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EU plans to boost outside lending by 32% in 2007-13

European Union governments plan to boost lending for infrastructure projects outside the 25-nation bloc by 32% to €27.3 billion ($35 billion) in 2007- 13, according to a tentative agreement by EU finance chiefs.

Loans by the European Investment Bank to the Mediterranean rim, the Balkans, Caucusus, Russia, Asia, Latin America and South Africa would go up from €20.7 billion in 2000-06, under an accord to be completed next week. The Netherlands and Britain led the way in blocking a proposal to raise the lending to €33 billion, warning that financial controls in some countries aren't up to EU standards and arguing that the money would be better spent closer to home. “The EIB should be encouraged to increase its operations outside the community,” said the draft, to be discussed by finance ministers at a November 28 meeting in Brussels. EU governments own and operate the Luxembourg-based bank, which finances construction and infrastructure projects inside and outside the bloc. The package foresees loans of €9 billion to the Mediterranean, €8.4 billion to future EU members such as Croatia and Turkey, €3.5 billion to eastern Europe, the southern Caucusus and Russia, €2.2 billion to Latin America, €900 million to South Africa, and €800 million to Asia. Another €2.5 billion will be allocated later. (Bloomberg)