European Investment Bank
Reducing Economic Differences: European Investment Bank (EIB)
Introduction to European Investment Bank
The European Investment Bank (EIB) was established in 1957 under the Rome treaty that created the EEC. Its primary objective is to fund projects that promote European integration. It focuses mainly on industry, energy, and infrastructure. The member states contribute to its finances, but it raises most of its funds on international markets. Some 8 percent of its budget goes to projects outside the EU. The bank only offers loans, not grants, and its contribution must be matched by an equivalent outlay from other sources. The EIB is an autonomous body able to make its own decisions free of political direction, within the general legal framework of the EU. It has been one of the most successful EU bodies. Since 1993 its annual lending volume has exceeded that of the International Bank for Reconstruction and Development (the World Bank).” (1)
Description of European Investment Bank (EIB)
The Concise Encyclopedia of the European Union describes european investment bank (eib) in the following terms: [1] With its headquarters in Luxembourg, the EIB was established in 1958 under the Treaty of Rome as the Community’s long-term lending arm. Often operating alongside the structural funds, or in partnership with other official lenders or the private sector, the EIB focuses on cross-border projects and on capital investments in less prosperous regions, especially in the fields of communications, the environment, energy and the encouragement of SMEs. Of its annual loan programme of some 630 billion, a little less than 90% is within the EU, the balance going to Eastern Europe, the Arab Mediterranean states and the African, Caribbean and Pacific countries participating in the Lomé Convention. The EIB operates on slim margins, its low lending rates reflecting its own ability to borrow on fine terms owing to its AAA credit rating (see more in this European encyclopedia). The Bank’s capital was increased in 1999 to 6100 billion, of which 6% is paid up; the uncalled capital represents a claim on the shareholders (the EU’s 15 member states) and is the foundation of the EIB’s standing as a borrower (see more in this European encyclopedia). The Bank’s total loans and guarantees, most of which are in the last resort guaranteed by the Community budget, are limited by statute to a ceiling of 25% of its capital. Since the launch of the single currency, the Bank has actively promoted its use in financial markets by borrowing in euro-denominated instruments.
After the murky waters of the Community’s accounts, the clean audit and transparent presentation of the EIB’s numbers and activities come as a relief (see more in this European encyclopedia). The ultimate authority in the Bank rests with the Board of Governors, which consists of one minister (normally the finance minister) from each shareholder (see more in this European encyclopedia). A 25-strong Board of Directors takes lending and borrowing decisions and a professional Management Committee (the bank’s president and seven vice-presidents) runs the organisation operationally.
European Investment Bank and the European Union
Resources
See Also
- EIB
Resources
Notas y References
- Based on the book “A Concise Encyclopedia of the European Union from Aachen to Zollverein”, by Rodney Leach (Profile Books; London)
See Also
Resources
Notes and References
Guide to European Investment Bank
More Topics about the European Union
European Economic Area, European Union, European Union History (including European Union Early Cooperation, Benelux Customs Union, European Coal and Steel Community, European Economic Community, European Community, Expansion of the EC, Single European Act, Creation of the European Union, Treaty on European Union, Amsterdam Treaty, Treaty of Nice, Treaty of Lisbon, Monetary Union and EU Growing Accountability), EU Pillar System, EU Major Bodies Structure, European Commission, Council of the European Union, European Parliament, European Court of Justice, Court of Auditors, European Central Bank, Economic and Social Committee, Committee of the Regions, European Union Policies, Common Agricultural Policy, Common Fisheries Policy,
EU Economic Differences, European Regional Development Fund, European Social Fund, Cohesion Fund, European Investment Bank, European Monetary System, Economic and Monetary Union, EU International Relations, EU Expansion,
EU and Non-European Nations and European Union Future.
The European Investment Bank (Article 308 TFEU)
Content about European Investment Bank from the publication “The ABC of European Union law” (2010, European Union) by Klaus-Dieter Borchardt.As financing agency for a ‘balanced and steady development’ of the EU, the Union has at its disposal the European Investment Bank (EIB), located in Luxembourg. The EIB provides loans and guarantees in all economic sectors, especially to promote the development of less-developed regions, to modernise or convert undertakings or create new jobs and to assist projects of common interest to several Member States.
Context of European Investment Bank in the European Union
The EIB has a tripartite structure: it is headed by the Board of Governors, made up of the Finance Ministers of the Member States, which sets the guidelines for credit policy and authorises EIB activities outside the EU. The Board of Governors is followed by the Board of Directors, which has 28 full members (one representative from each of the Member States and one from the European Commission) and 18 alternate members. Members are usually senior officials from the national finance or economic affairs ministries. The Board of Directors takes decisions in respect of granting loans and guarantees and raising loans. It makes sure that the bank is run in accordance with the guidelines of the Board of Governors. The day-to-day activities of the EIB are run by the Management Committee, an executive of nine persons appointed for a period of six years.