Ireland urged to tap EIB for funds
Ireland has been urged to increase its funding applications to the European Investment Bank and seize the "window of opportunity" presented by Brexit.
Andrew McDowell, vice president of the European Investment Bank, and a former adviser to Taoiseach Enda Kenny, made the comments in an address to the Oireachtas Finance committee yesterday, and repeated his view at a meeting of the Institute of International & European Affairs.
His comments came as tensions between the EU and the UK threaten to reach boiling point, prompting an intervention by EC President Donald Tusk who has urged calm.
Yet while the verbal hostilities over Brexit intensify, Mr McDowell also laid bare the complexities posed to the EIB by the UK's decision to exit.
Theresa May's government has publicly declared its stake in the bank is worth close to €11bn.
But Mr McDowell claimed any valuation was fraught with difficulty due to the scale of callable capital - money pledged to the EIB by the UK, which underpins the bank's AAA credit rating. "So the UK has only paid in about €2.5bn into the EIB. But it has this callable capital of about €40bn."
Determining how much of this pledged money will be drawn upon is unclear as the liabilities will only become evident when the loans approach maturity in 20-25 years' time.
He said that leaves any assessment of the UK's stake open to "great contention" and added: "I don't think this is something that has not been fully appreciated as of yet."
While Mr McDowell acknowledged the answer will be thrashed out between the remaining 27 stakeholders and the UK, he urged the EU to clarify the EIB's importance to the region, and reassure international money markets.
He highlighted the EIB has €470bn in outstanding bonds, which represent a "contingent liability each member state".
Yet Brexit also means the bank's teams that had focused on the UK are now "sharpening their pencils" for possible projects in Ireland. Mr McDowell said "now is a great opportunity for Ireland to accelerate the level of projects submitted to the EIB" given the legal and financial similarities to the UK economy.