The European Investment Bank is seeking to end a ten year investment gap in Israel.

The EIB is the investment arm of the European Union and its vice president Philippe de Fontaine Vive Curtaz recently met with acting Israeli Finance Minister Ehud Olmert to discuss ways that Europe can invest in Israel.

The intended investment will be in the context of the Barcelona Process, which seeks closer ties between the European Union and 12 non-European nations around the Mediterranean basin, of which Israel is one.

Ten year hiatus ending

The EIB had ceased all investment in Israel in 1995 to express European disappointment with Israeli policy both economically and politically.

The official reason at given for the cessation in investment was that Israel’s per capita income exceeded EIB criteria and that the government would not guarantee the investments, although the Europeans continued with Palestinian investments.

Javier Solana, European Union High Representative for the Common Foreign and Security Policy, hinted at such moves when he visited the region recently.

Talking about the disengagement and its momentum on the stalled Peace Process, "The European Union is supporting with more means and additional resources the process in the same three directions in which it is working now: political, economic and security."

Curtaz was in Israel recently to implement Solana vision and the European commitment to helping both Israel and the Palestinians. The Europeans are especially interested in investing in infrastructure, transport and energy.

EIB expresses interest

According to Ministry sources, the EIB expressed its interest to participate in the funding of the Tel Aviv light rail project, the Jezreel Valley rail line, and transportation projects linking Israel with neighboring countries.

Until the cessation of investment in Israel the project that received the largest funding from the EIB was the Nahal Soreq sewage project, which received an investment totaling $300 million (around 220 million euros).

Two-thirds of European assistance destined for Barcelona Process member states – or roughly $2.2 billion (around 1.7 billion euros) annually – passes through a special department within EIB that handles funding for projects around the Mediterranean. Founded by the Treaty of Rome in 1957 the EIB acts as the instrument of European finance which the European Union seeks to use the bank as a way of influencing policy both at home and abroad.