Proposal for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL authorising the Commission to vote in favour of the capital increase of the European Investment Fund
Date: 2020-11-25
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: European Commission, European Investment Fund, capital increase, powers of the institutions (EU)

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   EUROPEAN COMMISSION  Brussels, 25.11.2020  COM(2020) 774 final 2020/0343 (COD)  Proposal for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL authorising the Commission to vote in favour of the capital increase of the European Investment Fund  
 
EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

The Union, represented by the Commission, is a shareholder in the European Investment Fund 
(EIF) since the establishment of the EIF. It currently holds 29,7 % of the shares. The majority 
of  the  shares  (58,9  %)  are  owned  by  the  European  Investment  Bank.  The  rest  (11,4 %)  are 
owned by other financial institutions. 

Considering the expected impact of the COVID-19 crisis and with a view to contributing to 
the Union and EIF response to the crisis through the implementation of the expected InvestEU 
Programme  as  part  of  the  Multiannual  Financial  Framework  for  2021-2027,  the  Board  of 
Directors of the EIF [has decided] to propose a capital increase to the General Meeting, where 
the Commission, representing the Union as a shareholder of the EIF, has to be in a position to 
vote on the increase. 

The  EIF  has  calculated  an  immediate  need  for  an  increase  in  the  authorised  capital  by 
EUR 2 870 000 000, which corresponds to a cash injection of EUR 1 250 000 000. In order to 
effectively respond to the COVID-19 crisis, the capital increase should be put in place as soon 
as possible.  

This proposal aims to allow the Commission, representing the Union in the General Meeting, 
to vote in favour of the capital increase of the EIF.  

The  Commission  proposal  for  a  Regulation  of  the  European  Parliament  and  of  the  Council 
establishing the InvestEU Programme [2020/0108 (COD), InvestEU Regulation] provides in 
its  Article  32  for  the  participation  of  the  Union  in  the  capital  increase  and  was  originally 
intended to serve implicitly as a legal basis for the Commission to vote in favour of the capital 
increase  in  the  General  Meeting  of  the  EIF.  However,  given  that  there  is  a  degree  of 
uncertainty regarding the time of the entry into force of the InvestEU Regulation, a separate 
decision authorising the Commission to vote in favour of the capital increase at the General 
Meeting  has  to  be  adopted  beforehand  in  order  to  allow  for  the  subscription  period  for  the 
capital increase to be launched in due time.  

Thus,  shareholders  of  the  EIF  other  than  the  Union  will  be  able  to  provide  capital  support 
needed  immediately  after  the  start  of  the  subscription  period,  even  if  it  runs  for  a  longer 
period  of  time  to  allow  all  shareholders  to  decide  on  their  participation  in  accordance  with 
their  rules  and  procedures.  The  Union  may  then  participate  in  the  capital  increase  and 
subscribe  shares  after  the  entry  into  force  of  and  in  accordance  with  the  legal  basis  for  its 
participation (the InvestEU Regulation) as and if adopted by the co-legislators. In accordance 
with Article 5 (3) of the Statutes of the EIF, each member will be entitled to subscribe to a 
fraction  of  the  increase  corresponding  to  the  ratio  which  existed  between  the  shares 
subscribed  by  that  member  and  the  overall  number  of  EIF  shares  subscribed,  before  the 
capital increase. 

• 

Consistency with existing policy provisions in the policy area 

Additional capital will enable the EIF to implement the expected InvestEU Programme as a 
key  implementing  partner  foreseen  in  the  InvestEU  Regulation  and  therefore  contribute  to 
improving  the  competitiveness  and  socio-economic  convergence  and  cohesion  of  the  Union 
and  at  the  same  time  supports  the  recovery  from  the  COVID-induced  economic  crisis,  in 
particular as regards supporting innovative SMEs. This will include contributions in the fields 

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of innovation and digitisation, to the efficient use of resources in accordance with the circular 
economy objectives, to the sustainability and inclusiveness of the Union’s economic growth 
and to the resilience and integration of the Union capital markets, including through solutions 
that  address  the  fragmentation  of  Union  capital  markets  and  that  diversify  sources  of 
financing  for  Union  enterprises.  In  addition,  the  capital  increase  will  allow  for  further 
development of EIF’s role in the management of national and regional programmes, thereby 
contributing to the EU policy objectives of improving access to finance for SMEs, fostering 
regional development and supporting the objectives of the Capital Markets Union. 

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

Council Decision 94/375/EC contains a specific provision on capital increases in Article 3 in 
terms of which the position of the Union on a possible increase in the capital of the EIF and 
on its participation in that increase is to be decided unanimously by the Council, acting on a 
proposal from the Commission and after consulting the European Parliament. However, this 
provision is deemed excluded as legal basis for a new decision on the vote on an EIF capital 
increase  and  on  the  participation  in  an  EIF  capital  increase  by  the  Union  in  view  of  the 
development of the case-law of the European Court of Justice regarding so-called “secondary 
legal bases”1. Instead, a legal base in primary law should be proposed. 

