EIB offering to help offset financial gap post-Brexit
European Union's financing arm, the EIB, on Wednesday offered to help offset a financing gap caused by Britain's departure from the bloc.
The European Union's financing arm, the EIB, on Wednesday offered to help offset a financing gap caused by Britain's departure from the bloc and other emerging needs by leveraging higher budgetary guarantees and other financial instruments.
The European Investment Bank, which is owned by the European Union's member states, uses its capital deposits as security to fund loans for research, infrastructure and environmental projects in Europe and around the world.
Britain's exit from the bloc will leave a hole of 10 to 13 billion euros in the EU budget, according to some estimates, reducing funding available for infrastructure and other projects, but the EIB argues that increased use of its financial instruments can help plug that gap.
The German Sueddeutsche Zeitung newspaper, which first reported the proposed increase, said that would boost the guarantee volume by 3 billion euros to around 7.8 billion euros.
Alexander Stubb, EIB vice president, told the newspaper: "We will help to ease the pain of Brexit."
He said the bank could not completely offset the loss of Britain's funding after 2020, but it could ease the pressure.
The changes, together with or instead of more traditional grants and subsidies, could help the EU "do more with less", he said.
Using financial instruments such as loans and equity finance leveraged the EU budget by drawing in private investors, while ensuring the economic viability of projects, because recipients must repay these loans.
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