Report from the Commission to the European Parliament and the Council on borrowing and lending activities of the European Union IN 2008
Date: 2010-03-04
Institutions: European Commission
Subjects: Community loan, EU borrowing, Euratom loan, European Union, balance of payments, credit guarantee, financial aid, report, third country

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2009/ECFIN/033 

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EUROPEAN COMMISSION 

Brussels, 4.3.2010 
COM(2010)69 final 

REPORT FROM THE COMMISSION 
TO THE EUROPEAN PARLIAMENT AND THE COUNCIL 

ON BORROWING AND LENDING ACTIVITIES 
OF THE EUROPEAN UNION IN 2008 

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TABLE OF CONTENTS 

1. 

2. 

2.1. 

2.2. 

2.3. 

2.4. 

3. 

3.1. 

3.2. 

3.3. 

3.4. 

4. 

Introduction .................................................................................................................. 3 

Lending activities of the European Union ................................................................... 4 

Description ................................................................................................................... 4 

BOP facility.................................................................................................................. 6 

MFA facility................................................................................................................. 7 

Euratom facility............................................................................................................ 8 

Borrowing activities of the European Union ............................................................... 9 

Description ................................................................................................................... 9 

BOP .............................................................................................................................. 9 

MFA ........................................................................................................................... 10 

Euratom ...................................................................................................................... 10 

European Investment Bank — lending operations outside the Community .............. 11 

4.1. 

EIB lending activities................................................................................................. 11 

4.1.1.  Description ................................................................................................................. 11 

4.1.2.  Volume of signatures ................................................................................................. 12 

4.1.3. 

Impact of EIB lending activities on EU budget ......................................................... 12 

4.2. 

EIB borrowing activities ............................................................................................ 13 

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1. 

INTRODUCTION 

The  Council  decisions  establishing  the  various  lending  instruments  of  the  European  Union 
require the Commission to inform the Council and the European Parliament, each year, of the 
use  of  these  instruments.  In  order  to  meet  these  information  requirements,  this  report 
describes the lending operations for each of the areas concerned. 

In particular, this report gives a brief presentation of lending and borrowing activities under 
the  balance-of-payment  support  to  non-euro  area  Member  States  (BOP),  and  the  macro-
financial  assistance  provided  by  the  Community  to  third  countries  (MFA),  as  well  as 
guarantees associated with Community loans. In addition, it provides information on Euratom 
lending and borrowing activities. 

To  complete  the  picture  of  lending  activities,  the  respective  Council  decisions1  for  EIB 
lending activities outside the Community require the Commission to inform the Council and 
the Parliament on an annual basis of the situation regarding European Investment Bank (EIB) 
financing operations (loans and loan guarantees) guaranteed by the Union budget in the pre-
accession  countries,  the  Mediterranean,  Eastern  Europe,  the  Southern  Caucasus  and  Russia, 
Asia and Latin America and the Republic of South Africa. 

1 

Council  Decision  97/256/EC,  as  amended  by  Council  Decisions  98/348/EC  and  98/729/EC,  covering 
the  period  01.02.1997-31.01.2000  (the  ‘1997-2000  General  Mandate’),  and  Council  Decision 
2000/24/EC, replaced by Council Decision 2008/580/EC of 23 June 2008 (codified version), covering 
the period 01.02.2000-31.01.2007 (the ‘2000-2006 General Mandate’). Council Decision 1999/786/EC 
(Turkey  Earthquake  Reconstruction  and  Rehabilitation  Action  (TERRA))  forms  an  extension  of  the 
general mandates. Furthermore, Council Decision 2001/777/EC established a special lending action for 
selected  environmental  projects  in  the  Baltic  Sea  basin  of  Russia  under  the  Northern  Dimension. 
Council Decision 2005/48/EC established a separate mandate for certain types of projects in Russia and 
Western  NIS  (Ukraine,  Republic  of  Moldova  and  Belarus).  Finally,  Council  Decision  2006/1016/EC 
established a new general mandate covering the period 01.02.2007-31.12.2013 (the ‘2007-2013 General 
Mandate’), replaced by Decision 2009/633/EC of the European Parliament and of the Council. 

