Brussels, 08/02/2007 (Agence Europe) - 2006 was the first full year in which the new strategy decided by the European Investment Bank (EIB)'s governors in June 2005 was implemented: a qualitative strategy based on investment and financial innovation. The strategy consists of strengthening the leverage of the EIB's operations; concentrating its financing within the Union on six European priorities (cohesion; competitiveness and innovation; trans-European transport and energy networks; support for SMEs; environmental protection; and efficiency, diversification and security in the energy industry); and fostering economic convergence between the Union and its partner countries. At the traditional press conference to outline the EIB's progress over the preceding year, EIB President Philippe Maystadt, was relatively satisfied, noting that in 2006 the EIB had loaned a total of €45.8 bn for projects to help implement the EU's policies. Loans in the EU25 member states totalled €39.8 bn or 87% of the EIB's activities. Maystadt noted a slight reduction, however, in deals in the new member states (€5 bn in 2006 compared with €5.8 bn in 2005), which he put down to the frequent political changes in the new member states that slowed down some projects, and the lack of administrative absorption capacity. In other words, the difficulties encountered in trying to set up a number of projects. To correct this, Maystadt said the JASPERS initiative, funded by the EIB, the European Bank for Reconstruction and Development (EBRD) and the European Commission, was already up and running to provide free technical assistance for local infrastructure projects in new member states which may be eligible for Structural Fund aid.
Philippe Maystadt welcomed the increase in the EIB's own funding, due to the accumulation of reserves from its profits and an increase in capital which would enable the bank to take more risks, as foreseen in the strategy set out by its governors in 2005.
Maystadt said that to fund its activities in 2006, the EIB had raised an aggregate of €48 bn on the international capital markets through 303 bonds issues in 24 currencies and was planning to raise €50 bn to fund its activities in 2007.
The EIB president spoke at length about three 'fields of cooperation with non-EU countries', namely the three countries that will join the EU in the future (Croatia, Macedonia and Turkey), the countries covered by the EU's Neighbourhood Policy (NP) and countries in 'other continents'. He pointed out that the December 2006 European Council had decided to increase the EIB's scope for action outside the EU by a third for 2007-2013 to €27.8 bn (as opposed to €20.7 bn for 2000-2006). On the convergence process with the EU's neighbours, Philippe Maystadt said that loans of some €12.4 bn had been earmarked and this was the EIB's greatest mandate ever. This will include €8.7 bn for the 9 Mediterranean countries, almost doubling the amount available for Barcelona Partnership countries (funding reached €4.6 bn in 2000-2006, including €1.4 bn for 2006 alone - these figures do not include Turkey), and €3.7 bn for Russia and other eastern neighbours (a real challenge in a region where the EIB only lent a total of €85 million in 2000-2006). To tackle the challenge of the increase in bank activities, focussing on the trans-European energy and transport networks (TENs) and backing the private sector, a new 'institutionalisation' is being established, he said. The partner countries in the Mediterranean area will be fully associated in a beefed up version of FEMIP (Euro-Med Investment and Partnership Facility). For investment in Russia, Maystadt made it clear this would mainly cover projects in transport, energy and the environment that were of interest to the EU. Asked about the EIB's refusal to help fund the Baltic gas pipeline from Germany to Russia, Maystadt said that although it was priority section of a TEN, most of the project was situated outside the EU and several member states opposed it. He added that such funding would legally require unanimous voting on the EIB's Governing Council.
Cooperation with other continents, Maystadt said, was 'taking place in line with European policy in order to take account of the other financial players. With regard to sub-Saharan Africa and the Caribbean and Pacific States, the EIB lent €825 m in 2006, with priority being given to support for SMEs and energy projects. This economic input will be maintained over the period 2007-2013, with a lending capacity of nearly €4 bn. A major effort has been decided in favour of operations in Latin America and to a lesser extent Asia, with the ceiling for the periods in question being increased from €2.5 bn to EUR 3.8 bn - for the first time the ceiling is subdivided (indicative figures) into € 2.8bn for Latin America and €1 bn for Asia. These increased possibilities will enable the bank to continue supporting private European initiatives in these countries, as well as projects that help to protect the environment or promote European energy security.'
Asked about Chinese bank lending in Africa, often accused of lending unconditionally and therefore establishing an uneven playing field for the EIB, Philippe Maystadt said that he did not have any negative assumptions about new sources of funding as long as there was 'aid conditionality'. He said that a priori, the projects in Africa funded by Chinese banks were a good thing but if the funding was provided too easily, there was a danger of getting African countries back into excess debt situations. If there are no conditions on the loans in terms of good governance and social and environmental benefits, he said, the progress made by Africa would be whittled away. He added that unconditional funding would encourage the countries not to introduce the necessary reforms. Commenting that without the necessary technical studies to assess the projects, they ran the risk of not being viable, Maystadt called for the launch of dialogue with the Chinese Development Bank and African countries to highlight the need for conditionality. The EIB president concluded that abandoning conditionality altogether would be damaging to African countries themselves.
Asked about the interest in the euro around the world, Philippe Maystadt said that the euro was continuing to take up its role in the world. In many areas, its use as a transaction currency was increasing, particularly in Mediterranean and other EU neighbouring countries. He concluded that the euro was doing well and several countries had chosen it for their international dealings. For further information on the EIB's progress report for 2006: http: //http://www.bei.europa.eu/news/press/press.asp?press=3253 and http: //http://www.eib.org/news/events/event.asp?event=163 (ol)