MEPs ditch ring fencing for energy savings but demand more democratic oversight over the European Fund for Strategic Investments (EFSI) that has been setup to implement Commission President Juncker’s economic recovery plan.

Today’s vote in the Parliament’s ECON and BUDG committees follows a battle between political groups waged after last Thursday’s decision from the ITRE committee to ring fence €5 billion of investments guarantees under the EFSI for energy savings measures. The European People’s Party (EPP) – the biggest faction in the Parliament – pulled all the strings at its disposal to prevent this amendment from passing. The competence of the ITRE Committee was called into question and moved instead to the ECON committee, and EPP parliamentarians were even pressured by their national governments to remove the amendment.

The removal of the ring fencing and important references to the EU’s long term energy and climate targets for 2030 and 2050 means that the EFSI will lack much-needed strategic – and sustainable - guidance.

Nevertheless, MEPs did take important steps forward regarding democratic oversight and transparency of the fund, which had been so far largely absent and are crucial for the fund to be effective. Concrete amendments include:

  • The Parliament will have to approve the agreement between the European Commission and the European Investment Bank about the setup of the EFSI implementation rules.
  • The Parliament will play a bigger role in the selection of the EFSI’s Investment Committee, the experts who will decide on the allocation of EU guarantee to projects.
  • The European Court of Auditors will finally scrutinise the activities of the EIB and will brief the Parliament about its findings.
  • To avoid fraud and tax evasion, the EIB will be required to disclose the beneficial ownership of all the direct and indirect beneficiaries of its investments according to the EU Anti-Money Laundering Directive

Xavier Sol, Counter Balance Director says:

“MEPs refused the backroom deal between the Commission and the EIB about the setup of the fund and the projects initially proposed for funding. With the expansion of the competences of the Court of Auditors and the requirements on beneficial ownership, the amendments will improve the transparency and the quality of the projects to be financed. These are important steps that we’ve called for from the beginning.”

Markus Trilling, EU Policy officer for Bankwatch, says:

“The silver lining in this climate sell-out is that now more light is shining on a big pot of public money that needs to be invested in the public interest. The Commission must now propose clear investment guidelines and exclude dirty energy and infrastructure projects so as not to jeopardise the EU’s climate and nature protection ambitions.”