REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL ON BORROWING AND LENDING ACTIVITIES OF THE EUROPEAN UNION IN 2010
Date: 2011-08-09
Institutions: European Commission
Subjects: Community loan, EIB loan, EU borrowing, Euratom loan, balance of payments, credit guarantee, financial aid

EUROPEAN COMMISSION 

Brussels, 9.8.2011 
COM(2011) 485 final 

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND 
THE COUNCIL 

ON BORROWING AND LENDING ACTIVITIES OF THE EUROPEAN UNION IN 
2010 

 
 
 
 
  
 
TABLE OF CONTENTS 

1. 

2. 

2.1. 

2.2. 

Introduction .................................................................................................................. 2 

Lending activities of the European Union ................................................................... 2 

Overview ...................................................................................................................... 2 

BOP facility.................................................................................................................. 2 

2.2.1.  Main characteristics of the BOP facility ...................................................................... 2 

2.2.2.  BoP operations in 2010 ................................................................................................ 3 

2.3. 

MFA facility................................................................................................................. 4 

2.3.1.  Main characteristics of MFA ....................................................................................... 4 

2.3.2.  MFA operations in 2010 .............................................................................................. 5 

2.4. 

Euratom facility............................................................................................................ 5 

2.4.1.  Main characteristics ..................................................................................................... 5 

2.4.2.  Euratom operations in 2010 ......................................................................................... 6 

2.5. 

EU response to the euro area sovereign debt crisis...................................................... 6 

2.5.1.  Measures decided for Greece ....................................................................................... 6 

2.5.2.  European Financial Stabilisation Mechanism (EFSM)................................................ 7 

2.5.3.  European Financial Stability Facility (EFSF) .............................................................. 8 

2.5.4.  Operations with EFSM participation ........................................................................... 8 

3. 

3.1. 

3.2. 

3.3. 

3.4. 

4. 

4.1. 

4.2. 

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

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

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

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

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

European Investment Bank ........................................................................................ 10 

EIB lending activities................................................................................................. 10 

EIB borrowing activities ............................................................................................ 11 

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1. 

INTRODUCTION 

The  Council  decisions  establishing  the  various  lending  instruments  of  the  European  Union 
require the Commission to inform the European Parliament and the Council, each year, of the 
use of these instruments. 

In order to meet these information requirements, this report describes the lending operations 
(section  2)  for  each  of  the  areas  concerned  as  well  as  the  respective  borrowing  activities 
(section  3).  It  includes  the  balance-of-payment  support  to  non-euro  area  Member  States 
(BOP)1,  the  macro-financial  assistance  provided  by  the  European  Union  to  third  countries 
(MFA), the Euratom activities and the financial measures taken in order to respond to the euro 
area sovereign debt crisis. 

To  complete  the  picture  of  EU  activities,  the  final  section  provides a  summary  overview  of 
European Investment Bank (EIB) lending and borrowing activities in 2010. 

2. 

LENDING ACTIVITIES OF THE EUROPEAN UNION 

Financial support for third countries and for Member States is provided by the Commission 
under different legal bases, depending on the geographical areas concerned and the objectives 
pursued. 

2.1. 

Overview 

Financial  operations  administered  by  the  Commission  under  various  Council  decisions 
generally  take  the  form  of  bilateral  loans.  These  are  financed  from  the  capital  markets  with 
the guarantee of the EU budget. 

2.2. 

BOP facility 

BOP assistance takes the form of medium-term loans provided by the Union and is generally 
provided  in  conjunction  with  financing  provided  by  the  International  Monetary  Fund  (IMF) 
and  other  multilateral  lenders,  such  the  EIB,  the  EBRD  or  the  World  Bank,  or  bilateral 
assistance from Member States. 

2.2.1.  Main characteristics of the BOP facility 

The  facility  is  exceptional  in  nature  and  is  mobilised  on  a  case-by-case  basis  by  Council 
decision. Potential beneficiaries are the Member States outside the euro area being faced 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 
subject  to  the  fulfilment  of  economic  policy  conditions  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 Financial Committee (EFC) and the Member State in a memorandum 

1 

Council Regulation (EU) No 407/2010 of 11 May 2010 established a similar mechanism with the full 
support of the EU budget, the European financial stabilisation mechanism (EFSM), to support euro area 
Member States. 

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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  is a  condition  for the  disbursement of further instalments 
under these loans. 

