On Monday 30 June, at the 4th International Conference on Financing for Development (FFD4), the European Commission and the European Investment Bank (EIB) announced a new type of financial guarantee agreement that will provide up to €5 billion to de-risk investments and expand EIB operations outside the European Union.
This guarantee can now apply to entities that borrow money from financial markets on their own terms, without State backing. Until now, only operations backed by a State guarantee were eligible.
“This agreement is an important boost for the Global Gateway, our strategy to support sustainable development, strengthen EU’s presence globally and deepen our international partnerships. We are providing a €5 billion guarantee to unlock high-impact Global Gateway investments where they are needed the most”, the European Commissioner for International Partnerships, Jozef Síkela, asserted on Monday.
The initiative was announced at the launch of the UN’s FFD4 Conference, in Seville on Monday morning. The President of the European Council, António Costa, and the President of the European Commission, Ursula von der Leyen, reaffirmed the EU’s commitment to financing development aid, pointing out that 42% of global financing comes from the EU and its Member States.
The two Presidents called for a renewed international financial architecture, calling for massive mobilisation of the private sector, maximising the impact of public investment and strengthening national tax systems.
Opening the Conference, Ms von der Leyen said that a fair tax system was essential to attract private investment. Domestic taxation “is the most sustainable source of funding for services like healthcare or education”, she told nearly fifty heads of state or government.
Europe’s Social Democrats represented in Seville, despite the division of the European Parliament. The ‘S&D’ coordinator of the European Parliament’s Committee on Development, Udo Bullmann (German), is taking part in FFD4 with the aim, he said in a press release, of defending “genuine partnerships of equals - partnerships in which no one is left behind and in which Europe fully assumes its growing global responsibility”.
In a vote at the European Parliament plenary session on Tuesday 17 June, MEPs were unable to agree on a position for the UN conference. The vote revealed differing views within the pro-European coalition on the EU’s development cooperation objectives and in the light of major US budget cuts (see EUROPE 13661/21; 13662/39). (Original version in French by Bernard Denuit)