Making policies work

Multimedia

A conversation with Thomas Östros on European financial architecture for development

07-06-2021
Share Button

Mikaela Gavas (CGD) and San Bilal (ECDPM) host Thomas Östros, Vice President of the European Investment Bank to discuss the role of the bank in the debate on the European Financial Architecture for Development. Thomas emphasises the importance for the EIB to raise its development profile building on its in-house expertise on issues such as climate change and health and its close relationship with the European Commission. Responding to criticisms raised regarding the EIB’s limited presence on the ground and its insufficient development impact, he shares, among other things, the willingness of the EIB to increase local presence in countries of operation and develop upstream activities.

In 30-minute interviews with key stakeholders from the European bilateral and multilateral development banks, the European Commission and development finance experts, co-hosts Mikaela Gavas (CGD) and San Bilal (ECDPM) take you on a thought-provoking journey as they explore efforts to maximise the potential of European development finance and get to grips with how to devise a more collaborative system.

In late 2019, a ‘High-Level Group of Wise Persons’, set out to propose approaches for streamlining the complex web of European financial institutions for development to pave the way towards a more effective and rational system focused on sustainable development impact. The Group called for stronger EU policy guidance, greater emphasis on climate, biodiversity and development impact (notably in Africa), stronger visibility of European development finance, and better coordination and cooperation among finance and development partners. The Group also recommended the establishment of a European Climate and Sustainable Development Bank (ECSDB), thereby setting in motion a contest between Europe’s two multilateral banks, the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD) as to which would be most capable of fulfilling this role.

In 2020, a feasibility study was commissioned by the European Council to assess the viability of the two banks taking on this role, and to consider a third option – ‘Status Quo Plus’ – more cooperation short of a new bank. This third option has been put forward as the most attractive and feasible, albeit with the risk that it would be seen as an endorsement of the status quo and that the EU and the banks would not fundamentally change their actions. There is, however, still a long way to go to decipher what exactly the ‘plus’ means in practice. Decrypting this is fundamental in determining the ability of the EU to effectively contribute to a post-COVID-19 reconstruction that is greener, more inclusive and gender sensitive.

Trade, investment and financeDevelopment finance