With a total injection of 49 billion in environmental projects, the European Investment Bank (EIB) consolidated its position as “the climate bank” of the world last year, its president, Nadia Calviño, celebrated yesterday at the opening of the annual forum of the institution, in the presence of 900 representatives of the private and public sectors convened in Luxembourg to align their policies. This figure “represents more than half of the total financing granted last year,” and “we are on track to fulfill the promise of investing one trillion between now and the end of the decade.”
Investments in the energy transition and reconstruction of Ukraine are the main challenges facing the EU development bank today. But the institution is in the crosshairs of organizations and governments to lend more support in other priority sectors, such as security and defense, an old taboo that is breaking down in the heat of the war in Ukraine and geopolitical risks.
“Europe faces great uncertainties and the response we give to these challenges will define our Union for decades to come,” warned the President of the European Council, Charles Michel. “Defence is a pillar of our European sovereignty. We must act faster and more decisively, that is my main message.” Without explicitly requesting that the EIB expand its capacity for action in this field, Michel recalled that defense spending in the Twenty-seven increased by 8% in 2023, and it is estimated that in the next ten years investments could reach 600,000 million.
The current statutes of the EIB, the financial arm of the Union, explicitly prohibit investment in certain sectors, including arms and ammunition. But, as a result of the Russian invasion of Ukraine, in 2022 the institution launched the European Strategic Security Initiative and has agreed to invest up to 8,000 million euros in the coming years in security-related projects that for the first time may include technologies for use dual, civil and military. In December, the European Council called for “a greater role” for the EIB in supporting EU security and defence.
The matter will be on the table at the informal meeting of EU finance ministers at the end of the month in Ghent, where the first major policy debate on the club's future investment policies will take place. The European Commission openly advocates that the EIB review its policies and become more involved in the field of defence. The issue will take on renewed urgency in the coming months, as member states begin to tighten their belts to comply, coinciding with the reactivation of the stability pact after four years on hold to deal with the consequences of the pandemic and the Russian invasion of Ukraine. .
The EIB's annual investment report highlights the resilience of the European economy and the strength of investments compared to what happened in the financial crisis, and warns of the risk of governments excessively reducing public spending this year, because it would also slow down private sector. In the background, a fact that is “seriously worrying”, the gap with the United States. Productive investment in the EU remains 1.5 points below that recorded in the North American country. “Deglobalization and the green and digital transitions require structural changes in the European economy,” warns the bank, which calls for investment not only in technology and innovation, but also in training and social infrastructure to maintain “social cohesion.”
