Plan for non-EU investment revived
Europe’s largest development bank, the EIB, has revived plans for a new offshoot focused solely on non-EU projects that it expects to formalise in a year and have up and running within two years, its president said.
EIB head Werner Hoyer also said he was confident EU countries would replace the €3.5bn of British cash and nearly €40bn of callable capital that will be lost if Brexit goes ahead as planned.
The new internationally focused offshoot could potentially invest in a post-Brexit Britain, but its main aim is to bring more EU foreign spend into a streamlined and market-savvy unit.
Hoyer said the plan had been put on the back burner for a year due to Brexit and while a new EU budget was being hammered out, but that it was now active again.
“We have revitalised the whole idea and have presented ideas to our shareholders and others,” Hoyer said.
The bank currently invests between €65-80bn a year, with about 10% or €7-€8bn of that spent outside the EU, from central Africa to Argentina.
Hoyer said the EIB would reorganise internally and work with other European and national development banks in what he expects to be a comparable set-up to the European Investment Fund. The fund is a subsidiary of the EIB but is open to non-EU members and helps to provide financing for small and medium-sized businesses.
“Within the next 12 months we will probably see where the train is going to go, and within the next 24 months I want to see that thing established.”
On the EIB’s Brexit complexities, Hoyer laid out both the task of plugging the €40bn hole Britain will leave behind and what it means for the €55bn worth of assets the bank has amassed in the UK over the years.
“The UK is holder of more than 16% of the callable capital so this has to be replaced by the others. It will be, as always, a negotiation to the very last minute, but I am confident that we will get there,” he added, saying the cost was likely to be spread among EU members.
The Bank’s legacy UK portfolio is likely to be the more complex issue.