The 27 EU member states have unanimously approved a €10 billion capital increase into the European Investment Bank (EIB), making good on a June EU summit pledge for a "European Growth Pact" pushed by French President François Hollande.
The capital increase will allow Europe’s long-term lending institution to provide up to €60 billion over a 3-year period in additional lending for economically viable projects across the European Union.
The EIB is the long-term lending institution of the European Union and is owned by its member states. The bank makes finance available for investment in order to contribute towards EU policy goals.
“The unanimous decision by the governors of the European Investment Bank to strengthen the bank’s capital base and enable an additional €60 billion of increased lending demonstrates a shared desire to support investment that will create jobs and contribute to economic growth in Europe," EIB President Werner Hoyer said yesterday (8 January).
"We are committed to working with national authorities, public investors and private business to ensure effective use of the additional lending across all member states and to unlock significant private investment for projects,” Hoyer said in a statement.
The additional capital to be paid in by each country will reflect the bank's current shareholding structure. Additional lending will target four priority sectors and be dedicated to supporting innovation and skills, SMEs, clean energy and modern infrastructure.
The new financing will be in addition to the €50 billion regular annual lending.
Raising the EIB's capital was part of the so-called "European Growth Pact", agreed at the June 2012 summit of EU leaders, under pressure from the French president who had made a European growth initiative one of his priorities since he was elected in May 2012.
The pact aimed to mobilise €120 billion in "immediate measures" to restart the European economy but doubts were raised as to whether the money could be mobilised anytime soon.
The growth pact also included a decision to reallocate €55 billion worth of unused structural funds to small and medium-sized enterprises and youth employment.
A pilot phase for new project bonds (€5 billion) was also launched last summer to support infrastructure project sin energy, transport and broadband infrastructure.