EU/MEDITERRANEAN STATES : EIB CONFIRMS ITS COMMITMENT TO DEVELOPMENT.

The European Investment Bank (EIB) has confirmed its vocation as an investment bank in the Euro-Mediterranean region at the beginning of a 2006, a year which will be decisive in determining the bank's future activities in the area. Later in the year, European Union member states, all shareholders in the EIB,a will need to decide whether to convert the FEMIP (Facility for Euro-Mediterranean Investment and Partnership) into a bank in its own right.

Another key issue is to decide on the budgetary resources and guarantee ceilings for this region for the period 2007-2013. "This evolution means that we have gone from being an investment bank ato being a project bank and now we are going to become a development bank", said Philippe de Fontaine Vive, Vice-President of the EIB in charge of FEMIP who is currently involved in intense consultations with countries on both sides of the Mediterranean with a view to present several possible future scenarios.a

FEMIP AS AN EIB SUBSIDIARY?

The most radical of these options proposes to convert FEMIP into a development bank with equal representation on the Board of Directors alongside the EU member states and South Mediterranean partner countries, all participants in the Barcelona Process. The institution which will be a subsidiary of the EIB will become a fully-fledged regional development bank for the Mediterranean resembling in the long term the Asian Development Bank or the Inter-American Development Bank whose objectives are economic modernisation and social progress in their respective regions. The representation of member states on the Board of Directors, will ensure the new institution of visibility and give it a more robust political dimension than the existing FEMIP.

This ambitious option will imply structural costs inherent in establishing a head office and administrative costs recognised Mr Fonatine Vive who would ideally like to obtain a clear mandate from member states to start setting up the bank from 2007. If he is unable to convince the shareholders, it will always be possible to resort to the status quo option - renewal of the FEMIP pure and simple. In order to be prepared for...