Maystadt pledges greater openness at EIF

Date: 20/07/2000

By Renée Cordes

EUROPEAN Investment Bank President Philippe Maystadt is promising to extend reforms aimed at making the activities of the EU's long-term lending arm more transparent to the revamped European Investment Fund which he now heads as well.

The EIB, which is owned by EU member states, provides long-term investment finance for a wide range of infrastructure projects such as new roads and power stations. In recent years, the institution has put more resources into internal and external audits in response to mounting calls from non-governmental organisations (NGOs) for greater openness.

In addition to being scrutinised by an internal audit committee which reports to the board of governors, the EIB opens its books to an outside accounting firm chosen via a call for tender. It has also agreed to undergo regular audits by the European Court of Auditors under an accord signed last year by the bank, the Court and the European Commission.

"The bank must be at the forefront of best practices," Maystadt told the European Parliament's budgetary control committee last week, stressing that the search for ways to assess the quality and quantity of projects which receive funding from the institution would continue.

Maystadt is now planning to introduce similar changes at at the EIF, a joint venture between the EIB, the EU (represented by the Commission), and private and public financial institutions from the 15 member states. He told MEPs last week that he had written to the Court of Auditors proposing an accord along the lines of that reached between the Court, Commission and EIB which would also oblige the EIF to be audited regularly by the Court. "In the near future it should be possible to strike an agreement," he said.

But Maystadt warned that, as with the EIB, there would be limits on what kind of information the EIF could provide to outside auditors, as some data could damage the fund's ability to borrow money on the international capital markets. This prompted criticism from some NGOs and MEPs that the institution was taking a half-hearted approach to increasing transparency. "I wonder what it is that you are afraid of telling the auditors and us," said Danish MEP Mogens Camry of the Union for Europe of the Nations Group.

The move towards greater openness comes in the face of mounting criticism from some interest groups that the lending institutions are not accountable for their actions. Earlier this year, a group of NGOs criticised the EIB for failing to meet environmental and public accountability standards and called for the bank to be reformed.

CEE Bankwatch, which monitors the activities of international financial institutions, argues that the bank operates "largely exempt from the overall policy direction of the EU" and that it often disregards environmental concerns when deciding to allocate funds to projects.

European Investment Bank president Philippe Maystadt is promising to extend reforms aimed at making the activities of the EU's long-term lending arm more transparent to the revamped European Investment Fund which he now heads as well.