REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL ON BORROWING AND LENDING ACTIVITIES OF THE EUROPEAN UNION IN 2014
Date: 2015-07-10
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: EIB loan, EU borrowing, Euratom loan, Georgia, Greece, Hungary, Ireland, Jordan, Kyrgyzstan, Latvia, Portugal, Romania, Tunisia, Ukraine, balance of payments, credit guarantee, economic stabilisation, financial aid

EUROPEAN 
COMMISSION 

Brussels, 10.7.2015  
COM(2015) 327 final 

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND 
THE COUNCIL 

ON BORROWING AND LENDING ACTIVITIES OF THE EUROPEAN UNION IN 
2014 

EN 

   EN 

 
 
 
 
  
 
Table of Contents 

1. 

2. 

2.1. 

2.2. 

2.3. 

2.4. 

3. 

3.1. 

3.2. 

3.3. 

3.4. 

4. 

4.1. 

4.2. 

5. 

5.1. 

5.2. 

5.3. 

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

Lending activities of the European Union ................................................................... 3 

BOP facility.................................................................................................................. 3 

EFSM ........................................................................................................................... 5 

MFA facility................................................................................................................. 6 

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

Borrowing activities of the European Union ............................................................... 8 

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

EFSM ........................................................................................................................... 9 

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

Euratom ...................................................................................................................... 11 

European Investment Bank ........................................................................................ 11 

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

EIB borrowing activities ............................................................................................ 12 

Ensuring financial stability in the euro-area .............................................................. 12 

Greek Loan Facility.................................................................................................... 12 

EFSF........................................................................................................................... 12 

ESM............................................................................................................................ 13 

2 

 
 
 
 
 
1. 

INTRODUCTION 

The Commission is required to inform every year the European Parliament and the Council on 
the use of the various lending instruments of the European Union. 

This  report  describes  the  lending  operations  for  each  instrument  as  well  as  the  respective 
borrowing activities.  

Table 1: Evolution of operations of the European Union (outstanding amounts of capital in 
EUR million) 

ECSC 
i.l.(1) (2) 

Euratom 
(1) 

BOP 

MFA 

EFSM 

Total  

2010 

2011 

2012 

2013 

2014 

219 

225 

183 

179 

192 

466 

447 

423 

386 

348 

12 050

11 400

11 400

11 400

8 400

500

590

545

565

13 235

28 000 

40 662

43 800 

56 351

43 800 

56 330

1 829

46 800 

57 569

(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.  

2. 

LENDING ACTIVITIES OF THE EUROPEAN UNION 

Financial support for third countries and Member States in the form of bilateral loans financed 
from the capital markets with the guarantee of the EU budget is provided by the Commission 
under  various  legal  acts  of  the  Council  or  of  the  Council  and  the  European  Parliament, 
depending on the objectives pursued1. The consistency of financial support to third countries 
with the overall objectives of the EU external action is ensured by the Commission and the 
High  Representative  of  the  Union  for  Foreign  Affairs  and  Security  Policy  assisted  by  the 
European External Action Service (EEAS). 

2.1. 

BOP facility 

Balance-of-payments (BOP) assistance under Article 143 of the Treaty on the Functioning of 
the European Union (TFEU) and Council Regulation (EC) No 332/2002 of 18 February 2002 
establishing  a  facility  providing  medium-term  financial  assistance  for  Member  States' 
balances of payments2 (BOP Regulation) takes the form of  medium-term  loans  provided  by 
the Union. It is generally granted in conjunction with financing by the International Monetary 

1 

2 

Detailed  presentation  of  the  borrowing  and  lending  activities  of  the  Commission  is  available  at 
http://ec.europa.eu/economy_finance/eu_borrower/index_en.htm. 
OJ L 53, 23.2.2002, p.1. 

3 

 
 
 
 
 
                                                            
Fund (IMF) and other multilateral lenders, such as the European Investment Bank (EIB), the 
European Bank for Reconstruction and Development (EBRD) or the World Bank. 