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2. 

LENDING ACTIVITIES OF THE EUROPEAN UNION 

2.1. 

Description 

Financial support for non-member States and for non-euro area Member States is provided by 
the Commission under different legal bases, depending on the geographical areas concerned 
and the objectives pursued. 

Financial  operations  administered  by  the  Commission  under  various  Council  decisions 
generally  take  the  form  of  bilateral  loans  (macro-financial  support  to  non-member  States 
(MFA)  or  balance-of-payments  support  to  non-euro  area  Member  States  (BOP)),  where  the 
Community helps to re-establish a country’s macro-economic balance. The Euratom lending 
instrument  is  available  for  financing  operations  in  Member  States  and  certain  non-member 
States (Armenia, Russia and Ukraine). 

Each MFA, BOP or Euratom loan disbursement is based on a back-to-back operation. In other 
words, the amounts due (interest and/or principal), currency and payment dates of the loans 
match  the  amounts  due,  the  currency  and  payment  dates  of  the  underlying  borrowing 
transaction. 

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Table 1: Loan disbursements for macro-financial assistance, Euratom to non-member States, 
and Balance of Payments loans to non-euro Member States 

2001 

2002 

2003 

2004 

2005 

2006 

2007 

2008  Total 

EUR million 

Romania 

Subtotal  ‘Enlargement’ countries 
(Member States as of 01.01.2007) 

0 

0 

Albania(1) 

Bosnia and Herzegovina(2) 

fYRoM(3) 

Serbia and Montenegro(4) 

Tajikistan(6) 

Lebanon(7) 

Sub total MFA 

Euratom(8) 

BOP(9) 

50 

50 

28 

40 

0 

0 

0 

0 

0

10 

9 

10 

15 

50

50

9

30

50

280

60

0

12 

10 

10 

225 

60 

305 

40 

12 

40 

168 

25 

10 

65 

15 

215 

10 

51 

0 

0

479

39 

16

491

2 000

2 000

Grand Total 

345 

52 

143 

75 

230 

70 

39 

2 016

2 970

(1) A grant of EUR 3 million was disbursed to Albania in 2005 and a further grant of EUR 13 million in 2006. 
(2) Disbursement of the loan was accompanied by disbursements of grants of EUR 10 million in 2000. A further grant of 
EUR 15 million was paid in 2001 and of EUR 25 million in 2003. In 2005 EUR 15 million grants were disbursed. 
(3) Former Yugoslav Republic of Macedonia. A grant of EUR 10 million was disbursed in 2001, one of EUR 10 million in 
2002 and another of EUR 18 million in 2003. 
(4) One grant of EUR 115 million was paid to Serbia and Montenegro in 2002, one of EUR 35 million in 2003, one of 
EUR 10 million in 2004 and another of EUR 25 million in 2005. 
(5) In 2001 EUR 35 million were disbursed to Kosovo and EUR 13 million to Montenegro, granted in the form of budgetary 
support. In the same year a further grant of EUR 15 million was disbursed to Kosovo, followed by another one of 
EUR 15 million in 2002. 
(6) Tajikistan: This loan was accompanied by the disbursement of grants totalling EUR 14 million. A further grant of 
EUR 7 million was paid in 2003 (although decided in 2002), and the same amount in 2005 as well as in 2006. 
(7 Macro-financial assistance to Lebanon in the form of EUR 50 million in loans. One disbursement of EUR 25 million took 
place in June 2009. A first payment of grant of EUR 15 million was disbursed in December 2008. 
(8) Including Bulgaria and Romania (Member States as of 01.01.2007) 
(9) On 2 December 2008 the ceiling for the maximum amount of loans granted to non euro-area Member States under the 
BOP facility was increased from EUR 12 billion to EUR 25 billion. On 18 May 2009 the limit was increased to 
EUR 50 billion. 
Other grant disbursements for the period 2001 – 2008: 
Exceptional financial assistance. Grant disbursements to Armenia and Georgia totalling, respectively, EUR 8 million and 
EUR 10 million in 1998 and EUR 4 million and EUR 9 million in 1999. A further grant of EUR 6 million was made to 
Georgia in 2001. A grant of EUR 11 million was paid to Armenia in 2002. Further grants to Armenia of EUR 5.5 million and 
Georgia of EUR 6.5 million were paid in 2004. In 2005, EUR 1.5 million grant was paid to Armenia. In 2006, Georgia 
received two grants of EUR 11 million each. 
Republic of Moldova: a grant of EUR 25 million was paid in two tranches in 2008. 

