On the 9 December, the FMA hosted their yearly Annual Dinner event, online. Werner Hoyer, President of the European Investment Bank held a keynote speech followed by an interesting digital conversation.
The FMA was pleased to welcome special guests such as the political groups’ representatives Siegfried Muresan MEP (EPP Vice-President) and Robert Zile MEP (ECR Vice-President), and European Political Foundations’ representatives Dr. Eoin Drea, Svenja Hahn MEP and Jürgen Martens.
Werner Hoyer delivered a keynote speech about the work of the European Investment Bank (EIB), especially in the context of the Covid-19 crisis and the climate challenges the EU currently faces. He introduced the participants to the history of the EIB and affirmed the growing relationship between the European Parliament and the EIB, especially due to the 2015 Juncker-Plan that prepared the way for a constructive interinstitutional relationship.
The EIB can be seen as a financial tool that enables money to flow into projects, however, many people are not aware of its power and magnitude. “We are twice the size of the World Bank […] and you as policy shapers and policymakers must know what kind of powerful instrument you have in your hands,” he said. “The addition of advisory capacity brings us into a unique position. Lending, blending and advising should never be missing in an EU Bank”.
According to Werner Hoyer the EIB chooses their projects wisely under specific conditions, which are sustainability, financial viability and economic viability. During his time at the EIB, he explained, they already financed many projects and during the process, they make use of the advantage to have the best and advanced engineering department in the house. This ensures that EIB financed projects accomplish the needed characteristics. Often, other companies, for example, insurance companies, then show interest to co-finance a project. For Hoyer, it shows that there is the need to invest more in private activity.
Werner Hoyer introduced one of the main topics of this event, the Covid-19 crisis, with the example of BionTech in Germany, the company that produces one of the first vaccines. The EIB supported them already in their cancer research and within the trust they already had, decided to invest in the Covid-19 vaccine as well.
The second important topic was climate change. Climate challenges cannot be forgotten because of Covid-19. “We dedicate 50% of our business to climate and environmental challenges, one trillion euro of climate action and environmental sustainability until 2030, we are the first multilateral bank to be Paris aligned by the end of the year”. The EIB proposed a EIB Group Climate Bank Roadmap in November 2020 which got unanimously approved by all governments. This was another very important step towards the EU’s climate targets. The EIB has an enormous commitment to the Green Deal. Werner Hoyer promised that there would be even more investment in the future to help companies or institutions to align with the same values.
The discussion covered various topics, such as fossil fuel investment, financing education, financing of infrastructures in neighbouring countries, Green Deal, Rule of Law, the UK after Brexit, among others. Research and development, climate policy and innovation have been suffering throughout the pandemic, but Hoyer remains positive mentioning that member states are welcomed to combine RFF packages with loans of the EIB. He also mentioned the need for lending, blending and advising and with that, the EIB can provide help to countries, not only financially. He added that Europe needs a system of green bond principles – reporting rules, transparency and accountability so investors can rely on their money being used for a purpose that is described by objectives of the European Union. The EIB will also focus and expand health and education projects in the future.
Werner Hoyer pointed out that there is still apprehension and doubt about the transition to green energy instead of fossil fuels. He warned that investment in fossil fuels is no long-term investment anymore. This kind of Investment can only lead to harm, and this trend cannot be reversed in the next 15 years. Thus, he considered that it would be irresponsible to continue to invest in fossil fuels as a European bank.
The EIB and the UK will also go separate paths after the Brexit. UK money will gradually go back to the country and UK representatives within the EIB will be exchanged.
Other questions were about the preparation towards China’s non-sustainable investments in Africa and South America, obstacles the EIB faces, how long it will take to retrain non-workers into digital workers, worries about hydrogen energy and housing and the public market and its impact on emissions.
Werner Hoyer explained that the Chinese have flooded Africa and South America. However he says a growing trend of African investment reconsidering and rejecting Chinese projects as many are not durable and need to be rebuild after five years. The EIB needs to be present and help the African leaders to secure the future. He added that the investment in sustainable housing is one of the biggest projects to reduce emissions, therefore the EIB will increasingly invest in this field and go beyond European borders.
Finally, Hoyer addressed the concerns about the use of non-green hydrogen in the future to reach the EU’s climate goals. Hydrogen energy is currently seen as the top alternative to the use of fossil fuel but it needs to be guaranteed that its production does not cause carbon itself. That is why Hoyer explained, that it is with high demand that the EIB will only invest in hydrogen if it is green hydrogen. He himself is doing full research for every possibility concerning hydrogen energy because he does not believe that a focus on one energy will be sustainable for Europe’s future – technology should be open to benefit society.
The discussion ended on Hoyer’s last note that when different work cultures or institutions work together, it can be difficult. However, the interinstitutional cooperation between the EIB and the European shows that as when there is a constructive political dialogue that eventually translates in guidance on strategic issues and policy, Europe will be able to prevail challenging times.