The book is published and printed in Luxembourg by 1958-2008 • 1958-2008 • 1958-2008 1958-2008 • 1958-2008 • 1958-2008 15, rue du Commerce – L-1351 Luxembourg 3 (+352) 48 00 22 -1 5 (+352) 49 59 63 1958-2008 • 1958-2008 • 1958-2008 U [email protected] – www.ic.lu The history of the European Investment Bank cannot would thus mobilise capital to promote the cohesion be dissociated from that of the European project of the European area and modernise the economy. 1958-2008 • 1958-2008 • 1958-2008 The EIB yesterday and today itself or from the stages in its implementation. First These initial objectives have not been abandoned. (cover photographs) broached during the inter-war period, the idea of an 1958-2008 • 1958-2008 • 1958-2008 The Bank’s history symbolised by its institution for the financing of major infrastructure in However, today’s EIB is very different from that which 1958-2008 • 1958-2008 • 1958-2008 successive headquarters’ buildings: Europe resurfaced in 1949 at the time of reconstruction started operating in 1958. The Europe of Six has Mont des Arts in Brussels, and the Marshall Plan, when Maurice Petsche proposed become that of Twenty-Seven; the individual national 1958-2008 • 1958-2008 • 1958-2008 Place de Metz and Boulevard Konrad Adenauer the creation of a European investment bank to the economies have given way to the ‘single market’; there (West and East Buildings) in Luxembourg. Organisation for European Economic Cooperation. has been continuous technological progress, whether 1958-2008 • 1958-2008 • 1958-2008 in industry or financial services; and the concerns of The creation of the Bank was finalised during the European citizens have changed. 1958-2008 • 1958-2008 • 1958-2008 Building for the future negotiations which preceded the signing of the (photographs introducing the different parts of the book) Treaty of Rome establishing the European Economic This work is thus a history book. It follows the 1958-2008 • 1958-2008 • 1958-2008 Community. As well as contributing to the financing successive enlargements of the European Union as The Bank’s new building, of projects of common interest, it also met the well as the changes in the economic and political 1958-2008 • 1958-2008 • 1958-2008 opened on 2 June 2008, concerns of those who feared that the common market environment. It endeavours to understand how the summed up in two words would accentuate imbalances in regional development EIB has set its course over half a century of upheavals 1958-2008 • 1958-2008 • 1958-2008 – ecology and transparency – or hasten the decline of certain industries. The Bank whilst remaining true to plans of its founders. designed and equipped to adapt to This academic work on the history of the EIB 1958-2008 • 1958-2008 • 1958-2008 a new generation of working methods was translated into English and German from and communications requirements. French original texts. 1958-2008 • 1958-2008 • 1958-2008 Cover produced by the EIB graphics unit The Bank of the European Union (Sabine Tissot) The authors do not accept responsibility for the 1958-2008 • 1958-2008 • 1958-2008 translations. 2008 - The Bank of the European Union The EIB, 1958 -2008 Further information The EIB, 1958 The EIB, European Investment Bank Editors: Éric Bussière, 98 -100, boulevard Konrad Adenauer L-2950 Luxembourg Michel Dumoulin and Émilie Willaert, 3 (+352) 43 79 - 22000 in collaboration with Charles Barthel, 5 (+352) 43 79 - 62000 www.eib.org – U [email protected] Price: EUR 25 Jürgen Elvert, Paolo Tedeschi and Arthe Van Laer The Bank of the European Union The EIB, 1958-2008 The Bank of the European Union The EIB, 1958-2008 Editors: Éric Bussière, Michel Dumoulin and Émilie Willaert, in collaboration with Charles Barthel, Jürgen Elvert, Paolo Tedeschi and Arthe Van Laer The authors wish to extend their warmest thanks to Mrs Natacha Wittorski for her coordination work in this research and publication project. They also want to thank the people who have been instrumental in the history of the European Investment Bank and who agreed to meet them to relate their experience. A special thanks to Martina Pilger. © European Investment Bank, 2008 All rights reserved ISBN: 978-2-87978-072-6 Designed, printed and published by: Imprimerie Centrale, société anonyme, Luxembourg www.ic.lu 5 Preface The European Investment Bank (EIB) launched its first operations in 1958. Fifty years later seemed the right time to open the bank’s archives to an eminent group of historians of European integration so that they could write the history of this first half-century. In doing this, they were covering a subject that has in the past received very little attention from historians, in contrast to lawyers and economists (who have devoted numerous works to the EIB). This is the history of the European Investment Bank that the authors have uncovered, through their