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2.2. 

BOP facility 

The  activation  of  the  Balance-of-Payments  (BOP)  to  non-euro  area  Member  States  was  the 
major  event  of  the  year  2008  in  the  lending  (and  borrowing)  operations  of  the  European 
Community. 

The following is a summary of the main characteristics of the BOP facility, the key activities 
in 2008 and the expected evolution in the coming years. 

BOP  assistance  takes  the  form  of  medium-term  loans  provided  by  the  Commission  and  is 
generally provided in conjunction with financing provided by the IMF and other multilateral 
lenders,  such  the  EIB,  the  EBRD  or  the  World  Bank,  or  bilateral  assistance  from  Member 
States. The facility is exceptional in nature and is mobilised on a case-by-case basis. Potential 
beneficiaries  are  the  Member  States  outside  the  euro  area2  dealing  with  serious  balance-of-
payments  difficulties.  The  assistance  is  of  a  macro-economic  nature  (i.e.  not  linked  to  a 
specific use of the funds as in the case of project assistance). It is released on the provison that 
economic  policy  conditions  are  met  and  is  aimed  at  easing  the  recipient  Member  States’ 
global  external  financing  constraints  and  restoring  the  viability  of  the  balance  of  payments. 
Such  policy  conditions  are  agreed  by  the  Commission  (following  consultation  with  the 
Economic and Social Committee) and the Member State in a memorandum of understanding 
signed  prior  to  the  implementation  of  the  loan  agreements.  The  assistance  underpins  the 
implementation  of  adjustment  measures  designed  to  remedy  these  difficulties.  The 
verification  of  such  measures  will  be  a  condition  precedent  for  the  disbursement  of  any 
instalment under the loan. 

Created in 19753, several operations aimed at supporting the balance of payments of Member 
States under particular financial threats or difficulties were put in place by the Community, in 
the following twenty years, with loans funded by borrowings. 

The increased number of eligible Member States following enlargement and the intensity of 
the  international  financial  crisis  called  for  the  BOP  facility  to  be  activated  and  extended  in 
December 20084 from EUR 12 billion to EUR 25 billion in order to respond to the potential 
needs. Another increase to EUR 50 billion of the overall loan facility ceiling was decided in 
May  20095  in  order  to  continue  being  able  to  react  quickly  to  any  further  demand  for  BOP 
assistance. 

In  2008,  the  facility  was  reactivated  to  help  non-euro  Member  States  overcome  balance  of 
payments  difficulties  resulting  from  the  financial  crisis.  On  4  November  20086  the  Council 

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On  1  October  2009,  the  following  Member  States  had  not  adopted  the  euro:  Bulgaria,  the  Czech 
Republic,  Denmark,  Estonia,  Hungary,  Latvia,  Lithuania,  Poland,  Romania,  Sweden  and  the  United 
Kingdom. 
Council Regulation (EEC) No 397/75 of 17 February 1975 establishing a new mechanism known as the 
Community  Loan  Mechanism  (CLM)  to  help  some  EC  countries  overcome  unsustainable  current 
account imbalances caused by the first oil shock. 
Council Regulation (EC) No 1360/2008 of 2 December 2008 amending Regulation (EC) No 332/2002 
establishing  a  facility  providing  medium-term  financial  assistance  to  Member  States’  balances  of 
payments. 
Council  Regulation  (EC)  No  431/2009  of  18  May  2009  amending  Regulation  (EC)  No  332/2002 
establishing  a  facility  providing  medium-term  financial  assistance  to  Member  States’  balances  of 
payments. 
Council Decision 2009/102/EC of 4 November 2008. 

