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Small business 'backbone' of Europe, says banking chief

From Juliet Mann, CNN
updated 1:19 PM EST, Thu March 1, 2012
STORY HIGHLIGHTS
  • Werner Hoyer says the EIB will focus on small, medium enterprises in 2012
  • Hoyer says SMEs are the backbone of growth, innovation and employment
  • Last year the bank provided €13 billion of finance to small, medium enterprises

(CNN) -- The head of the European Investment Bank (EIB) says small and medium enterprises are the "backbone" of growth in Europe.

EIB president Werner Hoyer told CNN that the EU's financing institution, the EIB, will this year focus on small and medium enterprises (SMEs).

"SMEs are the backbone of growth, innovation and employment in Europe," he said. Hoyer, who took over as EIB president earlier this year, says the bank provided €13 billion of finance to SMEs last year and it intends to do the same in 2012.

The EIB invests in businesses and projects throughout the continent and across the world, including Africa and Asia. The institution's shareholders are the 27 member states of the EU, with its board of governors made up of national finance ministers.

Hoyer described the EIB's role as "Lending, blending and advising. That means we lend money for long-term investments, investments which could otherwise be financed only under big difficulties because of interest rates or the length of a loan."

Hoyer says the EIB is needed in struggling economies, adding that it had record investments in Greek SMEs last year. "One should remind oneself that the production of new technologies of innovation is in very many cases linked to small and medium sized companies," he said.

But Hoyer says the EIB is also investing in big projects in stronger economies, such as wind farms in the North Sea, because it's important for the institution in maintaining its AAA rating.

"Our investors look very closely at what we are doing -- what is the quality of the loan book, what is the quality of the credits we give out?" Hoyer said.

While it is one of the biggest lenders in the world, the EIB is also one of the biggest borrowers. Last year it borrowed €76 billion. "So far we enjoy the confidence and the trust of the markets so that it is possible to raise 76 billion," said Hoyer. "I hope we can again in 2012."

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