Recommendations for the continued modernization of the Mediterranean banking, financial and capital markets were outlined at the Facility for Euro-Mediterranean Investment and Partnership's (FEMIP) Experts (1) Committee Meeting in Luxembourg today.

Hosted by Mr Nicolas Schmit, Luxembourg Minister Delegate for Foreign Affairs and Immigration and Mr Philippe de Fontaine Vive, Vice-President of the EIB in charge of FEMIP, the two-day meeting was held under the Luxembourg Presidency of the European Union, in the European Investment Bank (EIB) headquarters.

FEMIP's Experts Committee's task is to come forward with practical and operational recommendations to FEMIP's Ministerial Committee of the Economics and Finance Ministers of the EU and the Mediterranean Partner countries (MPCs). The Committee concluded that Mediterranean countries should further pursue the agenda of financial sector reforms aimed at increasing support to business investment. The Committee's recommendations for completion of this reform focus on:

  • developing and implementing sound regulatory and supervisory systems in financial sectors, including capital markets
  • improving the banking system's efficiency and competitiveness, as well as product diversification for stronger private sector support
  • developing local capital markets

Mr Philippe de Fontaine Vive stressed: Modernisation of financial and banking markets provides a unique opportunity for MPCs to accelerate their alignment with EU's internal market, and to further encourage the flow of much needed investment into the Region. Banks play a critical role in the economy providing capital to business while channeling savings to the wider community. Regulation and good governance will provide the foundation for a modern market system. A well regulated banking sector will build market confidence, encourage more stable, long-term investment flows into the Region and strengthen transparency and accountability. Drawing on its own wide experience, FEMIP is ready to contribute to this process in a concrete way, through its innovative financial products, its direct presence in the Region through the support of its local offices, its increasing financing of investment, and its overall role as a catalyst in making things happen.

Some 150 senior officials and leading figures from EU and MPC administrations, banks, academic institutions and the European Commission participated in the Experts Committee meeting. The Committee's conclusions foresee close co-operation between the major political and economic actors in the Euromed area. Countries in the Mediterranean Region are currently forging closer ties with the EU, in the context of the European Neighbourhood Policy . In line with the decision of the participants, FEMIP will co-ordinate activities that will contribute to the modernization of banking, financial and capital markets across the region

In his closing address, Mr. de Fontaine Vive said that the countries in the Mediterranean must take responsibility for initiatives that will benefit the Region as a whole, while ensuring that the commitments adopted at the political level are implemented and produce tangible results.

Lending in the Mediterranean Partner Countries (MPCs) takes place under the Facility for Euro-Mediterranean Investment and Partnership (FEMIP). FEMIP focuses primarily on developing the private sector and financing socio-economic infrastructure underpinning private sector development.

In 2004, FEMIP lent a record EUR 2.2 billion in the MPCs. Additionally, grants under its Technical Assistance Support Fund reached EUR 13.8 million.

Its sectoral objectives have been fully met. With commitments from 14 Member States for an overall amount in excess of EUR 30 million, the FEMIP Trust Fund (FTF) was established at the end of 2004 to finance upstream technical assistance and risk capital operations in the region. FEMIP's stronger presence in the field, initiated by the opening of one regional office in Egypt, in October 2003, was reinforced with the inauguration of a local office in Tunis in December. The next one, in Morocco, is to be opened in June this year (for details on 2004 FEMIP results cf press release dated 4.3.2005).

Since 1995, out of a total of EUR 12.89 billion in the MPCs, EUR 1.76 billion has been channelled through partner banks and financing institutions to small and medium sized companies in the Mediterranean region.

(1) The external relations dimension of the Luxembourg Presidency is expanding considerably as the European Union becomes increasingly important on the global stage. The aim of the Union's foreign policy is to make the world safer, more prosperous and to ensure greater observance of human rights. A wide range of instruments is employed to achieve these objectives. Another major priority will be the implementation of the European Neighbourhood Policy, by which the European Union will pursue the development of its relations with the neighbouring countries of the enlarged Europe. This policy will be realised by drawing up and adopting action plans with all the neighbouring countries concerned.

The Barcelona process will remain the main framework for a coherent set of privileged relations with countries in the Euro-Mediterranean region. The VIIth ministerial "Euromed" Foreign ministers conference will be held in Luxembourg in May 2005, and aims at conducting a comprehensive review of political, economic and cultural cooperation between the EU and its partners in the "Euro-Mediterranean" Partnership, as well as defining orientations on the future of the process.