BOP assistance is granted on a case-by-case basis by the Council acting by qualified majority. 
Potential  beneficiaries  are  Member  States  outside  the  euro-area  being  faced  with  serious 
balance-of-payments  difficulties.  It  aims  at  easing  the  recipient  Member  States’  external 
financing  constraints  and  at  restoring  the  viability  of  a  country's  balance-of-payments.  It  is 
released  subject  to  the  fulfilment  of  economic  policy  conditions  decided  by  the  Council  – 
after consultation with  the  Economic and Financial Committee (EFC) on a draft  adjustment 
programme – and whose details are agreed by the Commission and the beneficiary Member 
State in a Memorandum of Understanding (MoU) prior to the conclusion of a loan agreement. 
The continued compliance with measures in the adjustment programme is reviewed regularly 
and is a condition for the disbursements of further instalments. The required funds are raised 
on the capital markets by the Commission on behalf of the European Union. 

The Commission reports regularly to the EFC and to the Council on the implementation of the 
BOP Regulation. 

The  BOP  facility  was  re-activated  in  2008  in  response  to  the  international  economic  and 
financial crisis and its ceiling was increased from EUR 12 billion to finally EUR 50 billion in 
May 20093 to enable the EU to respond quickly to any further demand for BOP assistance. Up 
to 31 December 2014, a total amount of EUR 16.6 billion had been committed to Hungary4, 
Latvia5 and Romania6 of which EUR 13.4 billion were disbursed. 

In 2013,  the  Council  adopted a second precautionary financial assistance (PFA) programme 
for  Romania7  of  up  to  EUR  2  billion.  Disbursements  may  be  requested  until  30  September 
2015. 

In 2014, no disbursements were made under the BOP facility. The total outstanding amount of 
capital at the end of 2014 was EUR 8.4 billion. 

3 

4 

5 

6 

7 

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 (OJ L 128, 27.5.2009, p.1). 
Council  Decision  2009/102/EC  of  4  November  2008  providing  Community  medium-term  financial 
assistance for Hungary (OJ L 37, 6.2.2009, p. 5).  
Council  Decision  2009/290/EC  of  20  January  2009  providing  Community  medium-term  financial 
assistance for Latvia (OJ L 79, 25.3.2009, p. 39). 
Council Decision 2009/459/EC of 6 May 2009 providing Community medium-term financial assistance 
for Romania (OJ L 150, 13.6.2009, p. 8).  
Council Decision 2013/531/EU of 22 October 2013 providing precautionary EU medium-term financial 
assistance to Romania (OJ L 286, 29.10.2013, p.1). 

4 

 
 
                                                            
Table 2: BoP assistance up to 31.12.2014 (amounts of capital in EUR billion)  

Country 

Amount 
decided 

Amount 
disbursed 

Amount 
reimbursed 

Amount 
outstanding 

Average loan 
maturity 
(years) 

Hungary 

Latvia 

Romania 

Romania (PFA) 

6.5 

3.1 

5.0 

2.0 

5.5

2.9

5.0

0

Total 

16.6 

13.4

4.0

1.0

0

0

5.0

1.5 

1.9 

5.0 

0.0 

8.4 

5.0

6.6

7.0

0

Operations since 31 December 2014 

In  January  2015,  EUR  1 200  million  was  reimbursed  by  Latvia  and  EUR  1 500  million  by 
Romania, decreasing the total outstanding amount of capital to EUR 5 700 million.  

Detailed information on BOP operations can be found at: 
http://ec.europa.eu/economy_finance/eu_borrower/balance_of_payments/index_en.htm 

2.2. 

EFSM 

Council  Regulation  (EU)  No  407/2010  of  11  May  2010  set  up  the  European  Financial 
Stabilisation Mechanism (EFSM) based on Article 122(2)8 of the TFEU. The EFSM is fully 
backed by the EU budget and has a total lending capacity of up to EUR 60 billion.  

