9 Private sector development in the Mediterranean
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13769/03
+ ADD 1
COM(2003) 587
| Commission Communication on support for private sector development in the Mediterranean
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| Legal base | — |
| Department | International Development
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| Basis of consideration | Minister's letter of 17 December 2003
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| Previous Committee Report | HC 63-xxxviii (2002-03), paragraph 12 (19 November 2003)
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| Discussed in Council | 25 November 2003 Economic and Financial Affairs Council
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| Committee's assessment | Politically important
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| Committee's decision | Cleared (decision reported on 19 November 2003)
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The Commission Communication
9.1 The purpose of the document was to set out options for restructuring
the Facility for EuroMed Investment and Partnership (FEMIP), the
main EC instrument for providing loan funds to 12 countries in
the Middle East and North Africa.[37]
FEMIP was placed under the management of the European Investment
Bank (EIB) when it was set up in 2002, with a mandate to target
the private sector, principally small and medium-sized enterprises,
which have difficulty accessing finance for investment.
9.2 The Communication reviewed FEMIP's performance
and concluded that, while lending levels were increasing, FEMIP
was not benefiting the private sector as much as it could. Two
options were put forward for discussion in the Economic and Financial
Affairs Council (ECOFIN). One was to develop FEMIP further and
the other was to restructure it as a majority-owned subsidiary
of the European Investment Bank (EIB).
9.3 We cleared the document before the Council meeting
but asked the Secretary of State for International Development
(Mr Hilary Benn) to tell us which option was accepted, and his
view of the outcome.
The Minister's letter
9.4 The Minister says:
"The 25 November 2003 meeting of ECOFIN agreed
unanimously to develop FEMIP further and to reinforce it within
the Bank. A "reinforced" FEMIP will be strengthened
by a number of features to support private sector development.
This decision was based on the FEMIP experience and the consultation
with Mediterranean Partner countries.
"Additionally ECOFIN decided that the case for
incorporating FEMIP into an EIB majority-owned subsidiary would
be fully assessed in December 2006, on the basis of an evaluation
of the reinforced Facility's performance, and taking into account
the outcome of consultations with Mediterranean Partner countries.
"I am very pleased with the outcome on this
issue. I consider that enhancements to FEMIP will allow for an
increased focus on small and medium sized enterprises, which are
crucial for employment generation and growth, and a less risk-averse
approach to the region. An EIB-subsidiary bank, on the other
hand, would have been costly to both EU Member States, Mediterranean
Partner Governments and to borrowers in Euro-Med partner countries."
Conclusion
9.5 We thank the Minister for providing us with
the information we requested and note that the outcome was the
one sought by the Government.
9.6 We cleared the document on 19 November 2003.
37 Morocco, Algeria, Tunisia, Egypt, Israel, Jordan,
the Palestinian Authority, Lebanon, Syria, Turkey, Cyprus, Malta,
though in practice only the first eight receive financial support
from FEMIP. Back
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