COMMISSION STAFF WORKING DOCUMENT Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL ON GUARANTEES COVERED BY THE GENERAL BUDGET Situation at 31 December 2019
Date: 2020-10-28
Institutions: Directorate-General for Budget, European Commission
Subjects: EIB loan, Euratom loan, budgetary reserve (EU), credit guarantee, fund (EU), general budget (EU), investment promotion, macro-financial assistance, sustainable development, third country

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 28.10.2020  SWD(2020) 241 final  COMMISSION STAFF WORKING DOCUMENT Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL ON GUARANTEES COVERED BY THE GENERAL BUDGET  Situation at 31 December 2019 {COM(2020) 677 final}  
 
 
Table of Contents 

1. 

2. 

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

Overview of capital loan operations covered by the EU guarantee....................... 2 

2.1. 

Loan operations covered by the EU budget guarantee ................................................ 4 

2.1.1.  EU loan operations to Member States .......................................................................... 4 

2.1.2.  EU loan operations to non-Member States .................................................................. 5 

2.1.3.  Guarantees given to the EIB ........................................................................................ 6 

2.2. 

2.3. 

Cumulative and annual EU budget guarantee exposures ............................................. 8 

Evolution of risk ........................................................................................................... 9 

2.3.1.  EU loan operations to Member States ........................................................................ 10 

2.3.2.  EU loan operations to non-Member States ................................................................ 11 

2.3.3.  Guarantes given to the EIB ........................................................................................ 12 

2.4. 

Payments under the EU budget guarantees ................................................................ 13 

2.4.1.  EU loan operations ..................................................................................................... 13 

2.4.2.  Guarantees given to EIB ............................................................................................ 14 

2.4.3.  Default interest penalties for late payment................................................................. 14 

1 

 
 
 
 
 
1. 

INTRODUCTION 

This  working  document  is  published  in  parallel  with  the  report  of  the  Commission  to  the 
European  Parliament  and  the  Council  on  guarantees  covered  by  the  EU  budget  at 
31 December 2019. It provides further information on the risk borne by the EU budget related 
to  Member  States  and  third  countries.  An  overview  of  the  outstanding  amount  of  loans 
covered by the EU budget under each programme is presented in section 2. Data concerning 
EU  loans  are  processed  by  the  Commission  whereas  EIB  (“the  Bank”)  figures  have  been 
provided by the Bank. 

2. 

OVERVIEW OF CAPITAL LOAN OPERATIONS COVERED BY THE EU GUARANTEE 

The  graph hereunder shows the breakdown of outstanding amounts by  financial instrument. 
Each financing facility is detailed in the sections below. 

EFSM 
58,5% 

MFA 
5,9% 

Euratom 
0,3% 

EIB 
35,1% 

BOP 
0,2% 

Table  A1  shows  the  outstanding  amount  of  capital  in  respect  of  borrowing  and  lending 
operations for which the risk is  covered by the  EU budget.  The figures  show the maximum 
possible  risk  for  the  EU  for  these  operations  and  must  not  be  read  as  meaning  that  these 
amounts will actually be drawn from the Guarantee Fund for external actions ("the Fund") or 
the EU budget. Accordingly, the relevant amounts are not registered as expenditure in the EU 
budget; rather they are formally recorded pro memoria only. 

2 

 
 
 
 
 
3 

AuthorisedCapitalCapitalAmount signedOperationsceiling (a)outstanding (b)outstanding (b)(minus cancellation)at 31.12.2018at 31.12.2019but not disbursedMEMBER STATES EIB (1) 1,1419330Euratom (2) 4,000Bulgaria34170Romania119960BOPLatvia3,1007002000Romania5,0001,00000EFSMIreland22,50022,50022,5000Portugal26,00024,30024,3000MEMBER STATES - TOTAL60,60049,79448,0450THIRD COUNTRIESMacro-Financial Assistance   Albania9540   Armenia6565650   Bosnia and Herzegovina140108940   fYRoM90000   Georgia58383820   Jordan3802803800   Kyrgyzstan1515150   Moldova600200   Montenegro7100   Serbia4733930   Tunisia8005008000   Ukraine3,8103,3103,310500Euratom (2)100100200EIB0EIB Pre-Accession countries 37,17810,71810,1972,290EIB Neighbourhood and Partnership countries (3)49,17012,55212,96111,905EIB Asia and Latin America12,4402,5452,5193,011EIB South Africa2,898694771143EIB Climate Change Mandate2,000887878333THIRD COUNTRIES - TOTAL109,59331,85632,15318,402GRAND TOTAL81,65080,19918,402(b) Capital outstanding: this is the amount of capital still to be repaid on a given date in respect of operations disbursed.(3) Loans subrogated to the EU following Syria defaults are included in this figure.(a) Authorized ceiling: this is the aggregate of the maximum amounts of capital authorised (ceilings) for each operation decided by the Council or by the European Parliament and the Council.TABLE A1: CAPITAL OUTSTANDING IN RESPECT OF OPERATIONS DISBURSED at 31.12.2019 (in EUR million)(2) The overall ceiling is EUR 4 000 million for loans to Member States and to certain non-member States. (1) There is no ceiling as it concerns countries which were not Member States at the time the EIB mandates were adopted. 
  
