The EU is moving ahead with plans to set up an organisation to promote and arrange financing for regional projects that could begin operations in early 1996. The new body, to be called the European Project Preparation Facility (EPPF), will be financed by the EU, but would co-operate with regional multilateral institutions, including the newly formed Bank for Economic Co-operation & Development in the Middle East & North Africa (MEDB – MEED 10:11:95).
The new European body will require capital of about ECU 20 million-50 million ($26 million-65 million), and would have a regional head office in either Cairo or Amman. However, EPPF will not be involved in financing projects itself, in line with the position held by a majority of EU states that there are enough financial resources already directed at the region, but not enough viable project opportunities.
The decision by the EU to move ahead with its plans reflects the continuing differences with the US about development needs in the Middle East. The EU wants to put its plans for the EPPF on the agenda at talks to be held in Cairo on 21 November. However, European Commission officials say the US is pressing all sides to dedicate the meeting to discussion of the MEDB, and is sidelining the EU’s plans. ‘A majority of EU members are not very happy, but we do not want to boycott the meeting…We do not want to send the wrong signal to the co-partners in the peace process,’ says one European Commission official.
Delegates at the Cairo talks will consider a 40-50 page document on the articles of MEDB, defining its role and structure. Also under discussion will be raising the bank’s capital of $5,000 million, of which $1,250 million will be paid-up. The US says commitments have already been received for 70 per cent of the capital, although some doubts have been expressed about how firm those commitments are. ‘We all want to see what is the exact shareholding structure,’ says the commission official. He says the US portion still requires approval by congress, which is far from
certain, particularly as the US is already in arrears to several existing multilateral organisations.