Los cronistas
C. PEDRO LEMEBEL LOS SUJETOS TRANS
2. Identidades trans y reterritorializaciones
past two decades. EIB financial products make an important contribution to EU
208 Commission Regulation (EC) No. 1828/2006 op cit. 209 European Commission (2014d) op. cit.
economic development expenditure.211 Yet most academic studies of policy sectors in which the EIB is active pay it little attention both in general212 and more specifically in the field of regional policy.213 One of the few academic studies to have been undertaken argues that the effectiveness of the EIB (particularly in the context of the economic crisis) is ‘underpinned by its close links and responsiveness to policy-making, its speed to increase lending and the ability of member countries rapidly to increase its subscribed capital, which facilitated increased lending in combination with retention of its AAA ratings’.214 This study does not aim to fill this gap, instead it, reviews evaluations and literature that have been produced, sets out some of the key issues and identifies areas for further research.
There is a limited body of academic and policy literature on the effectiveness and added value of EIB financing activities in relation to Cohesion Policy. Robinson notes that many EIB projects work on the basis of partnership between the Structural Funds and EIB loans. However, the scale of EIB lending to projects that are also funded through Cohesion Policy is unknown. As a consequence, it could be the case that some leverage effects or added value presently ascribed to Structural Funds are actually the result of EIB and Cohesion Policy activity combined. It could also mean that the leverage effect/added value of EU activities as a whole has been underestimated.215
3.6.1 Structural Programme Loans
An ex post evaluation of the use of Framework Loans to finance investment in the EU over the 2000-11 period states that Framework Loans are a relevant and, especially in the SPL case, effective instrument. These loans allow the EIB to target areas of European development which were previously unsupported or in receipt of only limited support. It creates leverage through blending with national, regional or EU grant or loan funding. These loans also allow the Bank to reach out to smaller schemes, often at the sub-state level. SPLs were more frequently rated as a satisfactory instrument than other non-SPL framework loans. The programmes to which SPLs contribute were better prepared and their objectives better defined.216 As SPLs contribute to Cohesion Policy programmes, this demonstrates the high level of added value of EIB lending to these programmes.
According to the ex-post evaluation the EIB’s contribution to SPLs is considered low. One reason is that the Bank has no influence on the content of the loans, as they are defined by the Operational Programmes. At most, certain measures or priorities within the OPs can be selected to form an EIB project. As a result, the projects do not always form an integrated programme that clearly addresses a single EIB priority. However, all schemes do fulfil one or more of the EIB´s eligibility criteria. Both EIB and Commission priorities stem from EU policy and therefore have significant overlap; in practice, the evaluation of SPLs indicates that OPs may have a fairly weak link to current EIB priorities217, which can lead to limitations in terms of EIB involvement. The implementation of SPLs faces a number of other challenges. First, the sheer number of sub-projects that are implemented per operation poses capacity and control challenges for the EIB. Second, sub-project allocation approvals are often more
211 Robinson (2009) op. cit. 212 Robinson (2009) op. cit.
213 Bache I (1998) The Politics of European Union Regional Policy: Multi-Level Governance or Flexible Gatekeeping?
Sheffield: Sheffield Academic Press; Hall R, Smith A and Tsoukalis L (eds) (2001) Competitiveness and Cohesion in EU Policies, Oxford: Oxford University Press; Doria L, Fedeli V and Tedesco C (eds) (2006) Rethinking European Spatial Policy as a Hologram: Actions, Institutions, Discourses, Aldershot: Ashgate.
