2006 Annual report of the EIB (debate) 
President
The next item is the report by Jean-Pierre Audy on behalf of the Committee on Budgetary Control on the European Investment Bank's annual report for 2006.
Jean-Pierre Audy
rapporteur. - (FR) Mr President, Commissioner, President of the European Investment Bank, ladies and gentlemen, my first words will be to thank you, Mr Maystadt, for the excellent relationship you have built up with the MEPs on the Committee on Budgetary Control, which has made a significant contribution to enabling the report we are about to debate to be written. I would extend these thanks to your team of staff, and especially, Philippe de Fontaine Vive, Vice-President, with whom I was able to work in complete transparency at the Bank's headquarters in Luxembourg.
You carry out your role, Mr Maystadt, with a great deal of competence, warmth, determination and courage, but also with wisdom and, I would add, with elegance.
The EIB, which was set up by the Treaty of Rome, celebrates its fiftieth anniversary in 2008. Its members are the European Union Member States, and their finance ministers form its board of governors. Its mission is to contribute to the development of the common market, using the capital markets and its own funds. It is a Community instrument, but within it power is exercised intergovernmentally.
It is a good thing that citizens' representatives are talking about these issues at a time when citizens themselves are demanding results from the European Union; they often benefit from the EIB's services without realising it. First I would like to congratulate the Bank for its action, its ambitious plan of activities and projects; I particularly welcome the excellence of the new strategy for 2007-2009 including transparency, the reinforcement of added value and the gradual increase in risk-taking, activities for the benefit of SMEs and local government, the use of new financial instruments and the stepping-up of cooperation with the European Commission. The important role of the Bank in the neighbourhood policy should also be underlined, and the report calls more specifically for further development of the facility for Euro-Mediterranean investment and partnership, or FEMIP, within the framework of the Euro-Mediterranean policy.
I believe, however, that the time has come to go even further, faster and better, in terms of both control and support for the European Union in financing its investments. In terms of control mechanisms, I think the time has come to set up genuine control of banking regulation, and I suggest that the EIB itself apply to the Committee of European Banking Supervisors, based in London, to look at the conditions for this task of regulation and in particular decide who could carry it out in the regrettable absence of an official European banking regulator.
Concerning support for the European Union in financing investment, where needs have been estimated at EUR 600 billion for the trans-European transport networks alone, I suggest that a reflection be carried out on the role of the European Union in terms of the development of our territory. The funding allocated by the Member States and the EU is far from able to meet these needs. Is it not understandable, Commissioner, that the European Union should have difficulty finding EUR 3.4 billion to finance as strategic a project from an industrial, scientific and military point of view as Galileo, under these circumstances?
I suggest that, given the quality of the EIB's human resources, its detachment and its experience of financing major infrastructure, the Commission gives it the task of carrying out a strategic study on the funding of investments, excluding no possible scenarios: subsidies, payment of sums subscribed by the Member States to the EIB's capital, loans (including special loans from the Member States as provided for in Article 6 of the EIB's Statute), innovative instruments such as risk sharing, loan guarantee instruments, financial engineering appropriate to long-term projects that are not immediately profitable according to market-based financial criteria, creation of an investment section within the European Union budget, financial consortia between European, national and local authorities, public-private partnerships, etc.
These, Mr President, Mr Maystadt, ladies and gentlemen, are the ideas put forward in this report. I look forward to hearing the debate that will follow and thank you for your attention.
Joaquín Almunia
Member of the Commission. - (ES) Mr President, ladies and gentlemen, I would like to thank Mr Audy, who has produced and just presented to us an excellent report on the annual report of the European Investment Bank for 2006. I think that, as the report reflects, the productive dialogue established between the European Investment Bank and Parliament in recent years is very important, as it benefits democratic transparency, which is very important to both Parliament and to the financial institution.
The EIB contributes significantly to launching and developing many European policies, and we should therefore welcome the quality of this dialogue, which is undoubtedly being strengthened with Philippe Maystadt at the bank's helm.
The activity of the European Investment Bank is also being strengthened through the new financial framework, with the new financial perspectives for the European Union for the 2007-2013 period. Obviously we are debating the 2006 report. The progress of these perspectives in this initial period of 15 or 16 months is not yet covered by the report, but with the new funding instruments launched thanks to these new perspectives, this cooperation will continue to take place and to become more ambitious and effective in many fields: in policies on research and development, regional development, trans-European networks, support for small and medium-sized enterprises, etc.
