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Towards a reinforced accountability architecture for the European Investment Bank

[New Report by Counter Balance] - Counter Balance has been monitoring the operations of the European Investment Bank (EIB) for eight years now. A central pillar of our work has been to improve the accountability of this bank towards European taxpayers and citizens affected by its activities inside and outside the EU.

Until recently, people and communities impacted by the EIB’s activities had nowhere to go to lodge a complaint. While upward accountability – vis-à-vis the EU institutions – was arranged more or less at the time of the legal foundation of the EIB, downward accountability – towards taxpayers and citizens affected by their activities – was entirely lacking until the establishment of the EIB’s Complaints Mechanism Office (CMO). What makes the EIB mechanism unique is that, if not satisfied with the conclusions of the CMO, citizens (even outside of the EU) can turn towards the European Ombudsman for issues related to ‘maladministration’.

In a report from May 2014 – “Holding the EIB to account, a never ending story”1 – Counter Balance analysed the first years of operation of this two-layered accountability mechanism covering the EU bank. While promising on paper, we came to the conclusion that the CMO struggles with structural weaknesses and has not been able to play its role fully: its recommendations are not binding, its independence is jeopardized, it holds a marginalised position within the EIB and it lacks resources. We also showed that the European Ombudsman did not move yet beyond a passive interpretation of its mandate.

This new report comes in a pivotal year – 2015 – with several opportunities to drastically reform the existing accountability framework of the EIB and make it more meaningful.

First of all, the EIB will revise the rules and procedures of it Complaints Mechanism Office. Also the Memorandum of Understanding between the European Ombudsman and the EIB will be under review. This document outlines the competences of the Ombudsman’s scrutiny over EIB operations.

Secondly, the growing macroeconomic role of the EIB – for instance through its role in the newly created European Fund for Strategic Investments under the Juncker investment plan – has only increased the necessity to democratise the “EU Bank” and make it a more accountable institution e.g. by granting more power to the European Parliament to scrutinise its activities and outline its priorities.

Unlike other international financial institutions such as the World Bank Group, the EIB is explicitly bound by the EU legal framework and its set of principles and laws which define concepts such as maladministration. Despite its hybrid nature of being both a bank and an EU institution, there are strong legal arguments to make the EIB a much more accountable and transparent institution, as well as a leader among public investment banks.

This paper will distil precise recommendations to the upcoming policy process of the revision of the EIB complaints mechanism and explore forward-looking possibilities to reinforce the accountability architecture of the EIB – including through a strengthened role for the European Ombudsman and the European Parliament.

Download here the report 'Towards a reinforced accountability architecture for the European Investment Bank'.