Mr. Andrew McDowell:

At this point in time, eligibility criteria in the EIB's lending rules prohibit lending to the defence sector and the armaments industry unless the technology we are supporting is dual use and can be used for consumer and commercial applications. In fact, there are a lot of areas where we finance things, for example the latest developments in radar technology, with civilian and military applications. That is okay. It is consistent with our eligibility criteria and it is okay for our investors. As part of its security and defence discussion, the European Council has asked us to look at how to lend more and invest more in research and development in the defence industry generally. Our lawyers are having a good look at this and it is the subject of intense debate among our board of directors on how to interpret the particular request from the European Council and on the implications for the bank and its funding. That process is one that is still being debated in the bank between the managing committee of the bank, including the vice presidents, and our board of directors, which includes an Irish director, as to how to bring that forward.

What is clear is that we could possibly do more in the dual use sector. It is not an area we have targeted in the past. If there is a desire for the EIB to play a greater role in European security, we could lend more to dual use technologies in a way that is consistent with the ethical requirements of our investor base. We raise approximately €65 billion a year on capital markets. I cannot give the committee an exact percentage on the bonds coming from institutional investors with specific ethical rules but I would say it is a very significant proportion. We had the green bond programme. We pioneered the development of the idea of green bonds, of which we are the largest issuer in the world. The buyers of green bonds would have very clear rules that we cannot finance armaments. There are other categories of investor with other ethical codes and one would have to look through the individual codes of each institution. We are in the process of doing that because we want to have a very good understanding of any impact of a change in our eligibility criteria on our ability to raise funding.

If we cannot raise funding as cheaply as we do right now, we cannot pass on those benefits to the beneficiaries. The purpose of our bank is to raise funding at a triple A rating. We raise funding more cheaply than any other bank in the world, not for our benefit but for the benefit of the EU member states and the promoters of projects in them. If our ability to do that is damaged, it is not to our detriment, but to the detriment of promoters of projects across EU member states. Our board has a very good understanding that anything we do must pay very careful attention to the requirements of our investors.