 
2.1. 

Loan operations covered by the EU budget guarantee 

The EU budget covers three types of operations. These are: 

2.1.1.  EU loan operations to Member States 

The outstanding  risk of these operations is  covered by the EU  Budget.  They  relate to  BOP, 
EFSM  and  to  borrowing  and  lending  granted  to  certain  Member  States  prior  to  their  EU 
accession under Euratom (table A2a) and EIB guaranteed financing operations (table A3). 

4 

Loan situationInstrumentDecisionDate ofAvailability - closed (a)AmountsAmountsAmountsdecisionperiod - partially disbursed (b)decidedoutstandingAmountsAmountsoutstanding(for Request for Funds) - disbursed in full (c)at 31.12.2018disbursedrepaidat 31.12.2019 - not yet disbursed (d)BOP2002/332/EC (*)18-02-200250,000.0010,100.001,700.000.001,500.00200.00Latvia2009/290/EC20-01-2009closed (b)3,100.00700.000.00500.00200.00Romania2009/459/EC06-05-2009closed(a)5,000.001,000.000.001,000.00Precautionary BOP for Romania 2013/531/EU22-10-2013closed(a)2,000.00EFSM2010/407/EU11-05-201060,000.0048,500.0046,800.000.000.0046,800.00Ireland2011/77/EU 07-12-2010closed(c)22,500.0022,500.000.000.0022,500.000.000.00Portugal 2011/344/EU17-05-2011closed(b)26,000.0024,300.000.000.0024,300.00EURATOM94/179/Euratom4,000.00436.00152.910.0040.08112.8477/270-271/Euratom29-03-1977BulgariaSEC(2000)661/218-04-2000closed(c)212.5033.810.0016.8816.94RomaniaC(2004)89130-03-2004closed(c)223.50119.100.0023.2095.90TOTAL59,036.0048,652.910.001,540.0847,112.84TABLE A2a: BoP, EFSM and Euratom lending operations to Member States  (EUR million)Period 01.01.2019 - 31.12.2019Operations made in 2019(*) Regulation establishing the facility stipulating that the outstanding amount of loans to be granted to Member States shall be limited to EUR billion 50 in principal 
2.1.2.  EU loan operations to non-Member States 

These  operations  are  covered  by  the  Fund.  They  relate  to  MFA,  Euratom  (Table  A2b)  and 
EIB guaranteed lending operations to third countries or Member States before accession to the 
EU (table A3). 

5 

AmountsdisbursedAmountsrepaidMFA3,802,897.004,360.73420.0052.134,728.60ALBANIA2004/580/EC29.04.04closed(c)9.005.401.803.60ARMENIA2009/890/EC30.11.09closed(c)65.0065.0065.00BOSNIA AND 99/325/EC10.05.99closed(c)20.00108.0014.0094.00HERZEGOVINA 02/883/EC09.11.02closed(c)20.002009/891/EC30.11.09closed(c)100.00GEORGIA778/2013/EU12.08.13closed(c)23.0038.0038.00(EU) 2018/59818.04.1829.05.21(b)35.00JORDAN1351/2013/EU11.12.13closed(c)180.00280.00100.00380.002371/2016/EU14.12.1603.04.20(c)200.00KYRGYZ REPUBLIC1025/2013/EU22.10.13closed(c)15.0015.0015.00MONTENEGRO*2001/549/EC*16.07.01closed(c)225.000.600.300.302002/882/EC*09.11.02closed55.00REPUBLIC OF MOLDOVA2017/1565/EU13.09.1718.07.20(b)60.0020.0020.00SERBIA *2001/549/EC*16.07.01closed(c)225.0038.7336.032.702002/882/EC*09.11.02closed(c)55.002009/892/EC30.11.09closed(b)200.00TUNISIA534/2014/EU15.05.14closed(c)300.00500.00300.00800.001112/2016/EU06.07.1608.03.20(c)500.00UKRAINE2002/639/EC12.07.02closed(c)110.003,310.003,310.002010/646/EC7.07.10closed(c)500.002014/215/EU14.04.14closed(c)1,000,000.00EU/2015/60115.04.15closed(c)1,800,000.00(EU) 2018/94704.07.1822.05.21(b)1,000,000.00EURATOMUKRAINE (Euratom)94/179/EC21.03.94100.00100.00EUR equivalent ****15.03.07(c)39.0 EUR06.10.08(c)22.0 USD15.10.09(c)10.3 USDof USD 83 millionSafety Upgrade24.6.2013(b)300.00TOTAL4,460.73420.0052.134,828.60* The decision refers to Serbia and Montenegro but the outstanding amounts of the two countries have been split as of  01.01.11 following the signature of the loan agreement with Montenegro on 09/02/2010 confirmed by Serbia on 24/11/2010** Means that the Council Decision did not foresee any expiry date and the total amount has not been disbursed*** Means that the Memorandum of Understanding and the Loan Agreement have not been signed or have not entered into force**** Including exchange rate valuation K2-R4 projectTABLE A2b:  European Union (MFA) and Euratom loans to Third countries (EUR million) Period 01.01.2019 - 31.12.2019Operations made in 2019   CountryDecisionDate of decisionAvailability Period (for Request for Funds)Loan situation - closed (a)- partially disbursed (b) - disbursed in full ( c )- not yet disbursed (d)Amounts decidedAmounts outstanding outstanding at 31.12.2018Amounts outstanding at 31.12.2019 
 
