Report on the European Financial Architecture
The European Union (EU) and its Members States have historically been the largest development donors in the world, contributing to improvements in poverty reduction and wealth creation around the globe. Europe’s development financial architecture plays an important global role, but is also complex, composed of a multiplicity of actors at EU and national levels. There are overlaps, gaps and inefficiencies, sectoral and geographical, especially in terms of presence and experience in Africa, of the main European multilateral finance institutions, the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD). And while the system collectively has a comprehensive range of development financial instruments available, there is a not a single EU strategy to define how these should be used in synergy to tackle the top-priority global challenges.
It is also true that such concerns about the effectiveness of the European Union’s external development financing architecture are not entirely new. In evaluating the EIB's financing activities outside the EU, the “Camdessus Report” identified serious deficiencies in the broader system already in the year 2010. To a certain extent they still remain, partly because there has been no decisive institutional follow-up on the recommendations of the report.
Against this background, the Council of the European Union established with Decision (EU) 2019/597 a High-level Group of Wise Persons with the task of producing an independent report on the challenges and opportunities for improving and rationalising the European financial architecture for development and possible scenarios for its evolution. The High-Level Group was tasked to provide an independent assessment and evaluate challenges and opportunities linked to the rationalisation of the European financial architecture for development. It assessed in particular the respective roles of the EIB and of the EBRD. In October 2019, the High-Level Group published a report in which it analysed the following three options to build such an European Climate and Sustainable Development Bank:
Option 1: Turn the EBRD into a European Climate and Sustainable Development Bank by transferring the extra EU activities of the EIB to the EBRD;
Option 2: Create a new mixed-ownership European Climate and Sustainable Development Bank with the EIB, the EBRD and Member States and the European Commission as shareholders;
Option 3: Create the European Climate and Sustainable Development Bank based on a EIB subsidiary.