In this week’s newsletter, we cover the European Investment Bank’s run for the presidency nomination, and we analyse the political implications of the COP28 for the European Union. Enjoy!
EIB Drama is still unfolding
Nadia Calviño’s candidacy for the European Investment Bank’s leader position has advanced further following a recent endorsement from Belgian Finance Minister Vincent Van Peteghem, who oversees the selection process given Belgium’s presidency of the Council of the EU from January 2024. Belgium expresses confidence in Calviño’s approval, highlighting the country’s role as a mediator dedicated to securing a compromise. The appointment will be deliberated on Friday during the EIB’s Board of Governors meeting.
As a reminder, the European Investment Bank (EIB) furthers the objectives of the European Union by providing long-term project funding, guarantees and advice. It supports projects within and outside the EU, and its shareholders are the EU’s Member States. Over the years, the amount of projects financed by the EIB has continuously grown. Recently, we have witnessed EIB’s funding projects like InvestEU (which mobilises EUR 372 billion in additional investment between 2021 and 2027), the EU’s ‘climate bank’ (which brought the EIB to align to the targets of the Paris Agreement and stop financing fossil fuels since 2021), EUR 25 billion guarantee fund to response to the Covid-19 pandemic in 2020, and, from October 2022, EUR 1.05 billion had been disbursed. EUR 540 million has been earmarked for 2023 to support Ukraine’s war efforts.
Additionally, under the existing rules (Article 308 TFEU), the annual appropriations from the EU budget related to the guarantee fund are authorised by Parliament and the Council as part of the annual budgetary procedure.
All these technicalities highlight how the nomination to lead the EIB is a(nother) political game inside the EU.
To confirm this, Danish Industry Minister Morten Bødskov affirmed Denmark’s ongoing endorsement of Margrethe Vestager as the new president of the European Investment Bank. Bødskov emphasised that the Danish government has consistently emphasised the need for a prompt resolution regarding the future EIB president. Acknowledging Vestager’s similar stance, Bødskov noted that Belgium is tasked with orchestrating the process, and Denmark has urged swift clarification.
Other elements of uncertainty also remain. France, the EIB’s second shareholder, has not explicitly given its blessing. Italy, the EIB’s third shareholder, has said it continues to support its candidate, Daniele Franco, although it might shift its vote to Denmark’s Margrethe Vestager. Two other candidates are in the running: Poland’s Teresa Czerwinska and Sweden’s Thomas Ostros.
On Friday, expect some fireworks before the weekend!
The EU facing the COP28
The European Union has approached the COP28 with clear objectives.
The EU’s objectives in the COP28 negotiations involve securing commitments from participating parties to triple global renewable energy capacity and double energy efficiency by 2030. Additionally, the EU aims to establish a process for phasing out ‘unabated’ fossil fuels and ending associated subsidies immediately.
In the past, we have seen the EU quickly adapting to challenging environments regarding climate legislation. This time, it might be different. Let’s analyse together why.
The EU has historically relied on several components, including ambitious domestic legislation and global relationship-building, to navigate complex negotiations. However, current internal developments and inconsistencies in the EU’s climate actions raise questions about its leadership role in international climate action in 2023.
Internally, the European Green Deal signifies a significant step forward in EU climate action. However, parliamentary opposition to the Nature Restoration Law and the recent objection to reducing pesticide use in agriculture indicate potential political backlash and waning public interest in climate regulation ahead of the European elections in June 2024. These developments may impact internal EU political support for crucial negotiation topics at COP28.
Externally, the success of the EU at COP28 could be influenced by two key factors. Firstly, climate legislation with a robust external dimension, such as the Carbon Border Adjustment Mechanism (CBAM) and the Net Zero Industry Act, has triggered accusations of protectionism and ‘climate colonialism’ by third countries.
Secondly, the EU still needs to look for a strong centre of gravity to guide its climate diplomacy where climate issues cut across various sectors and international fora. Before stepping down as a Commissioner to run for elections in the Netherlands, Frans Timmermans was a prominent figure in the EU’s negotiations on climate. However, this could not solve the problem of the EU being unable to set an example for the rest of the world.
In this challenging geopolitical context, the EU’s success at COP28 may not solely hinge on achieving negotiation objectives but also on how it is perceived, particularly among vulnerable parties in third countries. The EU’s ability to ‘build bridges’ and its involvement in shaping the final communiqué and coverage decision will be crucial.
