EU bank emerges from the shadows: EIB meets with civil society

Traumatised by voter rejection in a series of referenda, EU institutions are full of existential dread about the relevance of their mission to that mythical beast ‘the European citizen’.  Consequently ‘engaging with civil society’ has become the platitude du jour of eurocrats,  with even those working on the most arcane technical briefs pushed blinking into the sunlight of public scrutiny. 

And so it was with some trepidation that the TI-EU office attended the annual meeting of the European Investment Bank (EIB) with civil society organisations in Brussels last Tuesday (22 February). Soft soap and hard finance are not an enticing combination. How much does the EIB really matter in a world awash with corruption and the entire Middle East ablaze?

 The answer is: more than you might think. For a start, with a loan book of euro 72 Bn in 2010, the EIB is three times bigger than its better known sister organisation, the World Bank. True, much of that lending is in Europe, but a significant proportion – some 10% – goes to the rest of the world, including Egypt and the rest of the Middle East. Moreover, in 2010 it disbursed about euro 7Bn in loans to projects related to renewable energy and energy efficiency.

You can be sure that where issues of development and climate change are at stake, CSOs will be lining up with awkward questions. This meeting was no exception, with Vice President Philippe de Fontaine Vive and his team taking turns to answer queries about the EIB’s role in lending to dubious intermediary banks in Eastern Europe, supporting environmentally disastrous projects in Uganda, facilitating tax evasion in Zambia, and providing the funds for refitting coal and lignite power stations in Slovenia and Poland.

Our particular interest in the event hinged on 2 equally difficult questions: why had the EIB not signed up to a global cross-debarment initiative launched recently by other development banks, including the African and Asian Development Banks? And how does it ensure that the projects – including large public procurement projects-  it finances in countries with a low CPI  rankingare free from corruption? Its answers were only moderately reassuring. In the first case, it prefers to work within an EU debarment system that is not yet operational; in the second case, it relies to large degree on OLAF and other institutions to deal with cases of fraud.

In fairness to the EIB, its difficulties in monitoring the impacts of its operations are hampered by the lack of staff (one-tenth of that of the World Bank) and the fact that a certain amount of policy incoherence is inherited from the members of its governing board – finance ministers from the 27 EU member states. Even its most ardent critics – and a number were present – agree that the Bank has significantly raised its game in terms of assessing its projects on sustainable development  criteria. The bank plans to go even further and develop a set of human rights indicators that can be integrated into its appraisals. Although there may be a long way to go, it’s at least heading in the right direction.

Carl Dolan, EU Policy Officer, Transparency International Liaison Office to the EU