Considerations on COM(2000)289 - Amendment of Decision 2000/24/EC so as to extend the EC guarantee granted to the European Investment Bank to cover loans for projects in Croatia - Main contents
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dossier | COM(2000)289 - Amendment of Decision 2000/24/EC so as to extend the EC guarantee granted to the European Investment Bank to cover loans for ... |
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document | COM(2000)289 ![]() |
date | November 7, 2000 |
(2) Recent developments, following the results of the parliamentary and the presidential elections in early 2000, have fundamentally changed the political scenario in Croatia. The new Croatian government is fully committed to implementing a political and economic reform programme in line with the conditions of the European Union Stabilisation and Association process for the countries of South-Eastern Europe.
(3) The General Affairs Council of 24 January 2000 adopted a specific statement on Croatia and re-iterated its readiness to help Croatia meeting the challenges it faces in developing a closer relationship with the European Union.
(4) On 14 February 2000 the General Affairs Council invited the Commission to prepare a report on the feasibility of opening negotiations for a Stabilisation and Association Agreement with Croatia. The Commission intends to adopt such a feasibility report by June 2000.
(5) It is crucial to demonstrate the European Union's support to Croatia at this moment in implementing a political and economic reform programme elaborated after the elections of early 2000 in line with the European Union Stabilisation and Association process, by supporting Croatia's investment activities in infrastructure and private sector development.
(6) It is therefore appropriate to provide a guarantee mandate to the EIB to allow it to sign loan operations in Croatia. The EIB has indicated its ability and willingness to extend loans from its own resources in Croatia, in accordance with its Statute.
(7) On 31 October 1994 Council adopted Regulation (EC, Euratom) No 2728/94 establishing a Guarantee Fund for external actions i, amended by Regulation (EC, Euratom) No 1149/1999 i.
(8) Council Decision 2000/24/EC i grants the EIB a Community guarantee against losses under loans for projects outside the Community (Central and Eastern Europe, Mediterranean countries, Latin America and Asia and the Republic of South Africa).
(9) That global guarantee covering the general EIB external lending mandate laid down in Decision 2000/24/EC should be extended to Croatia. The loan ceilings should be increased in order to allow for the extension of corresponding loan facilities to Croatia. Decision 2000/24/EC should therefore be amended accordingly.
(10) The Treaty does not provide, for the adoption of this Decision, powers other than those under Article 308,
HAS DECIDED AS FOLLOWS:
Article 1
Article 1 of Decision 2000/24/EC is hereby amended as follows:
(1) The second sentence of the second subparagraph of paragraph 1 shall be amended as follows:
(a) in the introductory part, 'EUR 18 410 million' shall be replaced by 'EUR 18 660 million';
(b) in the first indent 'EUR 8 680 million' shall be replaced by EUR 8 930 million".
(2) In the first indent of paragraph 2, 'Croatia' shall be inserted after 'Bulgaria'.
Article 2
This Decision shall take effect on the day of its publication in the Official Journal of the European Communities.
Done at Brussels,
For the Council
The President
FINANCIAL STATEMENT
1. Title of operation
European Community guarantee for European Investment Bank loans in Croatia.
2. Budget heading(s) involved
B0-221. European Community guarantee for loans granted by the European Investment Bank to third countries in central and eastern Europe and Western Balkans.
3. Legal basis
Article 308 of the Treaty.
4. Description of operation
4.1 General objective
The action is intended to demonstrate the Union's support to Croatia after the elections of early 2000, in order to encourage Croatia to implement its political and economic reform programme in line with the conditions of the EU Stabilisation and Association process for the countries of South-Eastern Europe, by supporting the country's investment activities in infrastructure and private sector development.
4.2 Description
The budget entry is intended to provide budgetary back-up for a budget guarantee granted by the Community to the European Investment Bank to allow for the extension of loan facilities corresponding to EUR 250 million in Croatia.
4.3 Period covered and arrangements for renewal
The duration of the general EIB external lending mandate laid down by Decision 2000/24/EC shall remain unchanged.
5. Classification of expenditure or revenue
Compulsory expenditure/Non-differentiated appropriations.
