This article is part of our special report European Business Summit.
Irish MEP Gay Mitchell (EPP-ED) has called on the European Investment Bank (EIB) to persuade China to invest billions of euro in the bank, which would then be repaid through additional customs duties collected from increased trade.
Mitchell, who is the European Parliament’s rapporteur on a joint report regarding the EIB and the European Bank for Reconstruction and Development (EBRD), said such a move would ease the pressure on member states struggling to adhere to the terms of the Stability and Growth Pact due to rising levels of borrowing.
Presenting his report in Strasbourg today (March 24), he called for a ‘Marshall Plan’ to help boost SMEs, adding that the EIB was well placed to kick-start economic recovery by releasing funds to small businesses.
“Europe needs to think in terms of the Marshall Aid Plan which worked so well after the Second World War. If the EIB could persuade, say, China to invest in the Bank, it could use such resources to help kick-start the economy and help launch recovery.”
“This could be re-paid by committing part of the extra customs duties that would be collected by the EU from renewed external trade, and some of the new VAT receipts, to this objective,” said Mitchell.
He said EU inward investment in China was €7.1 billion in 2007, while China’s inward investment in the EU was just €0.6 billion. Increased trade would benefit both, he added.
Mitchell welcomed the EIB’s decision to boost lending to SMEs, which he said would help member states work their way through the financial crisis and highlighted the €310 million being made available at low interest rates to Irish businesses.
This is the first time that European Parliament has prepared a joint annual report on the two banks, and also the first time that the presidents of the EIB and EBRD will be present in the plenary chamber together.
“It is important that we consider the EIB and the EBRD at the same time so as to ensure better co-operation between them and the elimination of overlap. Both banks should ensure that there is maximum synergy so as to prepare for and assist economic recovery,” Mitchell said.