Also, with regard to the external actions of the European Investment Bank, on the basis of these financial perspectives the new EIB external mandate has already been adopted. It is not only in the Bank itself, but within the European Investment Bank group that cooperation is also being increased, with the European Investment Fund. Proof of this, for example, is the Jeremy programme.
In addition, we are satisfied with the tripartite agreement between the European Investment Bank, the EBRD, which is the European Bank for Reconstruction and Development, and the Commission, for actions by each of them in countries bordering the European Union to the east, and also with the development of the new FEMIP, which Mr Audy referred to, which is doing a great deal of work, and these are examples of an increasingly close link between the activities of the Bank and the external activities of the European Union.
Mr Audy's report highlights, and in my view rightly so, the potential of the European Investment Bank for developing innovative funding instruments that are capable of having an enormous effect in terms of increasing the resources available in the European budget for implementing a whole series of policies.
The Commission is aware of this potential. Not only have we already made some agreements with the European Investment Bank, which have been approved by the Council and Parliament, to do more with the same budgetary resources in areas such as trans-European networks or research and development policy, but also, in the context of the review of the Community budget that we will propose at the end of 2008 or the beginning of 2009 for debate, we are looking at extending these new funding mechanisms, and the resulting increase in capacity for action through the budgetary resources available, to other priority areas such as energy and climate change.
With regard to the mechanisms for cooperation with the Bank, I would also like to inform you that we are already finalising the negotiations with the Bank on a new memorandum of understanding to cover all of our cooperation relations, and we hope that it will enable these relations to be even more effective.
I cannot give a response to the suggestion from the rapporteur, Mr Audy, whose concern I share, regarding what the right solution is for the European Investment Bank to be supervised as a financial institution. I do not have the solution, but I think this is a very pertinent question, on which we should all cooperate in order to provide a suitable response.
Finally, Mr President, I would like to reiterate the Commission's satisfaction with this high level of cooperation between Parliament and the European Investment Bank, and I hope that in the future this will enable all of us - all the European institutions - to contribute to better achieving the Union's objectives.
Marusya Ivanova Lyubcheva
on behalf of the PSE Group. - (BG) The report is an example of good cooperation between the European Parliament and this financial institution which has the task to contribute for a balanced and sound development of the Community by using capital market tools and its own resources. I congratulate the rapporteur on his good presentation of the European Investment Bank, his reasonable suggestions aimed at enhancing cooperation, efficiency and transparency of operations. The Bank's report lists ample examples of achievement in terms of the main goals and priorities of the Union such as the geographic allocation of investments, strategic direction and project applications. Future efforts should focus on several areas such as to encourage private business to implement investment policies, including social responsibility projects in line with the EU social cohesion and territorial balance policy; to identify internal audit and internal control mechanisms; to set up offices in the new Member States; and to establish new financing mechanisms. I support the amendments made in plenary which deal with more stringent control over capital.
Bart Staes
Mr President, Commissioner, Mr Maystadt, ladies and gentlemen, the European Parliament has made a number of recommendations and I agree with three of them. I would also like to ask Mr Maystadt to respond to this in his reply.
We are happy that the European Investment Bank operates a zero tolerance policy with regard to fraud and corruption. The European Parliament would actually like to further reinforce that policy. We recommend measures, for example, for implementing an exclusion mechanism with regard to companies that are suspected or have been found guilty of corruption. We support a reinforcement of the policy on whistleblowers and we are in favour of a revision of the existing tendering procedures. What does Mr Maystadt think of these?
A second element: many billions of euros are invested in trans-European networks. As the European Parliament, we should seek to support those projects in particular that have a smaller or negative CO2 footprint.
Finally, with regard to external loan operations, we would like supervision to be exercised to ensure that such activities, particularly on the African continent, are in keeping with the European consensus with regard to development and also the millennium objectives.
As President of the European Investment Bank, how does Mr Maystadt respond to Parliament's recommendations?
Koenraad Dillen
(NL) Mr President, we applaud the fact that this report emphasises the EIB's zero tolerance policy with regard to fraud and corruption and also highlights the increasing number of investigations being conducted by OLAF. However, experience in contracting loans has shown us that the EIB is not without sin. Recently, for instance, a loan of EUR 100 billion to a large-scale mining project in Congo came under heavy criticism owing to all kinds of major irregularities, such as a lack of transparency in the negotiation process and in the final award of the contract. There was a serious conflict of interest. Since 2000, the European Investment Bank has already invested more than EUR 700 million in all manner of mining projects in Africa.
