Hoyer and out: New EIB president muddles through European parliament hearing
Bankwatch Mail | 8 October 2012
With the European Investment Bank having recently postponed the annual face-to-face dialogue with NGOs that the bank’s former president Philippe Maystadt initiated in autumn 2011 (see Bankwatch Mail 50), it was good to see new EIB president Werner Hoyer being put on the spot in September by MEPs during a hearing at the Europeam parliament’s Economic and Monetary Affairs Committee.
This article is from Issue 53 of our quarterly newsletter Bankwatch Mail
Subjecting Mr Hoyer to a rigorous range of questions, many of which drew on concerns raised by NGOs in recent years, it would be no surprise if the committee members drew less than satisfactory conclusions about, to be charitable, the EIB president’s considered – if less than considerable – responses.
Under questioning from MEPs, according to Hoyer the EIB is taking seriously the issue of its lending going to companies based in tax havens. And on this acutely important topic, that was about it from Hoyer. On whether EIB loans are making it to SMEs via intermediary institutions, a vital part of the EIB’s response to the ongoing economic crisis, Hoyer didn’t manage to answer within the time given, although he did state that all questions raised would be answered in writing, if not in person. A question from ALDE MEP Wolf Klinz on what are the indicators used by the EIB to assess the success of a project also fell by the wayside due to a lack of time.
Where Hoyer was more discursive was on the EIB’s future engagement with coal – specifically coal-fired power plants, where he said that the bank may have a role to play.
The EIB is already involved in the hugely controversial Šoštanj lignite power plant project in Slovenia, where marginal improvements in efficiency and reduced carbon emissions will still see Slovenia locked into fossil fuels for 30-40 years and prevent the necessary national emission decreases from taking place. There is speculation too that an EIB investment into energy transmission lines in Poland is aiding a coal–fired power plant – and there may be more Polish coal investments to come from the EIB.
It may be inferred then that the Polish fossil fuel lobby has the EIB firmly in its sights. Hoyer described how, with coal and fossil fuels in general, there are contradicting requests coming from MEPs – one saying the bank should go into coal, another saying the opposite. He also repeated the need to satisfy the often contradicting needs and positions of the EU’s 27 member states.
Yet as the EIB is mandated to support and help implement EU policies, the EU’s 2020 and 2050 climate and low-carbon strategies ought to be taking priority in the bank’s approach to investments.
As the latest alarming climate report, commissioned by 20 governments, has revealed, more than 100 million people will die and global economic growth will be cut by 3.2 percent of GDP by 2030 if the world fails to tackle climate change. The same report estimates the cost of moving the world to a low-carbon economy at about 0.5 percent of GDP this decade. With significant capital at its disposal, the EIB remains a major investment player, and in this context should be re-doubling its efforts to boost energy efficiency and renewables projects, not being distracted by coal plants.
The EIB is the biggest IFI lender in the world. It should, then, be focusing on the bigger picture, the climate crisis, rather than allowing itself to be buffeted by requests for one final fossil fuel fix.