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• The EIB has signed an €11.8 million EU grant to Bosnia and Herzegovina for the construction of the 6.9 km-long Tarčin-Ivan section of the motorway along the pan-European Corridor Vc.
• The grant comes from the Western Balkans Investment Framework (WBIF) Connectivity Agenda and complements a previously approved EIB loan worth €40.4 million.
• The project will improve regional connectivity and road safety and allow for faster social and economic integration of the Western Balkans and the European Union.

The European Investment Bank (EIB) has signed an €11.8 million EU grant with Bosnia and Herzegovina to finance the construction of the 6.9 km-long Tarčin-Ivan section of the pan-European Corridor Vc. The EU grant comes from the Western Balkans Investment Framework (WBIF) and complements an earlier EIB loan worth €40.4 million approved by the EU bank for the same section of the Corridor Vc. For the entire section including the 1 720 m long double-tube Tunnel Ivan, the European Union has provided a total of €23.3 million in grants in addition to financing provided by the EIB and the European Bank for Reconstruction and Development (EBRD), complementing funds provided by Bosnia and Herzegovina. This agreement marks another important step forward for EU assistance to the country in the construction of the Corridor Vc.

Corridor Vc is the most ambitious investment programme in Bosnia and Herzegovina to improve regional connectivity, shorten travel times and increase road safety along the route connecting the main economic and administrative centres in the country. In addition, Corridor Vc will contribute towards faster social and economic integration of the Western Balkans and the European Union.

EU Ambassador to Bosnia and Herzegovina Johann Sattler said: “The EU has allocated more than €200 million of grants under the Connectivity Agenda to help Bosnia and Herzegovina accelerate the construction of the Corridor Vc in the country. The construction works did not stop even during the coronavirus pandemic. The protective measures put in place in all active construction sites are a very positive sign as they mean retaining jobs in these difficult times. Large public investment programmes most importantly generate new jobs and acceleration of construction is more necessary than ever to mitigate the adverse impact of the pandemic.”

The grant agreement was signed by Bosnia and Herzegovina and the EIB on behalf of the European Union and will complement an EIB loan worth €40.4 million.

Head of EIB Lending Operations in Croatia, Slovenia and Western Balkans Matteo Rivellini said: “The EIB remains committed to the long-term, sustainable development of Bosnia and Herzegovina and we are proud of our role as one of the major investors in country’s road infrastructure. As motorways are drivers of economic and social development, this section will speed up integration of Bosnia and Herzegovina with the EU and help create new business opportunities throughout the region and with them jobs and income for the people. In times of economic uncertainty due to the COVID-19 pandemic, strategic investments like this are clear signals that the EU bank remains a reliable partner for the Western Balkans.”

“This project will bring Sarajevo and Mostar closer and shorten the travelling distance by connecting the M17 Road with Corridor Vc. In addition to faster and more comfortable travelling, this modern section will also give rise to new economic opportunities and improve environmental protection,” said Minister Vjekoslav Bevanda after signing the agreement.

More than 335 km of Corridor Vc runs through Bosnia and Herzegovina, connecting the port of Ploče in Croatia with Budapest. Thus far, 155 km have been completed or are currently being built. Recognising the need to support the country in this significant and expensive project, the European Union will facilitate construction of 11 mature projects on Corridor Vc. Under the Connectivity Agenda, the EU is also supporting construction of the Gradiška bridge and the rehabilitation of the Brčko Port.

The EU grant funds have been allocated through the Western Balkans Investment Framework (WBIF).

Western Balkans Investment Framework (WBIF) provides financing and technical assistance to strategic investments in the energy, environment, social, transport, and digital infrastructure sectors. It also supports private sector development initiatives.

Today the European Insurance and Occupational Pensions Authority (EIOPA) published its July 2020 Financial Stability Report of the (re)insurance and occupational pensions sectors in the European Economic Area.

During the last months, the Covid-19 outbreak further proved the importance of the Solvency II regulatory framework. The market-consistent and risk based approach helped insurers to better align capital to risk, build-up resilience and enhance the risk management practices, while the adjustments included for long-term guarantees allowed to partially mitigate market volatility caused by COVID-19.  As of year-end 2019 the insurance sector had a solid and comfortable capital buffer (median SCR ratio of 213%) which helped insurers to withstand the initial severe market shocks experienced with the Covid-19 crisis. However, a high level of uncertainty on the magnitude of economic disruption increases downside risks going forward. The COVID-19 has further intensified the preexisiting challenges posed by the prolonged low yield environment, a fundamental risk for both insurance and pension sectors.

