Brussels - 12 September 2023
The next President of the European Investment Bank (EIB) must unleash the institution's firepower to make housing, energy, transport, care and social infrastructure accessible and affordable for a European public still enduring a cost of living crisis.
The EIB should use the changing of its Presidency to end its current obsession with new clean tech fixes under a technocratic and profit-driven agenda for change to sustain the status quo, and instead invest in bottom-up and dispersed social innovation. These innovations improve residual income for households, basic services and social infrastructure - all of which jointly determine foundational liveability. The cost of living crisis is depriving especially low and middle income households from these basic necessities to live a decent life.
Counter Balance’s new report, Things Have to Change, released today, details how this should be achieved ahead of an informal EU Finance Ministers meeting on 15-16 September where the selection of a new EIB President will be discussed.
Frank Vanaerschot, Director Counter Balance, said:
“The next EIB President must ensure that the bank’s miserly penny-pinching days are over. For too long, the EIB has bet public money on business-first investments, acting like a commercial bank rather than the public institution it is supposed to be.”
“The EIB is currently preoccupied with technocratic green growth, hoping it will magically create jobs and improve societal wellbeing with minimal intervention. For this reason, the bank is more likely to loan public money to a rich fossil fuel giant still burning oil and gas for a ‘green’ energy investment, over a less wealthy local authority which knows its population’s needs but lacks the resources to pitch a large project.”
“Ensuring that every household in Europe can access quality and affordable housing, energy, transport and healthcare would help build the political legitimacy needed to transition to a green society. However, continuing to leave millions of households unable to access these services would be a huge moral and strategic blunder.”
The EIB must change its modus operandi and finance household livability instead of supply-side measures which try to maintain economic growth in the hope it one day trickles down to the general public. This means investing in essential public services like housing, food and transport so households do not need to waste expense accessing them, and helping build parks, libraries and infrastructure which carries social benefits despite less immediate returns.
The EIB should also take on riskier projects with high social returns. The bank’s overly cautious lending currently makes its financial results similar to many large, privately owned retail banks in Europe.
Wider economic structures within Europe also need to change to allow loans for longer-term social investments to be repaid. For example, national and local taxation could be reinvented through a wealth tax. Europe also needs rent controls, subsidies or both on public and private housing as part of a larger struggle to ensure everybody has access to housing and to stop people's homes being turned into assets on the balance sheets of the super rich.
Frank Vanaerschot added:
“The bank must use its financial firepower to invest in projects with high societal benefits over what merely guarantees high returns. The next President has a responsibility towards the EIB’s ultimate owners - EU tax payers - to build a legacy of quality and affordable housing, utilities, transport, healthcare and social infrastructure to be enjoyed by everyone across Europe.”
For more information, please contact Frank Vanaerschot at email@example.com or on +32 (0) 2 893 08 61
Notes to editors
- The informal EU Finance Ministers meeting where the new identity of the new EIB president will be discussed will take place on 15-16 September in Santiago de Compostela, Spain. More information on the meeting can be found here.