Brussels, 28/06/2013 (Agence Europe) - EU27 heads of state said at the European summit that they want to restore normal lending conditions to the economy and facilitate the financing of investment, particularly for small and medium-sized enterprises because they are the main job creators. This might be achieved through the European Investment Bank (EIB) and the heads of state decided to launch an investment plan to this effect.
The investment plan will be largely based on the EIB's work and its recent €10 billion capital hike. The summit wants the EIB's lending to increase by $40 from 2013 to 2015 in priority areas like innovation, skills, small business access to finance, rational resource use and strategic infrastructure. A budget of €150 billion will be dedicated to this.
The president of the EIB, Werner Hoyer, who attended the summit, said that the EIB had pledged to support any new economic growth initiative and measures to provide jobs to young people. The French president, François Hollande, said it meant releasing more investment for small and medium-sized enterprises with better use of the EIB, particularly when it is difficult to get a loan. The Spanish prime minister, Mariano Rajoy, said the main bottleneck for growth was the lack of loans for small business.
The Italian prime minister, Enrico Letta, said the EIB should be an arm of the real economy in order to protect the European Central Bank, which has been criticised for taking an over-intrusive approach. He said that the EIB would be able to retain its AAA credit rating (fears have been raised about a potential downgrade of the EIB).
In this connection, the president of the European Council, Herman Van Rompuy, made reassuring noises, saying that everyone was aware that the triple A was crucial for ensuring the bank's capital role in promoting investment throughout the EU, but the AAA was not an end in itself. François Hollande displayed flexibility, saying that the EIB has to lend as much as possible while meeting a number of criteria to protect its triple A rating.
The summit called for a strengthening of the risk-sharing instruments between the European Commission and EIB so that loans to small businesses can be increased. The European summit hopes to decide quickly with the EIB and Commission on the parameters for co-financing instruments using the structural funds that can be implemented in January 2014. The French president welcomed the leverage effect that could be generated in this way. The EU27 is planning to boost the European Investment Fund's lending ability and the EIB's mechanisms for financing commerce. In parallel, cooperation among national development banks and the EIB will be stepped up. The summit wants member states to sign partnership and operational agreements as soon as possible, set up the structural funds, small business competitiveness programmes (COSME) and programmes for research and innovation (Horizon 2020), all of which are extremely useful to small businesses. Implementation of the pilot phase of project bonds has begun, and six have already been approved. (MD with CG, LC, FG/transl.fl)