We need more Europe, not less
In 2011, more than 120,000 small and medium-sized enterprises (SMEs) received support from the European Investment Bank. The funding for SMEs reached a record level, providing 13 billion EUR worth of financing. At the annual press conference in Luxembourg, EIB's new chairman Werner Hoyer announced that the bank's main priority for 2012 will remain supporting sustainable EU economic growth and jobs.
SMEs account for more than two thirds of private sector employment in Europe and grow more quickly than larger firms, making them an important source of new jobs. However, their size also makes them more vulnerable in times of crisis, as they have more difficulty accessing finance.
The EIB is the home bank of the European Union, owned by its 27 Member States. Its goals are different than those of the European Central Bank as EIB’s new chairman Werner Hoyer explained to the press, “We are not here to help recapitalise Europe’s banks. Our goal is to aid the sustainable growth of the European Union through private investments”.
The acquisition of 80 new trains in Belgium, the construction of a medium-sized offshore wind farm in the Baltic sea and the expansion of the 3G broadband mobile network in Estonia would not have been possible without the help of the European Investment Bank.
Trust me, we can help you
During 2011, the EIB signed EUR 61 billion in new loans in almost 70 countries. Approximately EUR 54 billion was provided for projects within the European Union and EUR 7 billion outside. The EIB managed to extend its highest-ever financial contribution to the real economy by disbursing EUR 60 billion.
Support for projects that reduce carbon emissions rose to 30% of total lending, providing EUR 18 billion for climate action. This included EUR 5.5 billion for renewable energy investments, EUR 1.3 billion for energy efficiency and EUR 8 billion for sustainable transport.
Under the bank’s strategy to maintain its financial strength through a gradual return to pre-2008 lending levels, lending for new operations in 2012 is planned to decrease to EUR 50 billion. “We need to gradually reduce the lending volume to pre-2008 levels to protect the financial strength of the bank and its top credit rating, and consequently its ability to lend on favourable terms. However, the reduction in lending volume does not equate to fewer operations,” Mr Hoyer highlighted.
Private banks will not be pushed out
During the press conference Mr Hoyer fended off criticism that the EIB would be in competition with private banks. He explained why this is not the case: “We are attracting private money for projects which would otherwise be difficult to finance. Of course we always need to go through partner banks in order to finance projects with new loans, which are then combined with an EIB loan. It is not our job to compete with private banks or push them out of business!”
He rejected another myth that the European Investment Bank is giving out European taxpayers’ money. “We are borrowing money from the capital markets and we are passing it on to those who want to do something in the economic sphere. We are the world’s largest supranational borrower and successfully raised 76 billion euros on the capital markets last year. About 46% were raised through non-European investors. That tells us something about the trust in the potential of Europe”, he added.
Mr Hoyer concluded that the European Union is at a crucial point of the European construction. He does not think that we have ever faced a more critical political and economic challenge in the process moving forward. That is why we need more Europe, not less. This is a clear message of hope to all people imagining a doomsday scenario. CW