Moreover, the shock has also increased credit risk, challenging the asset side valuations of insurers and their solvency positions. There is also a significant concern that the forthcoming recession will negatively affect corporate sector profitability, resulting in rating downgrades, increased defaults and unemployment. Finally, a high interconnectedness of insurers with banks could further support spill-overs of mentioned risks from the real sector to insurers and pension funds.

Strains to demand and insurers’ underwriting profitability might take some time to unfold in parallel with the deterioration of the macroeconomic environment. In addition, some insurers run the risk of becoming involved in lengthy and costly legal battles in relation to claims occurred as a consequence of the lock down measures. Finally, confinement measures resulted in working from home arrangements, which in turn increased cyber risk and further highlighted the importance of a reliable cyber risk insurance market. All these factors might lead to materialisation of the risks on insurers’ balance sheet with a substantial lag and high uncertainties.

In the reinsurance sector, catastrophe activity in 2019 was benign with global insured losses below the average of the last ten years, supporting the increase of 22 percentage points to 240%, in the solvency ratio as compared to the last quarter of 2018. Investment and underwriting profitability remained broadly unchanged in 2019, but considerable pressure is expected from Covid-19 shock.

Finally, the COVID-19 crisis has also taken its toll on the financial situation of the European occupational pension fund sector. Institutions for Occupational Retirement Provision may be subject to funding and liquidity concerns due to suspended or lowered contributions from sponsors and members. Sponsoring undertakings in heavily affected sectors by the COVID-19 pandemic are expected to be in significant financial distress putting members of such pension funds at risk of unemployment in the near future. Sponsoring undertakings’ financial difficulties to maintain contributions, or in the worst case, sponsoring undertaking’ insolvency may test national pension protection schemes.

Gabriel Bernardino, Chairman of EIOPA said: ‘There is no doubt that the economy will experience a deep and unprecedented recession. The high uncertainty on the recovery path needs to be captured by an appropriate forward-looking risk assessment. In this respect, different recovery scenarios should be captured in the design of next year’s European Union-wide insurance stress test’.

This Financial Stability Report also includes two thematic articles, focusing on i) The EU sustainable finance taxonomy from the perspective of the insurance and reinsurance sector and ii) The impact of EIOPA statement on insurers’ dividends: Evidence from equity market.

Download the Financial Stability Report – July 2020

• An initial 2 000 charging points will be rolled out to roads and public spaces before the end of the year.
• The project will avoid the emission of 57 000 tonnes of CO₂ a year.
• Green recovery: driving the electric vehicle industry and creation of almost 600 jobs during the implementation phase.

The European Investment Bank (EIB) and Endesa are joining forces to promote electric mobility in Spain. To this end, the EU bank will provide the Spanish company with €35 million in financing for the installation of electric charging stations across the entire country. The project, which will be implemented over the next four years, will make it possible to roll out a total of 8 500 charging points for hybrid or electric vehicles.

The first 2 000 charging points will be installed this year on the main motorway network and in Spain’s principal urban areas, with the aim of covering 15 000 km and towns and cities with over 35 000 residents. This will provide electric vehicle drivers with charging points every 100 km and charging infrastructure in the country’s main towns and cities. The remainder of the stations will be installed gradually over the next three years until 2023, reaching 8 500 publicly accessible charging points. All of these will be on roads or in public car parks with open access for drivers.  

The EIB financing will help to speed up the transition to electric mobility in Europe and to meet the goal of having 1 million charging points in the EU by 2025, as outlined in the European Commission’s European Green Deal. To achieve this, several studies indicate that Spain will need to expand its network of charging stations from the current 9 000 to more than 120 000.

The project will help to cut polluting road transport emissions and to meet the goals of the European Green Deal and Paris Agreement, which state that emissions produced by this kind of transport must fall by 90% by 2050. According the Bank’s estimates, once they have been installed, the new electric charging points will prevent the emission of 57 000 tonnes of CO₂ a year.

