The borrowing policy of the European Economic Community (EEC)

Unlike the ECSC, the Treaty establishing the EEC did not empower the Commission to borrow funds from financial markets. However, specific and temporary instruments were created, empowering the institution to raise debt:

• the Community Loan Mechanism

→ Publication: Tosolini, M. (2024), ‘The First Oil Shock and the European Financial Assistance’, Economie & Institutions, 34-35, 27p.

Following the economic consequences of the first oil shock, the EEC Commission and its Member States agreed to implement a financial assistance to member states. Through the Community Loan Mechanism, the EEC Commission was empowered to borrow from the financial markets in order to grant loans to member states facing balance of payments deficits due to the oil shock. In this article, you can find here every borrowing operation made by the Commission for the CLM between 1976 and 1993.

Between 1976 and 1993, the EEC Commission borrowed up to 16 billion ECU (the equivalent of 21.45 billion US dollars) through 31 borrowing contracts.

If you want to use these elements, please cite the article.

• The New Community Instrument

The EEC member states agreed in 1978 to implement a second EEC borrowing instrument, named the ‘New Community Instrument’. It empowered the Commission to borrow from the financial markets in order to grant loans to companies. This was a mechanism to support the investment in the Community.