 
2.1.3.  Guarantees given to the EIB 

The  EU  provides  a  guarantee  in  respect  of  financing  granted  by  the  EIB  under  the  external 
lending mandates (ELM). 

The guarantee given to the EIB depends on the Mandate under which the loans are granted. 
The EU guarantee is limited as detailled below1: 

-  75%  of  the  total  amounts  of  loans  signed  in  the  Mediterranean  countries  based  on  the 
Mediterranean protocols of 1977 and Council Regulations 1762/92/EEC and 1763/92/EEC; 

-  70%  of  the  total  amounts  of  loans  signed  as  part  of  lending  operations  with  certain 
non-Member States authorised by Council Decisions 96/723/EC, 97/256/EC, 98/348/EC and 
98/729/EC; 

- the 65% guarantee rate covers three different mandates: 

 
regarding the 2000/2007 Mandate, the EU budget guarantee is restricted to 65% of the 
aggregate amount of credits opened (i.e. loans signed and not cancelled) plus all related sums 
authorised by Council Decisions 1999/786/EC2 and 2008/580/EC (codified version)3; 

 
for  the  last  two  Mandates  (2007-2013  and  2014-2020),  the  EU  budget  guarantee  is 
restricted to 65% of the aggregate amount of credits disbursed and guarantees provided under 
EIB  financing  operations,  less  amounts  reimbursed,  plus  all  related  amounts  authorised  by 
Decisions No 1080/2011/EU4and No 466/2014/ EU5. 

1  Within  each  portfolio  individual  EIB  loans  are,  de  facto,  guaranteed  at  100%  until  the  global  ceiling  is 

2 
3 
4 

5 

reached. 
OJ L 308, 3.12.1999, p. 35. 
OJ L 186, 15.7.2008, p. 30. 
Decision No 1080/2011/EU of the European Parliament and of the Council of 25 October 2011 granting an 
EU guarantee to the European Investment Bank against losses under loans and loan guarantees for projects 
outside the Union and repealing Decision No 633/2009/EC (OJ L 280, 27.10.2011, p. 1). 
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 L135 of 8.5.2014, p.1). 

6 

 
 
 
                                                 
