Mediterranean: Ebrd Might Compete with Eib
The European Investment Bank (EIB) may see its action in the Mediterranean competing with efforts by the European Bank for Reconstruction and Development (EBRD) if the latter's mandate were to be extended to this region. At the same time, debate on the creation of a Euro-Mediterranean investment bank as a subsidiary of the EIB is resurfacing.
As the Arab spring' unfolds with its massive and determined demands by populations for strong economic and social development in free and democratic societies, the creation of a Mediterranean development bank has come back into the spotlight as a particularly timely debate.
The idea fizzled out on several occasions but finally, in 2002, resulted in the creation within the European Investment Bank (EIB) of the Facility for Euro-Mediterranean Investment and Partnership (FEMIP) and its reinforcement four years later. The sea changes taking place in the last few weeks in the Southern Mediterranean countries and the changing relations between the two banks of the Mediterranean that will result nevertheless place in an entirely new light the question of the usefulness of a specific financial instrument.
The response is not simple or obvious. International finance tools already exist, from the FEMIP to the World Bank along with many other bodies. What is perhaps urgent in this connection is their coordination. However, the creation of a Mediterranean bank is a more ambitious and more political initiative.
The EIB has already expressed its interest and availability to take the plunge, contributing a significant part of the capital along with its expertise. The FEMIP's experience, its operational presence and its accomplishments on the ground over the years make it in principle a vital player in such a project. The important meeting of economy and finance ministers of the EU and their Mediterranean partners, in July 2012, could be a perfect opportunity to create this Mediterranean bank.
The scenario is not written yet, however. Other players are also expressing an interest in this leading role. The latest to date is the EBRD.
At the recent extraordinary European Council on Libya and the Mediterranean region, on 11 March, the heads of state and government preferred, after some hesitation, to stay silent on these two proposals. It is virtually certain that the proposals will be discussed at the summit, on 24-25 March.
Since the FEMIP was created in 2002, the EIB, the financial institution for EU member states alone, has played an ever more important role in the Mediterranean countries(1). The FEMIP, which groups all EIB intervention instruments, aims to grant loans to enhance the region's social and economic development. In 2010, lending totalled 2.6 billion or 40% more than in 2009 (see box). Recently (in February this year), the EIB proposed to increase its lending to around 6 billion in the region by 2013.
The trip to Tunisia, on 2-3 March, by EIB Vice-President Philippe de Fontaine Vive, responsible for Mediterranean financing, was meant to be a tangible illustration of the EIB's greater role in the region. The idea was to translate into reality the declarations by the Union's High Representative for Foreign Affairs, Catherine Ashton (12 February), on an increase in loans to 900 million for 2011.
"We reviewed all existing loans with the Tunisian authorities. Then we agreed to accelerate things," the EIB vice-president told Europolitics from Tunis. In concrete terms, the EIB decided to release around 1.2 billion for existing projects and to add another 600 million in credits. …