Wednesday

20th Nov 2019

Opinion

First overhaul the investment bank for a greener EU

  • A new 'Green New Deal' for Europe becomes more and more urgent to restructure our economy in the face of the climate challenge (Photo: Matt Tempest)

In a few weeks, as European citizens we will be called to elect our new representatives at the European Parliament.

This democratic choice will be essential to make sure they push on our behalf to shape the kind of Europe we want to live in. And an improved European Investment Bank (EIB) should be part of their scope.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 20 year's of archives. 30-day free trial.

... or join as a group

But why is focusing on the EIB so important now, and what role could this mainly unknown giant bank play in the just transition our society so badly needs?

While Brexit unfolds, far-right forces are likely to gain increasing ground in the next European parliament. In parallel, the climate outcry from the youth all over the world cannot be ignored any longer.

The European Union thus finds itself at a crossroads: listening to the citizens and getting closer to them, or barricading itself in an ivory tower doomed to be corroded at its foundation by the unbridgeable distance from its own community.

In this context it will be crucial to show that the EIB – the EU's bank, the 'financial arm' of the Union – joins forces with the rest of the EU institutions to face the future in the public interest.

After 60 years of silent activity from its Luxembourg headquarters, the EIB needs to open up and become a more accessible, democratic institution.

Over the last decade, the bank got increasingly under the spotlight especially when it took on the implementation of the 'Juncker investment plan'.

Gas and fossil fuels

Also thanks to the joint pressure of civil society organisations, the EIB has taken small steps to respond to the impact of its projects on local communities, from slightly improving its transparency practices to get out of direct support to harmful coal and mining projects.

But if the bank is to reflect the radical changes that are needed for the transformation of the European economy and society towards a sustainable path, what is necessary is rather a genuine overhaul.

We condensed the key steps for such fundamental reform in a new manifesto addressed to the members of the future parliament, calling them to prioritise the scrutiny over the EIB in their future mandate.

With the upcoming elections, the effort to reclaim democratic oversight on how the money of EU taxpayers is spent by the bank of the Union is indeed the kind of signal that EU citizens need to regain trust in their representatives in Brussels.

Many say that a 'Green New Deal for Europe' becomes more and more urgent to restructure our economy in the face of the climate challenge and of the big social inequality gap that contributed to turn frustrated citizens towards populistic, far-right extremes.

And most scenarios for such Green New Deal or the creation of a European Climate Bank - as pushed by the French president Emmanuel Macron - make the EIB a central player to roll-out climate-friendly investments.

But to make this happen, business as usual can no longer be an option at the EIB.

Showing its serious climate commitment would be an essential step in this direction.

As it becomes clearer every day that in order to achieve full decarbonisation by 2050 huge investments will be needed, the bank of the EU cannot afford to use its precious resources to still finance climate-wrecking fossil fuel projects.

The bank's upcoming new energy policy should guarantee its full alignment with the Paris Agreement, and rule a shift of funds from fossil fuels to energy efficiency and small-scale renewable projects.

In parallel, public participation in the policy-making of the bank should be strengthened, both for what concerns its governance and external oversight, and the involvement of affected citizens.

Its Board of Directors for example – the one approving the bank's loans – is not involved enough in the critical assessment of the funded projects and is often kept in the dark about the controversial aspects related to them.

And to date, the European Parliament has had very limited competences to steer change at the EIB.

Solid accountability to the citizens and communities impacted by its operations should then be another irrevocable pillar of the EU bank's operations.

Meaningful citizens' consultations, together with a stronger due diligence on human rights need to become a priority for the EIB.

At the same time, the bank needs to adopt a stricter attitude towards fraud and corruption. A series of investments in projects under corruption investigations cast doubt over the Bank's practices in this regard.

The recent Dieselgate scandal shows that the EIB needs to improve its monitoring and due diligence for all the projects it supports, especially when public support is granted to the private sector.

