NGOs attack EU investment bank record

European Investment Bank targeted over transparency, environmental scrutiny

A coalition of European NGOs yesterday criticised the European Investment Bank (EIB), claiming it was failing environmental and public accountability standards. CEE Bankwatch - which operates in central and eastern European (CEE) countries - Germany's Heinrich Böll Foundation and Friends of the Earth Europe called for the bank to be reformed.

Founded in 1958, the EIB is owned by EU member governments and provides long-term investment finance for infrastructure projects ranging from new roads and power stations to urban wastewater treatment systems. Some 90% of the bank's lending - which amounted to nearly euros 30bn in 1998 - finances projects within the EU, with half the remainder going to CEE countries.

CEE Bankwatch and partners claim that the bank operates "largely exempt from the overall policy direction of the EU" and that it "disregards environmental considerations". Underlying these problems, the NGOs say, is the bank's "secretive" manner of operating, which prevents it from being held publicly to account for its actions.

The groups' main criticisms of the bank focus on risks of environmental damage in CEE countries, to which the EIB is increasingly lending as they prepare to join the EU. Some of these projects breach national environmental laws, the NGOs claim. In the case of a Budapest ring-road, they say, the bank lent euros 72m even though projects showed that pollution levels would exceed national and EU permitted levels.

An EIB spokesperson denied the NGOs' charges of environmental irresponsibility. The bank had 70 technical staff appraising the likely environmental impact of proposed projects, Adam McDonaugh told ENDS Daily. He said it could reject projects for being too polluting and also funded projects designed to improve the environment.

Mr McDonaugh denied that the bank was secretive, stressing that it was fully responsible to the EU governments that own it. "We are not like other development banks," such as the World Bank, he said. "We don't own or manage these projects; we have a relationship with democratic governments".

Follow Up:
CEE Bankwatch network, tel: +48 12 429 11 01; European Investment Bank, tel: +352 43791.

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