European Investment Bank ‘must reform’

18 Jun 18

The European Investment Bank must stop investing in fossil fuels and boost its support for sustainable energy, and prioritise human rights, a group of European NGOs have urged.

The bank must undergo “fundamental reform and reconsider its investment focus” to “address structural problems” linked both to its business model and practices, said a to European finance ministers, who will meet in Luxembourg on Friday, signed by 21 NGOs.

The finance ministers will meet in their capacity as governors of the EIB for their annual meeting, which also marks the 60th anniversary of the European bank.

The letter said: “In order to maximise the positive impact of the bank’s operations on the sustainable development of the EU, a more rigorous investment selection prioritising quality over quantity appears necessary.

“While EU public finance will be key for the EU to achieve the Sustainable Development Goals, business as usual is no longer an option.”

It listed nine key steps the bank should take, including aligning its policies and investments with the Paris Agreement, cease the support for fossil fuels, enhance transparency and public participation, and make the protection and promotion of human rights a priority.

Bankwatch Network, an umbrella group for environmental and human rights organisation in central and eastern Europe, said in a statement: “Now, we urge our finance ministers to make the 60th anniversary of the world’s largest lender a turning point that would put Europe on a truly sustainable path with the public interest at its heart.”

The letter also said that in light of recent tax scandals, the EIB should adopt a “responsible taxation policy” to ensure it does not finance clients involved in tax avoidance and evasion schemes.

It also called for the end of financing of public private partnerships. The NGOs claimed that some projects turned out to be “financial fiascos for national debts as well as citizens”, such as those in Spain and Greece identified by the European Court of Auditors earlier this year.

The European auditors found that EU public private partnerships are not economically viable and only have limited benefits, resulting in billions of euros being inefficiently spent.

These partnerships, co-financed by the European bloc, have been found to suffer from widespread shortcomings and offer limited benefits, a report by the European Court of Auditors said. 

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