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Research Report

The European Investment Bank:: an overlooked (f)actor in EU external action?

Balazs Ujvari
Copyright Date: Jun. 1, 2017
Published by: Egmont Institute
Pages: 45
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Table of Contents

  1. (pp. 7-9)

    The external action of the European Union (EU) is a multifaceted field, markedly different from the foreign policy of nation states. It comprises a number of different policy areas where the relationship of the EU and its member states is governed by varying legal arrangements. The general guiding principles of EU external action are set out in Article 21 of the Treaty on European Union (TEU), which instructs the Union to, amongst others, safeguard its values and fundamental interests, encourage the integration of all countries into the world economy and foster the sustainable economic, social and environmental development of developing...

  2. (pp. 9-24)

    As the EU Bank, the EIB is the only international financial institution (IFI) politically accountable to EU policy-makers and institutions: it is owned jointly by all EU member states (see Annex 1) and has a Treaty-based obligation to align with and support EU policy priorities and action including outside the EU.⁸ A number of tools are in place to ensure this accountability and alignment. For instance, in accordance with Article 19 of the EIB Statue, each of the Bank’s financing projects is subject to a review procedure whereby the Commission screens their alignment with EU policies before approval. In countries...

  3. (pp. 25-30)

    In addition to delivering on regional EU policy frameworks, the EIB also has the potential to underpin the EU’s specific – often rapidly changing – country policies. When it comes to a policy of rapprochement or disengagement with a third country, the EU has several carrots and sticks at its disposal. For instance, the Union may offer or deny access to its internal market through a free trade agreement, relax or stiffen visa procedures, and provide or suspend funding through its regional or thematic financial instruments. Towards certain countries, the authorisation or suspension of EIB operations may also represent an...

  4. (pp. 30-33)

    In addition to delivering on regional EU policy frameworks and sudden shifts in specific bilateral EU policies towards third countries, the EIB also plays an important role in promoting the EU’s environmental, social, procurement (and possibly soon also taxation) standards as well as best practices in technical areas globally. First, the receipt of financing from the Bank is strictly conditional upon project promoters’ adherence to the above standards which is stipulated in EIB-financed project contracts. As asserted above, the EIB is the only MDB held to a strict set of requirements related to EU standards. Second, as a member of...

  5. (pp. 33-37)

    The foregoing chapters have shown how EIB operations have, over the recent years, contributed to EU regional policy frameworks (and the SDGs in a cross-cutting fashion) and how the Bank has delivered on its part of the EU policy package in the event of sudden shifts in the Union’s bilateral relations with third countries. Nonetheless, there remains room for improvement in order to allow for better leveraging of the EIB’s role as the investment arm of EU external action. This chapter raises the question of how the EIB factor, as a multiplier of EU external action, could be better exploited....

  6. (pp. 38-39)

    At a time of multiple geopolitical challenges in the EU’s neighbourhood and beyond, combined with an unfolding geo-economic competition spurred by the emergence of new actors on the global economic and political scene, it is of paramount importance that the Union takes stock of the instruments, capabilities and levers of influence that it has at its disposal in order to better shape developments outside of its borders. While around a mere 10% of its annual lending volume concerns operations outside the EU, this paper has identified several ways in which the EIB acts as a powerful multiplier of EU external...

  7. (pp. 40-41)

    1. Enshrine the SDGs in the mandates and facilities governing EIB external lending. While the Bank contributes to several SDGs through the core objectives (e.g. climate action, infrastructure development, private sector support) of its operations outside the EU, this strong link is yet to be articulated on paper. The SDGs could be mainstreamed across all channels of EIB external lending supported by a dedicated SDG strategy, as has been the case with climate action.

    2. Clarify how the fourth objective (‘addressing the root causes of migration’) to be added to the ELM will allow the EIB to better address the issue of...