In 2006 alone, the European Investment Bank loaned close to 6 billion euros in non-EU countries. A new report commissioned by Bankwatch shows that the loan numbers may be impressive but the EIB policies underpinning them are totally inadequate. Rather than acting as a standard-bearer of the norms and values called for by its original mandate and shared among EU member states, the EIB’s policy holes leave it currently as the wrong institution to be tackling such EU goals as improving the livelihoods of the most vulnerable in the developing world.

Author Dr Christopher Wright, Visiting researcher at the Center for Development and Environment at the University of Oslo, provides wide-ranging analysis of EIB policies vis a vis international best practices like the recommendations from the World Commission on Dams or the Core Labour Standards of the International Labour Organisation. His report argues that the EIB should produce a set of binding operational policies that specifically identify the social standards it is prepared to follow in developing countries.

At the same time, the report argues for the establishment at the EIB of an independent recourse mechanism that would improve the external accountability of the EIB as an EU institution. Only by doing so will the EIB clearly communicate to internal staff, project borrowers, stakeholders and governments that its development financing is driven by a strategic and unwavering commitment to achieving the Millennium Development Goals.