Restoring trust in the potential of EU institutions – including the EIB - to lead the way towards a more sustainable future is a complex mission and can't be done overnight.

But with efforts at different levels – from the European Commission and citizens' representatives at the European parliament, to the governance of the bank itself – positive change can be achieved.

It's in everyone's interest.

Author bio

Adriana Paradiso is communications coordinator at Counter Balance.

Disclaimer

The views expressed in this opinion piece are the author's, not those of EUobserver.

Exclusive

EIB 'maladministration' verdict over VW fraud report

EUobserver should have been granted access to a fraud investigation into a €400m EU loan to Volkswagen Group (VW), and recommendations on how to avoid future misuse, the European Ombudsman has concluded.

EIB 'more sensitive' to fraud after Dieselgate

The president of the European Investment Bank, Werner Hoyer, said the bank had high standards - but did not explain why an anti-fraud report on a loan to Volkswagen was being kept secret.

EIB silent on report into 'fraudulent' VW loan

European Investment Bank vice-president Taylor tells EUobserver the fraud investigation into a €400 million EIB loan to Volkswagen had 'considerable ramifications', but didn't want to explain why the report was kept secret.

EU banks more vulnerable to shocks than feared

Eurozone banks, such as Deutsche Bank, might be much more vulnerable to a repeat of the 2008 financial crisis than EU "stress-tests" have said, according to a new audit.

EU investment bank 'wide open to abuse by fraudsters'

Fundamental reforms are needed if the EIB is to become more accountable, democratic and transparent. Establishing a firm grasp on corruption to ensure that public money no longer feeds corrupt systems is a vital first step.

News in Brief

  1. Hungary, Poland block EU conclusions on rule of law
  2. France: wide EU backing for enlargement change
  3. EU Council calls for policy action to protect marine life
  4. ECJ: Poland's judicial independence in doubt
  5. Suspected 'middleman' in Caruana Galizia case arrested
  6. European populists more favourable to Russia
  7. Hungary's new commissioner approved by MEPs
  8. Balkan coal power plants fail to meet emissions targets

'A game of roulette' - life as a journalist now in Turkey

Turkey has more journalists behind bars than any other country in the world. The authorities seem to equate journalism with terrorism: everyone has the right to express themselves, but, in their eyes, legitimate journalism is a threat to security.

Stakeholders' Highlights

  1. Nordic Council of MinistersEarmarked paternity leave – an effective way to change norms
  2. Nordic Council of MinistersNordic Climate Action Weeks in December
  3. UNESDAUNESDA welcomes Nicholas Hodac as new Director General
  4. Nordic Council of MinistersBrussels welcomes Nordic culture
  5. UNESDAUNESDA appoints Nicholas Hodac as Director General
  6. UNESDASoft drinks industry co-signs Circular Plastics Alliance Declaration
  7. FEANIEngineers Europe Advisory Group: Building the engineers of the future
  8. Nordic Council of MinistersNew programme studies infectious diseases and antibiotic resistance
  9. UNESDAUNESDA reduces added sugars 11.9% between 2015-2017
  10. International Partnership for Human RightsEU-Uzbekistan Human Rights Dialogue: EU to raise key fundamental rights issues
  11. Nordic Council of MinistersNo evidence that social media are harmful to young people
  12. Nordic Council of MinistersCanada to host the joint Nordic cultural initiative 2021

Stakeholders' Highlights

  1. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  2. Nordic Council of MinistersEducation gets refugees into work
  3. Counter BalanceSign the petition to help reform the EU’s Bank
  4. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  5. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  6. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  7. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat
  8. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North
  9. Nordic Council of MinistersLeading Nordic candidates go head-to-head in EU election debate
  10. Nordic Council of MinistersNew Secretary General: Nordic co-operation must benefit everybody
  11. Platform for Peace and JusticeMEP Kati Piri: “Our red line on Turkey has been crossed”
  12. UNICEF2018 deadliest year yet for children in Syria as war enters 9th year

Join EUobserver

Support quality EU news

Join us