The research has been carried out in order to evaluate the current impact of the EIB on the Italian public financing. The results of the study regard both the most successful aspects of the EIB activity (which should inspire future action) and the less profitable features that represent a risk for the future. In fact, the lack of knowledge about the European Investment Bank activities and the misunderstandings concerning its role as a funding bank represent the most important obstacles to an effective expansion of the Bank’s activities in Italy. According to the research’s conclusions, even though Italian Municipalities that use public lending as a source of financing, requested for a “Cassa Depositi e Prestiti” (DD. PP.) – Deposits and Loans Bank - mortgage and only a few applied to private banks. The EIB is known but not enough to convince Municipalities to apply for its loans.

Public lending is one of the great instruments that can be used to enhance the expenditure and investments chances of cities. Until the 1990s most of the financial resources for Local Public Authorities to finance their debt were represented by transfers from the central State through financing by loans coming from the Italian Cassa DD. PP. and other public lending institutions. After the 1990s the financing system has progressively changed, pushed by the reduction of public transfers, the increase in local tributary income and the new financial competencies passed on local bodies. The financial autonomy recently given to Regions, Provinces and Cities have created new borrowing mechanisms and increased Local Authorities’ discretionality in selecting the financing tools. In the last few years the debt towards banks has decreased while the bonded debt has increased; commercial banks and equity providers are other important sources of finance.

The Italian National Research regarding European Investment Bank (EIB) Loan Finance is the result of a study made by a working group that has analyzed the context of public financing in Italy and the level of investment needs, in terms of:

Moreover, a review has been conducted on the main projects of urban land development and of the publicly funded Programmes for urban regeneration in Italy, in terms of both national and European Programmes as far as the EIB loan activity in Italy. The work team has elaborated a questionnaire addressed to the Municipalities that have taken part in the most important National and European programmes for urban development.

EIB funds investments both in the European Union and abroad support the European policies. Actually, the bank set its strategies according the EU political priorities and collaborates with other European Institutions in order to be able to offer relatively inexpensive money at very competitive conditions. The EIB finances up to 50 per cent of the total project costs and financing may be combined with EU grants or with loans from other banks.

According to the analysis’ results, it could be stated that EIB loans are advantageous for Local Bodies not only in financial terms (competitive rates, suitable repayment rules that are not easy to find in Italy), but also from a socio-economic point of view. In fact, the Bank pays attention, not only to the financial rate of return of its investment but also, to the socio-economic rate of return, and this approach ensures a great coherence between the project and the context in which it works. Moreover it has been demonstrated, through a survey analysis, that the EIB is the only financial player that provides financing for both single projects and whole programmes, as opposite to all the other banks, Cassa DD. PP. included.

Ministry for Infrastructure
Mrs. Cinzia Zincone

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Ministry for Infrastructure

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Urban Policy > Economy knowledge & employment > Urban economy

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