International

Eighteen months ago the president of the European Commission, Jean-Claude  Juncker, announced that he was going to ensure that investment would return to Europe. The EU budget would guarantee €16 billion and the European Investment Bank (EIB) a further €5 billion.  Along with those sums private investors would provide additional finance. In total, €315 billion on innovative investment would be created. According to a celebratory report from the Commission, since then an agreement has been reached on €100 billion in concrete investments. But what has emerged is that the money is not only being administered by the financial ‘old boys network’, but is also flowing into the coffers of the selfsame group of chums. The Juncker fund is not only undemocratic, but on top of that it lacks both innovativeness and integrity. 

A month ago the European Commission published a celebratory report on the Juncker Fund. As many as 250 projects have already been approved and a third of the planned investment has already been  raked in. In cases of this nature you have to treat the Commission’s claims with suspicion. This is mainly because while the member states might well present proposals for projects, and even put some money on the table, they have no influence on which projects are eventually selected. That choice is reserved to an investment committee that works closely with the EIB. 

So I wasn’t surprised when Counterbalance, a social organisation that keeps a close eye on the EIB, brought out a report  this week that showed that three of the eight members of the investment committee represent firms that have previously received loans from the EIB. Counterbalance investigated fifty-seven projects which had been paid by the EIB from the Juncker Fund and of those twenty were given to that bank’s old acquaintances.  That can happen, but certainly if members of the investment committee itself are not to take part in decision making as a result of a conflict of interest, then a strict democratic monitoring of that EIB committee is more necessary than ever. 

This autumn in the European Parliament we will be discussing the EIB’s budgetary accounts for the year 2015. The EIB will then be able to try to explain how it can be that the Juncker Fund, aimed at innovation, can have come into the hands of so many old acquaintances. How the investment committee arrives at its selection of projects is not evident  from the EIB’s website. What exactly is discussed in the committee? And with whom do the members of the committee have contact?

I have written previously a critical comment on the Juncker Fund, which takes risks with taxpayers’ money without national parliaments having any say in the matter. This gives lobbyists a free hand, unless there’s a strict policy on integrity and unless every form of conflict of interest is prevented. I agree with Counterbalance that only intensive monitoring by the European Court of Auditors, the European Ombudsman and the European Parliament can get rid of the ‘old boys network’. That’s certainly a big ask, if only because Juncker keeps a rein on national governments by means of the budgetary rules and is keen to enhance his power via a European investment fund.