7 

Mandate 2014/2020:32 30022 4427 9887 033Pre-Accession countries8 0753 5231 6391 629Neighbourhood and Partnership countries:19 68014 9285 1394 341   Mediterranean countries13 0308 5163 6062 930   Eastern Europe, Southern Caucasus and Russia6 6506 4121 5331 411Asia and Latin America:4 0833 621983833   Latin America2 6942 346713562   Asia1 1651 051252252   Central Asia2242241919South Africa462370227230Mandate 2007/2013:29 48425 24422 12715 080Pre-Accession countries9 0488 7128 3105 722Neighbourhood and Partnership countries:13 54810 9218 8936 537Mediterranean countries9 7008 2096 9815 243Eastern Europe, Southern Caucasus and Russia3 8482 7131 9121 294Asia and Latin America:3 9523 5063 1721 547Latin America2 9122 4802 4631 097Asia1 0401 019701440Central Asia779South Africa936756756397Climate change mandate2 0001 349997878Mandate 2000/2007(3):20 06018 33518 2975 568Pre-Accession countries10 2356 6916 6912 798Neighbourhood and Partnership countries6 5205 6175 5791 740Asia and Latin America2 4802 1052 105139South Africa825817817125Member States (following the accession)23 1053 105766sub-total 65 % (1)81 84466 02148 41327 681Financial agreements (70% Guarantee rate)Pre-Accession countries3 77047747747Neighbourhood and Partnership countries2 3101 5871 58730Asia and Latin America:1 0228098090South Africa37537537520Member States (following the accession)23 2353 235167sub-total 70 % (1)7 4776 4826 482264Financial agreements (75% Guarantee rate)Pre-Accession countries1 3505905900Neighbourhood and Partnership countries6 3624 4784 478127Member States (following the accession)21 9801 9800sub-total 75 % (1)7 7127 0477 047127Financial agreements (100% Guarantee rate)Pre-Accession countries4 70029290Neighbourhood and Partnership countries750315315186Asia and Latin America9037107100South Africa3002852850Member States (following the accession)23 9823 9820sub-total 100 % (1)6 6535 3205 320186Total  103 68684 87167 26228 258TABLE A3:  EIB FINANCING OPERATIONS WITH EU GUARANTEE at 31.12.2019 (in EUR million)OperationsAuthorised ceilingNet signatures (a)Amounts disbursedOutstanding capital(1) Percentage figures relate to the Guarantee rate.(2) Loans to Member States were drawn from 'Pre-Accession countries' or from 'Neighbourhood and Partnership countries' ceilings.(3) Including Turkey Terra and Special Action Turkey.(a) Net signatures equal amounts signed less cancellations 
 
2.2. 

Cumulative and annual EU budget guarantee exposures 

With the amortization profile based on the existing loans disbursed, it is possible to calculate 
the total capital exposure of the EU budget and the total capital and interest payments due to 
be received each year. The following table A4 includes the estimated amount of principal and 
interest  due  each  financial  year  by  each  country  according  to  disbursements  made  until 
31 December 20196. Data related to Member States are highlighted in yellow in the following 
table. 

6 

For  the  purpose  of  this  calculation,  it  is  assumed  that  defaulting  loans  are  not  accelerated,  i.e.  only  due 
payments are taken into account. 

8 

Annex to TABLE A3COUNCIL DECISIONS GRANTING AN EU GUARANTEE TO THE EIBGeographical Area/MandateDecisionDate of decisionRate of guaranteeDate of the Guarantee AgreementAmount decidedEUR mMED. Financial protocols(1)08.03.7775% (2)30.10.78/10.11.786 062MED. Horizontal cooperation1762/92/EEC29.06.9275% (2)09.11.92/18.11.921 800TOTAL MED. (3)7 862C and E Europe I90/62/EEC(4)12.02.90100%24.04.90/14.05.901 00091/252/EEC(5)14.05.91100%19.01.93/04.02.93700C and E Europe II93/696/EC(6)13.12.93100%22.07.94/12.08.943 000Asia, Latin America I93/115/EEC15.02.93100%04.11.93/17.11.93750Asia, Latin America Interim96/723/EC12.12.96100%18.03.97/26.03.97153Asia, Latin America Interim96/723/EC12.12.9670%21.10.97122South Africa95/207/EC01.06.95100%04.10.95/16.10.95300New mandates97/256/EC(7)14.04.9770%25.07.97/29.07.977 105FYROM98/348/EC19.05.9870%29.07.98/07.08.98150Bosnia and Herzegovina98/729/CE14.12.9870%16.06.99/22.06.99100Turkey Terra99/786/EC29.11.9965%18.04.00/23.05.00600Mandates 2000-20072000/24/EC(8)22.12.9965%19.07.00/24.07.00 (11)19 460The Baltic Sea basin of Russia2001/777/EC(9)06.11.01100%06.05.02/07.05.02100Russia, Belarus, Rep. Of Moldova and Ukraine2005/48/EC(10)22.12.04100%21.12.05/09.12.05500Mandate 2007-20132006/1016/EC(12) (13)19.12.0665%01.08.07/29.08.07 (14)27 484Climate change1080/2011/EU (13)13.10.1165%22.11.112 000Mandate 2014-2020 466/2014/EU (14)16.04.1465%22.07.14/25.07.1427 000Amendment to Mandate 2014-20202018/412 (15)14.03.1865%30.08.18/03.10.185 300(1) Including EUR 1,500 million for Spain, Greece and Portugal.TOTAL103 686(2) General guarantee of 75% for all credits made available under lending operations under a guarantee contract signed between the Community and the EIB on 30.10.78 and 10.11.78.(3) The Community has guaranteed EUR 5,497 million, of which EUR 141.5 million were covered by a 100% guarantee for Portugal.(4)  Poland, Hungary.(5) Czech Republic and Slovak Republic, Bulgaria, Romania.(6) Poland, Hungary, Czech Republic and Slovak Republic, Bulgaria, Romania, Baltic States and Albania.(7) Central and Eastern Europe, Mediterranean, Asia and Latin America, South Africa.(8) South-eastern Neighbours, Mediterranean countries, Latin America and Asia, Republic of South Africa, Special action Turkey, as amended (2005/47/EC).(9) A special lending action for selected environmental projects in the Baltic Sea basin of Russia under the Northern Dimension.(10) A special lending action for certain types of projects in Russia, Belarus,Republic of Moldova and Ukraine.(11) Restated and amended in 2005.(12) Pre-Accession countries, Neighbourhood and Partnership countries, Asia and Latin America, Republic of South Africa.(13) The initial amount  of EUR 25,800 has been increased up to  EUR 29,484 million further to a Council and European Parliament Decision of 13.10.2011,  granting  an additional mandate of EUR 2,000 million to tackle climate change and an amount of EUR 1,684 million to foster EIB risk policy.(14) The Decision establishes a fixed ceiling of  EUR 27 billion + an optional additional amount of EUR 3 billion to be decided and activated  in whole or in part following the mid-term review of the EIB Mandate.(15) The ceiling fixed in 2014 was increased to EUR 32,300 million, to allow responding to potential upcoming challenges and Union priorities, as well as to fulfil a new objective on economic resilience. 
 