In light of the objectives and activities of the EIF, as set out in its Statutes and decisions taken 
by  its  governing  bodies  in  accordance  with  the  Statutes,  and  in  light  of  the  primary  aim 
pursued with the capital increase, which is to support SMEs, innovation and jobs in parallel to 
addressing other pressing needs such  as climate change, COVID-relief and the digitalisation 
of  the  EU  economy  in  particular  through  the  implementation  of  the  expected  InvestEU 
Programme, thus promoting action in support of the Union's industry, Article 173(3) TFEU is 
considered as the appropriate legal basis for the proposed authorisation to the Commission to 
vote in favour of the capital increase. 

Decision No 562/2014 of the European Parliament and of the Council of 15 May 2014 on the 
participation of the European Union in the capital increase of the European Investment Fund 
(OJ L 156, 24.5.2014, p. 1) was also based on Article 173(3) TFEU. 

• 

Subsidiarity (for non-exclusive competence)  

The  Union,  represented  by  the  Commission,  as  a  shareholder  of  the  EIF  is  exclusively 
competent to vote on decisions on capital increases of the EIF. 

• 

Proportionality 

The additional authorised capital, to the extent subscribed by the shareholders of the EIF, will 
provide the EIF with the capital it needs to contribute to EU objectives. 

3. 

BUDGETARY IMPLICATIONS 

The proposal has no budgetary implications, as the vote at the General Meeting on the capital 
increase of the EIF does not oblige the Union to subscribe shares. Budgetary implications will 

1 

Judgment  of  the  Court  of  6  May  2008,  Case  C-133/06,  European  Parliament  v  Council  of  the 
European Union, ECLI:EU:C:2008:257. 

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only result from the InvestEU Regulation providing the legal basis for the participation of the 
Union in the capital increase.  

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2020/0343 (COD) 

Proposal for a 

DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

authorising the Commission to vote in favour of the capital increase of the European 
Investment Fund 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 173(3) thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national parliaments, 
Having regard to the opinion of the European Economic and Social Committee2, –– 

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

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According to Article 5(2) of the Statutes of the European Investment Fund (the Fund) 
the  authorised  capital  of  the  Fund  may  be  increased  by  decision  of  the  General 
Meeting acting with a majority of 85 % of the votes cast. 

Considering  the  expected  impact  of  the  COVID-19  crisis  and  with  a  view  to 
contributing  to  the  response  of  the  Union  and  the  Fund  to  the  crisis  through  the 
implementation  of  the  expected  InvestEU  Programme3  as  part  of  the  Multiannual 
Financial Framework for 2021-2027 and through further development of EIF’s role in 
the  management  of  national  and  regional  programmes,  the  Fund  has  calculated  an 
immediate need to increase its authorised capital by EUR 2 870 000 000.   

The Board of Directors of the Fund [has decided] to submit a request to the General 
Meeting  for  approval  of  an  increase  of  the  Fund’s  authorised  capital  by  EUR  2  870 
000  000  through  the  issuance  of  2 870  new  shares  and  of  the  arrangements  for 
payment  and  other  modalities  for  such  capital  increase.  If  the  capital  increase  is 
approved,  each  new  share  will  have  a  nominal  value  of  EUR 1 000  000  and  each 
subscribed share will be paid-in as to 20% of its nominal value. The General Meeting 
may require payment of the remaining 80% under the conditions laid down in Article 
7(3) of the Statutes of the Fund. All shares, whether existing or newly issued, will be 
of equal value and carry equal rights in all respects. 

The Board of Directors has proposed that the newly authorised shares be available for 
subscription during a single subscription period starting immediately upon approval of 
the  capital  increase  by  the  General  Meeting  and  ending  on  30  September  2021.  The 
Union will be able to participate in the subscription under the conditions laid down in 
the General Meeting’s decision once the legal basis approving the participation of the 
Union in the capital increase has entered into force. 

OJ C , , p. . 
Proposal  for  a  Regulation  of  the  European  Parliament  and  of  the  Council  establishing  the  InvestEU 
Programme, 2020/0108 (COD). 

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(5) 

In  order  to  allow  the  Union  representative  in  the  General  Meeting  to  vote  on  the 
capital  increase  as  soon  as  possible,  this  Decision  should  be  adopted  as  a  matter  of 
urgency. It is therefore considered to be appropriate to provide for an exception to the 
eight-week period and the ten-day period referred to in Article 4 of Protocol No 1 on 
the  role  of  national  Parliaments  in  the  European  Union,  annexed  to  the  Treaty  on 
European Union, to the Treaty on the Functioning of the European Union and to the 
Treaty establishing the European Atomic Energy Community.  

(6) 

For  the  same  reason,  this  Decision  should  therefore  also  enter  into  force  on  the  day 
following that of its publication, 

HAVE ADOPTED THIS DECISION:  

Article 1 

The Commission, representing the Union, is authorised to vote at the General Meeting of the 
European Investment Fund in favour of the proposed capital increase of EUR 2 870 000 000.  

Article 2 

This Decision shall enter into force on the day following that of its publication in the Official 
Journal of the European Union.  

Done at Brussels, 

For the European Parliament 
The President 

For the Council 
The President 

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