The European Investment Bank has provided a further loan of DEM 190 million for modernisation of hospitals in Mecklenburg-Vorpommern. This brings aggregate financing to date for this purpose to DEM 456 million, out of a total amount earmarked of DEM 1.335 billion (679 million euro). The loans are being channelled via intermediary banks to the project promoters, the Land of Mecklenburg-Vorpommern and individual hospitals.

The scheme to modernise hospital infrastructure in this Land, programmed to continue over a good number of years, is designed to enhance the quality of medical care and improve the efficiency of the various hospitals on a lasting basis. In the course of the renovation work, the number of beds will be matched to demand and specialist departments will be reallocated among the various institutions.

Financing for hospitals comes under the EU Growth and Employment initiative decided by the June 1997 European Council in Amsterdam. This initiative opened up scope for the EIB to extend its area of operations to the health and education sectors. The Bank has so far approved financing of EUR 2.22bn in all for seven projects, part of this having already been disbursed. Works attracting support include hospital modernisation schemes in Berlin, Thüringen and Sachsen-Anhalt as well as higher education institutes in Thüringen and Berlin.

Throughout the EU, the EIB has made available, and already partly disbursed, a total of EUR 4.1bn since autumn 1997 in support of 28 projects to upgrade health and education infrastructure.

The Bank has also this week concluded a global loan for DEM 455m with Kreditanstalt für Wiederaufbau (KfW) towards renovation of concrete slab apartment blocks in the new eastern Länder. The overall amount advanced to KfW so far for this purpose thus comes to DEM 1bn (EUR 504m). The institution passes the funds on to public and private-sector promoters- irrespective of size and ownership - in support of small and medium-scale renovation, upgrading and modernisation schemes in concrete slab apartment blocks and buildings.

The European Investment Bank is thereby underpinning regional development in eastern Germany, classified as an Objective 1 area under the EU's regional development policy, as well as urban renewal and energy saving.

Refurbishment of rundown housing will help to counteract the formation of social ghettos and outward migration from the areas concerned. As the renovation works are labour intensive, they will also serve to create employment. Most of the schemes also include installation of heat insulation or improvements to heating plant, thereby making for a noticeable decrease in energy consumption.

Euro 1 = DEM 1.95583, 0.666300 GBP.