 
                                                 
9 

RankingCountryTotal repayments due20202021202220232024202520262027202820292030-20491Portugal28 948.3584.37 334.33 085.51 811.32 101.9268.12 268.12 208.1158.1558.18 570.52Ireland27 612.1515.63 515.6410.62 410.61 198.12 783.12 371.11 311.12 586.11 2209 290.03Turkey8 461.1633.3696.9682.4620.8585.5514.2501.4478.1437.3388.12 923.04Ukraine5 518.9788.6201.5205.5189.3745.4108.3149.5199.1187.3891.71 852.65Morocco3 496.0296.3332.1334.9325.5313.8292.8246.3184.4179.2177.7812.96Egypt3 282.7271.9595.6582316.8308298.5207.6146.589.687.23797Tunisia3 058.3269.8283.2275248.5235.6211.3195.9240200.973.8824.28Serbia2 177.9148.9156.8156.9148.1146.1143.4133.3122.7109.7103.8808.29Bosnia and Herzegovina1 229.378.173.273.5128.56565.464.862.661.259.4497.710South Africa975.1100.698.694.994.186.493.3150.343.44039.3134.111Jordan920.953.26473.974.252.873.150.94545.7125.6262.612Romania679.4143.1113.89683.480.854.339.333.525.872.413Georgia653.725.532.232.728.524.524.928.628.229.629.5369.414Lebanon618.171.996.5102.893.48879.855.318.27.91.42.915Israel521.329.430.13132.533.632.933.431.232.334.3200.616Panama484.557.452.251.85250.55049.548.948.43.520.317Ecuador470.8-13.819.627.633.934.133.432.631.931.2212.618Montenegro429.426.239.145.544.744.443.441.840.234.424.145.519Brazil322.75135.319.925.425.22513.313.313.313.387.520India320.718.86.99.39.39.39.39.3142.470.85.629.621Moldova, Republic of320.416.520.623.42426.826.124.322.320.118.398.122Armenia310.815.522.523.223.623.52383.511.811.411.261.423Latvia236.67.26.55.85.85.8205.80000024North Macedonia192.112.21720.221.320.818.718.216.61211.523.625Bulgaria183.146.539.330.323.117.810.44.243.93.30.226Albania182.027.226.422.119.917.715.713.912.69.8511.627Syrian Arab Republic166.652.331.426.419.718.13.43.43.43.43.41.728Viet Nam161.413.912.51010.510.911.71211.911.810.146.229Croatia160.132.628.523.720.918.715.47.44.33.12.42.930Nicaragua149.06.97.77.98.69.810.710.410.29.99.757.231Sri Lanka144.715.515.612.511.410.610108.46.86.737.232Bangladesh116.3--0.71.82.56.1666681.333Argentina107.812.821.615.49.39.69.99.99.90.90.97.634Paraguay91.06.810.58.13.43.43.43.43.43.43.441.735Honduras89.72.53.14.15.97.37.37.37.36.86.831.236Costa Rica83.3-2.333.244.1444450.537Bolivia82.71.62.33.53.83.85.45.45.45.45.340.838Belarus75.9-1716.916.916.88.4-----39China70.58.88.363.43.43.43.43.43.43.423.340Lao People's Democ. Rep.64.03.43.53.53.63.73.83.944.14.226.341Slovakia60.01311.57.16.15.14.94.84.72.8-042Poland51.718.117.216.4-------043Palestine37.34.34.34.34.34.34.34.34.31.41.4044Czech Republic34.612.111.511--------45Nepal30.0-0.11.12.12.12.12.12.12.12.114.246Kyrgyzstan27.30.10.10.10.10.10.10.10.70.75.719.347Russian Federation22.73.33.23.23.23.23.23.6----48Tajikistan18.70.90.81.11.51.51.51.51.51.51.45.649Mongolia18.4-0.711110.90.90.90.910.150Maldives12.01.7---0.80.80.80.80.80.85.551Kosovo7.8----0.20.40.40.40.40.45.552Azerbaijan6.53.2------3.3--053Indonesia3.13.1---------054Lithuania2.61.80.8---------55Colombia0.90.9----------57 968.51 374.211 0793 686.44 361.13 428.23 342.04 694.93 565.82 779.91 790.817 866.035 534.23 134.43 039.83 009.526623 053.92 284.22 197.62 031.51 746.52 212.110 162.993 502.74 508.714 118.86 695.97 023.16 482.15 626.26 892.55 597.24 526.44 002.928 028.962.0%30.5%78.5%55.1%62.1%52.9%59.4%68.1%63.7%61.4%44.7%63.7%Table A4: Total annual risk borne by the Budget based on the amounts (capital and interest) due under MFA, BOP, Euratom, EFSM and EIB operations disbursed at 31.12.2019Total MSTotal non MSGrand totalPercentage MSNB: Amounts reported in the future (i.e., 2020 until 2049) include the expected repayment of Principal and Interest. Interest is included as follows: the total expected interest for Fixed Rate Loans and (only) the next instalment's interest for Variable Rate Loans. 
2.3. 

