The European Investment Bank (EIB) found itself in the spotlight during this week’s debates in the European Parliament. MEPs were called to give direction to the EU house bank’s development role through the amendment of its 2014-2020 external lending mandate.
Today the European Parliament voted in favour of an expanded mandate for the operations of the EIB outside Europe (the so-called “ELM”). This vote finalises the review of the ELM, which started back in 2016.
Over the last decade, the EIB’s contribution to EU external action has been steadily increasing, and this renewed mandate goes in the same direction. It will grant extra guarantees to support the EIB’s operations overseas and add “migration” as a new priority, thus investing the bank with a prominent role in the EU’s response to the so-called “refugee crisis”.
For this purpose, the amended mandate includes the new EIB “Economic Resilience Initiative”, aimed at mobilising billions of euros in private investments in the private and public sectors in western Balkans, the Middle East and north Africa over the next three years. This initiative is designed to tackle the root causes of both migration and forced displacement, as war and persecution have led people to embark on long, dangerous trips to reach Europe.
This revised mandate also seeks to strengthen the standards and transparency of the EIB. For example, according to the new guidelines, the bank will have to disclose more information on the projects it supports and make the evaluation sheets used to assess the expected impact of its projects available to the public.
In addition, on the taxation front, the EIB is asked to reinforce its capacity to fight tax evasion and avoidance in its projects through the revision of its tax havens policy. In parallel, the European Commission will also be required to report annually on how this policy is implemented. Furthermore, the Parliament stressed the need for the EIB to better assess the environmental, gender and social impacts of its projects, and to strengthen its Human Rights due diligence.
These targeted amendments vindicate Counter Balance and Bankwatch‘s positions and concerns related to EIB operations outside of the EU, which have been summarised in the recent "Going Abroad“ report. Taking a closer look at the projects financed by the EIB outside Europe, the report found out a dismal track record on a range of issues from transparency to human rights.
Xavier Sol, director of Counter Balance, said: „This review process has led to mixed results. On the one hand, the EIB will be required to increase transparency at project level, clean up its act on tax havens and better streamline gender, environmental and social issues in the assessment of the projects it will finance. On the other hand, the reviewed mandate does not include measures to ensure thatthe increased guarantees awarded to the bank are matched by effective and fair implementation. And same goes for its newly-added priority – migration – where the bank’s added value remains unclear. The EIB is being asked to do more, but is it really asked to do better?“
Anna Roggenbuck, CEE Bankwatch Network policy officer, said: „The EIB’s external action will not benefit people living outside the EU as long as the bank continues to finance projects contributing to human rights violation and environmental destruction, such as the Southern Gas Corridor. The extension of the ELM does not require the bank to condition its loan to the respect of human rights, which means that the EU’s external action is missing the opportunity to make a real difference for people living in the countries covered by this mandate.“
NOTES FOR EDITORS
The External Lending Mandate (ELM) sets out the guidelines and priorities for the bank when lending outside of the EU. It determines the eligibility criteria for an EU guarantee for losses for loans outside the EU – except for ACP countries, where the bank operates under the Cotonou agreement. The ELM covers the period 2014-2020, and its mid-term review started in 2016 (see the legislative file).
This mandate is a binding legal file and it goes through the so-called co-decision procedure at EU level: on the basis of a proposal made by the European Commission, the European Parliament and the Council come to an agreement on the final text to be adopted.
For more information contact:
EIB Policy Officer, CEE Bankwatch Network
Mobile: +48 509970424 Office: +48 91 831 5392
Director, Counter Balance
+32 2 893 08 61