Under its Amsterdam Special Action Programme to bolster growth and employment in Europe, set up in the wake of the Amsterdam European Council, the European Investment Bank (EIB), the financing institution of the European Union, has granted the Region of Réunion an FRF 150 million (ECU 23 million (1)) loan for extending and modernising the island's secondary education infrastructure.

A second loan for FRF 400 million (ECU 60 million) has also been advanced for road improvement schemes on the island. Both loans can be drawn on over a number of years.

The EIB's ECU 23 million loan for the education sector concerns construction of three new secondary schools (in Ste Suzanne, St Benoît and St Joseph) and rehabilitation and extension of three others (in St Louis, St Benoît and St Joseph). These schemes form part of the Region's Multi-Annual Investment Programme (PPI) for developing local educational amenities during the period 1998-2002. By improving school facilities, this programme is designed to help raise teaching standards with a view to providing pupils with a better preparation for the jobs market. Given the number of staff normally required for running schools of this size (more than 100), these schemes are likely to generate a substantial number of new jobs, especially for teachers.

The ECU 60 million loan for road infrastructure is intended to part-finance the upgrading of 28 kilometres of main roads on the island's east and west coasts. The project adopted - a product of the Long-Term Development Programme for the National Network (PALT) - consists of schemes to improve the capacity and safety of the coast road (addition of third lane and increased protection from rockfalls), the Bras-Panon and Ste Marie stretches (creation of two-lane dual carriageway bypasses) and the Ste Clotilde crossing (turning two existing parallel roads into three-lane dual carriageway). These schemes will markedly improve the island's road infrastructure, which provides the only method of overland transport, and so help increase the scope for economic development.

This is the EIB's second loan to the Region of Réunion for improving its road infrastructure: in 1993, a loan for the same amount, FRF 400 million (ECU 60 million), was granted for upgrading six - now completed - sections of main road totalling 33 km.Over the last five years, the Island of Réunion has attracted EIB loans amounting to some FRF 848 million (ECU 128 million) for its airport, its roads, and now its education system.This overseas region of France, which is classified as an Objective 1 area under the Structural Funds and also benefits from enhanced support for the Union's outermost regions, faces genuine disadvantages compared with other EU regions.In addition, education is one of the priority sectors targeted by the EU Heads of State or Government in the Amsterdam Resolution on Growth and Employment and covered by the "Amsterdam Special Action Programme" (ASAP) implemented by the EIB. The latter extends the Bank's field of operations to include the labour-intensive sectors of health, education and urban renewal. At the same time, ASAP bolsters the Bank's action in support of trans-European networks and the environment. It also contains a feature designed to facilitate the access of innovative SMEs to venture capital. Overall, ASAP operations could increase the volume of lending by some ECU 10  billion over the next three years.

(1) The conversion rates used by the EIB for statistical purposes during the current quarter are those obtaining on 31 December 1997, when ECU 1 = FRF 6.61.