214 Griffith-Jones S and Tyson J (2012) op cit., p. 8.
215 European Parliament (2013b) The implications of EIB and EBRD co-financing for the EU budget: follow up, Study
for the Directorate-General for Internal Policies, Policy Department D:Budgetary affairs, available at: http://www.europarl.europa.eu/RegData/etudes/etudes/join/2013/490670/IPOL-JOIN_ET(2013)490670_EN.pdf
216 European Investment Bank Operations Evaluation (2012) op. cit. 217 Ibid,
based on eligibility and exclusion criteria and a certain perception of (regulatory and reputational) risk, rather than on their consistency and actual contributions to the realisation of the objectives of the investment programme.218,219
Commentators have argued that improving the effectiveness SPLs (and framework loans more generally) requires a more programmatic approach to implementation (i.e. adopt a set of indicators and targets to provide proof of effectiveness, rather than collecting information on huge numbers of individual allocations without necessarily enquiring about their achievement for the wider programme). Also, it has been suggested that the EIB should accept a certain level of risk rather than creating the ‘illusion of control’ by establishing an individual project-monitoring framework that it does not have the resources to control. This would imply earlier involvement of the EIB and a more pro-active role in the Cohesion Policy programming phase (either Partnership Agreements or OPs). It would allow the Bank to streamline the allocation process and enhance the level of control over the investment.220 To an extent, such an approach is already possible and has become more apparent in the 2014-2020 period, as the EIB are in certain cases consulted in the development of Partnership Agreements and Operational Programmes and also attend Monitoring Committees as an observer on a selective basis.
3.6.2 Co-Financing for FIs in Cohesion Policy
In some cases the EIB co-finances FIs. To date, there is no accurate information available at the aggregate level regarding the EIB lending in relation to FIs.221 Box 4 provides an example of some of the benefits and challenges of EIB lending in relation to Cohesion Policy. One of the main challenges is the EIB’s insistence on the treatment of its loan as senior debt (i.e. a debt that takes priority over other unsecured or otherwise more junior debt), which prejudices potential private sector equity investment.
218 An investment programme is made up of many schemes implemented by the same promoter or a group of
separate projects with different promoters coordinated by a central body. Investment programmes in SPLs must fit within the Operational Programmes.
219 European Investment Bank Operations Evaluation (2012) op. cit. 220 Ibid.
221 Through the EIB project database a number of credit lines for enterprise FIs (JEREMIE) in the UK and urban
development (JESSICA) in Lithuania and Spain can be identified. However, it is not possible to search the database systematically to identify all credit lines to FIs.
Box 4: EIB Co-financing for JEREMIE initiatives in the UK
A mid-term review of the JEREMIE funds in England in 2007-13 noted that they use a mix of ERDF and other public sector grant matched with a loan from the EIB. The EIB loan is a substantial source of pre- match funding for the JEREMIE projects.
An important feature of the way the EIB has provided finance to the projects is that, as they generate returns, the EIB loan is repaid first. The mid-term evaluation notes that this condition of the EIB loan from the perspective of the FI is sensible in that it minimises the cost of the EIB loan to the funds. There were a number of potential disadvantages of the JEREMIE approach depending on the circumstances, including the complexity and cost of the fund of funds model, the costs and seniority of the EIB debt-financing (although EIB financing costs were highly competitive versus commercial banking options at the time). Moreover, it places the balance of risk associated with fund performance on public sector investors (ERDF in particular), although this is a reflection of the use of substantial debt-financing in the model. It significantly reduces the attractiveness of private equity investment into the fund alongside the EIB and ERDF, and the project developers’ investigations at the time confirmed this (although this also reflects the perceived returns that the funds generate). The EIB’s insistence on the treatment of its loan to the HF as senior debt also prejudices potential private sector equity investment.
In addition, some of the funds co-financing FIs were required to introduce the entire EIB loan at the start, which increases the lifetime costs of the loan finance (compared to introducing the loan in tranches). A positive aspect is that it generated higher-than-forecast treasury income to offset the Fund’s costs, in part the result of this initial drawdown of the full EIB loan and the interest it earns on the large cash deposit it represents.
Source: Regeneris (2013) Mid-Term Review of the English JEREMIE Funds, available at: http://british-business- bank.co.uk/wp-content/uploads/2013/10/Northern-JEREMIEs-Review-Summary-Report-Final-07-11-13.pdf
One measure of success mentioned by interviewees in terms of lending activities is that the EIB enjoys a high level of continuity in terms of the partners with which it does business. Often after a successful loan agreement, multiple further consecutive loan agreements are planned. In terms of its lending, the EIB is less bound by Cohesion Policy regulations, and its relationship is primarily based on a contractual arrangement that takes regulations into account but can also be flexible. This means that the EIB can exercise considerable flexibility in offering solutions.