The role of the European Investment Bank (EIB) has been a marginal topic during the European election campaign – regrettable for a bank with such an impact on the European economy. Here are some good reasons why newly elected MEPs should pay attention to the EIB over the coming five years in office.
The EIB may not be the most famous of the EU institutions, but with annual investments amounting to 75 billion euro, it is certainly a crucial one for politicians with a master plan and vision for Europe. That money can be invested in strategic sectors across Europe to tackle issues such as unemployment, climate change or sustainable energy supply, to name just a few of the challenges Europe is facing.
The EU institutions have already called upon the “EU bank” to steer economic recovery through a capital increase in 2013 and by setting up new mechanisms to finance infrastructure projects, small and medium sized enterprises and tackle youth employment. However, although the bank’s impact has grown steadily over the years, democratic control over the EIB has lagged behind. Political guidance from an elected body is central if the EIB is to be an effective public bank operating in the public interest.
Over the last decade the bank has been more closely scrutinised by civil society organisations and the European Parliament, with some success. The bank has turned from an institution once believed to be accountable “solely to the financial markets”, to one that maintains an open dialogue with civil society, reports regularly to the Parliament, has adopted transparency and anti-corruption policies and has shifted its fossil fuel dominated energy portfolio to one that favours sustainable energy projects.
These are remarkable steps forward, in which the role of the Parliament was decisive. With resolutions calling for more transparency and a phasing out of fossil fuel lending, an open letter to demand a moratorium on loans to the extractive industry and better reporting to the Parliament pushed the EIB to enact reforms.
However, there remains much to be improved and we call on the new Parliament to scrutinise the bank’s operations more closely in order to tackle some key issues.
Ensuring the transparency of the EIB activities
When operating through intermediary financial institutions and complex financial mechanisms, the activities of the EIB are often difficult to trace and lacking in accountability. To date the EIB has not yet put into practice numerous calls from the European Parliament to step up its transparency when reaching out to SMEs through financial intermediaries.
Stepping up the sustainability of EIB operations
The previous Parliament focused largely on the amount being invested in Europe through the bank, and by doing so privileged quantity over the quality of its lending. However, positive environmental and social impacts of EIB lending should be at the core of the bank’s mission, especially when financing large infrastructure projects. In 2014, the EIB will for the first time develop a Climate Change Policy – a window of opportunity for the new Parliament to raise its voice and call for strict requirements and climate objectives.
Further democratisation of the “EU bank”
The next Parliament should encourage the opening of public consultation on key sectoral and horizontal policies of the EIB, such as its transparency or tax havens policy, and engage with those processes. Maximising democratic control over the EIB and its accountability to European citizens is absolutely crucial to ensuing it performs in the interest of all. And who is better placed to rebalance a democratic deficit than the newly elected European Parliament?