Reclaiming public banks: A thought provoking exercise
In this new report, Eurodad partner Counter Balance and member Re: Common look into the role of public banks as powerful tools to finance projects of public interest and how public finance needs to be transformed for this to happen.
Public investment banks have a huge potential to finance projects in times of austerity and drag the European economy out of the crisis. Also the European Commission understood this and made the European Investment Bank (EIB) the main implementer of its €315 billion recovery plan which was presented by president of the European Commission Jean-Claude Juncker at the end of 2014.
However, what is lacking at the time being is a fundamental discussion about the mission and functioning of the EIB and other public investment banks. Are the projects financed really supporting the interest of citizens? Is the EIB sufficiently dedicated to a transition towards a sustainable Europe? What about public participation and transparency in its operations? And who benefits most from the projects financed by the EU bank?
The report critically explores these questions. It concludes that the EIB’s business model makes it impossible for the bank to realise its potential. The bank is currently instrumental to the financialisation of the European economy and it lacks the relevant transparency and accountability structures to guarantee good governance.
The report puts forward key principles for a new business model to reclaim public banks in the public interest and make them a key driver of the transition towards socially and environmentally sustainable and equitable societies.
This report is a first step in rethinking the role of public investment banks and as an invitation to join the discussion.