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Monday 23 January 2017

Investing in some of the world's poorest people is a duty and necessity for the European Union's bank

Werner Hoyer

Published 19/09/2016 | 02:30

'Europe needs to tackle global challenges that matter to its future'
'Europe needs to tackle global challenges that matter to its future'

Those of us who help to shape and deliver Europe's actions and policies must face an unpalatable fact. Europe's ability to deal with a humanitarian crisis on its shores and in its neighbourhood, and its capacity to cope with a longer-term migration challenge, is being called into question.

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Meanwhile, the hostile voices of the far right and the populists grow ever shriller. Alongside other international financial institutions, I believe the EIB, as the EU Bank, can offer a concrete way to counter this and to move beyond the rhetoric.

At the United Nations Summit on Refugees and Migrants this week in New York, I will be laying out how we can put such mechanisms into place.

The need to act is not just about averting the political threat to Europe's cohesion; it is not just about tackling an erosion of trust or reputation either. It is nothing less than a moral imperative.

The challenge of migration is global, as are many of the factors that fuel it. Poverty and climate change are firmly in the sights of development banking, but violence and war that have been the direct trigger for the current refugee crisis appear in many ways beyond the influence of the world's development banks and other international financial institutions. And yet through the right kind of support for those regions and countries most affected by the crisis of forced displacement, we can invest in local communities and people, and help create opportunities close to home for those fleeing violence and persecution.

This is the thinking behind the World Bank's Global Concessional Finance Facility to which the EIB is giving strong support, and it is at the heart of our own Economic Resilience Initiative. Focused on the Western Balkans and Europe's southern neighbourhood, it will entail a significant increase of EIB financing in these regions: a new €6bn in addition to the €7.5bn already planned.

It combines support for the private sector, particularly to the benefit of young people and women, with more investment in socially important sectors like water, health and education. We estimate that this extra financing would trigger around €15bn in additional investments in those regions from 2016 to 2020, taking the total EIB mobilisation of investment in the regions to €35bn. It will ease the pressure on those countries providing a public good by hosting huge numbers of refugees, and also provide more opportunities for those driven from their homes by investing even more in the development of these economies.

Less than three months since EU leaders endorsed the EIB Resilience Initiative, it is now ready to go and we are starting to draw up the first projects.

I see this as the first concrete step in support of the EU's new Global Strategy presented by High Representative Federica Mogherini in June and the External Investment Plan just announced by EU Commission President Juncker.

As we prepare to launch the Initiative, I welcome the current discussions on how the EU can further work to tackle the root causes of migration also in Africa. As the EU Bank, we are ready to deploy our expertise and experience to support this.

Whether with the European national financing institutions and development agencies or with IFIs, we are focused on avoiding duplication and complementing each other's efforts by more effective collaboration and with the UN Agencies. It's about using our resources and taxpayers' money properly as well as being effective.

We have just agreed to establish an African Caribbean and Pacific migration package with an additional €800m to help finance small business and migration-relevant public sector lending in Africa. Some may wonder why the EU Bank is even doing this kind of thing.

It is a fair question. The vast majority of our lending is devoted to creating jobs and growth within Europe. Yet in order to help itself, Europe needs to tackle global challenges that matter crucially to its own future.

Werner Hoyer is the President of the European Investment Bank.

Irish Independent

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