Potential  beneficiaries  for  the  EFSM  assistance  are  Member  States  faced  with  difficulties 
caused  by  a  serious  deterioration  in  the  international  economic  and  financial  environment. 
The  use  of  EFSM  is  subject  to  policy  conditionality  in  the  context  of  an  economic  and 
financial adjustment programme as agreed under a MoU concluded between the Commission 
and the beneficiary Member State and it follows a similar decision making process as for the 
BOP  assistance.  The  assesment  of  the  financial  needs  and  regular  surveillance  in  the 
programme implementation are made by the Commission in consultation with the European 
Central  Bank  (ECB),  at  least  every  six  months  regarding  the  general  economic  policy 
conditions  of  the  adjustment  programme  and  every  three  months  for  the  verification  of 
fulfilment by the Member State of economic policy conditions attached to the assistance. Any 
changes that may be needed to the 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. 

8 

Article  122(2)  of  the  TFEU  foresees  financial  support  for  Member  States  in  difficulties  caused  by 
exceptional circumstances beyond their control. 

5 

 
 
 
                                                            
The  EFSM  facility  was  activated  in  2011  for  Ireland9  and  Portugal10,  committing  a  loan 
amount of up to a EUR 22.5 billion and EUR 26 billion respectively. The total commitments, 
including also the European Financial Stability Facility (EFSF), the IMF and other Member 
States amount to up to EUR 85 billion and EUR 78 billion respectively: 

Table 3: Breakdown of commitments (in EUR billion) 

Country 

EFSM 

EFSF 

IMF 

Others 

Total 

Ireland 

Portugal 

Total 

22.5 

26.0 

48.5 

17.7

26.0

43.7

22.5

26.0

48.5

22.3* 

85.0

78.0

22.3 

163.0

* EUR 4.8 billion from other Member States (United Kingdom, Sweden, Denmark) and EUR 
17.5 billion from the Irish State (Treasury and National Pension Reserve Fund). 

Since  the  implementation  of  the  EFSM  facility,  reductions  in  the  interest  rate  margin  and 
extension of maturities have been decided and applied to all the loans.  

In  March  2014,  EUR  1 800  million  were  disbursed  to  Portugal  and  EUR  800  million  to 
Ireland (final tranche). 

In November 2014, EUR 400 million was disbursed to Portugal (final tranche).  

The total outstanding amount of the EFSM facility is EUR 46 800 million at the end of 2014 
(Ireland: EUR 22 500 million, Portugal: EUR 24 300 million). 

Ireland  completed  the  EU/IMF  financial  assistance  programme  in  February  201411,  while 
Portugal exited the programme in June 201412.  

Detailed 
http://ec.europa.eu/economy_finance/eu_borrower/efsm/index_en.htm 

information 

operations 

EFSM 

can 

on 

be 

found 

at: 

2.3.  MFA facility 

Macro-Financial  Assistance  (MFA)  is  being  provided  to  support  EU  candidate,  potential 
candidate and neighbourhood countries to resolve short-term balance-of-payments problems, 
to  stabilise  public  finances  and  to  encourage  structural  reform  implementation.  MFA  is 

9 

10 

11  

12  

Council  Implementing  Decision  No  2011/77/EU  of  7  December  2010  on  granting  Union  financial 
assistance to Ireland (OJ L 30, 4.2.2011, p. 34). 
Council  Implementing  Decision  No  2011/344/EU  of  30  May  2011  on  granting  Union  financial 
assistance to Portugal (OJ L 159, 17.6.2011, p. 88). 
Council Implementing Decision No 2013/525/EU of 22 October 2013 amending Council Implementing 
Decision No 2011/77/EU on granting Union financial assistance to Ireland (OJ L 282, 24.10.2013, p. 
71). 
Council  Implementing  Decision  No  2014/234/EU  of  23  April  2014  amending  Council  Implementing 
Decision No 2011/344/EU on granting Union financial assistance to Portugal (OJ L 125, 23.4.2014, p. 
75).  

6 

 
 
 
                                                            
 
provided  on  an  exceptional  and  temporary  basis  and  is  based  on  strict  economic  policy 
conditionality. MFA operations typically complement IMF adjustment programmes. MFA can 
be provided in the form of loans and/or non-reimbursable grants. 

Should a beneficiary country fail to honour its repayment obligations, the Commission may 
activate the Guarantee Fund for External Actions13 so that the repayment of the corresponding 
borrowing by the Commission is done from its funds14. 