Evolution of risk 

The evolution of risk corresponds to the schedule of the total annual repayments (amount in 
capital including interests due) under all financial instruments covered by the EU budget. In 
case  of  loans  to  Member  States,  the  risk  is  directly  covered  by  the  EU  budget.  Regarding 
loans  to  third  countries,  the  risk  is  covered  in  the  first  instance  by  the  Guarantee  Fund  for 
external Actions. 

The  weight  of  EFSM  (58.5%  of  the  total  oustanding  including  accrued  interest)  clearly 
highlights that most of the risk is nowadays directly borne by the EU budget, whereas before 
the  financial  crisis,  EIB  loans  to  non-Member  States  made  up  the  highest  exposure  via  the 
Guarantee Fund for external Actions. 

2.3.1.  EU loan operations to Member States 

In 2019, Member States represented 60.1% of the EU budget exposure (cumulated total risk 
borne  by  the  EU  budget,  see  table  1  above)  with  the  following  breakdown  between  the 
financial instruments:  

10 

Outstanding Capital31.12.2018Accrued Interest31.12.2018Total%Outstanding Capital31.12.2019Accrued Interest31.12.2019Total%Member StatesEuratom152.90.5153.40.2%112.80.3113.20.1%BOP1 70033.91 733.92.1%2001.1201.10.2%EIB1 14191 1501.4%932.67939.61.2%EFSM46 80060047 40057.5%46 800594.447 394.458.5%Sub-total Member States49 793.9643.350 437.261.2%48 045.4602.948 648.360.1%Third CountriesMFA4 360.726.84 387.65.3%4 728.625.84 754.45.9%Euratom1000.5100.50.12%1000.5100.50.1%EIB27 395.2147.627 542.833.4%27 324.8138.227 46333.9%Sub-total third countries31 855.9174.932 030.938.8%32 153.4164.432 317.839.9%Grand Total81 649.9818.282 468.1100%80 198.8767.380 966.1100%Table 1: Total outstanding amounts covered by the EU budget at 31 December 2019 (in EUR million) 
 
 
 
 
Graph A1: Total annual risk borne by the EU budget (EUR million) related to Member States 
at 31.12.2019 for the period 2020-2026 (based on amortization plans of existing loans) 

As  Graph  1  illustrates,  the  main  risk  for  the  EU  budget  is  linked  to  EFSM  loans,  which 
represent 97.6% of the total outstanding of Member States. 

