Since it was set up in October 2002, FEMIP has established itself as the Euro-Mediterranean development bank, striving to foster economic and social modernisation and enhanced regional integration in the partner countries.

Accordingly, FEMIP's top priority remains support for the private sector, to which it devoted 51% of the EUR 2.2 billion lent in the Mediterranean Partner Countries in 2005. For the most part (35%), these operations are conducted with the local banking sector, in order to enhance its ability to finance productive investment by SMEs. At the same time, FEMIP is keen to support investment in basic infrastructure in the energy (Egypt, Gaza-West Bank, Syria), environmental (Turkey, Lebanon, Morocco) and transport and communications sectors (Syria, Lebanon, Morocco, Turkey). 2005 also saw the resumption of financing operations in Gaza and the West Bank, with two loans improving the living conditions of the Palestinians in practical terms via the supply of electricity and the establishment of a guarantee fund in support of SMEs.

FEMIP has also increased its technical assistance activity: in 2005, 33 operations totalling almost EUR 25 million facilitated the implementation of capital projects or supported the carrying out of studies, thus helping to support institutional reforms and the definition of sectoral development strategies in the southern and eastern Mediterranean.

2006 will be a crucial year for the future of the Euro-Mediterranean Partnership: the European Council is, on the one hand, to decide on the budgetary resources and guarantee ceilings for this region for the period 2007-2013 and, on the other, to re-examine the question of whether to turn FEMIP into a subsidiary. The Finance Ministers of the partner countries are currently being consulted on an informal basis and all the EU and partner countries' Finance Ministers will be giving their views at the FEMIP Ministerial Committee meeting to be held in Tunis on 25 and 26 June.

Study on migrant workers' remittances

In addition to its financing operations, FEMIP wants to make available to all those involved in the Euro-Mediterranean Partnership the analytical data required to increase understanding of the economic and financial issues associated with development and, in particular, of the factors that can help towards strengthening the financial and banking sector of the partner countries. It has already undertaken a survey of the sovereign debt markets in the Mediterranean countries (published in December 2005 ) and defined an ambitious programme of work on access to credit for businesses.

With that in mind, FEMIP is today making public the first detailed analysis of financial flows from Mediterranean migrants in Europe, an overlooked subject that has not yet been fully measured. This study shows, first, the extent of the phenomenon: some EUR 7.1 billion is officially transferred every year from Europe to eight Mediterranean countries (between EUR 12 and 14 billion if informal transfers are included). It also shows that the methods of transfer used are extremely expensive for those sending the money and prevent the funds from being put to sufficiently good use in order to finance the recipient countries' economies. Thanks to the range of questions raised and recommendations made, this document provides a sound basis for engaging in a process of information and consultation on the measures that can be taken to improve the transfer terms offered to migrant workers and to promote the channelling of these remittances through the banks in order to increase their effectiveness.

The text of the study and a summary note are available on the EIB's website at: http://www.eib.org/publications/

Partnership with the FEMISE university network

To boost its capacity for economic analysis of the region, FEMIP was keen to tap into solid expertise concerning the economic and banking environment in the partner countries. As part of its new partnership policy with universities, EIB Vice-President Philippe de Fontaine Vive will today be signing a partnership agreement with the Euro-Mediterranean network of economic institutes, FEMISE, which brings together 55 institutes that specialise in studying the Euro-Mediterranean Partnership. It is run jointly by the University of Cairo's Economic Research Forum and the Marseilles-based Mediterranean Institute and covers 12 EU countries, one Acceding State (Romania), one Accession State (Turkey) and the nine Mediterranean Partner Countries.

Cooperation with the FEMISE network2 will encompass a number of fields: carrying out studies, consulting on specific issues, exchanges of experts, labelling of joint operations, etc. It will be based on a programme of network activities that fit in perfectly with FEMIP's objectives:

  • transition and economic reforms, including economic governance and development of the private sector;
  • social policies, especially with regard to public health and employment;
  • regional integration: North-South and South-South;
  • the role of the State and reform of economic institutions;
  • the potential social and economic contribution of the Wider Europe Neighbourhood Policy.

Intensified technical assistance programme

FEMIP has two tools for financing technical assistance activities:

  1. Tthe FEMIP Technical Assistance Support Fund. Financed by the European Commission (MEDA), this Fund supports investment activity by helping promoters to identify, define and manage projects and optimise their contribution to development.
  2. The FEMIP Trust Fund. Launched in 2004 and financed - to date - by 15 EU Member States and the European Commission, the FEMIP Trust Fund supports the development of the private sector by financing studies and providing upstream technical assistance and private equity finance.

In 2003-2005, these two instruments enabled FEMIP to support around 50 operations totalling almost EUR 70 million in the environmental (32% of financing), human capital (5%) and infrastructure sectors (32%) and by bolstering the financial and banking sector in the partner countries (31%).

The priority in 2006 is to strengthen the banking sector and its ability to finance the economy more effectively. FEMIP's experience demonstrates that tapping savings, transforming them into medium and long-term resources and channelling those resources into productive investment are issues common to all countries in the Partnership. Technical assistance for this sector will focus on the following areas:

  • improving the conditions governing businesses' access to credit; strengthening the regulatory and prudential framework within which banks operate;
  • developing the private equity industry and increasing the capacity of investment funds;
  • training banking personnel in lending techniques and investment support;
  • developing micro-finance.

Further information on the FEMISE network is available at: www.femise.org.