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decided  to  provide  medium-term  financial  assistance  to  Hungary  of  up  to  EUR 6.5 billion 
under  the  balance  of  payments  facility  for  non-euro  Member  States.  The  EU  financial 
assistance was provided to restore investor confidence at a time when Hungary was seriously 
threatened by difficulties in its balance of current payments as a result of heightened financial 
market volatility and uncertainty as well as a severely disrupted funding environment for most 
of  the  last  quarter  of  2008.  The  intention  was  to  disburse  the  EUR 6.5 billion  loan  in  four 
instalments.  On  9  December  2008  a  first  instalment  of  EUR 2 billion  was  disbursed.  The 
balance  was  to  be  disbursed  in  20097  or  in  2010  as  the  economic  policy  conditions  are 
gradually met. 

BOP  is  expected  to  represent  a  substantial  part  of  future  EU  lending  activity  in  terms  of 
volume.  In  2009,  the  Council  decided  to  support  two  additional  countries  under  the  BOP 
facility: 

•  EUR 3.1 billion for Latvia (Council Decision 2009/290/EC of 20 January 2009), and 

•  EUR 5 billion for Romania (Council Decision 2009/459/EC of 6 May 2009). 

2.3.  MFA facility 

Detailed information on MFA operations can be found in the annual Commission Report to 
the Council and the European Parliament on the implementation of MFA to third countries8. 
The  main  characteristics  of  the  MFA  facility,  the  key  activities  in  2008,  and  the  expected 
evolution in the coming years can be summarised as follows. 

Macro-financial assistance (MFA) in the form of loans and/or grants supports the political and 
economic reform efforts of the beneficiary countries and is implemented in association with 
the  Bretton  Woods  institutions.  Key  features  of  the  Community  MFA  are:  the  exceptional 
character  of  this  assistance,  the  fact  that  it  complements  financing  from  the  International 
Financial  Institutions  (IFIs),  and  macroeconomic  conditionality.  In  close  coordination  with 
the International Monetary Fund (IMF) and the World Bank, Community MFA, tailored to the 
needs of a specific country, has supported several third countries with the overall objective of 
stabilising the financial situation and establishing market-oriented economies. 

The MFA loans are generally disbursed in several instalments, as and when macroeconomic 
conditionality milestones are met. Each disbursement is subject to a borrowing transaction by 
the  Commission.  Should  a  situation  of  default  arise  as  a  result  of  failure  by  the  beneficiary 
country  to  honour  its  repayment  obligations,  the  Commission  may  activate  the  Guarantee 
Fund  for  External  Actions9  so  that  the  corresponding  borrowing  by  the  Commission  is  not 
affected. 

Grants and loans disbursed under this instrument since 2001 are listed in Table 1 above. 

The  key  MFA  activities  in  2008  relate  to  negotiations  with  the  relevant  authorities  and 
focused on the following:  

7 

8 
9 

Two additional tranches of EUR 2 billion and EUR 1.5 billion were disbursed in March and July 2009 
respectively. 
Not yet published for 2008. For 2007, see COM/2008/520. 
See Council Regulation (EC, Euratom) No 480/2009. 

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•  The  terms  of  the  assistance  to  Lebanon  (Memorandum  of  Understanding  and  Loan 
Agreement signed on 18 and 19 December 2008 respectively). The MFA programme with 
Lebanon consists of a grant of EUR 30 million and a loan of EUR 50 million, both to be 
disbursed in two instalments. The payment of the first tranche of the loan (EUR 25 million) 
was  made  in  early  June  2009,  and  the  release  of  the  second  tranche  is  planned  for  2010 
(subject to the fulfilment of the conditionalities attached to this assistance). 