Together with the environmental benefits, these investments will drive the electric vehicle industry and have a positive impact on job creation at a critical time due to the COVID-19 economic crisis. In concrete terms, EIB studies indicate that the Endesa project will enable the creation of almost 600 jobs during the implementation phase and a further 40 permanent positions.

EIB Vice-President Emma Navarro, who is responsible for the Bank’s climate action and operations in Spain, said: “The decarbonisation of transport is key to meeting our goal of achieving climate neutrality by 2050. This is why we are happy to join forces with Endesa to promote investment in infrastructure facilitating the use of electric vehicles while also contributing to the recovery of the Spanish economy, at an extraordinarily difficult time due to COVID-19. As the EU climate bank, the EIB will lend its full support to Spain by financing investments helping it to overcome this crisis and move towards a low-carbon economy.”

For Endesa CEO José Bogas, “being supported by the EU climate bank guarantees the solidity of Endesa’s proposal to revitalise the country: the economy and the environment cannot be separated; economic growth must be sustainable. Consolidating Spain’s electric vehicle charging network while creating wealth and jobs and cutting emissions is a clear example of this vision.”

The EU climate bank

The EIB is the world’s largest multilateral provider of climate finance. Its goal is to be a leader in mobilising the finance needed to limit the average global temperature increase to 1.5°C compared to preindustrial levels in order to meet the Paris Agreement objectives. On 14 November 2019, the EIB Board of Directors approved its new climate objectives and the new energy lending policy. The Bank will gradually increase its financing for climate and environmental objectives up to 50% by 2025, with the goal of ensuring that the EIB Group mobilises at least €1 trillion in the critical decade between 2021 and 2030 to promote investments helping to meet these objectives. It also announced its intention to align all EIB Group activities with the Paris Agreement. To this end, the EIB will cease financing fossil fuel-based projects from late 2021.

“Wholesale constraints on our lives are easing as we better learn to live with COVID-19,” says FRA Director Michael O’Flaherty. “We must acknowledge how frontline workers, courts, national bodies, civil society worked tirelessly to promote and protect fundamental rights during the pandemic. This work should not stop here. We need to continue to build on their efforts in the ‘new normal’ to respect and advance fundamental rights for all.”

This fourth FRA Bulletin on the Coronavirus pandemic in the EU: fundamental rights implications looks at how EU Member States tackle the pandemic and the impact on fundamental rights:

1. States of emergency: Many governments continue to lift states of emergency or equivalent to manage the pandemic but they often extend or impose other crisis measures. Courts, national human rights bodies and civil society organisations continue to question the legality of fundamental rights restrictions.
2. Daily life: Although governments gradually eased restrictions, all EU governments maintain physical distancing measures. These include wearing of masks in some places and stay-at-home orders for COVID-19 sufferers.

As Member States reopen schools and plan for the next school year, various assessments underline how children from disadvantaged backgrounds lack equipment and support for distance learning.

With many people working again, studies point to the pandemic’s disproportionate impact on women when it comes to work-life balance and caring responsibilities.

Judicial systems also continue to return to normal. They tried to clear case backlogs through longer hours or more staff. Many still use video hearings for some cases.

Member States continue to ease temporary controls at their internal borders and restrict travel to the EU in line with EU recommendations.

3. Vulnerable groups: COVID-19 measures continue to affect some groups more.

Restrictions eased for older people and people with disabilities in institutions. But sometimes visiting guidelines are too complex or restrictions are over-implemented or disproportionate leading to greater stress and loneliness.

Some Member States run initiatives to counter the impact on Roma communities, such as educational programmes or access to information and healthcare.

Some also support victims of rising domestic violence, by opening new shelters, support networks and more funding to better protect victims.

4. Digital concerns: Many Member States work on contact-tracing apps and other technological tools, including the use of drones and other forms of surveillance to combat the pandemic. Data protection bodies continue to call for legal clarity on the use of such tools.

Governments continue to fight disinformation by enhancing transparency on virus statistics, creating dedicated platforms and media funding.

5. Racism: The pandemic is further stoking intolerance towards minorities. In several Member States, politicians reportedly used racist and xenophobic language. Some countries also reported racial profiling and disproportionate enforcement of COVID-19 related restrictions towards ethnic minority groups.

This report covers measures in place in the 27 EU Member States from 1 to 30 June 2020.