The European Investment Bank, the European Union's financing arm, has approved an ECU 500 million loan package for the Polish and Czech flood damage reconstruction programme. The EIB Funds will part-finance repair schemes for roads, railways, municipal infrastructure, flood protection and water facilities, damaged in the summer floods in the Oder and Morava river catchment areas of Southern and South-Western Poland and the Eastern part of the Czech Republic. ECU 300 million is being earmarked for Poland and ECU 200 for projects in the Czech Republic.

EIB Vice-President Wolfgang Roth, responsible for overseeing the Bank's activities in Central and Eastern Europe, said: "This loan package will enable the EIB to respond rapidly and flexibly to meet the immediate flood reconstruction needs in the two countries. The package reinforces the EIB's wider support for efforts to prepare Poland and the Czech Republic for membership of the European Union".

The new package follows on ECU 1 million in grants advanced by the EIB in July as immediate assistance for flood damage in the two countries. In Poland ECU 500 000 will help restore the ancient University library at Wroclaw while in the Czech Republic the reconstruction of a hospital in Olomouc will be supported with an identical amount.

The Bank's staff have begun discussions with the national authorities to identify urgent priority schemes for the new loan package, with the focus on financing emergency work already underway or due to be started over the next 24 months. The EIB is expecting that much of the finance will go to support investment to repair roads, including bridges carriageways and drains, and for the railways, covering work on tracks, viaducts and embankments, as well as electrical and telecommunications networks and signalling equipment.

The EIB plans to lend up to ECU 3.5 billion over the next three years as part of the EU's co-operation policy for projects designed to strengthen their economies and prepare candidate countries for eventual accession to the Union. In addition, at the request of the European Council of Ministers, the EIB is to create a substantial pre-accession lending facility to support preparations for membership. Since 1990, the EIB has advanced ECU 5 billion for projects in 11 countries in the region, of which ECU 1.4 billion in Poland, and ECU 1.2 billion in the Czech Republic. The Bank is also adjusting its lending priorities for the two countries to assist post-flooding reconstruction efforts.

The conversion rates used by the EIB for statistical purposes during the current quarter are those obtaining on 30 September 1997, when ECU 1 = GBP 0.69, IEP 0.76, USD 1.113, CZK 36.6244.