS COVERED BY THE FUND 
DEFAULT INTEREST INCURRED BUT NOT RECEIVED 

Other receivables 

ACCRUALS 

LIABILITIES 

Guarantee Fund 

TOTAL 

PAYMENTS FROM THE BUDGET 
DEFAULT INTEREST INCURRED BUT NOT RECEIVED 

Other liabilities 

ACCRUALS 

Result 
Result carried over 
Result for 1996 

PROFIT AND LOSS AT 31 December 1996 

1. INCOME 

Interest on investment securities 
Appreciation on transfer of investment securities 
Interest on investments 
Interest on current account 
Default interest received on late recoveries 

SUB-TOTAL 

2. COSTS 

Spread of premium or discount 
Commissions 
Financial charges 
Depreciations on transfer of investment securities 

SUB-TOTAL 

NET RESULT 

31 December 1996 

14 427 909 00 
330 000 000 00 

204 358 136 23 

271154609 44 
16 934854 87 

288 089 464 31 

8 724 298 38 
fl77A79fl3fl 

845 599 807 92 

31 December 1996 

779 860 000 00 
16 934 85487 

796794 854 87 

104 534  51 

104 534  51 

23 819 84285 
24 880 575 69 
48 700 418 54 

TOTAL 

845  599 807  92 

5 713 32190 
7 943 70 
13 598  452 62 
522 831  55 
6 887 304 43 
26 729 854 20 

1  625 722 05 
205  638  05 
11738 61 
6  179 80 
1849 778 51 

24 880 575 69 

ISSN 0254-1475 

COM(97) 208 final 

DOCUMENTS 

EN 

01  03  17 

Catalogue number  :  CB-CO-97-193-EN-C 

ISBN 92-78-19476-X 

Office  for Official  Publications of the European Communities 

L-2985 Luxembourg