research in the archives of the EIB and other European and national institutions and inter- views with a number of key figures. During the research and analysis the EIB observed two basic principles. Firstly, it wanted to provide the easiest access possible to historical sources as well as to the people who had played key roles in the past, so that the researchers could put together all the material they deemed necessary to their task. Secondly, the EIB gave the authors complete freedom in interpreting the facts and editing their work. It is a truism to say that the degree of integration achieved by the European Union fifty years after its foundation has exceeded the hopes and expectations of the founding fathers in the mid-1950s. The same applies to the European Investment Bank. And it is unlikely that any of the negotiators or signatories of the EEC Treaty would have thought that the EIB would one day become the biggest lender (and the biggest borrower) among the international financial institutions and a vital player in long-term financing within the European Union. The authors of this work provide a precise descrip- tion of these developments and document the context in which they emerged. To attempt to sum up the salient points of the authors’ analyses in just a few paragraphs would not do them justice. But, on the basis of the historical picture they have painted, I should like to mention three characteristics that are, in my opinion, essential to properly understand the development of the EIB during the first fifty years of its existence, and will continue profoundly to influence its development in the future. Firstly, the historians’ analysis highlights a constant duality in the life of the European Investment Bank: it is, at one and the same time, a European institution and a bank. Depending on the period, one or other of these two dimensions tends to be given more weight. In the course of time, there has been a slow swing of the pendulum, sometimes favouring the EIB’s banking dimension and at other times its role as a European institution. There is, therefore, a certain ’existential ambiguity’ in the personality of the EIB. This characteristic, which is surprising on the face of it, reflects the 6 choice that was made by the founding fathers and has been confirmed over time as the treaties and Statute of the bank have been revised. The EIB, unlike the other international financial institutions with which it is often compared, does not have as part of its remit the power to define policies, since these are decided by the Council, the Parliament and the Commission. The bank’s task is to support the implementation of European Union policies via the financial instruments at its disposal. If this division of tasks between a political and an implementing sphere may seem clear in principle, one cannot ignore the fact that it is very difficult to identify in practice where policy definition ends and where implementation begins. Moreover, daily practice teaches us that separating these two dimensions completely is not only inefficient but might also be dangerous. If implementation constraints are ignored when policies are being drawn up, then there is a risk of making it impossible to achieve the desired political objectives. It is therefore unavoidable that the EIB should seem a dual entity, combining in variable proportions its roles as European institution and financial intermediary. Secondly, the geographical perimeter of its activities brings a further dimension of duality to the European Investment Bank. The historical analysis shows clearly that the founding fathers envis- aged the EIB’s activities being limited to the sphere occupied by the Member States of the European Economic Community. Because this sphere was to be enlarged considerably over the years, it quick- ly became obvious, however, that it made little sense to limit the EIB’s activities to the frontiers of the Member States when, by operating in the future Member States, the EIB could facilitate those countries’ integration into an enlarged European Union. That being said, these pre-accession activ- ities in future Member States do not fundamentally modify the EIB’s Eurocentric perspective. The difference is more in the timing of intervention than in the geographical perspective. The policies of the EU do not, however, stop at its borders and, over time, the EIB has been called to intervene in a growing number of countries in the world. Although there are certainly synergies and economies of scale to be achieved by combining operations within and outside the EU, it is just as obvious that there are important differences between these two types of activity in that their economic and social aims, the institutional environment in which they are conducted and the operational constraints to which they are subject differ appreciably.