On 29 April the European Investment Bank (EIB) held a conference in co-operation with Hungary's Ministry of Finance and National Development Office in Budapest on Hungary's economic development after EU accession.

Speakers included Wolfgang Roth, Vice President of the EIB; Luis Riera Figueras, Director for Regional Policy, European Commission, and János Veres, State Secretary, Ministry of Finance. Together with some 130 representatives from public and local authorities and the banking sector they discussed the investment needs of Hungarian municipalities and SMEs and ways and means to maximise the benefit of loans and grants provided by Hungary's EU membership.

Wolfgang Roth pointed to the important investment needs and the roles of the national authorities, European Commission, EIB and the local banks in meeting these. Luis Riera Figueras focussed on the role of the EU's structural assistance designed to promote growth and cohesion by providing resources to regions, which are less well developed or are in need of structural adjustment.

Wolfgang Roth said he was particularly pleased about the close cooperation between the EIB and the Commission in using the pre-accession instruments, in particular ISPA, that established a good basis for the successful implementation of projects under the Cohesion Fund and Structural Funds in the coming years.

János Veres added that EU grants available between 2004 to 2006 represent about 2.0 to 2.5 per cent of GDP, and this can be expected to double from 2007. These grants can generate a multiplier effect supporting the growth potential for the national economy as a whole. It is of high importance therefore that potential beneficiaries of Community grants have access to financial facilities to ensure the required internal funds. EIB loan facilities can also help in this area. He confirmed that the government funds for co-financing EU grant supported municipal projects have already been set aside in the budget.

Peter Heil, Head of the Community Support Framework Managing Authority, National Development Office, encouraged all potential applicants to apply for EU Assistance, emphasising that money is and will be made available, both in the form of grants and loans, and the key for Hungary will be to realise a sufficient number and volume of eligible and viable projects.

Representatives of some dozen local commercial banks expressed confidence that funds are available in the Hungarian banking system for co-financing to municipalities, corporates and SMEs with eligible projects. They also expressed interest in new lending opportunities in these segments.

EIB has provided some EUR 1 billion in credit lines (global loans) to nine Hungarian partner banks to date for the financing mainly of SME and municipal investments. New Global Loans of some EUR 300 million are expected to be signed this year in line with growing investment activity. The EIB also signed special EU grant facilities for municipal lending with four Hungarian banks on April 30th, 2004 as part of its ongoing effort to offer additional support to this important segment.

Given the success of this forum, grouping the main actors in this field, the sponsors agreed to consider a follow-up seminar on specific themes for a future date in Hungary.

The European Investment Bank, the long term financing institution of the EU finances economically viable investment projects fostering EU integration. The EIB has been at the forefront of investment in Hungary during the pre-accession period with total loans of over EUR 4 billion and remains committed to working with public and private sector promoters in the years to come. The Bank is actively discussing with the Hungarian Authorities and with the European Commission ways and means to maximise the potential opportunities offered by Hungary's EU membership and to achieve its full integration with the Union as well as furthering economic growth.