European Union governments may increase the capital of the EU’s in-house investment bank amid calls from southern Europe and the campaign trail in France for more pro-growth policies.
A proposal to put an additional 10 billion euros ($13 billion) into the European Investment Bank could unleash 60 billion euros in loans to co-finance projects worth as much as 180 billion euros, EU President Herman Van Rompuy said.
“It’s a gigantic multiplier,” Van Rompuy said at the bloc’s Committee of the Regions in Brussels today. “I’m happy that no small number of governments have already said that they favor such an operation.”
Lending by the EU-owned EIB took on a central role in the growth-boosting efforts demanded by the frontrunner in France’s presidential campaign, Francois Hollande, in his debate against incumbent Nicolas Sarkozy yesterday.
A now-dormant fund used in the early stages of the debt crisis has about 10 billion euros left, potentially providing the capital to transfer to the Luxembourg-based investment bank.
The bank signed loan agreements worth 61 billion euros in 2011. The capital increase, on the agenda for a June 28-29 summit, would require approval of all 27 EU leaders.
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