by Adedotun Michael
The EU is fueling the Brexit fire as The European Investment Bank (EIB) will reportedly put most UK applications for long–term loans on hold until a Brexit deal has been agreed, The Express reports.
The real story
According to the statement, “In two years’ time, the treaties will cease to apply to the UK and this means that it will cease to be a member of the EIB.
“Clearly, the EIB group has to exercise a duty of care concerning operations maturing after 2019, and hence has to carry out careful due diligence in view of the current circumstances,” the statement added.
Currently, the UK provides 16 per cent of the capital of the Luxembourg-based multilateral institution, whose mission borders on funding for infrastructure spending and other activities that promote European cohesion and integration. It is however disappointing that the EIB has done nothing to finance to finance the nine projects worth £1.4billion which it earlier this year agreed upon in the UK.
The impending effect
Piers Williamson, chief executive of the Housing Finance Corporation revealed, “Brexit does not necessarily mean the end of the UK’s membership to the EIB although they require that members “shall be the member states”.
He said, “The EIB has been a significant source of funding for UK housing regeneration for the last 20 years.
“We understand that our existing contractual commitments will be met but we don’t expect to be able to apply for anymore funding at the moment,” he added.
A Universities UK spokesman said, “If the European Investment Bank decided to no longer consider UK applications even before we leave the EU, it would be problematic for universities.
“In recent years, funding has helped to build research facilities and modern teaching and learning spaces to ensure that UK universities’ facilities are internationally competitive,” he asserted.
The decision would impact big capital projects that fund schools, university buildings and hospitals due to its attractive interest rates.
The possible way forward
Also, a treasury spokesman said they were working on a workable alternative. He said, “We are clear that UK companies should be able to access EIB funding on equal terms as other member states while the UK remains a member of the EU.”
He stressed further “While we work to make sure this happen, we have taken action to support business investment by authorizing the British Business Bank to increase its support for venture capital funds and have offered construction guarantees on infrastructure projects.”