Regarding  the  implementation  of  the  MFA  to  Ukraine,  approved  in  201015,  which,  together 
with the funds available from a previous operation approved in 200216, amounts to EUR 610 
million in loans (MFA I), the MoU was signed in the framework of a Ukraine-EU summit in 
February 2013. The first tranche of EUR 100 million was disbursed in May 2014, while the 
second tranche, in the amount of EUR 260 million, was disbursed in November 2014.  

On  14 April  2014,  the  Council  decided  to  make  MFA  available  to  Ukraine17  in  the  form  of 
loans  for  a  maximum  amount  of  EUR 1  billion  and  with  a  maximum  maturity  of  15  years 
(MFA  II),  to  cover  Ukraine's  urgent  balance  of  payments  needs  as  identified  in  the 
government's  economic  programme  supported  by  the  IMF.  The  first  tranche  of  EUR  500 
million was disbursed in June 2014 while the second tranche, also of EUR 500 million, was 
disbursed in December 2014. 

On 15 May 2014, the European Parliament and the Council decided to make MFA available 
to Tunisia of a maximum amount of EUR 300 million, all in loans, with a maximum maturity 
of 15 years18.  

No  disbursements  were  made  in  2014  under  the  MFA  decisions  adopted  by  the  European 
Parliament and the Council in 2013 for Georgia (EUR 46 million, of which EUR 23 million in 
loans19),  the  Kyrgyz  Republic  (EUR  30  million,  of  which  EUR  15  million  in  loans20)  and 
Jordan (EUR 180 million, all in loans21).  

13 

14 

15 

16 

17 

18 

19 

20 

21 

See Council Regulation (EC, Euratom) No 480/2009 establishing a Guarantee Fund for external actions 
(Codified version) (OJ L 145, 10.6.2009, p. 10). No default has been registered so far for MFA loans. 
Although the repayment of the borrowing is covered in fine by 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(2014)214 and the accompanying 
Staff Working Document SEC(2014)129.  
Decision  No  388/2010/EU  of  the  European  Parliament  and  of  the  Council  of  7  July  2010  providing 
macro-financial assistance to Ukraine (OJ L 179, 14.7.2010, p. 1). 
Council Decision 2002/639/EC of 12 July 2002 providing supplementary macro-financial assistance to 
Ukraine (OJ L 209, 6.8.2002, p. 22). 
Council  Decision No 2014/215/EU  of  14  April  2014  providing  macro-financial  assistance  to  Ukraine 
(OJ L 111, 15.4.2014, p. 85). 
Decision No 534/2014/EU of the European Parliament and of the Council of 15 May 2014 providing 
macro-financial assistance to the Republic of Tunisia (OJ L 151, 21.5.2014, p. 9). 
Decision No 778/2013/EU of the European Parliament and of the Council of 12 August 2013 providing 
further macro-financial assistance to Georgia (OJ L 218, 14.8.2013, p. 15). 
Decision  No  1025/2013/EU  of  the  European  Parliament  and  of  the  Council  of  22  October  2013 
providing macro-financial assistance to the Kyrgyz Republic (OJ L 283, 25.10.2013, p. 1). 
Decision No  1351/2013/EU of  the European  Parliament  and  of  the  Council  of 11  December 2013 on 
providing macro-financial assistance to the Hashemite Kingdom of Jordan (OJ L 341, 18.12.2013, p. 4). 

7 

 
 
                                                            
Operations since 31 December 2014 

On 10 February 2015, the first tranche of EUR 100 million was disbursed to Jordan.  

On 15 April 2015, the European Parliament and the Council decided to make macro-financial 
assistance  available  to  Ukraine  for  a  third  MFA  loan  (MFA  III)  of  a  maximum  amount  of 
EUR 1 800 million22.  

On 21 April 2015, the third tranche of EUR 250 million was disbursed to Ukraine (MFA I). 

On 21 April 2015, the first tranche of EUR 10 million was disbursed to Georgia. 

On 07 May 2015, the first tranche of EUR 100 million was disbursed to Tunisia. 

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 countries23 
and 
http://ec.europa.eu/economy_finance/eu_borrower/macro-
financial_assistance/index_en.htm. 

at: 

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).  

