2000/24/EC: Council Decision of 22 December 1999 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 the Republic of South Africa)
Date: 1999-12-22
Institutions: Council of the European Union
Subjects: EIB loan, European Investment Bank, credit guarantee, financial loss, investment abroad

L 9/24

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Official Journal of the European Communities

13. 1. 2000

COUNCIL DECISION

of 22 December 1999

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 the Republic of South Africa)

(2000/24/EC)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community, and in particular Article 308 thereof,

Having regard to the proposal from the Commission (1),

Having regard to the opinion of the European Parliament (2),

Whereas:

(1)

(2)

(3)

(4)

(5)

(6)

The European Council meeting in Madrid on 15 and 16
December 1995 confirmed the importance of the Euro-
pean Investment Bank, hereinafter referred to as ‘the
EIB’, as an instrument of cooperation between the
Community and Latin America and called on the EIB to
intensify its activities in the region; whereas these
projects should be of interest to both the Community
and the countries concerned;

The European Council meeting in Florence on 21 and
22 June 1996 welcomed the results of the Asia-Europe
summit, which marked a turning-point
in relations
between the two continents;

The European Council meeting in Amsterdam on 16
and 17 June 1997 welcomed the conclusions adopted at
the Second Euro-Mediterranean Conference, which was
held at Valletta, Malta, on 15 and 16 April 1997 and
reaffirmed the principles and objectives agreed at Barce-
lona in 1995;

The European Council meeting in Luxembourg on 12
and 13 December 1997 launched the enlargement
process with the Central and Eastern European countries
and Cyprus;

The European Council meeting in Cardiff on 15 and 16
June 1998 welcomed the efforts which the Republic of
South Africa was making to modernise its economy and
integrate it into the world trading system;

The EIB is completing the current loan programmes for
Central and Eastern Europe, the Mediterranean region,
Asia and Latin Amercia and the Republic of South Africa
pursuant
to Decision 97/256/EC (3), as well as the
lending that is governed by the Protocol on Financial
Cooperation with the Former Yugoslav Republic of

(1) OJ C 145, 26.5.1999, p. 10.
(2) Opinion delivered on 19 November 1999 (not yet published in the

Official Journal).

(7)

(8)

(9)

(10)

(11)

(12)

(13)

Macedonia,
348/EC (4);

according

to Council Decision

98/

The Council has invited the EIB to start operations in
Bosnia and Herzegovina;
these operations may be
continued, subject to a positive report being drawn up
as stipulated in Decision 98/729/EC (5);

Although Bosnia-Herzegovina and FYROM have been
included in the Central and Eastern Europe region since
the adoption of Decision 97/256/EC,
the EIB's total
lending effort to applicant countries within this region
should increase given the importance of the pre-acces-
sion facility the EIB plans to create for EIB lending for
projects in these countries without a guarantee from the
Community budget or Member States;

In these circumstances, the EIB should ensure that its
guaranteed lending within the Central and Eastern
Europe mandate will
finance particularly projects in
those countries which have fewer projects suitable for
financing from the pre-accession facility or projects in
non-applicant countries;

the

between

and Nepal,

The Cooperation Agreements between the European
European
Community
Community and Lao PDR and between the European
Community and Yemen entered into force on 1 June
1996, 1 December 1997 and on 1 July 1998 respec-
tively; the Cooperation Agreement between the Euro-
pean Community and South Korea was signed on 28
October 1996; whereas Nepal, Yemen, Lao PDR and
South Korea should become beneficiaries of EIB funding
under the EIB's mandate for Asia and Latin America;

It is appropriate to make certain improvements in the
programmes of operations in respect of duration and
country coverage; it is appropriate to adjust the blanket
guarantee rate and the portion of lending for which the
EIB is invited to cover the commercial risk from non-
sovereign guarantees;

The Council is calling on the EIB to continue its opera-
tions in support of investment projects carried out in
those countries by offering it the guarantee provided for
in this Decision;

In June 1996, the Commission, in agreement with the
EIB, presented to the Council a proposal for a new
guarantee system for EIB lending to third countries;

(3) OJ L 102, 19.4.1997, p. 33. Decision as last amended by Decision

98/729/EC (OJ L 346, 22.12.1998, p. 54).

(4) OJ L 155, 29.5.1998, p. 53.
(5) OJ L 346, 22.12.1998, p. 54.

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(14) On 2 December 1996 the Council approved conclusions
on new guarantee arrangements for EIB lending to third
countries, according to which the approach of a global
guarantee, without distinguishing between the regions
and projects,
is approved and a risk-sharing scheme
accepted; under the risk-sharing scheme the EIB should
secure adequate non-sovereign third-party guarantees for
commercial risks, with the budgetary guarantee in that
case covering only political risks arising from currency
non transfer, expropriation, war or civil disturbance;

(21)

For the purpose of adopting this Decision, the only
powers provided for by the Treaty are those set out in
Article 308 thereof,

HAS DECIDED AS FOLLOWS:

(15)

The guarantee arrangements should not affect the excel-
lent credit standing of the EIB;

Article 1

(16)

(17)

(18)

Regulation (EC, Euratom) No 1149/99 (1), revised the
target amount and the provisioning rate for the Loan
Guarantee Fund established by Regulation (EC, Euratom)
No 2728/94 (2);

