The UK and the European Investment Bank (EIB)

The European Investment Bank (EIB) was established by the Treaty on the Functioning of the European Union and the shareholders/members can only be member states of the EU. The Statute of the European Investment Bank is defined by PROTOCOL (No 5) ON THE STATUTE OF THE EUROPEAN INVESTMENT BANK which can be found in a copy of the Consolidated version of the Treaty on European Union available at

Document 12016M/TXT

After Brexit, the UK will no longer be allowed as a shareholder of the EIB unless an alternative arrangement is agreed during the withdrawal negotiations. This will be an interesting topic for discussion.

Currently, the UK is one of the four largest shareholders in the EIB and provides approximately 16% of the EIB’s capital. Capital in the EIB is used to fund infrastructure projects.

EIB investments in the UK economy came to €6.9 billion in 2016, making the country the 5th largest recipient of EIB loans last year. Infrastructure projects accounted for 47% of total investments, while environment claimed 36%. Innovation and support to smaller businesses in the UK claimed 14% and 3% respectively. Over the past five years (2012-2016) the EU bank has invested over €31.3 billion in the British economy.

http://www.eib.org/

The EIB financial report for 2016 shows reserves of €69,036,534 consisting of €21,699,135 paid up capital and a further €44,480,798 accumulated profits. This would imply the UK’s share would be worth €11,045,845 (or around €11.0 billion).

2016 Financial Report of the EIB

Other details from the financial report shows the bank has liabilities of around €470 billion – is the UK liable for 16% of this debt (around €75 billion) when it leaves the EU ? These debts were incurred by the Bank – do individual shareholders still bear responsibility after they divest their interest and end up effectively paying off the loans owed by somebody else under separate legal agreement ? If so, does this imply that the UK could have a claim to a share (16%) of future profits.

Elsewhere, recent reports show that funding received by the UK is slowing because of Brexit

https://www.thetimes.co.uk/article/brexit-eu-bank-cuts-off-cash-for-british-building-projects-s2qvc66z2
http://www.globalconstructionreview.com/news/european-investment-bank-stops-investment-britain-/
https://www.architectsjournal.co.uk/news/european-investment-bank-freezes-public-building-loans-due-to-brexit/10022730.article

The articles mention that since Article 50 was invoked, only 3 projects have had funding signed off and since June there have been no projects financed.

Of course, the UK remains a full member of the EU until a withdrawal agreement is reached or the time limit for talks expires.