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MEPs Delay Tackling EIB Problems

Mar 17 2004

An international NGO coalition today welcomed the European Parliament's Economic and Monetary Affairs Committee (EMAC) decision to not reject a highly critical report [1] on the European Investment Bank (EIB), the EU's secretive house bank. But NGOs are concerned that the report will be completely watered down in the discussions to come.

The EIB is the world's largest international finance institution, lending over 40 billion EUROs a year in loans within Europe and Internationally. It has been the subject of significant debate due to its ambiguous accountability to the European Union, lack of transparency and investments in some of the most socially and environmentally controversial projects in recent years [2].

The author of the EMAC annual report, Spanish MEP Monica Ridruejo, said she was unhappy with the way EMAC colleagues approached the issue. Many seemed to have not even read the report. In her speech she emphasised that the European Parliament is responsible for ensuring improved corporate governance within the EIB and pointed out that should it neglect this responsibility both the Parliament and the European Commission would be discredited.

"It is not the responsibility of the European Parliament to agree with the EIB on the report," Ms. Ridruejo concluded. "This makes a fiction of the Parliament's supervisory role."

CEE Bankwatch Network/Friends of the Earth International campaigner Magda Stoczkiewicz said:

"The EIB does not live up to the standards which befit a public financial institution and needs to change. We believe that the European Parliament has an important role to play in stimulating reform within the EIB and therefore we are calling for thorough discussion of the issues mentioned in Ms. Ridruejo's report."

Before the EMAC meeting the bank acknowledged many of the issues raised in the report but denied there was a need for urgent reforms.

Friends of the Earth International Finance Institutions Campaigner Hannah Ellis said:

"This report should trigger real debate as to how the EIB can be reformed to ensure tax payers' money is invested sustainably. The EIB is currently completely unaccountable to the European Union, acting like a private bank, but spending public money."

Notes

[1] Criticisms include:

• the EIB's weak corporate governance structure,
• the EIB's lack of transparency and unwillingness to disclose information
• it's lack of accountability due to its unclear status as both an EU institution and a bank
• its lack of procedures and capacity to thoroughly assess and monitor hugely expensive projects both before and after it agrees to finance them.

A copy of Monica Ridruejo's report is available on request.

[2] Such as the Chad-Cameroon Oil Pipeline, the Bolivia-Brazil Gas Pipeline and the Sepon Copper Mine in Laos.

More information on the NGO EIB campaign is available here:
www.bankwatch.org/issues/eib/meib.html

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