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European Investment Bank (EIB) - Annual report 2008

2009/2166(INI)

The Committee on Budgetary Control adopted the own-initiative report drawn up by Tamás DEUTSCH (EPP, HU), welcoming the 2008 Annual Report of the EIB and encouraging it to continue its activities to promote the development of the European economy and foster growth, stimulate employment, and promote interregional and social cohesion. Members note with satisfaction the EIB’s quick response to the global economic crisis and call on the Bank to continue its financial crisis management programmes in particular for those Member States, which have been severely hit by the crisis and to further increase its lending activity in those countries. They expect that EIB funding in 2009 amounting to EUR 75 billion will leverage real economy investments for a total amount of around EUR 225 billion.

The committee asks the EIB and the Member States to consider the possibility (as the EU has legal personality in accordance with the Lisbon Treaty) of the European Union becoming a shareholder in the Bank in addition to the Member States.

Banking supervision: Members are convinced of the necessity of a European prudential supervisory system under which the EIB is subjected to the same prudential rules as credit establishments. For this reason, they support the idea that the Committee of European Banking Supervisors (CEBS) should be turned into a more competent European Banking Authority (EBA) within the framework of the European Financial Supervisory Authority. They recommend that all financial institutions and groups who show activity in more than one EU Member State, including the EIB, fall within the competence of the EBA

The report welcomes the fact that the Bank has been able to retain its top quality credit standing, in spite of the market volatility and invites the EIB to make every effort to retain the AAA rating, which is crucial in order to guarantee the best conditions for its loans.

External mandate and investment facility: the report calls in particular for greater consistency in the EIB’s external mandate, as regards both the sufficiency of funds for the whole period of the new mandate and their distribution by geographical areas. Members stress that the external action of the EIB should be in line with EU policy objectives as stipulated in the Treaty on European Union. They take the view that the EIB should keep a balance in terms of lending between the different regions in the EU neighbourhood and consider that, as regards regions where EIB activity may overlap with other regional or international publicly funded financial institutions, a clear division of labour may be necessary.

The committee regrets that the EIB’s annual report on the investment facility contains mainly financial information and very little – if any – information on the results of the various programmes financed. It observes that the forthcoming review of the Financial Regulation offers an opportunity to include the projects and the results of the investment facility in the discharge procedure. It calls on the Commission to propose a possible solution for achieving this objective when making its proposal;

Transparency and the fight against fraud: the report welcomes the systematic follow-up of Parliament’s recommendations undertaken by the EIB and the fact that in May 2009, the EIB launched a public consultation on its Complaints Mechanism Policy, PDP and Transparency Policy. Members regret that the PDP was not reviewed in 2009 as foreseen and expects the EIB to review these three policies as soon as possible. They request that the EIB clearly specifies the conditions for non-disclosure of information in its forthcoming new PDP in order to set up high transparency standards.

The committee supports the EIB’s ‘zero-tolerance’ policy towards fraud and corruption, and asks the Bank to speed up, in cooperation with the Commission, the establishment of a blacklist of fraudsters, and the development and implementation of a debarment system for companies found guilty of corruption by the EIB and other multilateral development banks.

Policy towards Offshore Financial Centres (OFCs): the committee welcomes the Bank’s renewed policy towards OFCs, going beyond simply maintaining the existing ban on financing promoters who are based in a blacklisted OFC.

Members express their concern about the lack of transparency regarding the way ‘global loans’ are allocated and monitored in terms of tax governance. They call on the EIB to request that financial intermediaries make public any use of the global and framework loans they receive, including a report of their activities in any individual country in which they operate. The Bank should ensure that the income produced from these funds cannot be moved to tax havens after the projects are finished.

Strategy and objectives: Members welcome the EIB’s Corporate Operational Plan (COP) for 2009-2011, in which the Bank has significantly revised upwards its operational activity targets compared to the orientations given in the COP 2008-2010. They ask the Bank to make sure that its loans will contribute to the effort in achieving the Europe 2020 strategy objectives.

The committee calls for enhancing the combined use of EU grants with the EIB financial instruments, in particular in cohesion regions. It requests that, in future, the EIB report details major loans supplementing ERDF grants to regions implementing technologically advanced programmes or programmes related to renewable or clean energy supplies.

Members highlight the EIB’s significant role in supporting small and medium-sized enterprises during the financial crisis. They call on the EIB to apply bolder risk-taking in its lending policy towards SMEs without jeopardising its triple A status. They suggest that the EIB adapts the 2006 Risk Capital Mandate for the European Investment Fund and demand that the EIB’s participation in the JASMINE programme, (currently EUR 20 million) be at least doubled.

The EIB is called upon to:

  • further enhance transparency in its lending through financial intermediaries and to establish clear financing conditions for financial intermediaries and lending effectiveness criteria;
  • set up a scoreboard on the multiplication effects of EIB lending operations to SMEs;
  • develop a more detailed and methodologically harmonised analysis in its annual reports of the implementation of the financial instruments complementing Structural Fund operations;
  • add details in its next annual report about the first achievements of two policies from 2009: the JASMINE (Joint Action to Support Microfinance Institutions in Europe) initiative and the implementation of the Mezzanine Facility for Growth;
  • simplify the complicated and bureaucratic regulations found in certain projects in order to make the financing on projects more rapid and efficient, with special regard to the global crisis;
  • make every effort to avoid duplication of work with the European Bank for Reconstruction and Development (EBRD) outside the EU.