The European Investment Bank (EIB) is the European Union’s development bank. With an annual budget of just over €70 billion, it is supposed to bring benefits for the citizens of member countries, as well as for the local situations in the global South in which it intervenes. Economic growth while respecting human rights is also one of the prerogatives of the European Bank for Reconstruction and Development (EBRD), set up to help the post-communist states of Central Europe and Asia.
In the span of just a week, both institutions have generously bestowed hundreds of millions of euros for projects that do not seem to be, properly speaking, relevant to this mandate. These projects, in a more or less direct way, all involve Italy.
The EIB has allocated a record €1.5 billion for the Trans Adriatic Pipeline, the now-famous TAP, the last portion of the Southern Corridor gas pipeline which starts in Azerbaijan and passes through Turkey, a project strongly backed by the European Commission. Little importance was given to the fact that in this way, we are continuing to invest in the extraction of fossil fuels, as well as committing fully to a project that is intended to be in use for decades, since it does not exclude the use of the much-maligned Russian gas, as well as a possible extension up to Turkmenistan (the fourth producer of natural gas in the world).
So it is that the much-touted Paris Agreement on Climate Change is becoming an empty exercise in rhetoric. Furthermore, no one is paying heed to the protests across the Salento area, which considers the TAP harmful, to begin with, for the communities and the region.
This is not exactly “development.” The board of directors of the EIB has ignored the arguments of the inhabitants of the Salento region, supported by groups and organizations across Europe, and has also turned a blind eye to other shady aspects of the pipeline project.
First of all, there are those found by the journalistic investigation “Azerbaijani Laundromat,” which revealed that between 2012 and 2014, Azerbaijan transferred €2 billion through a Danish bank, in part destined for Western European politicians. Among the names, we find the Italian Luca Volonté, unsurprisingly touting a pro-Azerbaijani agenda in the Council of Europe. The (often well-supported) allegations against the Baku government of money laundering, corruption, human rights violations and systematic repression of any form of opposition have not been enough to prevent the EIB from writing a billion-euro check.
On the other hand, if we look at what has been happening in Italy—for example, the MOSE project—we see that in the past, the Luxembourg-based institution has been willing to disburse the allotted portions of funding despite the fact that the projects being supported were marred by corruption. Along with the money for the TAP, the EIB has also granted a loan for the Nenskra dam in Georgia, which will be built by the Italian company Salini-Impregilo.
A further $230 million in public financing for this hydroelectric project has been guaranteed by the EBRD. In this case as well, the interests of local communities were ignored, particularly those of the inhabitants of Svaneti, right next to the border with Abkhazia, who are complaining of devastating impacts for their region, blatantly inadequate public consultations and possible violations of international conventions.
The TAP and Nenskra are two examples of how great building projects follow a logic that has little to do with the much-touted “development,” at least regarding the areas where they are actually built. The fact that the public financing for both these projects has been approved while they are already registering long delays in their construction timelines is another confirmation that there are many problems with this situation.
It needs to be stressed that if these public institutions had not chosen to “expose” themselves (i.e. open up the purse strings) for such projects, it is unlikely that private banks would have picked up the slack, as they have kept well away from any serious involvement in both the gas pipeline and the dam.
The role of international financial institutions, often acting with a great lack of transparency and away from the prying eyes of the big media, is thus increasingly crucial for implementing policies that a large share of the European population is willing to mount a forceful challenge to.
