Since 1990, the European Investment Bank has doubled its Europe-wide lending to around EUR 30 billion a year. In Germany, the volume of loans provided has increased sevenfold to EUR 5.2 billion (1998), such that the Federal Republic has become the largest recipient of EIB financing with 18% of the total. A decisive factor in the vigorous growth in operations in this country was the unification of Germany. As the new Länder all constitute assisted areas in terms of European regional policy, the EIB has devoted particular attention to modernising their infrastructure and rebuilding their economy. Of overall lending in Germany since 1990 (EUR 27.4 billion as of August 1999), some 50% have been channelled to the new Länder for renovating the energy and telecommunications sectors, promoting the establishment of new industrial and service enterprises, fostering smaller businesses and, more recently, upgrading urban infrastructure and modernising both hospitals and educational establishments. Hence, the emphasis of EIB activity is shifting away from the creation of new production capacity and infrastructure towards improving the quality of services and education potential.
The European Investment Bank works closely and fruitfully in Germany with the local banking sector. About 80% of major capital investment projects are financed jointly with German partner institutions. For smaller ventures, the EIB furnishes its partner institutions with credit lines on which the institutions draw to provide sub-loans under their own responsibility for purposes agreed with the Bank.
Over recent years, Berlin has become a particular focus of EIB activity. Since 1990, EUR 3.6 billion have been advanced for 16 large-scale infrastructure projects such as modernisation of gas and water supply plus district heating networks, development of the Potsdamer Platz, upgrading of the Berlin Trade Fair facilities and modernisation of hospitals in East Berlin. The Bank is set to continue its strong commitment to underpinning projects in Berlin.
EIB activity in Central and Eastern Europe also considerably benefits Berlin - as an important hub for traffic between countries in the East and West of Europe - as well as, of course, the new Länder.
The European Investment Bank has become the largest source of external lending for upgrading infrastructure in the Central and Eastern European countries. It cooperates closely here with the European Commission whose financial aid under the PHARE programme is often combined with EIB loan funds in order to offer particularly attractive financing packages, especially for environmental schemes. Access to EIB loans is open to all ten applicant countries, irrespective of whether they are able to join the European Union at an earlier or only later stage. Since 1990, the EIB has lent around EUR 10 billion in Central and Eastern Europe and is now providing some EUR 2.5 billion a year for modernising these countries' economies, strengthening the fabric of smaller businesses, developing energy supplies and expanding telecommunications. About 50% of this amount is given over to developing communications, not only rail and road networks but also air links. The principal objective is to enhance connections between Central and Eastern Europe and the European Single Market in order to promote these countries' participation in labour sharing in Europe, so assisting their economic revival and facilitating their accession to the Union. Under this heading, major transport corridors already crossing the territory of the Union are to be extended eastwards with a view to creating trans-continental transport corridors.
An important communications link will stretch from Berlin via Warsaw and the Baltic States to Helsinki, with another connecting Berlin via Dresden-Prague-Bratislava and the Balkans to Istanbul. A further route will run from Berlin via Wroclaw-Katowice-Lvov to Kiev. The European Investment Bank is involved in financing almost all sections currently under construction of these links, as is also the case with the extension of trans-European networks within the Union.
In the former Yugoslavia, the EIB mounted operations from the late 1970s until the outbreak of war. It has recently been able to arrange an initial series of finance contracts in Macedonia and Bosnia-Herzegovina. The EIB can claim longstanding experience in the region and is intending to play a significant role in the reconstruction of Kosovo, development of Albania's economy and, as soon as political conditions permit, rebuilding of the remainder of Yugoslavia, while making its own contribution to ensuring the success of the Stability Pact for the Balkans.
Since end-1997, the European Investment Bank has become a major investor in venture capital funds. The EIB participates in such funds to the tune of up to 50% of their respective size and on condition that they are administered by professional fund managers, i.e. the managers must have a sound track record in selecting undertakings and assume an active part in developing and advising the firms concerned. Experience has shown that providing capital is not sufficient in itself, but needs to be supplemented by advisory services. To date, the EIB has contributed a total of EUR 470 million to 21 venture capital funds Europe-wide. Also, via the European Investment Fund, it has indirectly invested a further EUR 125 million in various funds. An additional 26 operations involving financing of EUR 670 million are either to be signed shortly or at the negotiating stage. Of participations amounting to EUR 1.26 billion in all already concluded or to be signed in the near future, German equity funds have benefited from EUR 102 million. The goal of EIB venture capital activity is to make available equity capital or quasi-capital assistance to fairly recently established firms, so enabling them rapidly to expand their business and fostering the creation of jobs in Europe.