The EIB turns over a new leaf: Effective aid, no oil, green transport the new strategy of the EU housebank
Today, 3rd JUne 2008, in the presence of the finance ministries of the EU Member States, the European Investment Bank will launch a radical new strategy to celebrate its 50th anniversary, aiming to challenge climate change and to achieve the Millennium Development Goals.
Anders Lustgarten, newly elected head of policy at the EIB, told the Luxemburger Whal that the bank has developed a completely new set of policies aimed at “genuine pro-poor development, not the stuff we do to look good in the newspapers while the bulk of our money goes to big business.”
“Fifty years of subsidies to big international western corporations is enough. It’s time for a profound reform of the bank,” Mr Lustgarten said. “We have to get out of fossil fuels right now, as the World Bank’s own review of the extractive industries suggested, and to design a new lending framework that will really help alleviate poverty.”
“We took this opportunity to look at what we do after fifty years and we collectively said: ‘Wait a minute. Can giving piles of taxpayers’ cash to enormously wealthy corporations to dig mines and oil wells and keep almost all the profits, while leaving local communities to clean up the mess, really be the best way to spend our time?’ Yeah, it might look good on the balance sheets, ‘Somebody’s making money and a rising tide must float all boats, blah blah blah’, but there’s gotta be a more intelligent way. Jesus, even George Soros doesn’t believe in free markets these days.”
The EIB lends more than EUR 50 billion worldwide annually and almost 13% of its overall portfolio goes outside the EU. The main projects financed in the south consist of large infrastructure and extraction of natural resources for export. Most of these projects cause the degradation of natural habitats and have major negative impacts on local communities, instead of alleviating poverty and offering development opportunities. The renewed portfolio of the bank will promote local development, local markets and renewable energies, in order to encourage the participation of local communities in decision-making processes and ensure that money will stay in the south.
“The time for change has arrived,” added Anne-Sophie Simpere, French Vice-president of the Bank. “The EIB wants to go beyond the moratorium on financing fossil fuel projects demanded by the European Parliament last November to allocate the vast bulk of its energy portfolio to green energy and energy efficiency.” The Vice-President said also that in order to challenge climate change, a deep revision of transport policy is needed in favour of zero-impact transport.
European civil society, which has spent a decade pressing the EIB for responsible and sustainable lending, welcomed this historic change with a mixture of joy and confusion.