The financial perspective for the period 2000 to 2006
according to the Interinstitutional Agreement of 6 May
1999 between the European Parliament, the Council and
the Commission on budgetary discipline and improve-
ment of the budgetary procedure (3) envisages a ceiling
for the loan guarantee reserve in the Community budget
of EUR 200 million per annum;

rules

relevant

as with the

EIB financing in eligible third countries should be
managed, in accordance with the EIB's usual criteria and
procedures, including appropriate control measures, as
well
and procedures
concerning the Court of Auditors and OLAF, in such a
way as to support Community policies and to enhance
coordination with the Community's other
financial
instruments; there is regular consultation between the
EIB and the Commission to ensure coordination of
priorities and activities in these countries and to measure
progress towards the fulfilment of the Community's rele-
vant policy objectives; the setting and periodic review of
the operation objectives and the measurement of their
fulfilment are the responsibility of the EIB's Board of
Directors; in particular, EIB financing in the candidate
countries should reflect the priorities established in the
accession partnerships between the Community and
those countries; thus the transparency of the EIB lending
under this Decision should be substantially enhanced;

(19) As from the date on which this Decision takes effect, the
Community guarantee covering the special earthquake
facility for Turkey under Decision 1999/786/EC (4) shall
take the form of an extension of the global guarantee
under this Decision;

(20)

The EIB and the Commission will adopt the procedures
for granting the said guarantee;

(1) OJ L 139, 2.6.1999, p. 1.
(2) OJ L 293, 12.11.1994, p. 1.
(3) OJ C 172, 18.6.1999, p. 1.
(4) OJ L 308, 3.12.1999, p. 35.

The Community shall grant the EIB a global guarantee in
1.
respect of all payments not received by it but due in respect of
credits opened,
in accordance with its usual criteria, and in
support of the Community's relevant external policy objectives,
for investment projects carried out
in Central and Eastern
Europe, the Mediterranean countries, Latin America and Asia
and the Republic of South Africa.

This guarantee shall be restricted to 65 % of the aggregate
amount of the credits opened, plus all related sums. The overall
ceiling of
to
credits opened shall be
EUR 18 410 million, broken down as follows:

equivalent

the

— Central and Eastern Europe:

EUR 8 680 million,

— Mediterranean countries:
EUR 6 425 million,

— Latin America and Asia:
EUR 2 480 million,

— Republic of South Africa:

EUR 825 million;

and shall cover a period of seven years beginning on 1
February 2000 for Central and Eastern Europe, the Mediterra-
nean countries, Latin America and Asia and beginning on 1
July 2000 for the Republic of South Africa and ending for all
regions on 31 January 2007.

report on the application of

The Commission shall
this
Decision at the latest on 31 January 2004, or six months
before any new accession treaties enter into force, and make
proposals for amendments of this Decision if appropriate. The
Council will discuss and act on any proposal with effect from 1
August 2004, or the date of entry into force of any new
accession treaty.

If, on expire of the guaranteed lending period on 31 January
2007, the loans granted by the EIB have not attained the
overall amounts referred to in the second paragrapha, this
period shall be automatically extended by six months.

2.

The countries covered by paragraph 1 are:

— Central and Eastern Europe: Albania, Bosnia and Herzegovina,
Former Yugoslav
Bulgaria, Czech Republic, Estonia,
Republic of Macedonia, Hungary, Latvia, Lithuania, Poland,
Romania, Slovak Republic and Slovenia;

— Mediterranean countries: Algeria, Cyprus, Egypt, Israel, Jordan,
Lebanon, Malta, Morocco, Syria, Tunisia, Turkey, and Gaza-
West Bank;

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— Latin America: Argentina, Bolivia, Brazil, Chile, Colombia,
Costa Rica, Ecuador, El Salvador, Guatemala, Honduras,
Mexico, Nicaragua, Panama, Paraguay, Peru, Uruguay and
Venezuela;

fulfilment of the Community's relevant external policy objec-
tives, taking into account the operational objectives and appro-
priate measurements of their fulfilment to be established by the
EIB for lending under this Decision.

— Asia: Bangladesh, Brunei, China,

Indonesia, Laos,
Macao, Malaysia, Mongolia, Nepal, Pakistan, Philippines,
Singapore, South Korea, Sri Lanka, Thailand, Vietnam and
Yemen;

India,

— Republic of South Africa.

The EIB is hereby invited to aim to cover the commercial
3.
risk on 30 % of its lending under this Decision from non-sover-
eign guarantees as far as possible on an individual regional
mandate basis. This percentage shall be expanded upon when-
ever possible insofar as the market permits.

For the purposes referred to in the first subparagraph, the EIB
shall transmit to the Commission the appropriate information.

Article 3

The EIB and the Commission shall fix the terms on which the
guarantee is to be given.

Article 4

Article 2

This Decision shall taken effect on the day of its publication in
the Official Journal of the European Communities.

The Commission shall inform the European Parliament and the
Council each year of the loan operations and progress made on
risk-sharing under Article 1(3) 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. The Commission information submitted to the Euro-
pean Parliament and the Council shall include an assessment of
the contribution of the lending under this Decision to the

Done at Brussels, 22 December 1999.

For the Council

The President

K. HEMILÄ