In 1990, the Council fixed a borrowing limit of EUR 4 billion, of which some EUR 3.7 billion 
have been decided and EUR 3.4 billion already disbursed. According to the Council decision 
on  the  lending  ceiling  (77/271/Euratom,  as  amended)  the  Commission  shall  inform  the 
Council once the signed amount reaches EUR 3.8 billion and, if appropriate, propose a new 
lending ceiling. 

In  2013,  the  Commission  adopted  Decision  C(2013)  3496  on  granting  an  up  to  EUR  300 
million  Euratom  loan  in  support  of  the  Ukraine  safety  upgrade  program  of  nuclear  power 
units.  The  loan  will  enter  into  force  once  all  conditions  for  effectiveness  have  been 
satisfactorily completed.  

3. 

BORROWING ACTIVITIES OF THE EUROPEAN UNION 

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. Borrowing and lending is conducted as back to back operations, which ensures that 
the  EU  budget  does  not  take  any  interest  rate  or  foreign  exchange  risk24.  Outstanding 
borrowings are matched by outstanding loans. 

22 

23 
24 

Decision  (EU)  2015/601  of  the  European  Parliament  and  of  the  Council  of  15  April  2015  providing 
macro-financial assistance to Ukraine (OJ L 100, 17.4.2015, p. 1). 
COM(2014) 372 and SWD(2014) 193. 
The EFSM Regulation allows resorting to pre-funding as it authorises the Commission "to borrow on 
the  capital  markets  or  from  financial  institutions  at  the  most  appropriate  time  in  between  planned 

8 

 
 
                                                            
3.1. 

BOP 

In 2014, under the BOP facility, no borrowings were raised in the market. 

The total outstanding amount raised for BOP is EUR 8.4 billion at the end of 2014. 

3.2. 

EFSM 

During 2014, EUR 3 billion were raised in two transactions; in March 2014 a EUR 2.6 billion 
benchmark bond (maturity 4 April 2024 and coupon of 1.875%) was issued to support Ireland 
and Portugal, as part of their financial assistance packages under the EFSM. 

In November 2014, a EUR 660 million bond was issued (maturity 4 October 2029 and coupon 
of  1.375%).  Of  this  amount,  EUR  400  million  were  used  to  fund  the  last  disbursement  to 
Portugal under the EFSM. 

These  EU  bonds  met  high  demand  in  the  market  resulting  in  largely  oversubscribed  order 
books.  All  important  groups  of  investors  and  in  particular  long-term  investors  (investment 
funds, asset managers, insurance and pension funds) as well as official institutions purchased 
these EU bonds.   

The secondary market performance of these EU bonds was positive and confirmed the EU's 
standing  as  a  strong  benchmark  bond  issuer.  According  to  the  calculations  and  using  input 
from 22 banks, secondary market turnover in EU benchmark bonds was EUR 26.3 billion in 
2014 (which compares to EUR 31 billion in 2013). 

The total outstanding amount raised for EFSM is EUR 46.8 billion at the end of 2014. 

Table 4: EU EFSM borrowing operations during 2014 (in EUR million) 

Country 

Issue date 

Maturity Date 

Size 

Ireland (800), Portugal (1 800) 

25/03/2014 

04/04/2024 

2 600 

Portugal (400)25 

Total 

12/11/2014 

04/10/2029 

400 

3 000 

disbursements so as to optimise the cost of funding and preserve its reputation as the Union's issuer in 
the markets." However, any resulting cost of carry is borne by the borrower. 
Together with EUR 260 million for MFA Ukraine; see 3.3. below. 

25 

9 

 
 
 
 
 
                                                                                                                                                                                          
3.3.  MFA 

In 2014, four MFA borrowing operations were executed successfully for Ukraine: EUR 100 
million on 20 May, EUR 500 million on 17 June, EUR 260 million on 12 November and EUR 
500 million on 3 December. 

The first tranche of MFA I, amounting to EUR 100 million, was disbursed in May 2014. The 
funding was done by a tap of the EU 10-year EUR 2.6 billion bond issued in March (see 3.2 
above) increasing it to EUR 2.7 billion. 