Following  the  facility's  inception  in  19752,  several  operations  aiming  at  supporting  the 
balance of payments of Member States under particular financial threats or difficulties were 
carried out by the Community over the following twenty years. These operations consisted of 
loans funded by Community borrowings. 

The  intensity  of  the  international  financial  crisis  (that  started  in  2007/2008)  called  for  the 
BOP  facility  to  be  activated  again.  In  addition,  the  increased  number  of  eligible  Member 
States following enlargement and the worsening of the economic situation in several of them 
led to an increase of its lending ceiling in order to respond to the potential needs. In particular, 
the ceiling was increased in December 20083 from EUR 12 billion to EUR 25 billion while a 
further increase to EUR 50 billion was decided in May 20094 in order to retain the capacity to 
react  quickly  to  any  further  demand  for  BOP  assistance.  Of  this  ceiling,  an  amount  of 
EUR 14.6 billion has been granted at 31 December 2010 to Hungary5, Latvia6 and Romania7. 

Table 1: situation of BoP at 31.12.2010 (in EUR million)  

Country 

Amount decided 

Amount disbursed 

Hungary 

Latvia 
Romania8 
Total 

2.2.2.  BoP operations in 2010 

6,500

3,100

5,000

14,600

 5,500

 2,900

 3,650
12,050

A total amount of EUR 2.85 billion was disbursed over several tranches in 2010. 

2 

3 

4 

5 
6 
7 
8 

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. 
Council Decision 2009/290/EC of 20 January 2009. 
Council Decision 2009/459/EC of 6 May 2009. 
The 3rd tranche of EUR 1.2 billion to Romania was disbursed on 24.03.2011 

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Table 2: list of loan operations disbursed under BoP facility in 2010 

Country 

Decision 

Tranche 

Date 

Latvia 

2009/290/EC 

Romania 

2009/459/EC 

3rd 

4th 

2nd 

3rd 

11/03/2010 

20/10/2010 

11/03/2010 

22/09/2010 

Total 

Amount  in  EUR 
million 

500

200

1,000

1,150

2,850

Regarding the implementation of ongoing BoP operations: 

– 

– 

the  availability  period  of  the  financial  assistance  to  Hungary  expired  in  November 
2010. As a consequence, the last EUR 1 billion of the facility will not be disbursed. 
As  for  Latvia,  EUR  200  million  are  still  available  until  January  2012,  but  the 
Member  State  has  no  intention  to  request  it.  Consequently,  a  total  amount  of  EUR 
1.2 billion will not be disbursed under the current BoP operations. 

Furthermore, the 4th tranche for Romania of EUR 1.2 billion was disbursed in March 
2011, and the 5th and last tranche was disbursed in June 2011. 

2.3.  MFA facility 

Detailed information on MFA operations can be found in the annual Commission Report to 
the European Parliament and the Council on the implementation of MFA to third countries9.  

2.3.1.  Main characteristics of MFA 

The  purpose  of  the  MFA  instrument  is  to  help  candidate,  potential  candidate  and 
neighbourhood  countries  resolve  short-term  balance  of  payments  problems  and  stabilise 
public  finances,  and  to  encourage  their  implementation  of  structural  reforms.  MFA  is 
provided on an exceptional and temporary basis, and based on strict conditionality. It is tied to 
adjustment and reform efforts to ensure that the economies of recipient countries are brought 
back to a sustainable path and improve their resilience to future macroeconomic shocks. MFA 
operations complement IMF adjustment programmes. MFA can take the form of grants and/or 
loans. 

Regarding the methodology for deciding between the use of loans and grants in the individual 
MFA operations, a comprehensive note clarifying the criteria used was submitted in January 
2011 by the Commission to the Economic and Financial Committee, which endorsed it. The 
methodology will also be presented in the 2010 MFA Annual report. The criteria agreed fall 
in two broad categories: the recipient country’s level of economic and social development10 as 

9 
10 

Not yet published for 2010. For 2009, see COM/2010/513, SEC/2010/1117. 
Gross national income per capital is proposed as the primary indicator. 

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well as its debt sustainability and repayment capacity. Criteria applied by the World Bank and 
IMF for granting financial assistance are also taken into consideration. 

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  Actions11  so  that  the  repayment  of  the  corresponding  borrowing  by  the 
Commission is secured12. 

