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(see alphabetical index on page 4)
Definition Private debt issued by the sponsor(s) of a project, either a private company or a special purpose vehicle (SPV) created by one or more companies to finance a specific project. The EU Project Bond Initiative [or: the EU project bond instrument]will provide credit enhancement for projects in order to make it easier for their sponsors to attract private financing. The Council and the European Parliament reached an agreement on 22 May 2012 to initiate a pilot phase on European project bonds in 2012‐13 (press release @ http://tiny.cc/pilotprojectbonds). When raising financing through a project bond, the company or SPV will issue senior and subordinated tranches of debt. By creating a subordinated tranche, which will take first losses, the credit standing of the senior debt will be enhanced because it will carry less risk. This will attract more investors. The EIB and the EU will share the risks involved. For the EU, this will take the form of an upfront capped contribution from the EU budget to cover its agreed share of the potential losses on the projects supported. The residual loss will be borne by the EIB. Examples: projects on the core network in the field of transport, infrastructure priority corridors and areas in the field of energy, etc. Full list of the projects @ http://tiny.cc/COM2011_665 (pp 38 ‐ 55). Not to be confused with project bonds (see above). Sovereign issuance in the euro area is currently conducted by Member States on a decentralised basis, issuing euro‐denomianted bonds using various national procedures. The introduction of commonly issued eurobonds would mean a pooling of sovereign issuance among the Member States and the sharing of associated revenue flows and debt‐servicing costs, as well as obligation to pay back the debt. The Commission issued a green paper on the subject in November 2011. The results of the consultation (concluded 8 Jan. 2012) can be seen @ http://tiny.cc/eurobonds_consult. Also called stability bonds or euro‐securities.
Definition A bank whose role is to provide long‐term finance in support of investment projects. The EIB's shareholders are the 27 Member States of the EU, which have jointly subscribed its capital. Its board of governors is composed of the member states' finance ministers. The EIB is the largest international non‐sovereign lender and borrower, raising the resources it needs to finance its lending activities by borrowing on capital markets, mainly through public bond issues. In 2011, EIB funding amounted to EUR 61 billion. Roughly 90% of this went to projects within the EU, supporting a broad range of policy objectives, including cohesion policy in disadvantaged regions and investments by SMEs. Outside the EU, the EIB is active in over 150 countries. More information @ www.eib.org. A joint initiative (started in 2007) of the European Commission and the European Investment Bank to support higher risk and reward investment in research, development and innovation (the RDI projects). The EUR 10bn that is available under the RSFF will be financed by EIB by leveraging up to EUR 2bn of capital of which EUR 1bn is from the Community Seventh Framework Programme and EUR 1bn from EIB’s own resources that covers the risks incurred related to higher risk financing. More information @ http://tiny.cc/RSFF & http://tiny.cc/RSFFyou (video). Loan Guarantee Instrument for Trans‐European Transport Network Projects – is an innovative financial instrument set up (in 2008) and developed jointly by the European Commission and the European Investment Bank (EIB) which aims at facilitating a larger participation of the private sector involvement in the financing of Trans‐European Transport Network infrastructure (“TEN‐T”). More information @ http://tiny.cc/LGTT. The structural funds are key instruments in the financing of the EU's cohesion policy. The EU budget for 2012 includes payments of around EUR 43.7 bn for the European Regional Development Fund, the European Social Fund and the Cohesion Fund. Cohesion policy is aimed at reducing disparities between the levels of development of the EU's various regions, notably as regards its least developed regions. Particular attention is paid to rural areas, areas affected by industrial transition, and regions that suffer from natural or demographic handicaps. Management of the structural funds is shared by the member states and the Commission.
European Investment Bank (EIB)
Risk Sharing Finance Facility (RSFF)
Loan Guarantee for Transport
Definition FTT is a tax levied on transactions of financial instruments (e.g. shares, bonds, derivatives). A proposal for an EU‐wide FTT proposing to tax a wide base of financial transactions was made by the Commission in September 2011 and is being intensively discussed by the Council. The Commission estimates that, depending on market reaction, yearly revenues could amount to EUR 57 billion on the basis of its proposal. Variations of such a tax covering narrower base of financial transactions exist in a number of Member States (e.g. stamp duty, etc.) and outside of the EU (e.g. Singapore, Switzerland, etc.). A framework laying down the maximum annual amounts which the European Union may spend in different policy fields over a fixed period of not less than 5 years. The purpose of the MFF is to ‐ translate political priorities into figures; ‐ impose budgetary discipline on the EU; and ‐ facilitate the adoption of the annual EU budget. The future MFF will cover the 2014‐2020 period and is currently under negotiation. A six‐month period each year when member states' budgetary, macro‐ economic and structural policies are coordinated so as to allow member states to take EU considerations into account at an early stage of their national budgetary processes and in other aspects of their economic policymaking. The European Semester of 2012 has already entered the second phase, during which the member states have to complete their national reform programmes and stability and convergence programmes. The European Commission evaluated these documents and adopted on 30 May country‐specific recommendations. See http://tiny.cc/recommendations2012. After a discussion by the Council and the European Council in June, these will formally be adopted in July. More information: http://www.consilium.europa.eu/policies/european‐ semester. A package of policy and legislative measures for reinvigorating and completing the internal market in view of achieving a highly competitive social market economy in the EU. It seeks to strengthen citizens' and businesses' confidence in their internal market and to ensure that its benefits are passed on to consumers. It includes goals such as the development of modern trans‐European energy, transport and telecom infrastructure, expansion of digital content markets, creation of unitary patent protection, facilitate the mobility of workers, etc.
Financial Transaction Tax (FTT)
Multiannual Financial Framework (MFF)
Single Market Act
Definition EURES (European Employment Services) ‐ is a cooperation network formed by public employment services. Trade unions and employers’ organisations also participate as partners. The objective of the EURES network is to facilitate the free movement of workers within the European Economic Area (EEA) (the 27 members of the European Union, plus Norway, Liechtenstein and Iceland) and Switzerland, by providing information, advice and recruitment/placement (job‐matching) services. The EURES portal offers job vacancies in 31 European countries, CVs from interested candidates, information about living and working abroad and much more. Check it out at www.ec.europa.eu/eures.
Index EURES Portal, 4 Eurobonds, 1 European Investment Bank (EIB), 2 European Semester, 3 Financial Transaction Tax (FTT), 3 Loan Guarantee for Transport, 2 Multiannual Financial Framework (MFF), 3 Project Bonds, 1 Risk Sharing Finance Facility (RSFF), 2 Single Market Act, 3 Structural Funds, 2