•  The regularisation of the split between Serbia and Montenegro of the MFA loans granted 
in favour of the former Federal Republic of Yugoslavia. On 2 October 2008, the Council 
adopted  Decision  2008/784/EC  establishing  a  separate  liability  of  Montenegro  and 
reducing proportionately the liability of Serbia with regard to the long-term loans granted 
by  the  Community  to  the  State  Union  of  Serbia  and  Montenegro  (formerly  the  Federal 
Republic  of  Yugoslavia)  pursuant  to  Decisions  2001/549/EC  and  2002/882/EC10, 
authorising  the  Commission  to  sign  a  separate  loan  agreement  with  the  authorities  of 
Montenegro. This decision is simply the outcome of Montenegro’s independence in June 
2006 and of an agreement reached between Serbia and Montenegro in July 2006 to allocate 
external liabilities between the two separate states. It does not create any new obligations 
for  the  Community  and  has  no  budgetary  implications.  Once  a  separate  loan  agreement 
with  Montenegro  is  concluded  and  enters  into  force  (expected  by  the  end  of  2009), 
Serbia’s current liabilities will be readjusted. 

•  In 2008 the Commission completed the implementation of the macro-financial assistance 
programme totalling EUR 45 million for the Republic of Moldova decided by the Council 
on 16 April 2007. The second and third instalments of the grant (EUR 10 million and EUR 
15  million  respectively)  were  released  in June and  December 2008. The  programme was 
part  of  the  financing  package  in  support  of  the  Government’s  arrangement  with  the  IMF 
under  the  Poverty  Reduction  and  Growth  Facility  (PRGF)  dating  back  to  May  2006  and 
expiring in May 2009. 

•  In December 2008, the Commission released the first grant instalment of EUR 15 million 
under the programme of macro-financial assistance to Lebanon approved on 10 December 
2007. 

•  There were no loan disbursements under MFA in 2008. 

MFA focuses on neighbouring regions, such as the Western Balkans and the Caucasus. The 
impact  of  the  prevailing  economic  and  financial  crisis  has  been  particularly  severe  in  those 
regions.  As  a  result,  several  pre-accession  and  neighbouring  countries  have  approached  the 
Commission formally or informally with requests for MFA, and the Community faced intense 
activity in 2009 to meet the demands under this facility. It is difficult to predict for how long 
such  a  high  demand  will  persist,  but  in  any  case  it  will  be  linked  to  an  overall  return  to 
normality in the more economically developed countries. 

2.4. 

Euratom facility 

The  Euratom  loan  facility  may  be  used  to  finance  projects  within  Member  States  (Council 
Decision 77/270/Euratom) or in certain third countries (Ukraine, Russia or Armenia) (Council 
Decision  94/179/Euratom).  These  loans  are  off-budget  operations  that  the  Commission 

10 

OJ L 269, 10.10.2008, p. 8. 

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finances  back  to  back  by  borrowing  from  the financial  market.  In  1990  the  Council  fixed  a 
borrowing limit of EUR 4 billion, of which some EUR 3.4 billion have been decided. In 2002 
the  Commission  proposed  an  increase  in  the  borrowing  limit  from  EUR 4 billion  to 
EUR 6 billion, for which agreement has not yet been reached at the Council. 

Euratom  activities  in  2008  focused  on  the  second  disbursement  (USD 22 million)  under  the 
K2R4 project. On 29 September 2004 the Commission approved a loan for a total amount in 
EUR equivalent to USD 83 million for the safety upgrade of the nuclear power units known 
as Khmelnitsky Unit 2 and Rovno Unit 4 (K2R4) in Ukraine. The loan became effective on 
7 July 2006  after  verification  that  all  conditions  precedent  of  the  loan  agreement  had  been 
satisfactorily  fulfilled.  A  first  tranche  of  EUR 39 million  was  disbursed  on  15  March  2007. 
On 6 October 2008, a second tranche of USD 22 million (EUR 15.2 million equivalent) was 
disbursed, following the corresponding borrowing operation. 

