The role of European investments. The economic slowdown resulting from the terrorist attacks now being a fact, Member States are counting heavily on the EU to limit the negative effects. This is no European rhetoric. In Ghent, the Heads of State and Government acknowledged that the Fifteen had almost no national room for manoeuvre in the budgetary field, and in practice they were counting on European co-operation (acceleration of the "Lisbon Strategy) and on two EU bodies: the European Central Bank (ECB) in the short-term - through a reduction in interest rates as soon as possible - and the European Investment Bank (EIB) in the medium- and long-term. The incidents surrounding the Ghent text relating to interest rates are well known. The Summit had to keep a balance between the message it wanted to put across and respect for the ECB's independence. There remained a line and a half: the European Council "noted that a further improvement in inflation prospects and the maintenance of wage restraint would provide room for manoeuvre for monetary policy". The ECB will no doubt act in the coming weeks, if figures on inflation are confirmed.
As for the role of the EIB, in my opinion this is not spoken of enough. It is increasingly becoming an instrument at the service of Union policies. Philippe Maystadt has accentuated and rendered more visible the political nature of the bank over which he presides. In the first years of its existence, the EIB ensured its credibility, conquered the trust of the markets and deserved the "triple A" that enables it to obtain credits on the best conditions. It was essential, and it's what enabled it then to gradually broaden its field of action. What a journey since then! Today, Philippe Maystadt is extremely attentive to any possible way of supporting EU actions. Each time the EU launches new programmes or new strategies, the EIB studies ways and means of being able to contribute; suffice it to recall its "Innovation 2000 Initiative", which provides for three-year loans of 12 to 15 billion euro in support of the Lisbon Strategy, the doubling of the reserve intended to guarantee measures in favour of SME venture-capital, the reform of the European Investment Funds, backing for the new transport guidelines.
Three EIB initiatives. The EIB's "post-Ghent" initiatives will be presented in detail to the EcoFin Council of 6 November, but they have already been discussed by its president and the president of the Commission, and on the whole anticipated by Philippe Maystadt himself who declared: "The EIB may finance 15 or 20-year projects, by borrowing on the capitals market at interesting rates to which States or private financial institutions still have no access. We shall finance projects whose duration and cost may frighten banks". In other words: if in current circumstances banks hesitate to finance projects for which return lies far in the future, if, for budgetary reasons, States are unable to provide all the public capital that would be desirable, if SMEs run into difficulties in finding funds through the usual channels, the EIB is there. According to available indications, the EIB's new plan would essentially comprise tree initiatives:
a) in the field of transport, the environment and tourism, the EIB proposes exceptionally financing, for two years, up to 75% of the projects (instead of the 50% in normal times). Mr. Maystadt stipulated that this would especially relate to the priority trans-European networks, achievement of which is lagging behind (he added that "an effort by the Commission is required to bring the deadlines forward"), but without forgetting small and medium-sized environmental programmes (water and waste treatment, urban renewal), in partnership with local authorities;
b) use the "structured financing mechanism" (loans for which repayment is linked to the success of the project) for sectors experiencing special difficulties, like telecommunications operators or airline companies. Of course, the EIB does not intervene in the day-to-day difficulties of companies in these sectors, but may contribute through the aforementioned mechanism in their research/development projects, in the spirit of the objectives of Lisbon (make Europe the most competitive area in the world);
c) intensify the action of the European Development Fund (in which the EIB is the majority shareholder) in venture-capital, taking shares in funds which, since 11 September, have lost a considerable part of their capitalisation.
Certainly, EIB action is but one element of the EU, and it has no immediate effect. But it is significant that the Fifteen should turn to two European bodies to distance the risk of recession: the ECB (without the euro, Europe would today be in the midst of a monetary crisis) and the EIB. (F.R.)