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By
Francesco Guarascio
BRUSSELS (Reuters) - The European Investment Bank, the EU's
lending institution, cut lending by nearly 20 percent last year
and plans to keep financing at a similar level in 2019 at around
60 billion euros ($69 billion), the EIB president said on
Tuesday.
The bank is also preparing for all Brexit outcomes, including
Britain's departure without a deal in March. Plans are in place
for the other 27 EU states to plug the capital gap caused by
Britain's departure, even in the event of a no-deal Brexit that
would create a sudden shortfall without any transition period,
Werner Hoyer told a news conference.
Hoyer said 2018's decrease in lending was due to improved
economic conditions in the EU which allowed the bank to invest
less and concentrate on riskier and more profitable projects.
Despite signals of a slowdown in several EU economies, the bank
would keep a similar level of funding this year.
Britain's departure from the bloc will deprive the bank of one
of its largest shareholders and of 3.5 billion euros of British
paid-in capital and 35 billion euros of UK callable capital
which are key for the bank to maintain its triple-A rating and
low funding costs.
The gap in the paid-in capital will be covered with the bank's
reserves, Hoyer said, while the hole in the callable capital
would be filled proportionally by the 27 remaining governments
of the EU.
A deal on filling the gap has been reached at technical level to
address the shortfall but it needs to be formalised by EU
finance ministers.
Hoyer said the formal deal would be sealed once there is clarity
on the Brexit process.
Agreement among EU states has been hampered by divisions about
the future composition of the shareholding, with Poland pushing
for a bigger share - which would come with more powers.
The provisional compromise reached envisages a modest increase
for Poland and smaller capital rises for Romania, and perhaps
for Luxembourg.
($1 = 0.8738 euros)
(Reporting by Francesco Guarascio; Editing by Alexandra Hudson)
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