What I would like to stress here is that these many millions come from European taxpayers and that our institution's loan and contract policy must therefore also be subject to the most thorough supervision possible, particularly when funding projects outside Europe.
Paul Rübig
(DE) Mr President, President Maystadt, I would like to congratulate Mr Audy, because he made the point very well that trans-European networks have particular significance for us. I can imagine that, in this respect, the EIB also provides an incentive instrument for ownership unbundling.
We now have the Commission's proposals before us, that is, to increase the focus on ownership unbundling in the energy and telecommunications sector. My suggestion would be to concentrate on creating incentives here rather than focusing on making statutory obligations.
My second point is that the export industry is currently having difficulty in maintaining its performance, especially now the euro is strong. Would it not be possible to focus on special programmes to provide guaranteed support for the export performance of our European businesses?
Philippe Maystadt
President of the European Investment Bank. - (FR) Mr President, Commissioner, ladies and gentlemen, allow me first of all to thank you for giving me the chance once again to continue our dialogue with the European Parliament. I think it is important that an institution like the EIB should regularly have to explain itself to the representatives of EU citizens.
I would particularly like to thank Mr Audy for his report. I can bear witness to the fact that he has put a great deal of personal effort into writing this report. He took part in many working meetings both in Brussels and Luxembourg, thereby taking up the constructive dialogue we began with his predecessors. In his presentation this morning, he highlighted two points.
The first issue is one we have already talked about in previous reports - I remember Mr Schmidt's report and Mr Lipietz's report - and it is the issue of whether the European Investment Bank, because it is a bank, should be subject to banking control or supervision. This is not provided for as the texts currently stand. There are, of course, audits of the European Investment Bank: the audit by the Court of Auditors, to the extent that the EIB uses EU funds, and also the audit by the audit committee, composed of experts appointed by the governors, who report directly to our governors. It is true, however, that, if we want to apply the best banking practices to the EIB, it would undoubtedly be desirable for a specialist body to check that these practices are correctly applied to the EIB.
Theoretically, we can think of three possible avenues. The first is written into the Treaty of Maastricht, in Article 105(6). This would be the possibility of the European Central Bank exercising this supervisory role. The Treaty states that the Council, acting unanimously, may confer a prudential supervision role on the European Central Bank. This is an avenue that exists theoretically but realistically it is doubtful whether the Member States, at the moment at least, would be unanimous in conferring this new role on the European Central Bank.
Another possibility is the one we have embarked on informally, namely calling on a national regulator. At the moment it is the Luxembourg regulator, the Supervisory Council of the Luxembourg financial sector, which also performs this role in relation to the European Investment Bank, particularly when it comes to checking Basel II is being applied correctly.
A third avenue for exploration would be to strengthen the audit committee provided for in our Statute, and to convert it into a quasi-banking supervisor. The Reform Treaty provides for the enlargement of the audit committee. A first step might be to appoint a number of banking supervisors, who would bring to the audit committee the necessary experience to check that the EIB is actually applying best practices in this matter.
The second point highlighted by Mr Audy was the special role he would like to see the European Investment Bank play in infrastructure, particularly the trans-European networks. As you know, the EIB already plays a relatively important role in this. Last year, we financed the trans-European networks to the tune of nearly EUR 9 billion. We use various instruments, including our structured finance facility, which allows us to take more risks than is generally the rule. For example, we recently did this for a motorway in Greece. This is a good concrete example of the use of this particular facility to encourage the private sector to take more risks with the operation of a motorway.
With the European Commission very recently, we developed a new guarantee mechanism to cover a particular type of risk, the risk of insufficient traffic during the first few years of operation of an item of infrastructure. Experience has shown that the first four or five years are often the trickiest. These are the years when income is not necessarily at the level hoped for. This causes problems for private operators, so to encourage the private sector to take on the financing of such infrastructure regardless of this problem, in conjunction with the Commission we have developed a new guarantee mechanism.
I would add that the European Investment Bank has taken the initiative of setting up a European expertise centre in public-private partnerships to share our experience in this area with national representatives. Mr Audy, this is certainly an area in which the EIB is eager to continue its action.
Mr Staes asked a question about the anti-fraud policy. We have just published our anti-fraud policy following a consultation procedure that required several rounds of talks. In relation to the specific question he raised, about a debarment system that would prohibit companies guilty of fraud or corruption from continuing to participate in projects we were financing, we announce in this policy that we hope to be able to use the same system that the Commission is attempting to set up. If we could not - and we should know this by the end of the year - if, for legal reasons, we could not use the same system, then we would set up our own debarment system.