In 2009 lending and borrowing activity was to include the disbursement of the third (and last) 
tranche11 under the loan agreement for the K2R4 project (USD 10.3 million) in Ukraine. 

3. 

BORROWING ACTIVITIES OF THE EUROPEAN UNION 

3.1. 

Description 

In  order  to  finance  the  lending  activities  decided  by  the  Council,  the  Commission  is 
empowered  to  borrow  funds  on  the  capital  market  on  behalf  of  the  respective  Community 
(EC,  Euratom).  For  each  instrument  (BOP,  MFA  and  Euratom  loans)  the  borrowing  and 
lending mechanism operation is determined in its respective legal base. There is a strict ‘back-
to-back’ link between a borrowing operation and the related lending operation, which ensures 
that the EU budget is free of any interest rate or foreign exchange risk. 

3.2. 

BOP 

In November 2008 the EC concluded a EUR 6.5 billion loan commitment to the Republic of 
Hungary  under  the  BOP  facility.  A  first  instalment  of  EUR  2  billion  was  financed  on  9 
December 2008 via the issuance of a 3 year bond.  

This bond issuance succeeded in bringing the EC as issuer back to the euro benchmark bond 
market. The bond was very well received in the market. As investor interest was very strong, 
the bond was quickly oversubscribed. All important investor classes were represented in the 
final  distribution,  including  central  banks,  investment  funds,  bank  treasuries  and  insurance 
companies.  The  bond  price  was  close  to  the  best  in  its  reference  group,  the  Sovereign 
Supranational Agency Sector (SSA), in line with issuers such as EIB, KFW and SFEF. 

11 

The last tranche was disbursed in October 2009. 

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The  secondary  market  performance  was  very  satisfactory  and  confirmed  the  EC’s  strong 
standing as a first class benchmark bond issuer. This standing was reinforced with subsequent 
benchmark  bonds  issued  throughout  2009,  building  on  the  foundations  laid  with  the  2008 
benchmark issuance. 

3.3.  MFA 

There was no funding under macro-financial assistance in 2008. 

3.4. 

Euratom 

An amount of USD 22 million was raised for Euratom in 2008.  

Table 2: Volume of borrowing operations by financial instrument from 2001 to 200812 

2001 

2002

2003

2004

2005

2006 

2007 

2008

EUR million 

305 

40 

12

40

118

25

10

65

15

215

19 

51 

39 

16

2 000

345 

52

143

75

230

70 

39 

2 016

MFA 

Euratom 

BOP 

Total 

12 

More information on the EC bonds can be found at 
http://ec.europa.eu/economy_finance/financial_operation_instruments/market_operations59_en.htm. 

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Table 3: Total borrowing of the European Union — outstanding amounts at the end of each 
period 2000-2008(1)  

ECSC 

Euratom 

BOP 

MFA 

Total European Union

EUR million 

2000 

2001 

2002 

2003 

2004 

2005 

2006 

2007 

2008 

2 039

1 386

713

431

423

440

436

400

266

40

80

105

170

385

436

474

484 

2 000

1 656

1 633

1 379

1 372

1 214

1 080

969

786

654

3 695

3 059

2 172

1 908

1 807

1 905

1 841

1 260

3 404

(1)  The  conversion  rates  used  are  those  of  31 December  of  each  year.  Original  amount  of  borrowings,  plus  or  minus 
repayments of the principal, cancellations, annulments and exchange-rate adjustments. 

4. 

EUROPEAN  INVESTMENT  BANK  —  LENDING  OPERATIONS  OUTSIDE  THE 
COMMUNITY 

4.1. 

EIB lending activities 

4.1.1.  Description 

Loans granted by the EIB from its own resources are either in the form of direct financing for 
individual  projects  or  global  loans  to  financial  intermediaries,  which  then  allocate  funds  to 
smaller-scale  local  projects.  Some  of  the  EIB  loans  outside  the  Community  benefit  from  a 
guarantee of the European Union budget and are, unless otherwise specified, the focus of this 
report. Under the current external mandate, the EIB can also provide loan guarantees. A wider 
range of financial instruments (including equity in certain cases) is used by the EIB under its 
own risk facilities13 and when it manages Community or Member States’ resources (notably 
in  the  Mediterranean  and  ACP  countries).  A  separate  report  will  review  the  EIB  operations 
carried out under the external mandate. 

