BERLIN (Reuters) - Britain could wait more than three decades to recover billions of euros in capital once it ceases to be a shareholder in the European Investment Bank on its departure from the European Union, the boss of the bank said.
In an interview with German business daily Handelsblatt, Werner Hoyer also said the loss of the 16 percent of shareholder capital that Britain holds would force the bank to rein in its lending unless other member states stepped up to compensate.
The EIB, owned by the EU’s member states, uses their capital deposits as security to fund loans for research, infrastructure and environmental projects in Europe and around the world.
Hoyer said that the need to unwind positions in an orderly fashion meant that Britain would only see its cash allocation to the bank - a total of 3.5 billion euros (£3.1 billion) - in 2054, 35 years after the expected March 2019 exit date.
“As things stand, repayment will come only when the current loan portfolio, in which the British are participants, is fully recovered,” he told Handelsblatt.
A final decision on a further allocation of about 36 billion euros in capital from Britain, which was not paid in cash, has yet to be taken, but Hoyer said that under a proposal by lead Brexit negotiator Michel Barnier, a British deposit could take the place of the shareholder capital, also until 2054.
“That strikes me as a fair position that does both sides justice,” he told the paper.
Britain must choose from a range of existing off-the-peg models for its relationship to the European Union when it leaves the bloc, Barnier told a group of newspapers separately.
Reporting By Thomas Escritt; Editing by Hugh Lawson