| Author (Person) | Fleming, Stewart |
|---|---|
| Series Title | European Voice |
| Series Details | Vol.12, No.5, 9.2.06 |
| Publication Date | 09/02/2006 |
| Content Type | News |
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By Stewart Fleming Date: 09/02/06 The European Investment Bank (EIB), the EU's long-term financing institution, is stepping up its lending to developing countries as part of the Union's efforts to increase its influence around the world. But its role in development, which some see as the creation of a European version of the World Bank, is facing growing criticism. Last year, in one of the largest single project loans it has made, the EIB put up EUR 500 million to help China finance the expansion of Beijing's airport. In 2000-04 the EIB had only advanced EUR 56m to China. EIB officials say that the loan to China was a significant new initiative and part of a policy which will see the bank steadily increase its lending to those developing countries that have a credit rating above the investment grade yardstick of Triple B. But questions are being raised by non-governmental agencies about how the EIB is approaching its role in developing countries. A joint report published this week (8 February) by four non-governmental organisations including Friends of the Earth International and CEE Bankwatch, says that "the EIB is a client-driven institution and this would have to change if the bank is to deliver development goals". The NGOs point out that under the Austrian presidency the EIB's external mandate is to be revised and it says that while this process is under way the EIB needs to "undertake profound and urgent changes if it is to deliver positive environmental outcomes and alleviate poverty". Their report says that the EU seems determined to make the EIB "the EU equivalent of the World Bank", the much larger development bank based in Washington, which is owned by 184 governments around the world. The EIB and the European Commission this week signed a memorandum to create a special trust fund to disburse European aid to Africa. Amadeu Altafaj, spokes-man for Louis Michel, the European commissioner for development and humanitarian aid, said: "What we are doing is a first. It is something for which we use the World Bank. We think it can be done at a European level." It was, he said, "opening up a new chapter for the EIB". But he described the NGOs' criticism as premature. The board that would administrate the fund would have representatives from the member states and the Commission. Lending to developing countries remains a small proportion of the EIB's operations. Last year the EIB made loans of just EUR 3 billion to non-EU developing countries compared with only EUR 2.2bn in 2004. It also lent EUR 2bn to developing countries in South Eastern Europe which are potential EU members, including Turkey. The World Bank group's annual lending is around $20 billion (EUR 24bn). Last year the EIB lent a total of EUR 47bn, the lion's share of which (EUR 42bn) funded projects in the EU. EUR 5.8bn of this went to the ten new member states. The EIB says that financing economic and social cohesion in the enlarged EU remains its top priority with total lending for regional development hitting EUR 34bn, about 80% of the EIB's lending within the EU. Author takes a look at the European Investment Bank's strategy to step up its lending to developing countries as part of what he sees as the European Union's efforts to increase its influence around the world. |
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| Source Link | Link to Main Source http://www.european-voice.com/ |
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| Subject Categories | Politics and International Relations |
| Countries / Regions | Europe |