13 

In  July  2009,  the  Board  of  Governors  approved  extensions  to  the  EIB’s  Pre-Accession  Facility  and 
Mediterranean Partnership Facility II so as to enable indirect equity investments in infrastructure funds. 

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4.1.2.  Volume of signatures 

The total volume of EIB operations signed increased by 20 % to EUR 57.6 billion in 2008, of 
which  an  amount  of  EUR 51.5 billion  was  signed  with  Member  States  and  EUR 6.1 billion 
with partner countries. 

EIB lending in non-member States in 2008 — Overview 

EU Budget 
and EDF 
resources(1) 

Own resources 
under 
Community / 
Member States’ 
Guarantee 

Own resources 
under EIB own 
risk facilities 

EUR million 

TOTAL 

2 009 

1 444 

3 453

62

1 365 

33 

1 460

469 

203 

225 

469

203

561

4 270 

1 477 

6 145

336

398

Pre-Accession countries 
(Mandate 2007-2013) 

Neighbourhood and 
Partnership countries 
(Mandate 2007-2013) 

ALA — Asia and Latin 
America (Mandate 2007-2013) 

RSA — South Africa 
(Mandate 2007-2013) 

ACP-OCT countries(2) 

Total 

(1) 

(2) 

Granted and administered by the EIB out of the budgetary resources of the EC or the European 
Development Fund (EDF). 

Africa, Caribbean, Pacific / Overseas Countries and Territories. 

4.1.3. 

Impact of EIB lending activities on EU budget14 

The  EIB  provides  project  financing  both  inside  and,  with  a  partial  guarantee  from  the  EU 
budget, outside the EU. Lending activities have an impact on the EU budget  when  they  are 

14 

For  the  impact  of  guarantees  given  to  EIB  and  the  impact  of  EU  own  risk  lending,  see  report  on 
guarantees covered by the budget at 31.12.2008, COM2009 (398). 

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accompanied  by  Community  guarantees,  interest  subsidies  or  special  conditions  comparable 
to risk-bearing operations for the lender. 

loans  and 

loan  guarantees  for  projects  outside 

On 19 December 2006, the Council granted a Community guarantee to the EIB against losses 
the  Community  (Decision 
under 
2006/1016/EC15), replaced by Decision 2009/633/EC of the European Parliament and of the 
Council of 13 July 200916). The Community guarantee is restricted to 65 % of the aggregate 
amount  of  credits  disbursed  and  guarantees  provided,  less  amounts  reimbursed,  plus  all 
related  sums.  The  maximum  ceiling  for  EIB  financing  operations  carried  out  under  this 
mandate 
is  EUR 27 800 million  consisting  of  a  basic  ceiling  of 
EUR 25 800 million  and  an  optional  mandate  of  EUR 2 000 million,  its  activation  being 
decided by the Council and the Parliament based on the outcome of the mid-term review in 
2010. 

in  2007-2013 

4.2. 

EIB borrowing activities 

Under  the  2008  funding  programme  the  EIB  raised  an  amount  of  EUR 59.5 billion.  This 
represents  a  significant  increase  over  2007  (EUR 54.7 billion  i.e.  +9 %).  This  substantial 
increase  was  realised  in  2008  in  a  difficult  funding  environment.  It  was  characterised  by 
volatility,  market  uncertainty,  and  from  mid-October,  a  severely  disrupted  funding 
environment. Therefore, reliance on larger, liquid transactions and low levels of demand for 
structured issues continued. 

15 
16 

OJ L 414, 30.12.2006, p. 95. 
OJ L 190, 22.07.2009, p. 1. 

EN 

13 

   EN