COUNCIL DECISION

of 19 December 2006

granting a Community guarantee to the European Investment Bank against losses under loans and loan guarantees for projects outside the Community

(2006/1016/EC)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 181a thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Parliament(1),

Whereas:

(1) Since 1963, the European Investment Bank (the ‘EIB’) has undertaken operations outside the Community in support of the Community’s external policies.

(2) Most of those operations have been carried out upon request by the Council and have benefited from a Community budgetary guarantee administered by the Commission. Most recently, the Community guarantee was established for the period 2000-2007 by Council Decision 2000/24/EC of 22 December 1999 granting 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)(2) and by Decisions 2001/777/EC(3) and 2005/48/EC(4) for regionally specific lending actions.

(3) With a view to supporting EU external action without affecting the EIB’s credit standing, the EIB should be offered a Community budgetary guarantee for operations carried out outside the Community. The EIB should be encouraged to increase its operations outside the Community without recourse to the Community guarantee, particularly in the pre-accession countries and the Mediterranean as well as in investment grade countries in other regions, while the nature of the coverage of the Community guarantee should be clarified as covering risks of a political or sovereign nature.

(4) The Community guarantee should cover losses under loans and loan guarantees for EIB eligible investment projects carried out in countries covered by the Instrument for Pre-Accession Assistance(5) (the ‘IPA’), the European Neighbourhood and Partnership Instrument(6) (the ‘ENPI’) and the Development Cooperation Instrument (the ‘DCI’), where the loan financing or guarantee has been granted according to a signed agreement which has neither expired nor been cancelled (‘EIB Financing Operations’).

(5) The amounts covered by the Community guarantee under this Decision should represent ceilings for financing by the EIB under the Community guarantee. They should not form targets that the EIB should necessarily meet.

(6) The EU’s external relations policies have been revised and broadened in recent years. This has notably been the case for the Pre-Accession Strategy as set out in the Commission’s 2005 Enlargement Strategy Paper, for the European Neighbourhood Policy, as set out in the Commission’s Strategy Paper of 12 May 2004, for the renewed partnerships with Latin America and South-East Asia and for the EU’s Strategic Partnerships with Russia, China and India.

(7) From 2007, the EU’s external relations will also be supported by the new financial instruments, i.e. the IPA, the ENPI, the DCI and by the Instrument for Stability(7).