STUDENTS GET INSPIRED IN VIEW OF THE CONFERENCE
How can the European Investment Bank truly become Europe’s Climate Bank?
Laura GIL- BESADA, student Master in European Governance, University of Luxembourg
Out of the many exciting topics raised in the talk given by Mr Xavier Sol, an essential one is the EIB’s commitment to achieving a greener economy. As the largest multilateral lender in the world, the EIB holds no little sway in how funds are allocated and spent.
The EIB had pledged itself to mitigating climate change before von der Leyen’s
Commission presented the idea of transforming a part of the EIB into Europe’s Climate Bank. Therefore, the milestones the EIB had already achieved should not be discounted. Some of the highlights include pushing the Bank out of the coal businesses in 2013 and the commitment to achieving a Fossil Free EIB by the end of 2021 through its Energy Lending Project. It has also pledged one trillion euros by 2030 to climate-related projects and committed itself to the Paris Agreement and the European Green Deal. However, the
EIB must go further. The Bank’s financing of unsustainable infrastructure (such as transport projects) are proof that the EIB’s sectoral policies are not aligned with the Paris Agreement, and the Energy Lending Policy’s loopholes allow financing of gas projects.
Therefore, the EIB should take more significant steps to truly become a climate leader. To do so, the EU Member States should increase the EIB's capital so it can transform itself into the real financial pillar of the European Green Deal. Additionally, the EIB should hold fund-receivers accountable for where they spend the money. Due to the current coronavirus pandemic, the EIB has already released billions to fund different projects and pledged many more. However, even during such a trying time, the EIB’s loans should be allocated to projects which contribute to climate change mitigation and adaptation or, at least, that do not negatively affect climate change, such as high carbon infrastructures like airports and motorways. Moreover, cooperation with the EU Member States should increase during these times, so the economic recovery is a green one, alongside the indications by the National Energy and Climate Plans.
In summary, the need for a fast economic recovery cannot be more important than the need to avert a future climate-related catastrophe. The EIB should genuinely live up to its potential during these difficult times and become an inspiration for other banks and countries alike. Only if it does so can it become the EU Climate Bank.
Further to a presentation by Mr Xavier Sol, Counter Balance Director, Brussels to a group of Master in European Governance students of the University of Luxembourg, in May 2020.
The EIB: technocratic or political?
by Francesco Manti, student Master in European Governance, University of Luxembourg
In the last two decades, there has been a sort of hybridisation between politics and technocracy. A mixture between public and private, what Peter Crouch in his Post-Democracy would call private Keynesianism, as the tendency by the State to withdraw from activities of public interest (such as funds for education or research) to make room for private actors. Obviously, the EIB is a financial institution of the European Union that has as its objective the regional development and the under-developed countries’ one; but in order to answer to the question it is interesting to look at the investments, the projects and the composition of the Bank.
For what concerns the economic side, there is a strong emphasis on supporting (especially in ACP countries) the creation and growth of SMEs, with parameters that are in sharp contradiction with those listed by the European Commission and operating through loans and not funds given its role as a bank. In my opinion, it expresses a markedly neoliberal logic, arose impetuously during the Washington Consensus’ period. A vision, according to which, beyond the general lines on tariffs and investments, the private sector is seen as the main factor for structural cohesion not only limited in generating wealth and wellbeing, supporting the nascent national institutions.
Besides the technical nature, the political situation behind the EIB has to be tackled, with shareholders being the 28 Member States of the EU, based on their economic weight (GDP) within the European Union at the time of its accession. Conceptually similar to IMF, the shares’ division confers more power to the economically stronger States. Therefore, those projects follow a more coherent and interconnected policy with the investments of individual MSs, compared to Communitarian development projects.
Thus, the EIB shows a dual nature: technocratic by its means, political in the original intentions of its members.
Further to a visit of Master in European Governance students of the University of Luxembourg, at the European Investment Bank on 6th December 2018.