Following up the conclusions of the March 2000 Lisbon Summit, which called for increased support for risk capital initiatives for SMEs, the shareholders of the European Investment Fund today approved a reform of the institution with a view to turning the EIF into the EIB group's specialist risk capital arm. While maintaining the tripartite structure of the Fund, the EIB will become the majority shareholder, with a stake of over 50%, and the operator of the institution. The reform clears the way for the concentration of all the EIB group's risk capital activities in the hands of the EIF and will make it possible to target operations in this highly specialised field more effectively. This new form of relationship between the EIB and the EIF will also encourage productive sharing of expertise between the Bank and the Fund in support of SME finance and will thus boost the innovative and catalytic effect of the EIB group's actions within Europe's banking and financial community.

The EIF Annual General Meeting also agreed on the composition of its new Board of Directors, which will be chaired by Mr. Philippe Maystadt, President of the EIB. The Board will consist of four members nominated by the EIB, two by the European Commission and one by the financial institution shareholders.

Commenting on the new arrangements, Mr. Maystadt said: "The EIF's new position in the EIB group will further enhance its role in the pursuit of Community objectives. The extra capital received from the EIB and the boost in its business prospects following the reform, will enable the EIF to establish itself as a centre of excellence within the EIB group in the development of risk capital activities on a pan-European scale."

The new Board appointed Mr. Walter Cernoia as Chief Executive of the EIF. Mr. Cernoia, who joined the EIB in 1982, has since 1996 been the Director for EIB operations in Central and Eastern Europe.

The EIF shareholders also approved the 1999 results which confirm that the Fund continues to progress well in financial terms. EIF saw a rise in its net income in 1999 to EUR 19.4 million. A dividend of EUR 6 000 per subscribed share will be paid, double the amount paid in 1999. On the operational side, the EIF has now provided guarantee support for lending totalling nearly EUR 4 billion (EUR 2.8 billion at its own risk) and invested over EUR 200 million in venture capital funds.

More information on the EIF and its transactions in 1999 can be found in EIF's Annual Report, which is available by the EIF. Since 1997, the EIB has promoted the growth of innovative and job-creating SMEs under its Amsterdam Special Action Programme (ASAP). To date, Bank financing approved under this heading for some fifty venture capital fund operations throughout the EU has totalled more than EUR 1.2 billion. The new Board of Directors voted in at the EIF's General Meeting on 19 June 2000 is composed as follows: