Debate: Financial activities of the European Investment Bank – annual report  - Control of the financial activities of the European Investment Bank – annual report
Date: WEDNESDAY, 6 JULY 2022
Speaker: Werner Hoyer
Language: EN

I touch upon a few items, which I consider particularly relevant. First, I think it was Ms Grapini who first who mentioned the issue of SMEs and the need to emphasise our work on SMEs, in particular in cohesion countries. The fact is, that per capita, the work on SMEs in cohesion countries clearly outnumbers the activities in non-cohesion countries. So we are indeed particularly ambitious in this field.  The second issue, and I take that extremely seriously, is the transparency issue. We’ve been trying to get better there. We’ve been making progress here and there, sometimes making steps backwards first to do them. But, we try even when we need to acknowledge that the more we do private-sector business, the more we ‘suffer’ from confidentiality requirements imposed on us from the private-sector partners. That doesn’t make things easier, but we try everything in our talks with the promoters to come to an agreement to publish for all projects over EUR 50 million and give the necessary transparency to you. This critical issue is a flip side of mobilising private investments and support innovation, and this is key for the future of the European economy.  In this context, let me say that I was a little bit surprised by the remark about vaccine development and production. Surprised because it’s one of the areas where we in EIB are particularly proud. When I first heard of something coming up – and I was told in January 2020 this could be more than an epidemic situation, it could develop into a pandemic – I then read through the literature and found out that, okay, in these situations, maybe vaccinations would be useful if there is a vaccine, but that normally takes 5 to 10 years to develop. So we then talked to our life science experts in the Bank – and this is one of the unique features of EIB: we are a bank that is to a large extent, driven by natural scientists, by engineers and not by people who are good at counting numbers. That is necessary as well, of course.  But a lot of times people told us, well, President, are you aware that for a couple of years we are cooperating with the small team of researchers at the University of Mainz and we finance their development of a cancer medication on the basis of a new technology. Everybody now knows that technology. At that time, none of us did – mRNA, never heard of it. And that technology led these people to develop the BioNTech vaccine within six or eight months. It was clear miracle. But you need to be able to go into that risk. This is something a private commercial bank could not have done.  With the backing of the shareholders of EIB and the backing of the European Commission and support of this House, it was possible. You might go into losses with projects like that, and then it’s necessary to have a wider, broader portfolio that levels out positive and negative experiences. This, of course, was a very, very positive experience and nowadays, half the commercial world would have been happy to be the inventor of this medication and this vaccine. So you need to do these things. So therefore, I think I simply do not grasp the logic behind the criticism against the BioNTech vaccine.  Fourth point, so, I thought I can promise you we will not backtrack. And I’m not at all an ideologist when it comes to these things. But when we went out of fossil fuels in 2019, in the speech in the General Assembly of the United Nations, for which I did not have the backing of my own Board yet, I realised immediately that the bosses of BlackRock were doing the same thing vis-à-vis their private asset holders. They said, I cannot explain to my asset holders that we are investing in something, which looks very good, is very helpful in the short run, but we know that we need to write it off within 15 or 20 years, but it will be on our balance sheet for 40 or 30 years. This doesn’t fly with the private sector and one should not do it open-eyed in the public sector. No, no. The present crisis, as serious as it is – and we will have, in my opinion, two tough winters ahead in Europe – must lead us to an acceleration of our efforts in this field of energetic transformation.  Fifth point, we cooperate very well with the European Court of Auditors. I know that there are other ambitions, but the relationship between the EIB and the Court of Auditors is laid down and the competence of the ECA is laid down in the Treaty. It cannot simply be changed by an agreement. So that would be a very, very big issue to undertake. So it goes without saying, of course, and therewith I come to an end, that we are in full compliance with applicable sanctions. Sometimes we were ahead of time when we closed our business in Russia immediately after Crimea. And when we acted on Ukraine within seven days after the beginning of the war and, to be honest, it was a very courageous step on the side of my shareholders and the Board members of the Bank that they agreed on behalf of their Member States to this proposal at a time when you are not so in full command of all the details in a country which is at war. And being at war is for all of us a new experience, and we must get used to it and hopefully overcome that situation soon.  Mr Kelly asked about a guarantee fund for green mortgages. I’m open to this. These ideas of bundling projects is a very interesting and useful one – in some countries of the European Union I would like to see more of it. For instance, when I was new at the Bank, we found out that the situation of the the buildings, the quality of the buildings for schools in Ireland were sometimes shameful. And individual local school owners or magistrates would come to us and say, can’t you do this or that? Well, we cannot do that for 500 schools individually. But then we arrived at the idea of school bundling, and within three years that thought, that thing had been taken care of by this project of school bundling. We can do that in other circumstances as well. And a guarantee fund for green mortgages might be an interesting means for that. Thank you very much for your interest and your support.