Mr. Andrew McDowell:

One could make the argument that some easing up on the fiscal rules to facilitate more investment would be good for business for the EIB. We would be okay with that. There is widespread recognition across Europe that there needs to be more investment in infrastructure in particular.

The concern that some countries have about any further flexibility in the fiscal rules is to what extent that flexibility will be used sensibly to finance projects that make a real economic and social impact as opposed to building bridges to nowhere. It may be that the EIB could have a role. Further flexibility for projects co-financed by the EIB would provide sufficient reassurance to all EU and eurozone member states that these were high quality projects. We do not just finance projects, we have also have to put them through a very intensive environmental, social and economic appraisal to make sure that they actually make sense. The degree of confidence that our shareholders, the 28 member states, have in the EIB appraisal process may make it easier to provide some additional flexibility to co-financed infrastructure projects. This will, however, ultimately be a matter for the Commission and the member states to decide.

There may well be further debate on the fiscal rules. The Commission introduced a particular investment clause in the Stability and Growth Pact two years ago. This allows for further investment levels but only in very tightly defined circumstances - countries have to be in recession and the project has to be of common interest at European level. This is so rigidly defined, in fact, that there has been almost no further investment. Only one single project has got through this additional flexibility introduced by the Commission. The Commission did, however, promise a review of these investment laws by the middle of next year. Now is certainly a good time to look at ideas of how to perhaps expand the flexibility of this investment clause for countries like Ireland with big investment requirements.