Executive Summary:
Council Decision (EU) 2019/654 of 15 April 2019 amends Protocol No 5 on the Statute of the European Investment Bank (EIB) following the United Kingdom's withdrawal from the European Union. The decision adjusts the Bank's capital, governance, and voting procedures. It takes effect the day after the Treaties cease to apply to the UK, with an exception for the capital adjustment if a prior decision on capital increase exists.
Key Points / Main Content:
Capital Adjustment:
* The Bank's capital is set at EUR 204,089,132,500, with the United Kingdom's subscribed capital removed from the list of Member States' contributions.
Governance Strengthening:
* The Board of Directors will consist of 28 directors and 31 alternate directors.
* Revised nomination arrangements for alternate directors are specified.
Voting Procedure Changes:
* The Rules of Procedure of the Bank are approved by a qualified majority.
* The Bank's operational plan is decided by a qualified majority.
* The Board of Governors appoints the Management Committee by qualified majority, based on a proposal from the Board of Directors, also acting by a qualified majority.
Management & Oversight:
* The Bank should reinforce the three lines of defense principles.
* Lending volumes should be kept sustainable, and a framework for determining sustainable lending levels should be developed.
* The Audit Committee should include members with knowledge of supervisory issues, including members from a banking supervisory authority from both inside and outside the euro area.
Impact Analysis:
European Investment Bank (EIB):
Impact: Requires adjustments to its capital structure, governance, lending frameworks, and internal procedures to reflect the UK's withdrawal and the strengthened governance.
Action Required: Implement changes to capital subscription, Board of Directors composition, voting procedures, lending policies, and Audit Committee structure.
Member States (excluding the UK):
Impact: Increased capital subscriptions to maintain the Bank's capital, along with changes to the nomination process for alternate directors.
Action Required: Adjust capital contributions and participate in the revised nomination process for alternate directors.
Board of Directors and Board of Governors:
Impact: Changes in composition, voting procedures, and responsibilities regarding the operational plan and appointment of the Management Committee.
Action Required: Adhere to the new voting procedures and revised responsibilities in decision-making processes.
Management Committee:
Impact: Changes in the appointment process.
Action Required: N/A
Audit Committee:
Impact: Changes in structure and required expertise.
Action Required: Adjust the Audit Committee to include members with knowledge of supervisory issues, including members from a banking supervisory authority from both inside and outside the euro area.
Key Entities Referenced
European Union: A political and economic union of member states located primarily in Europe.
European Investment Bank: The European Union's investment bank, which provides finance for projects of European significance.
Treaty on the Functioning of the European Union: One of the two primary treaties that form the constitutional basis of the European Union (EU).
European Council: A collective body that defines the overall political direction and priorities of the European Union.
United Kingdom: A country that was formerly a member state of the European Union, and whose withdrawal is the subject of this decision.
Board of Directors: The governing body of the European Investment Bank responsible for decision-making.
Board of Governors: The governing body of the European Investment Bank consisting of ministers designated by the Member States.
Management Committee: The European Investment Bank's resident executive body; it operates under the authority of the President and supervises the day-to-day running of the Bank.
L 110/36 EN Official Journal of the European Union 25.4.2019
DECISIONS
COUNCIL DECISION (EU) 2019/654
of 15 April 2019
amending Protocol No 5 on the Statute of the European Investment Bank
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the Functioning of the European Union, and in particular Article 308 thereof,
Having regard to the request of the European Investment Bank,
After transmission of the draft legislative act to the national parliaments,
Having regard to the opinion of the European Parliament (1),
Having regard to the opinion of the European Commission (2),
Acting in accordance with a special legislative procedure,
Whereas:
(1) On 29 March 2017, the United Kingdom notified the European Council of its intention to withdraw from the
Union pursuant to Article 50 of the Treaty on European Union. The Treaties will cease to apply to the United
Kingdom from the date of entry into force of the Withdrawal Agreement, or failing that, two years after that
notification, i.e. on 30 March 2019, unless the European Council, in agreement with the United Kingdom
unanimously decides to extend that period.
(2) In accordance with Article 308 of the Treaty on the Functioning of the European Union, the members of the
European Investment Bank (the ‘Bank’) are the Member States.
(3) The withdrawal of the United Kingdom from the Union will bring an end to the United Kingdom's membership
of the Bank, to its subscribed capital in the Bank, to its right to nominate members and alternate members of the
Board of Directors, and to the term of office of the members and alternate members of the Board of Directors
nominated by the United Kingdom.