The first tranche of MFA II, amounting to EUR 500 million, was disbursed in June 2014. The 
funding was done by another tap of the EU 10-year EUR 2.6 billion bond following the EUR 
100 million increase of the same bond executed in May, which further increased its liquidity 
by bringing the total outstanding amount to EUR 3.2 billion. 

The second tranche of MFA I, amounting to EUR 260  million, was disbursed in November 
2014. This amount was included in the EUR 660 million bond issued in November 2014 (see 
3.2  above).  This  bond  was  tapped  in  December  to  fund  the  second  tranche  of  MFA  II, 
amounting  to  EUR  500  million,  increasing  it  to  the  new  size  of  EUR  1.16  billion.  For  EU 
issuances, this tap marked a new historical record yield level as low as 1.363%. 

The total outstanding amount for MFA is EUR 1 828.6 million at the end of 2014. 

Table 5: EU MFA borrowing operations during 2014 (in EUR million) 

Country 

Description 

Issue date 

Maturity Date 

Size 

Ukraine 

Ukraine (MFA I) 
1st tranche 

20/05/2014 

04/04/2024 

100 

Ukraine 

Ukraine (MFA II) 
1st tranche 

17/06/2014 

04/04/2024 

500 

Ukraine 

Ukraine (MFA I) 
2nd tranche 

12/11/2014 

04/10/2029 

260 

Ukraine 

Ukraine (MFA II) 
2nd tranche 

03/12/2014 

04/10/2029 

500 

Total 

1 360 

10 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.4. 

Euratom 

In 2014, there was no borrowing operation under Euratom. 

4. 

EUROPEAN INVESTMENT BANK  

4.1. 

EIB lending activities 

The  EIB  provides  financing  either  directly  to  individual  investment  projects  or  through 
financial intermediaries to smaller-scale projects undertaken by SMEs or by local authorities 
and  municipalities.  The  EIB  also  provides  loan  guarantees,  technical  assistance  and  venture 
capital. 

In  2014,  EIB  signed  a  total  financing  volume  of  EUR  77  billion  (compared  to  EUR  71.7 
billion in 2013).  

EIB financing activities have an impact on the EU budget when they are accompanied by EU 
guarantees or other EU budget funds. This is the case for: 

-  EIB  financing  operations  carried  out  under  the  external  lending  mandate  (covering  Pre-
Accession  countries,  Neighbourhood  and  Partnership  countries,  Asia  and  Latin  America, 
South  Africa).  Such  financing  benefits  from  an  EU  budget  guarantee  covering  risks  of 
sovereign or political nature. A separate report on the 2014 EIB external lending activity 
will be issued by the Commission during the second semester 2015. 

-  risk sharing financing facilities involving the use of the EU budget to support EU policies 
(e.g. Risk Sharing Finance Facility for research and development projects and the Project 
Bond Initiative). 

In 2014, EIB financing in EU Member States represented EUR 69 billion – or 90% of EIB's 
total lending. In 2014, EUR 7.8 billion was signed outside the EU, of which EUR 4.1 billion 
is  covered  by  an  EU  guarantee  to  the  European  Investment  Bank  against  losses  under 
financing operations supporting investment projects outside the Union ("EU Guarantee").  

The  EU  guarantee  granted  under  Decision  1080/2011/EU  for  a  period  expiring  on  31 
December 2013 was automatically extended by 6 months since a new decision granting EU 
guarantee for EIB operations outside the EU had not yet been adopted.  

The new Decision granting an EU guarantee for EIB operations outside the EU26 was adopted 
on  16  April  2014  by  the  European  Parliament  and  the  Council.  The  size  of  the  overall 
mandate amounts to EUR 27 billion plus an additional optional amount of EUR 3 billion. The 
activation  in  whole  or  in  part  of  the  optional  amount  shall  be  decided  by  the  European 
Parliament and the Council in accordance with the ordinary legislative procedure and based 
on the results of a mid-term review. 

