O'Flaherty's EIB role to be decided in June

The European Investment Bank was set up under the Treaty of Rome in 1958 to fund projects that further the objectives of the European Union.

A non-profit organisation, it is owned by the 15 member-states and as a result is able to borrow money at the best possible rates on the international money market. It then makes cheap finance available to eligible projects, which are defined as those furthering economic integration and cohesion, such as communications networks.

It has a board of governors made up of the finance ministers of the 15 members-states. Below them is another board of directors made up of 24 nominees of the members-states and one from the European Commission.

The bank is run by a management committee made up of seven vice-presidents and a president. Mr Hugh O'Flaherty will take up his post as vice-president in June. Based in Luxembourg, he will earn the same salary as an EU commissioner, approximately £147,000 (€186,000) a year. His term of office is four years. The vice-presidents are also members of the board of directors.

The four largest member-states, Germany, Italy, France and the UK, get to appoint one vice-president each. The other states are grouped together and rotate an appointment between them. Ireland is in a group with Denmark and Greece.

The only Irish appointee to the post until now was Prof Noel Whelan, who served from 1982 to 1988. Prof Whelan was seconded from the public service, where he was secretary of the Department of the Taoiseach under Mr Charles Haughey. He was succeeded by Mr Padraig O hUiginn.

The management committee deals with the day-to-day running of the banks and vets project and policy proposals before they are submitted to the board of directors for approval.

Each vice-president has specific areas of responsibility, including the activities of the bank in the country or group of countries that nominates them. Mr O'Flaherty's other responsibilities will be decided by the new president of the bank when he takes over in June. If the former Supreme Court judge is given the responsibilities of his predecessor, he will control regional development policy and project evaluation as well as lending in Albania, Cyprus, Malta, Turkey and the former Yugoslavia.

Last year the bank lent €31.8 (£25.1) billion. The vast bulk of the money, €27.8 billion, went to countries within the EU. An additional €2.4 billion was lent to countries applying to join the EU and €1.6 billion to other states. The loans included one of €95 million to the ESB for the construction of a new power station at Poolbeg in Dublin and almost €18 million in loans to two venture capital funds run by ICC and ACT. The funds are targeted at small and medium-size enterprises.

Yesterday the bank announced a €375 million loan to the Polish government to allow it to upgrade the country's roads network.