2.3.2.  EU loan operations to non-Member States 

In 2019, non-Member States represented 39.9% of the EU budget exposure (cumulated total 
risk borne by the EU budget,  see table 1 above)  with  the following breakdown between the 
financial instruments:  

Graph A2: Total annual risk borne by the EU budget (EUR million) related to non-Member 
States at 31.12.2019 for the period 2020-2026 (based on amortization plans of existing loans) 

As graph A2 illustrates that the weight of MFA and Euratom loans are marginal in the total 
annual risk in comparison with the EIB loans granted (these amounts include loans signed and 
disbursed under all EIB mandates). 

11 

 
 
 
2.3.3.  Guarantes given to the EIB 

90%  of  the  2007-2013  EIB  external  Mandate  has  been  signed  but  an  amount  of 
EUR 3,184 million still remains to be disbursed within 10 years from the end of the Mandate. 

The 2014-2020 Mandate covers EIB financing operations to be signed during the period from 
1 January 2014 to 31 December 2020. 

Risk factors: 

a) Factors increasing the risk: 

 

 

the interest on the loans must be added to the authorised ceiling; 

an  additional  factor  to  be  considered  is  that  some  loans  are  disbursed  in  currencies 
other than the EUR. Due to  exchange rate fluctuations,  the ceiling may  be exceeded 
when the amounts disbursed are converted into EUR at the year end. 

b) Factors reducing the risk: 

 

 

 

the limitation of the guarantee given to the EIB; 

operations already repaid;  

the ceilings are not necessarily taken up in full; 

12 

A. Pre-Accession Countries9 0488 712402B. Neighbourhood and partnership countries13 54810 9222 067C. Asia and Latin America3 9523 506383D. South Africa9367560E. Climate Change Mandate (2011-2013)2 0001 35033329 48425 2443 184(a) During the last 6 months of implementation, EUR 100m was re-allocated from the Neighbourhood and Partnership countries to Pre-Accession.(b)  For the limited number of loan commitments signed in USD: conversion into EUR using the exchange rates at signature.(c) For the limited number of loan commitments signed in USD: conversion of balance into EUR using exchange rate as at 31.12.2019.Table A5a: EIB loan balances remaining to be disbursed under 2007 - 2013 financial framework (at 31.12.2019) - EUR millionCeiling (a)Net signatures (b)Balances to be disbursed (c) A. Pre-Accession Countries8 0753 5231 888B. Neighbourhood and partnership countries19 68014 9289 801C. Asia and Latin America4 0833 6212 629D. South Africa46237014332 30022 44214 461(a)  For the limited number of loan commitments signed in USD: conversion into EUR using the exchange rates at signature.(b) For the limited number of loan commitments signed in USD: conversion of balance into EUR using exchange rate as at 31.12.2019.Table A5b: EIB loan balances remaining to be disbursed under 2014 - 2020 financial framework (at 31.12.2019) - EUR millionCeilingNet signatures (a)Balances to be disbursed (b)  
 
 
 

in some cases, notably private sector operations, the EU budget guarantee covers only 
well  defined  political  risk  events,  with  the  EIB  (or  a  third  party  guarantee)  covering 
other risks (e.g. commercial). 

2.4. 

Payments under the EU budget guarantees 

The EU borrows on the financial markets and on-lends the proceeds to Member States (BOP, 
EFSM) and to third countries (MFA) or nuclear sector companies (Euratom). 

Procedures  have  been  set  up  to  guarantee  the  repayments  of  the  borrowings  due  by  the  EU 
and also the guarantees given in connection with the EIB financing operations. 

2.4.1.  EU loan operations 

The loan repayments are scheduled to match the repayments of the borrowings due by the EU. 
If the  recipient  of the loan is  in  default, the Commission  will first  draw on the budget  cash 
resources  to  ensure  a  timely  repayment  of  the  EU  borrowing  on  the  contractual  due  date. 
Therefore,  the  Commission  would  draws  on  its  cash  resources  in  order  to  avoid  delays  and 
any resulting costs in servicing its borrowing operations . Furthermore, being mindful of most 
expenditures taking place during the first quarter of each year, debt redemption is structured 
for the months thereafter as well as for the beginning of each month when cash balances are 
highest. 

Should  the  amounts  needed  for  the  necessary  cash  coverage  exceed,  for  a  certain  period  or 
date, the available treasury funds of the Commission, the Commission would, in accordance 
with Article 14 of Council Regulation 609/20147, draw on additional cash resources from the 
Member States in order to fulfil its legal obligations towards its lenders. 