2.3.2.  MFA operations in 2010 

The key MFA activities in 2010 relate to proposals of new operations and related negotiations 
with the relevant authorities. They focused on the following: 

– 

– 

The European Parliament and the Council adopted in July 2010 a decision to provide 
EUR  500  million  to  Ukraine13  in  the  form  of  a  loan.  Together  with  a 
EUR 110 million  loan  from  a  decision  taken  by  the  Council  in  2002,  a  total  of  up 
EUR 610 million is available for Ukraine. 

Concerning the Republic of Moldova, a decision has been adopted in October 2010 
to provide up to EUR 90 million in the form of grant. 

There was no operation disbursed under the MFA loan facility in 201014. 

2.4. 

Euratom facility 

2.4.1.  Main characteristics 

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  finances  back  to  back  by 
borrowing from the financial market. As in the case of MFA, the Commission may activate 
the Guarantee Fund for External Actions in case of default.  

In 1990, the Council fixed a borrowing limit of EUR 4 billion, of which some EUR 3.4 billion 
have  been  decided  and  disbursed.  In  2002  the  Commission  proposed  an  increase  in  the 

11 

12 

13 

14 

See  Council  Regulation  (EC,  Euratom)  No  480/2009.  No  default  has  been  registered  so  far  for  MFA 
loans. 
Although  the  repayment  of  the  borrowing  is  covered  in  fine  by  the  guarantee  of  the  EU  budget,  the 
Guarantee Fund acts as liquidity buffer protecting the EU budget against the risk of calls resulting from 
payment defaults. For a comprehensive report on the functioning of the Fund, see COM(2010)418 and 
the accompanying Staff Working Document (SEC(2010)968). 
Decision  n°  388/2010/EU  of  the  European  Parliament  and  of  the  Council  of  7  July  2010  providing 
macro financial assistance to Ukraine (OJ L 179 of 14.07.2010, p.1).  
Regarding the implementation of ongoing financial grant assistance, payments of EUR 7.7 million and 
EUR 23 million in favour of Georgia were made in January and August. Furthermore, EUR 30 million, 
were disbursed in favour of Kosovo in September and the first tranche of the EUR 40 million, in favour 
of the Republic of Moldova was disbursed in December 2010. 

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borrowing limit from EUR 4 billion to EUR 6 billion, for which agreement has not yet been 
reached at the Council. 

2.4.2.  Euratom operations in 2010 

In 2010, neither loan decisions were taken nor disbursements were carried out. 

2.5. 

EU response to the euro area sovereign debt crisis 

In  addition  to  the  balance  of  payments  crisis  mentioned  in  section  2.2,  the  global  financial 
crisis and economic dowturn led to a deterioration of the borrowing conditions of several euro 
area  Member  States.  To  overcome  difficulties  resulting  from 
the  financial  crisis, 
unprecedented  fiscal  and  monetary  measures  have  been  taken  by  governments  and  central 
banks  of  these  Member  States.  However,  short-term  and  long-term  financing  conditions 
remained difficult. 

The Council and the euro area Member States have therefore decided in May 2010 a package 
of measures to preserve financial stability in the euro area and Europe at large. 

2.5.1.  Measures decided for Greece 

Following  a  request  by  the  Greek  authorities,  euro  area  Ministers  unanimously  agreed  on 
2 May 2010 to activate stability support to Greece via bilateral loans from the other euro area 
Member  States,  centrally  pooled  by  the  Commission,  under  the  conditions  set  out  in  their 
statement of 11 April 2010. 

The  support  was  provided  in  the  context  of  a  three  year  joint  programme  with  the  IMF 
involving  a  financial  package  of  EUR 110 billion  to  help  Greece  meet  its  financing  needs. 
The  programme  was  accompanied  with  strong  policy  conditionality15  negotiated  with  the 
Greek authorities by the Commission and the IMF, in liaison with the ECB. 

Euro area Member States contributed for their part EUR 80 billion16. In addition, the IMF has 
reached an agreement with the Greek authorities to support this programme with a stand-by 
arrangement of about EUR 30 billion17. 

