EU finance ministers shelving Euro-Mediterranean bank proposal

Last night, European Union finance ministers were giving a sceptical reception to proposals that a new Euro-Mediterranean bank be established to finance development projects in countries of the region.
The ministers were expected to be shelving the idea yesterday at their monthly meeting, as Spain appeared to be the only EU country strongly in favour of the development-assistance initiative.
In lieu of the Euro-Mediterranean bank concept, the gathering of finance ministers was expected to promote the creation of a unit within the European Investment Bank, as the most cost-effective way of promoting growth in the Mediterranean basin.
Additionally, a new ‘non-financing institution’ could be established as a forum for the countries and agencies involved.
The EU head office last month proposed the Euro-Med bank be made a subsidiary of the Luxembourg-based EIB, the EU's agency for long-term development financing.
However, opponents had contended that a subsidiary would effectively constitute a new bank with its own shareholders, and most EU countries are apparently not convinced that one is needed.
The finance ministers are expected to send their opinion on the matter to the 15 EU leaders for a mid-March summit meeting in Barcelona.
The European Union has gone to lengths to develop a special relationship with Malta’s Mediterranean neighbours - Algeria, Cyprus, Egypt, Israel, Jordan, Lebanon, Morocco, the Palestinians, Syria, Tunisia and Turkey. To this end, it has pledged billions of euros in aid, but the distribution of funds has been complicated by closed economies, incompatible banking sectors and the violence between Israel and the Palestinians.
The ministers were also putting together a position paper on labour and financial market reforms for the economic summit on 15 and 16 March.