European Investment Bank accused of funding environmental damage in Central & Eastern Europe

Activists monitoring the activities of international financial institutions in Central and Eastern Europe have accused the European Investment Bank (EIB) of secrecy and of funding infrastructure projects that contravene environmental laws.

“We need more questions being asked about the European Investment Bank’s activities,” Magda Stoczkiewicz of CEE Bankwatch told edie.

CEE Bankwatch has published a report that is heavily critical of the EIB’s environmental track record. Stoczkiewicz is hopeful that The European Investment Bank: Accountable only to the market? will result in some improvement. At the Brussels press conference to launch the report, several MEPs and two EC officials were present. The MEPs included members of the budget and budget control committees and the EC officials represented the environment and budget directorate generals.

With the EIB increasingly funding infrastructure projects outside the EU, particularly projects in Central and Eastern European states seeking EU accession, CEE Bankwatch believes the time has come for the bank to become as accountable as the World Bank.

CEE Bankwatch accuses the EIB of “behaving like a development bank of the late 50s” and says that it lags behind the World Bank “in terms of its transparency, accountability, and the ways it addresses environmental issues in its work”. The NGO argues that the EIB “surreptitiously [picks] up projects of questionable merit that have been rejected by other banks as environmentally unsound”.

More specifically, Stoczkiewicz says that the EIB has an over-dependence on technical fixes when funding infrastructure projects in areas such as water treatment and that it fails to consider environmental impacts thoroughly when planning energy and transport projects. CEE Bankwatch also believes that environmental impact assessments are not done properly and are not checked properly, but that EIB secrecy means that governments – including the EU itself – and the public do not have access to enough information to allow for a full understanding of the bank’s activities.

The EIB defends itself by pointing out that it is not a multilateral development bank like the World Bank – it does not own or manage projects – but uses EU environmental legislation or, in the case of projects outside the EU, national environmental laws, when assessing project suitability.

CEE Bankwatch argues that the EIB’s status as an independent bank does not exempt it from accountability and that it appears as though the EIB does not in practice apply EU environmental legislation in all cases. “When you look at their areas of activity, their portfolio, there really isn’t much difference between them and the other development banks,” says Stoczkiewicz.

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