6. Type of expenditure or revenue
A guarantee to the European Investment Bank.
7. Financial impact
Only if a call is made on the guarantee.
7.1 Method of calculating total cost of operation (relation between individual and total costs)
A token entry is proposed, given that the amount and timing of any call on this budget heading is fraught with uncertainty and cannot be calculated in advance.
7.2 Itemised breakdown of cost
Not applicable.
7.3 Operational expenditure for studies, experts etc. included in Part B of the budget
Not applicable.
8. Financing of expenditure for operations
In the event of a default, payments would be made directly from the Guarantee Fund to the creditor.
If the Guarantee Fund did not contain sufficient resources to cover a default, additional payments would be called up from the budget, with
- any margin remaining in the reserve being the first recourse;
- any margin available under the ceiling of Category 4 of the Financial Perspective or following redeployment within Category 4 being the second recourse;
- a revision of the Financial Perspective in line with the provisions of the Interinstitutional Agreement which might involve redeployment within other categories being the third recourse.
In order to meet its obligations, the Commission may provisionally undertake debt servicing by drawing on its liquid assets. In that event, Article 12 of Council Regulation (EEC, Euratom) No 1552/89 of 29 May 1989 is applicable.
9. Measures to verify that guarantee arrangements have been implemented
In accordance with the EIB's usual procedures including appropriate control arrangements.
10. Elements of cost-effectiveness analysis
10.1 Specific and quantified objectives; target population
- Quantifiable objectives: see point 4 above.
- Population: Croatia.
10.2 Justification of the operation
- To assist Croatia in implementing its political and economic reform programme in line with the conditions of the EU Stabilisation and Association process for the countries of South-Eastern Europe after the elections of early 2000, by supporting the country's investment activities in infrastructure and private sector development.
- Choice of ways and means: the EIB under the Yugoslavia Financial Protocols already extended loans to Croatia. It can start operations as soon as exploratory talks with Croatia will have been completed successfully.
- Main factors of uncertainty which could affect the specific results of the operation: if Croatia would change its political line in a way which would put at risk the honouring of its commitments to make substantial progress regarding political and economic conditionality under the EU Stabilisation and Association process, the action would be suspended or deferred.
10.3 Monitoring of the operation
Performance indicators selected
The Commission information to be submitted to the European Parliament and the Council annually shall include an assessment of the contribution of the lending under the present Decision to the Community's relevant external policy objectives, taking into account the operational objectives and appropriate measurements of their fulfilment to be established by the European Investment Bank for lending under Decision 2000/24/EC.
11. Administrative expenditure (Section III, Part A of the budget)
Not applicable. The proposed operation will not involve any increase in the number of Commission staff or administrative expenditure.
12. Impact on the reserve for guarantees
12.1 Provisional schedule of loans to be committed while the decision is in force
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12.2 Estimated use of the guarantee reserve to provision the Guarantee Fund
The provisioning rate of the Guarantee Fund for external actions as from 1 January 2000 is 9%. The rate of the blanket guarantee is 65%.
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12.3 Estimated use of the guarantee reserve by the present proposal i
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* Annotation: as regards the year 2001 onwards, this statement does not take into account the assumptions of EUR 400 million per year for macro-financial assistance [16] as indicated in recital 21 of Council Decision 97/256/EC. The full realisation of the assumptions of EUR 400 million per year for macro-financial assistance with yearly provisioning requirements of EUR 36 million would result in a remaining margin within the reserve of EUR 3.14 million in 2001, EUR 0.0 million in 2002 and EUR 18.44 million in 2003. For the sake of comparison, macro-financial assistance in 1997 amounted to EUR 460 million, in 1998 to EUR 150 million and in 1999 to EUR 390 million. Furthermore, Council Decision 94/179/EURATOM of 21 March 1994 empowers the Commission to contract borrowings to finance projects to increase the safety and efficiency of nuclear power stations in certain non-member countries or projects relating to the decommissioning of such installations. The authorisation of projects under this Decision could require additional provisioning of up to EUR 36.77 million over the period 2001-2003. Finally, the statement does not take into account the vetoed 1995 EIB special action programme under the Turkey customs union.