The role of the Commission 

Under the Greek Loan Facility, the Commission is not acting as a lender nor as a borrower. In 
particular, the representatives of the Member States of the European Union have decided on 5 
May  2010  to  entrust  the  Commission  with  the  tasks  in  relation  to  the  coordination  and 
management of the pooled bilateral loans as set out in an Intercreditor Agreement concluded 
on  8  May  2010  by  the  euro  area  Member  States  providing  the  support.18  The  role  does  not 

15 

16 
17 
18 

The  main  elements  of  policy  conditionality  were  enshrined  in  Council  Decision  of  10  May  2010 
addressed to Greece with a view to reinforcing and deepening fiscal surveillance and giving notice to 
Greece to take measures for the deficit reduction judged necessary to remedy the situation of excessive 
deficit  (2010/320/EU).  The  conditionality  was  further  detailed  in  a  Memorandum  of  Understanding 
concluded between the Greek authorities and the Commission on behalf of euro area Member States. 
Of which EUR 38 billion had been disbursed until March 2011. 
Of which EUR 14.6 billion had been disbursed until March 2011. 
These  tasks  inter  alia  comprise,  on  behalf  and  under  the  instruction  of  the  euro  area  Member  States 
providing  the  support,  the  negotiating  and  signing  of  a  Loan  Facility  Agreement  with  Greece,  the 

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imply an increase in the expenditure of the Commission or of any other item of expenditure 
under the EU budget19. 

2.5.2.  European Financial Stabilisation Mechanism (EFSM) 

Council  Regulation  (EU)  No  407/2010  of  11  May  2010  set  up  the  European  Financial 
Stabilisation Mechanism (EFSM) based on Art. 122(2)20 of the Treaty on the Functioning of 
the European Union (TFEU) with the full backing of the EU budget. The maximum available 
amount under the mechanism is EUR 60 billion. 

Union  financial  assistance  under  EFSM  takes  the  form  of  a  loan  or  of  a  credit  line.  The 
Commission  is  empowered  on  behalf  of  the  European  Union  to  contract  borrowings  on  the 
capital markets or with financial institutions.  

The activation of the mechanism is subject to strong conditionality, in the context of a joint 
EU/IMF support programme.  

In particular, the Union financial assistance is granted by a decision adopted by the Council, 
acting by a qualified majority on a proposal from the Commission, containing (a) the terms of 
the loan/credit line, (b) the general economic policy conditions to the financial assistance and 
(c)  the  adjustment  programme  prepared  by  the  beneficiary  Member  State  to  meet  the 
economic conditions attached to the assistance.  

the  beneficiary  Member  State  conclude  a  Memorandum  of 
The  Commission  and 
Understanding  (MoU)  detailing  the  general  economic  policy  conditions  laid  down  by  the 
Council. The Commission then communicates the MoU to the European Parliament and to the 
Council.  The  economic  policy  conditions  are  reviewed  regularly  and  may  be  adjusted  if 
required21. 

The Commission is required to regularly report to the Economic and Financial Committee and 
to the Council on the implementation of the EFSM Regulation and on the continuation of the 
exceptional occurrences that justified its adoption.22 The first report has been published on 30 
November 2010 concluding that the exceptional events and circumstances still exist and the 
EFSM should therefore be maintained.23  

opening  of  an  account  in  the  name  of  the  Lenders  with  the  ECB,  and  the  use  of  that  account  for 
processing of all  payments  on  behalf  of  the  Lenders  and  from  the  Borrower,  the  co-ordination  of  the 
process  for  disbursements,  certain  calculations,  distribution  amongst  Lenders  of  payments  and  the 
provision of information to Lenders regarding breaches of the Loan Facility Agreement or requests for 
waivers or amendments in respect thereof. 
http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/EN/genaff/114338.pdf 
Art.  122.2  of  the  TFEU  foresees  financial  support  for  Member  States  in  difficulties  caused  by 
exceptional circumstances beyond Member States' control. 
The review is conducted by the Commission, in consultation with the ECB, at least every six months. 
Any  changes  that  may  be  needed  to  its  adjustment  programme  are  discussed  with  the  beneficiary 
Member State. The Council, acting by a qualified majority on a proposal from the Commission, shall 
decide  on  any  adjustments  to  be  made  to  the  initial  general  economic  policy  conditions  and  shall 
approve the revised adjustment programme as prepared by the beneficiary Member State. 
The  report  should  be  submitted  within  six  months  following  the  entry  into  force  of  the  Council 
Regulation  (EU)  No  407/2010  and  where  appropriate  every  six  months  thereafter  (article  9  of 
Regulation). 
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2010:0713:FIN:EN:PDF 

19 
20 

21 

22 

23 

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2.5.3.  European Financial Stability Facility (EFSF) 

The European Financial Stability Facility (EFSF) was created by the euro area Member States 
as  a  Luxembourg-registered  company  owned  by  them,  following  the  decisions  taken  on  9 
May 2010 within the framework of the Ecofin Council. 