As regards our financing in the energy sector, we have reviewed our policy on financing energy projects in the light of European guidelines on combating climate change. As a result, we have decided to give priority to investments of the type that will reduce CO2 emissions, and this already shows up in the figures for 2007, since finance for electricity generation products using fossil fuels accounts for only 25% of our financing in the energy sector. In 2007, the amount committed to renewable energies, for example, far exceeds the amount committed to these more traditional forms of energy generation.
Finally, as regards the millennium development goals, we are obviously trying, as far as possible, to make sure our projects contribute to their achievement. However, I would draw your attention to the fact that when we intervene outside the European Union, we are acting on the basis of specific mandates given to us by the European Council. The millennium development goals do not feature as such in the mandates we have received from the European Council. That is why it is not possible to make as direct a link as you would have liked.
Finally, to Mr Dillen who, if I understood correctly, mentioned a project he said we financed in the Democratic Republic of Congo, I can say that for several years now we have not provided any more finance in the Democratic Republic of Congo. Our board of directors has in principle approved finance for a mining project in Katanga, but nothing has yet been paid out for this project. The loan agreement has not yet been signed. Why is this? It is because the new Congolese Government quite rightly wanted to renegotiate the licence conditions to ensure more of the revenue went back to the Congolese state, and we suspended the signing of the contract until a satisfactory agreement had been reached between the promoter and the Congolese Government.
Mr President, those are a few answers I can give to those who spoke, and I would like to thank Parliament once again, and particularly the Committee on Budgetary Control for our excellent collaboration.
(Applause)
President
Thank you very much, President Maystadt. We are very grateful to you for your presence here this morning, for your report and especially for the work you do for the European Union as President of the European Investment Bank. Thank you again and all the best!
Jean-Pierre Audy
rapporteur. - (FR) Mr President, I would in turn like to thank the Commissioner, Mr Almunia, and the President of the European Investment Bank, Mr Maystadt, for these specific answers. I would also like to thank the rapporteurs from the political groups, who supported the writing of this report.
I would just like to share a few thoughts on the debate we have just had, firstly on the task of regulation. I believe it is in everyone's interest that banking regulation of this kind should be set up. Obviously I do not have the solution. The idea that it is the European Central Bank that should do it seems to me a good one. For the Luxembourg regulatory body to play a stronger independent role, a genuine regulatory role, could also be a short-term solution. Nevertheless, I believe Parliament will be very interested in the opinion of the Committee of European Banking Supervisors if the Bank applies to it as the report suggests.
Finally, regarding the financing of infrastructure, I would like to say that the European Union is clearly at a cross-roads and that financing is not enough now, but that debt should obviously not be used to fund operation, which is sadly what is happening in some Member States. Debt used skilfully for investment is, however, a key part of economic and social performance in Europe, which is competing with all the other economic regions of the world. I believe the time has come for a major development policy for the land, partially supported by investment. There needs to be public investment, because if there is not, we cannot expect there to be private investment. It is a problem of collective confidence in the future of the European Union and I am delighted that the European Investment Bank can offer its expertise thanks to its experience and the quality of its human resources.
President
The debate is closed.
The vote will take place today.
Written statements (Rule 142)
Jorgo Chatzimarkakis  
in writing. - (DE) Mr President, President Maystadt, Mr Audy, ladies and gentlemen, I would first like to thank the rapporteur most warmly and congratulate him on the good, balanced work he has carried out. I congratulate the EIB on its successful activities and ambitious business plan. When it comes to energy and innovation, the EIB is helping the EU to implement its policy. Without the EIB we would not have got the CIP off to such a good start.
The EIB's strategy for 2007-2009 provides for reinforcement of the value added, the gradual increase in risk taking, the use of new financial instruments and the stepping-up of cooperation with the Commission. I heartily endorse this strategy.
The evaluation of the activity by the EIB rapporteur and the suggested next steps are correct. However, we must not forget that the role of Parliament is limited. Although the EIB is one of the Community's institutions, its power is exercised internally according to intergovernmental rules, which means that the Member States are the most influential shareholders. The European Parliament has been commenting on the EIB's activity reports regularly since 1999 and this has developed into a close, trusting, successful relationship of cooperation. I would particularly like to praise the cooperation with President Maystadt, which is exemplary for relationships with other institutions.
