For years the European Parliament has struggled to properly oversee the European Investment Bank. In fact, even if the EIB is engaging in a more regular dialogue with the EP, the bank still largely ignores the recommendations of the European Parliament. With the new EU guarantee awarded for EIB operations in the framework of the European Fund for Strategic Investments (EFSI), there is a historical opportunity for the European Parliament to push for a more systematic oversight of the EIB.

The limited competences of the EP over the EIB

Since its creation in 1958, the EIB has operated in a relative anonymity from its headquarters in Luxembourg – hundreds of kilometer away from the political arenas of Brussels and Strasbourg. This coincided with the development of a “culture of secrecy” and a low political profile.

It is only since the late nineties that the European Parliament recognized the importance of the bank through annual resolutions in which the EP assesses the activities of the bank and alternates between fierce criticisms and attributing awards for the Bank’s support to EU policies.

But monitoring of the implementation of the calls made by the EP in its resolutions is lacking at the moment. The EP has been urging for instance the EIB to step up its transparency when lending to financial intermediaries [1], but to date such demand has not been seriously addressed by the bank. Among other non-binding demands ignored, the call for the bank to phase-out its support to fossil fuels [2] and to adopt a more ambitious taxation policy in order to get rid of investments through tax havens [3].

In parallel, the EIB has steadily been tasked with managing parts of the EU budget, especially for its operations outside the EU - its external mandate is covered by an EU guarantee and it also manages funds from the European Development Funds under the Investment Facility for ACP countries. Those various mandates have so far been the most direct way for the Parliament to scrutinize the operations of the bank, but they only cover less than 10% of the EIB’s lending portfolio.

After two capital increases in 2010 and 2012 which significantly increased the volume of its operation, the EIB is now about to be the cornerstone of the Juncker Plan via the management of the EFSI. This new visibility and enhanced macroeconomic role in Europe comes in contrast to the limited accountability of the bank towards the elected representatives of European citizens – the European Parliament.

The Juncker Plan, a turning point?

For the first time, through the use of the EU budget, the EP will have legal means to monitor the activities of the EIB within Europe. The regulation setting up the EFSI demands the EIB and the EC to clearly demonstrate to the European citizens and the Parliament how they are delivering and what is the added-value of the new instrument. On 14 October, the EP has for example approved the nomination of the Managing director and its Deputy director for the Investment Committee of the EFSI in charge of validating the use of EU guarantee for a given project. The regulation also calls for the European Court of Auditors to monitor the operations of the EIB under the EFSI – something it has never done in the past.

In addition, a resolution about the EIB operations adopted in April 2015 proposed to set up of a platform for dialogue between the EIB and the Parliament, similar to the quarterly monetary dialogue between the ECB and Parliament, in order to ensure increased parliamentary oversight of the EIB’s activities.

A key challenge for MEPs in the coming years will be to improve the continuity of its engagement towards the EIB. The European Parliament should use at best its new powers to make the bank a more open, accountable, transparent and sustainable institution.

[1] 2011/2186(INI), Annual Report 2010, Par 10 & 74, 2013/2131(INI), Annual Report 2012, Par. 60, 89, 90 & 92, 2014/2156(INI), Annual Report 2013, Par. 51 & 53
[2] 2014/2156(INI), Annual Report 2013, Par. 42
[3] 2012/2286(INI), Annual Report 2011, Par. 99, 2014/2156(INI), Annual Report 2013, Par. 53