EFSF is able to issue bonds guaranteed by euro-area Member States for up to EUR 440 billion 
for on-lending to euro-area Member States in difficulty, subject to conditions negotiated with 
the Commission in liaison with the European Central Bank and IMF and to be approved by 
the Eurogroup. The lending by the EFSF is not covered by an EU budget guarantee. 

The Commission provides advice and support to the EFSF. It is represented in the Board of 
Directors and co-ordinates its own borrowing activities with EFSF's for the financing of the 
programmes  where  bith  are  involved  in  order  to  optimize  their  capital  market  activities  in 
terms of timing. 

2.5.4.  Operations with EFSM participation 

• 

Operations decided in 2010: Ireland24 

In response to the Irish authorities' request on 21 November 2010, a three year joint EU/IMF 
financial  support  was  decided.  The  total  programme  for  Ireland  will  amount  up  to  EUR  85 
billion and will be disbursed in several tranches. EUR 17.5 billion will be financed by an Irish 
contribution  through  the  Treasury  cash  buffer  and  investments  of  the  National  Pension 
Reserve Fund. The remainder of the overall package will be funded by: 

– 

– 

– 

– 

• 

The EFSM up to EUR 22.5 billion25; 

The EFSF for an amount up to EUR 17.7 billion; 

The IMF for an amount up tof EUR 22.5 billion; 

Bilateral loans from United Kingdom (EUR 3.8 billion), Sweden (EUR 0.6 billion) 
and Denmark (EUR 0.4 billion). 

Operations decided after the end of 2010: Portugal26 

Following the formal request for financial assistance made on 7 April 2011 by the Portuguese 
authorities, the terms and conditions of a three year financial assistance package were agreed 
by  the  Eurogroup  and  the  Council  on  17  May  2011.  The  financial  package  will  cover 
Portugal’s financing needs up to EUR 78 billion and will be shared equally amongst: 

– 

24 

25 

26 

27 

The EFSM for an amount up to EUR 26 billion27;  

Council  implementing  Decision  n°77/2011/EU  of  7  December  2010  on  granting  Union  financial 
assistance to Ireland (OJ L 30 of 4.02.2011, p.34). 
On 12 January 2011, the first tranche of EUR 5 billion was disbursed to Ireland. Until June 2011, EUR 
11.4 billion was disbursed. 
Council implementing Decision n°344/2011/EU of 30 May 2011 on granting Union financial assistance 
to Portugal (OJ L 159 of 30.05.2011, p.88). 
On 31 May 2011, the first tranche of EUR 1.75 billion was disbursed to Portugal. Until June 2011, EUR 
6.5 billion was disbursed. 

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– 

– 

The EFSF for an amount up to EUR 26 billion;  

The IMF for an amount up to EUR 26 billion. 

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 markets on behalf of both the European Union and 
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 ‘back-to-back’ link 
between a borrowing operation and the related lending operation, which ensures that the EU 
budget does not take of any interest rate or foreign exchange risk. Outstanding borrowings are 
matched by outstanding loans. 

Table 3: Total borrowing of the European Union — outstanding amounts of capital at the end 
of each year over the period 2002-2010(1) (EUR million) 

ECSC i.l.(1) 
(2) 

Euratom (1) 

BOP 

MFA 

Total European Union

2002 

2003 

2004 

2005 

2006 

2007 

2008 

2009 

2010 

713

431

423

440

436

400

266

214

219

80

105

170

385

436

474

484 

481

466

2,000

9,200

12,050

1,379

1,372

1,214

1,080

969

786

654

584

500

2,172

1,908

1,807

1,905

1,841

1,660

3,404

10,479

13,235

(1)The conversion rates used are those of 31 December of each year. 
(2)The European Coal & Steel Community is in liquidation since 2002. The last bond issued by ECSC matures in 2019.  

3.2. 

