First overhaul the investment bank for a greener EU

In a few weeks, as European citizens we will be called to elect our new representatives at the European Parliament.

This democratic choice will be essential to make sure they push on our behalf to shape the kind of Europe we want to live in. And an improved European Investment Bank (EIB) should be part of their scope.

But why is focusing on the EIB so important now, and what role could this mainly unknown giant bank play in the just transition our society so badly needs?

While Brexit unfolds, far-right forces are likely to gain increasing ground in the next European Parliament. In parallel, the climate outcry from the youth all over the world cannot be ignored any longer.

The European Union thus finds itself is at a crossroads: listening to the citizens and getting closer to them, or barricading itself in an ivory tower doomed to be corroded at its foundation by the unbridgeable distance from its own community.

In this context it will be crucial to show that the EIB – the EU’s bank, the ‘financial arm’ of the Union – joins forces with the rest of the EU institutions to face the future in the public interest.

After 60 years of silent activity from its Luxembourg headquarters, the EIB needs to open up and become a more accessible, democratic institution.

Over the last decade, the bank got increasingly under the spotlight especially when it took on the implementation of the ‘Juncker investment plan’.

Also thanks to the joint pressure of civil society organisations, the EIB has taken small steps to respond to the impact of its projects on local communities, from slightly improving its transparency practices to getting out of direct support to harmful coal and mining projects.

But if the bank is to reflect the radical changes that are needed for the transformation of the European economy and society towards a sustainable path, what is necessary is rather a genuine overhaul.

We condensed the key steps for such fundamental reform in a new manifesto addressed to the members of the future parliament, calling them to prioritise the scrutiny over the EIB in their future mandate.

With the upcoming elections, the effort to reclaim democratic oversight on how the money of EU taxpayers is spent by the bank of the Union is indeed the kind of signal that EU citizens need to regain trust in their representatives in Brussels.

Many say that a ‘Green New Deal for Europe’ becomes more and more urgent to restructure our economy in the face of the climate challenge and of the big social inequality gap that contributed to turn frustrated citizens towards populistic, far-right extremes.

And most scenarios for such Green New Deal or the creation of a European Climate Bank – as pushed by the French president Emmanuel Macron – make the EIB a central player to roll-out climate-friendly investments.

But to make this happen, business as usual can no longer be an option at the EIB.

Showing its serious climate commitment would be an essential step in this direction.

As it becomes clearer every day that in order to achieve full decarbonisation by 2050 huge investments will be needed, the bank of the EU cannot afford to use its precious resources to still finance climate-wrecking fossil fuel projects.

The bank’s upcoming new energy policy should guarantee its full alignment with the Paris Agreement, and rule a shift of funds from fossil fuels to energy efficiency and small-scale renewable projects.

In parallel, public participation in the policy-making of the bank should be strengthened, both for what concerns its governance and external oversight, and the involvement of affected citizens.

Its Board of Directors for example – the one approving the bank’s loans – is not involved enough in the critical assessment of the funded projects and is often kept in the dark about the controversial aspects related to them.

And to date, the European Parliament has had very limited competences to steer change at the EIB.

Solid accountability to the citizens and communities impacted by its operations should then be another irrevocable pillar of the EU bank’s operations.

Meaningful citizens’ consultations, together with a stronger due diligence on human rights need to become a priority for the EIB.

At the same time, the bank needs to adopt a stricter attitude towards fraud and corruption. A series of investments in projects under corruption investigations cast doubt over the Bank’s practices in this regard.

The recent Dieselgate scandal shows that the EIB needs to improve its monitoring and due diligence for all the projects it supports, especially when public support is granted to the private sector.

Restoring trust in the potential of EU institutions – including the EIB – to lead the way towards a more sustainable future is a complex mission and can’t be done overnight.

But with efforts at different levels – from the European Commission and citizens’ representatives at the European parliament, to the governance of the bank itself – positive change can be achieved.

It’s in everyone’s interest.