The future of European development banking : what role and place for the European Investment Bank?

The European Investment Bank (EIB) not only is the bank of the European Union (EU), it also is the world's largest multilateral lender. Hitherto rarely at the centre of public attention, the ongoing negotiations on the next EU budget round, the Multiannual Financial Framework (2021-2027) (MFF), have placed the EIB in the midst of the political struggles over form and function of the European development finance architecture. In the context of the negotiations on the MFF 2021-2027, the European Commission (EC) proposes to reform the financing of its external action. With the Neighbourhood, Development and International Cooperation Instrument (NDICI), the Commission seeks to overhaul a multi-layered and fragmented external financial architecture and to integrate the eleven existing instruments into one. At the origin of the EC's proposal lies the desire to develop a flexible, consistent, and simplified system (European Commission 2018). Geopolitical interests and considerations about aid effectiveness and impact are the main drivers behind this reform proposal. The debate centres on the allocation of funds and more importantly on the question of how "to do" development finance in the future. The substantive debate on development effectiveness and impact thereby also morphs into an institutional question, with different stakeholders advancing distinct preferences. Against this backdrop, the paper takes stock of the European development finance landscape and the EIB's role as part of this landscape. It looks at the interactions between different European development stakeholders and assesses the proposed reform and its potential impact on European development policy. With the EIB at the heart of the European financial architecture, the paper seeks to answer three questions: (1) What is the EIB's role in the European development landscape and how does it respond to its operational environment? (2) What is the EIB's institutional relationship with other EU actors. What are the main challenges and points of divergence? (3) What are the competing visions for the future of European development finance and what role will the EIB be able to play in the different scenarios?