(4) The maintenance of the capital of the Bank requires an increase in the capital subscribed by the remaining
Member States.
(5) The increase in the capital subscribed by the remaining Member States should occur in parallel with a further
strengthening of the governance of the Bank.
(6) The functions of the Board of Directors should be strengthened by allowing for the nomination of additional
alternates, and better use should be made of alternate Board members and non-voting experts to enhance their
role in supporting the decision-making process of the Board of Directors, in particular with regard to the analysis
of financing proposals.
(7) The use of qualified majority voting by the Board of Directors and the Board of Governors should be extended to
crucial areas, namely the decision on the Bank's operational plan, the appointment of members of the
Management Committee and the approval of the Rules of Procedure.
(8) In order to enhance the effectiveness of the reforms set out in this Decision, the Bank should take further
initiatives to reflect, in line with best banking practice, the principles of the ‘three lines of defence’ at all relevant
levels of the Bank, including in the Management Committee.
(1) Opinion of 15 January 2019 (not yet published in the Official Journal).
(2) Opinion of 31 January 2019 (not yet published in the Official Journal).25.4.2019 EN Official Journal of the European Union L 110/37
(9) Furthermore, and in line with Member States' expectations, lending volumes should be kept sustainable and
a framework for determining sustainable lending levels should be further developed, while the functions of the
Audit Committee should be strengthened by making sure that the Committee includes members with knowledge
of supervisory issues. In particular, it should be ensured that the Audit Committee always includes members
drawn from a banking supervisory authority from both inside and outside the euro area.
(10) The Statute of the European Investment Bank should therefore be amended accordingly,
HAS ADOPTED THIS DECISION:
Article 1
Protocol No 5 on the Statute of the European Investment Bank, annexed to the Treaty on the Functioning of the
European Union, is amended as follows:
(1) the first subparagraph of Article 4(1) is amended as follows:
(a) the introductory part is replaced by the following:
‘1. The capital of the Bank shall be EUR 204 089 132 500, subscribed by the Member States as follows:’;
(b) the following line in the list is deleted:
‘United Kingdom 39 195 022 000’;
(2) in Article 7(3), point (h) is replaced by the following:
‘(h) approve, acting by a qualified majority, the Rules of Procedure of the Bank.’;
(3) in the first subparagraph of Article 9(1), the following sentence is added:
‘It shall, acting by a qualified majority, decide on the Bank's operational plan.’;
(4) Article 9(2) is amended as follows:
(a) the first subparagraph is replaced by the following:
‘2. The Board of Directors shall consist of 28 directors and of 31 alternate directors, nominated in accordance
with this paragraph.’;
(b) the third subparagraph is replaced by the following:
‘The alternate directors shall be appointed by the Board of Governors for five years as shown below:
— two alternates nominated by the Federal Republic of Germany,
— two alternates nominated by the French Republic,
— two alternates nominated by the Italian Republic,
— two alternates nominated by common accord of the Kingdom of Spain and the Portuguese Republic,
— three alternates nominated by common accord of the Kingdom of Belgium, the Grand Duchy of Luxembourg
and the Kingdom of the Netherlands,
— four alternates nominated by common accord of the Kingdom of Denmark, the Hellenic Republic, Ireland
and Romania,
— six alternates nominated by common accord of the Republic of Estonia, the Republic of Latvia, the Republic
of Lithuania, the Republic of Austria, the Republic of Finland and the Kingdom of Sweden,
— nine alternates nominated by common accord of the Republic of Bulgaria, the Czech Republic, the Republic
of Croatia, the Republic of Cyprus, Hungary, the Republic of Malta, the Republic of Poland, the Republic of
Slovenia and the Slovak Republic,
— one alternate nominated by the Commission.’;L 110/38 EN Official Journal of the European Union 25.4.2019
(5) the first subparagraph of Article 11(1) is replaced by the following:
‘1. The Management Committee shall consist of a President and eight Vice-Presidents appointed for a period of
six years by the Board of Governors, acting by a qualified majority, on a proposal from the Board of Directors,
acting by a qualified majority.’.
Article 2
1. This Decision shall apply from the day following that on which the Treaties cease to apply to the United Kingdom.
2. Point (1)(a) of Article 1 shall apply from the date referred to in paragraph 1 of this Article unless a decision to
increase the capital of the Bank has been adopted with effect from that date or before that date.
Done at Luxembourg, 15 April 2019.
For the Council
The President
P. DAEA