In the case of BOP loans, where amounts to be reimbursed can be very high, the beneficiary 
Member States are required to transfer the amounts due to the European Central Bank seven 
business  days  in  advance  of  the  contractual  due  date.  This  gives  enough  time  for  the 
Commission and Member States to provide for the cash advance to ensure timely repayment 
in case of default. The same process applies for the EFSM loans with 14 days lead time. 

In a second step, the treasury situation would be regularised as follows: 

BOP and EFSM loans 

a) 

The Commission may need to propose a transfer or an Amending Budget to budget the 
cash advance under the corresponding budget line "01 02 02 European Union guarantee 
for Union borrowings for balance-of-payments support" or "01 02 03 European Union 
guarantee  for  Union  borrowings  for  financial  assistance  under  the  European  financial 
stabilisation mechanism". 

b) 

The recovered funds will be re-paid to the EU budget. 

Euratom and MFA loans 

a) 

7 

8 

If  the  payment  delay  reaches  three  months  after  the  due  date  and  if  the  borrower  is  a 
third country, the Commission draws on the Guarantee Fund for external action to cover 
the default8 and to replenish its treasury. 

See  Article 14 of  Council  Regulation (EU, Euratom) No 609/2014 of 26 May 2014 on  the  methods and 
procedure for making available the traditional, VAT and GNI-based own resources and on the measures to 
meet cash requirements (OJ L 168, 7.6.2014, p. 39). 
Except for Bulgaria and Romania which were granted Euratom loans before joining the Union. The loans 
(and loans guarantees) to accession countries were covered by the Fund until the date of accession. From 
that  date,  those  that  remained  outstanding  ceased  to  be  external  actions  of  the  Union  and  are  therefore 
covered directly by the EU budget. 

13 

 
                                                 
b) 

The Commission might also need to draw on the EU budget, most likely by means of a 
transfer, to provide the corresponding budget lines under articles "01 03 04  Guarantee 
for Euratom borrowings to improve the degre of efficiency and safety of nuclear power 
stations in third countries" or "01 04 03 Guarantee for Euratom borrowings" or "01 03 
03 European  Union Guarantee  for Union borrowings for macro-financial  assistance to 
third  countries"  with  the  necessary  appropriations  needed  to  cover  the  default.  This 
method is used when there are insufficient appropriations in the Fund or if the borrower 
is  a  Member  State  and  the  transfers  are  likely  to  require  advance  authorisation  by  the 
budgetary authority. 

c) 

The  recovered  funds  may  either  be  kept  on  the  Fund  account  (the  next  annual 
provisioning  from  the  EU  budget  being  reduced  accordingly)  or  re-paid  to  the  EU 
budget. 

2.4.2.  Guarantees given to EIB 

The  EU  provides  a  guarantee  in  respect  of  financing  granted  by  the  EIB  under  the  external 
lending mandates. When the recipient of a guaranteed financing fails to make a payment on 
the  due  date,  the  EIB  asks  the  Commission  to  pay  via  the  Fund  the  amounts  owed  by  the 
defaulting entity in accordance with the relevant guarantee agreement. 

The  guarantee  call  must  be  paid  within  three  months  of  receiving  the  EIB's  request,  either 
from  the  Fund9  or  directly  from  the  EU  budget  should  the  resources  of  the  Fund  be 
insufficient10. 

The  EIB  administers  the  loan  with  all  the  care  required  by  good  banking  practice  and  is 
obliged to seek the recovery of the payments due after the guarantee has been activated. 

2.4.3.  Default interest penalties for late payment 

a) 

EU loans 

For loans granted by the EU, default interest is owed by loan beneficiaries for the time 
between the date at which cash resources are made available by the EU budget and the 
date of repayment to the EU. 

b) 

EIB loans 

For EIB loans, EIB is entitled to default interest which is calculated during the period 
between the due date of a defaulted loan instalment and the date of receipt of the cash 
resources by the EIB from the Commission. From the latter date, default interest is due 
to the Commission. 

9 

10 

Since the entry into force of Council Regulation (EC, Euratom) No 480/2009 of 25 May 2009 establishing 
a  Guarantee  Fund  for  external  actions  (codified  version),  the  "Guarantee  Fund  Regulation"  (OJ  L  145, 
10.6.2009, p.10), the agreement between the EU and the EIB on the management of the Fund foresees that 
the  Commission  must  authorise  the  Bank  to  withdraw  the  corresponding  amounts  from  the  Fund  within 
three months from the date the EIB calls on the guarantee. 
If there are insufficient resources in the Fund, the procedure for activating the guarantee is the same as for 
borrowing/lending operations, see point 2.4.1 above and footnote 7. 

14