Debate: Financial activities of the European Investment Bank - annual report  - Control of the financial activities of the European Investment Bank - annual report
Date: MONDAY, 5 JULY 2021
Speaker: Werner Hoyer
Language: EN

It has been a difficult, yet crucial, year for the EU, its citizens and its institutions, and I would like to use this opportunity to congratulate all of you for having kept the EU’s democratically elected institution fully operating throughout this challenging period. I am happy to see that our constructive and fruitful exchange has continued throughout the pandemic.  I would also like to thank the rapporteurs of the two reports, Mr Silva Pereira and Mr Eickhout, for their thorough work and their good cooperation. The issues in your reports are extremely relevant. I also very much appreciate your support to the EU Bank – both for its activities in and outside the EU. As you know, the EIB Group is an extremely effective instrument to the EU. In 2020, it increased its financing volumes to almost EUR 77 billion, exceeding its own targets. A third of these funds, EUR 25.5 billion, went into the immediate crisis response that started with the first package in March last year. Most of it went to small and medium-sized businesses to avoid insolvencies and job losses, especially in countries that did not have the necessary budgetary means for massive national rescue packages. It was important to have a European response there because the impressive national schemes that we have seen, if left alone, would lead to a threat to the integrity of the internal market. So we needed a European component to that crisis response.  At the outset of the pandemic, like firefighters, our job was to run forward into the fire and save others – in this case thousands of companies across the EU and beyond. By 31 March 2021, the EIB Group had approved financing of EUR 64.1 billion for COVID-19-related projects. The European Guarantee Fund (EGF), launched at the peak of the crisis, is now delivering fast. Businesses of different sizes have access to short-term financing, allowing them to pay their employees’ salaries, their invoices and keep their business afloat, and I have listened carefully: there was the idea of making this a revolving or permanent institution, this European Guarantee Fund. We have already reached half of our target. Around EUR 14 billion worth of projects have been approved, spread over all 22 participating Member States, representing over EUR 116 billion of investment in the real economy.  Outside the EU, as part of Team Europe, we also contributed over EUR 7 billion, including EUR 600 million to the COVAX global vaccine distribution facility, and I am of the firm opinion that this must be expanded because we must bring substance to the statement that nobody will be safe until everybody is safe in this world. So we need to strengthen our activities also outside the European Union.  In the EU, our support is not only aimed at helping companies. A very substantial part of our work during the COVID-19 crisis was to support health projects aimed at ending the pandemic. This support targets the race in vaccine development, therapeutics and diagnostic solutions against COVID—19. We signed loans to support hospitals and we quickly approved a loan of EUR 100 million to BioNTech – by the way a company we have known for a long time because we had financed the development of their cancer products – that was leading to the development of the mRNA technology, which is now useful for fighting COVID-19. So we were practically the first in the industry to be on that track. We were in the favourable position of already working with them for several years because of the cancer treatment activities. We also supported over 25 highly innovative European biotech and medtech companies with projects in treatments and diagnostics against COVID. The healthcare sector is clearly an example of what the EU Bank does best. As a public bank, we step in to invest where private money would not, or not yet, because of the long-term horizon of these projects and their high risks. But, looking at the wider economy, what is clear is that the pandemic has exacerbated existing imbalances and accelerated structural changes. This is why the programmes we approved in the context of the 2021—2027 multiannual financial framework are of crucial importance. Under InvestEU, the EIB Group will deploy EUR 19.6 billion of guarantee and a significant part of our work on InvestEU will be to directly support cohesion regions and Just Transition. We are also very excited to have started bilateral discussions with several Member States on how to implement the Recovery and Resilience Facility through providing advisory services and developing financial instruments.  This brings me to my next point, which is how best to support the green recovery and transition. Speaking of transition, today we are all countries in transition: transition to a climate—friendly and truly digital economy. Yes, as we learned, sometimes the hard way, like from the transition of many so—called new Member States in the early 90s, this process comes at a cost. A transition to net zero also risks disrupting personal identities and deepening social inequalities. Some jobs once thought to be for life might be lost. What does it mean? It means that we need to put people in a position to grasp the opportunities of change and managing expectations to avoid disillusionment. It means that we need to have a just transition.  I appreciate very much that this Parliament is so supportive of our climate action ambitions. Our Climate Bank Roadmap sets out how we will support the European Green Deal with the most ambitious strategy on climate action of all multilateral development banks (MDBs), and of course fully in line with the EU taxonomy on sustainable finance, which I welcome very much because we need transparency, we need accountability and we need reporting obligations. Only then will the investors give us the money that we need in order to finance all these policies to reach our objectives. It cannot be done with taxpayers’ money only.  From 2025 onwards, 50% of our lending will be for climate action and environmental sustainability. This will help to leverage EUR 1 trillion of EU investment of the EIB Group over the critical decade ahead. That’s a massive commitment. The second one is of course the full alignment of all our activities with the Paris Agreement since the start of this year, and we are on track to achieve our objectives.  We need huge increases in investment in physical capital – new energy systems, new transport systems, our carbon sinks, our ecosystems – and, as I mentioned before, in people to develop skills and innovate. We need EUR 300 billion a year, just to modernise the energy sector! Yet, for years, Europe has been lagging behind when it comes to investment. As was mentioned before, the Juncker Plan was a big step forward.  Let me say at the end a word about the link between innovation, climate and development. It is crucial that we begin to think of these three dimensions together. We will never be able to solve our climate issues and reach the climate objectives of the United Nations if we think that with 8% CO2 emissions in Europe reduced we can do it. No, we must help the other parts of the world to go in the same direction, and not with old technologies, but with new technologies. If there is one sector where the Europeans are top of the class in the entire world, then it is clean tech. We will have this edge now only for a couple of years and then the others will have caught up. So, if we don’t want to see Chinese coal—power plants to electrify Africa or American plants in the west of Africa or elsewhere with shale gas used, then we must go into action. Otherwise, the Sustainable Development Goals of the United Nations and the Paris goals will be going up in smoke.  I need to stop here because I am so full of energy and ideas to refer to you, but I think I have the opportunity to come back and also to respond to individual questions.