26 

Decision No 466/2014/EU of the European Parliament and of the Council of 16 April 2014 granting an 
EU  guarantee  to  the  European  Investment  Bank  against  losses  under  financing  operations  supporting 
investment projects outside the Union (OJ L 135, 8.5.2014, p. 1). 

11 

 
 
                                                            
4.2. 

EIB borrowing activities 

In a volatile market context, execution risk remained high throughout the year, especially for 
large benchmark transactions. The solid demand for EIB bonds first supported a tightening of 
shorter  dated  spreads,  especially  in  EUR.  Rating  agencies  preserved  the  EIB's  AAA  rating, 
supported by  the implementation of the 2012 capital increase. 

In 2014, EIB borrowing  activity amounted to EUR 61.6 billion with an average maturity of 
7.2 years. 

5. 

ENSURING FINANCIAL STABILITY IN THE EURO-AREA 

In  response  to  the  global  economic  and  financial  crisis,  the  euro-area  Member  States  have 
decided on measures to preserve financial stability in the euro-area and Europe at large. These 
measures are outlined below and are not guaranteed by the EU budget. Additional information 
at: 
existing 
on 
http://ec.europa.eu/economy_finance/assistance_eu_ms/index_en.htm 

facilities 

found 

three 

can 

the 

be 

Greek Loan Facility 

5.1. 
Following the unanimous agreement of the euro-area Finance Ministers on 2 May 201027 to 
support Greece, a three-year joint programme with the IMF involving a financial package of 
up  to  EUR 110 billion  to  help  Greece  was  set  up,  accompanied  by  strong  policy 
conditionality28  negotiated  with  the  Greek  authorities  by  the  Commission  and  the  IMF,  in 
liaison  with  the  ECB.  The  loans  disbursed  by  the  euro-area  Member  States  under  this  first 
programme amount to EUR 52.9 billion and to EUR 20.1 billion from the IMF. The financial 
terms  of  the  facility  were  re-adjusted  in  December  2012  (extension  of  the  final  maturity, 
reduction of the margin).  

On 14 March 2012, a Second Economic Adjustment Programme was approved by the euro-
area  finance  ministers  and  the  IMF,  adding  EUR  130  billion  to  the  undisbursed  amounts  of 
the first programme. This second programme foresees therefore a total financial assistance of 
EUR  164.5  billion,  the  IMF  contribution  amounting  to  EUR  19.8  billion.  While  the  first 
programme  was  set  up  as  an  Inter-creditor  Agreement  of  pooled  bilateral  loans  from  the 
supporting  euro-area  Member  States,  with  the  Commission  providing  coordination  and 
management, the second one is financed via the EFSF.  

5.2. 

EFSF 

The EFSF was created by the euro-area Member States as a Luxembourg-registered company 
owned  by  them  and  designed  as  a  temporary  rescue  mechanism  for  on-lending  to  euro-area 
Member  States  in  difficulty  by  issuing  bonds  guaranteed  by  euro-area  Member  States.  In 
October 2010, it was decided to create a permanent rescue mechanism, the European Stability 

27 

28 

The support is provided 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  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 MoU concluded between the Greek 
authorities and the Commission on behalf of euro-area Member States. 

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Mechanism  (ESM)  which  entered  into  force  on  27  September  2012.  As  of  1  July  2013,  the 
EFSF is no longer engaged in the financing of new financing programmes or new loan facility 
agreements. However, it remains active in the ongoing programmes for Greece, Portugal and 
Ireland where it is a lender (together with the IMF and some Member States). 

5.3. 

ESM 

The  permanent  crisis  mechanism,  the  ESM,  became  as  of  1  July  2013  the  permanent 
mechanism  for  responding  to  new  requests  for  financial  assistance  by  euro  area  Member 
States.  

It has an effective lending capacity of EUR 500 billion. Total subscribed capital amounts to 
EUR 704.8 billion, with paid-in capital by euro-area Member States of EUR 80.5 billion and 
committed callable capital of EUR 624.3 billion.  

The  ESM  (together  with  the  IMF)  has  provided  financial  assistance  to  address  Cyprus' 
financial sector imbalances. It has also granted financial assistance to the Spanish government 
for the recapitalisation of the country's banking sector. 

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