EIB Puts Faith in U.K. to Make `Right Decision' to Avoid EU Exitby
U.K. voters likely to show pragmatism, EIB chief Hoyer says
Even if U.K. left EU, unlikely to affect bank's credit rating
The European Investment Bank isn’t making plans for how it would be affected by a potential U.K. exit from the European Union because British voters will probably vote to stay in the EU, EIB President Werner Hoyer said.
“We hope and we trust that the British people are going to show their pragmatism and their rationality and therefore we think we should not interfere, we should trust our British friends to take the right decision,” Hoyer said Wednesday in a Brussels interview.
U.K. voters are set to go to the polls June 23 to decide whether or not Britain should remain in the EU. Analysts at Societe Generale SA said in a March 1 research note that if the U.K. dropped out of the 28-nation bloc and pulled its capital out of the EIB, the investment bank could face a cut to its credit rating and its bonds could come under pressure.
“This is speculation which is founded on nothing, so I don’t speculate on that at all” Hoyer said, when asked about the note. He also said the immediate impact of a “No” vote isn’t clear because of the negotiations that would follow.
“If the Brits take that decision -- which I hope and I’m pretty sure they will not do -- then there is a negotiation process for the European treaties for the next two years and we are part of the treaty,” Hoyer said. “The governments, those who will stay in the European Union and the one that might leave, will have to negotiate a new setup. Of course we will be affected by the outcome of these negotiations but we are not part of these negotiations ourselves.”
The U.K. is one of the Luxembourg-based bank’s four main shareholders and has a 16 percent share in the EIB. So far, the referendum has not affected lending in the U.K., which has supported projects including companies such as Airbus Group SE, Nissan Motor Co., Rolls-Royce Holdings Plc and Ford Motor Co. EU finance ministers would have to discuss any future changes to the bank’s lending programs or shareholder structure.
Britain’s share of EIB investment rose to a record 7.8 billion euros ($8.9 billion) last year, accounting for about 11 percent of lending to all 28 EU nations, the EIB said in January. Chancellor of the Exchequer George Osborne said in a Jan. 14 statement that this increase has been one of the British government’s goals and shows the bank’s confidence in the U.K.’s economic strategy.
Speaking Wednesday to a Brussels conference, Hoyer made the case that the EIB is one of the biggest success stories for the EU. “I would say nowadays the bank is one of the last undetected treasures of the European integration process,” he said.