BOP 

Bond issuances succeeded in confirming the EU as a major issuer to the euro benchmark bond 
market. The bonds were very well received in the market. As investor interest remained very 
strong,  the  bonds  were  always  quickly  oversubscribed.  All  important  investor  classes  were 
represented  in  the  final  distributions,  including  central  banks,  investment  funds,  bank 
treasuries and insurance companies28. The bond prices were close to the best in their reference 
group,  the  Sovereign  Supranational  Agency  Sector  (SSA),  in  line  with  issuers  such  as 

28 

Further  information  on  the  EU  borrowing  operations  are  provided  in  the  investor  presentation: 
http://ec.europa.eu/economy_finance/eu_borrower/documents/eu_investor_presentation_18_may_2011
_rev.pdf 

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European  Investment  Bank  (EIB),  "Kreditanstalt  für  Wiederaufbau"  (KFW)  and  "société  de 
financement de l'économie française" (SFEF). 

The secondary market performance was also very satisfactory and confirmed the EU’s strong 
standing as a first class benchmark bond issuer.  

Table 4: EU bond issued during 201029  

Country 

Description 

Issue date 

Maturity 
Date 

Size 
(EUR) 

Coupon 

Latvia and 
Romania 

EU 3.375/2019

11/03/2010

10/05/2019

1.5 bn 

3.375%

Romania 

EU 2.375/2017

22/09/2010

22/09/2017

1.15 bn 

2.375%

Total

2.65 bn 

One borrowing operation was raised on a back-to back basis for the funding of the 4th tranche 
of EUR 200 million for Latvia: 

Table 5: EU private placement during 2010 

Country 

Description 

Issue date 

Maturity 
Date 

Size 
(EUR) 

Coupon 

Latvia 

EU 2.875/2025

20/10/2010

20/10/2025

0.2 bn 

2.875%

3.3.  MFA 

In 2010, there was no borrowing operation under macro-financial assistance. 

3.4. 

Euratom 

In 2010, there was no borrowing operation under Euratom. 

4. 

EUROPEAN INVESTMENT BANK  

4.1. 

EIB lending activities 

Loans  granted  by  the  EIB  either  finance  individual  projects  directly  or  SMEs  and  smaller-
scale local projects through financial intermediaries.  

In  2010,  the  total  volume  of  EIB  signed  operations  reached  EUR 72 billion,  down  by  9% 
versus the record level in 2009, marking a gradual return to pre-crisis territory. 

As  regards  the  geographic  distribution  of  the  lending  and  the  coverage  by  the  EU  budget 
guarantee: 

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In  the  EU:  an  amount  of  EUR 63 billion  was  signed  in  EU  Member  States.  This 
amount is not covered by the EU guarantee. 

Outside  the  EU:  EUR 9 billion  was  signed  outside  the  EU.  Out  of  this,  the  EU 
guarantee covers EUR 5 billion. 

EIB lending activities have an impact on the EU budget when they are accompanied by EU 
guarantees, interest rate subsidies or other EU/EIB risk-sharing provisions. In particular: 

The majority of EIB loans outside the EU benefit from an EU budget guarantee covering the 
sovereign  or  the  political  risk,  while  the  commercial  risk  is  taken  by  the  EIB.  A  separate 
report on the 2010 EIB external lending activity will be issued by the Commission during the 
second semester 2011.  

At the same time, the EIB manages risk sharing facilities involving the use of the EU budget 
to support intra-EU policies (e.g. Risk Sharing Finance Facility for research and development 
projects and Loan Guarantee for TEN-Transport projects)30. 

4.2. 

EIB borrowing activities 

Market  uncertainty  remained  elevated  throughout  the  year,  making  issuance  challenging, 
particularly for issuance of large sized transactions and in longer maturities.  

The  setup  of  EFSF  and  the  economic  reforms  undertaken  contributed  to  a  restoration  of 
market  confidence  in  EU  issuers,  although  the  market  remained  vulnerable  to  recurring 
headline risks. The EIB was able to navigate around such volatility by seizing windows for 
benchmark issuance and conducting more targeted issuance when volatility was elevated. The 
EIB’s continued strong standing in the market facilitated this. 

Consequently, the EIB was able to attain its objectives under the 2010 funding programme by 
raising an amount of EUR 67 billion on favourable terms. 

30 

The  Commission  reports  to  the  Council  and  Parliament  on  the  implementation  of  new  financial 
instruments  financed by  the EU  budget  on an  annual  basis  in  the  framework of  the  annual budgetary 
exercise, in accordance with point 49 of the Inter-institutional Agreement between the EC, the EP and 
the Council. 

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