The independent study on optimising the European financial architecture for development, commissioned by the ‘Ecofin’ Council at the end of 2019 (see EUROPE 12384/5) and led by French expert Thierry Senechal, was sent to EU Member States on 11 March.
The study analyses three scenarios—(A) transferring operations outside the European Union from the EIB to the EBRD; (B) having the EIB set up a subsidiary for its activities outside the EU and become a minority shareholder alongside the Member States, the European Commission and national development banks; (C) improving the existing institutional architecture (‘status quo+’)—against five evaluation criteria such as coherence of the European approach, impact on the ground and costs involved.
In terms of impact on the ground, scenario (A), which relies on the EBRD, headed since October 2020 by the French Odile Renaud-Basso, has the advantage of relying on a bank with a very good reputation as a development bank, according to the authors of the study. The EBRD should then significantly expand its geographical deployment and become more involved in public sector projects. If scenario (B) is chosen, the EIB, which is recognised as a provider of low-cost finance, would have to change its governance and risk appetite substantially, the authors argue. The strength of scenario (C) is that the national development banks are active in a wide range of projects.
A table assesses the EU’s annual capacity to lend for development in non-Member States. It indicates that scenarios (A) and (B) are more or less equivalent, with a capacity of between €15.2 and €15.4 billion and €14.5 and €14.7 billion, respectively. The annual capacity for total loans from the EU would amount to between €18.1 and €18.4 billion under scenario (C) and would hence be higher.
See the summary of the study: https://bit.ly/3czX08I; and the entire study: http://bit.ly/3bTn5Aw (Original version in French by Mathieu Bion)