§ Mr. SpearingTo ask the Chancellor of the Exchequer if, with reference to the Act to amend the statutes of the European investment bank permitting the establishment of a European investment fund—Cm 2359—approved by Parliament on 29 November, he will state(a) the maximum permitted liability of the fund in guarantees, (b) the initial contributed capital subscribed by the European Community as such, by member states, and by others respectively, (c) who will be inviting others to become members of the fund, and what qualifications they are likely to possess, (d) the limitations placed on the fund in respect of the purposes of the enterprises to which assistance is given, (e) when he expects the statutes of the fund to be decided and how and by whom they will be published and (f) who will appoint its governing body, and by what means, and to whom the person representing the interests of Her Majesty's Government on that body will be responsible.
§ Mr. Nelson[holding answer 7 December 1993]: The rules of operation of the proposed new European Investment Fund are set out in the fund's statute. At 229W present, this document exists only in draft form, but it will be adopted by the governors of the European investment bank immediately after they establish the fund itself. If the draft statute is adopted in the form in which it now stands, the situation would be as follows:
(a) The fund would initially be limited to providing guarantees with a total value of no more than three times the amount of its subscribed capital. Since the fund's subscribed capital is fixed at 2 billion ecu, £1.511 billion, this would mean that it could grant guarantees worth up to 6 billion ecu, £4.534 billion.
(b) It is envisaged that 40 per cent.—800 million ecu or £605 million—of the fund's initial subscribed capital would be held by the European Investment Bank, 30 per cent.—600 mecu or £453 million—by the European Community, with the remaining 30 per cent.—600 mecu or £453 million—contributed by banks and financial institutions, which operate within the Community, and which agree to become members of the fund.
(c) It is for the board of governors of the EIB to invite institutions to become members of the fund. So far as participation by banks is concerned, the EIB has approached institutions which are well established, and well known to it as clients, with invitations to take part.
(d) The fund will operate through the Community in support of small and medium-sized enterprises, and of projects which form part of trans-European networks.
(e) The statute of the fund will be adopted by the governors of the European investment bank immediately after the fund is established. Establishment, in turn, will take place as soon as the treaty amendment which enables this to happen has been ratified by all 12 EC member states. This is expected to occur early in the new year. Once the fund becomes operational it will of course publish its own statute, but in order to avoid delay it may be possible to arrange for the EIB, or the European Commission, to publish the statute in advance of this.
(f) The fund's supreme governing body will be the annual general meeting. The membership of this body will be fixed by the fund's statute, with all three classes of shareholders participating. The European Community's representative at the meeting will be one of the members of the Commission, and the EIB will be represented by its president. Both of these will be responsible for safeguarding and representing the interests of Her Majesty's Government, by virtue of the United Kingdom's position as a member state of the Community, and a shareholder in the EIB, respectively.
All figures converted at 30 November 1993 £-ecu conversion rate (£=1.3232 ecu).