Brussels, Luxembourg Margrethe Vestager wants to realign the European Investment Bank (EIB) if she is elected as the new president of the development bank. She said in an interview with the Handelsblatt that she was not just applying for a job, but for a mandate for reform. The bank has to become faster and take more risks.
She wants to place a particular focus on the technology sector. There is a “hole” in the market, says the long-time EU competition commissioner.
There is a lack of European funding when start-ups reach a certain size and want to scale up their production. “Some things are not financed in Europe.” Entrepreneurs then looked for their capital in the USA, Singapore or Saudi Arabia.
From their point of view, there is no lack of private capital in Europe. It just needs to be “activated”.
The EIB can develop new financial products with large pension funds and family offices, she says. They have an interest in supporting start-ups in the long term.
EIB can play role in building AI industry
The business model of the development bank in Luxembourg has long been to provide cheap loans for strategic European goals in order to mobilize a multiple of private capital (“crowding-in”). A commitment from the EIB is seen as a seal of quality by other investors because the bank examines its projects very carefully.
Vestager also sees a role for the bank in building a European AI industry. The EIB cannot create an entire sector, she says. The drive to start a business must come from companies and universities. “But the bank can provide funding for companies that want to develop, research and use artificial intelligence.”
>> Read here: Why the USA is outpacing the Europeans when it comes to AI investments
The Dane recently took a leave of absence to concentrate on her election campaign. She has been touring Europe’s capitals for a few days to collect supporters. Last week she was in Berlin and met Finance Minister Christian Lindner (FDP), Chancellery Minister Wolfgang Schmidt (SPD) and Economics Minister Robert Habeck (Greens). According to reports, she arrived there safely.
EU finance ministers discuss EIB candidates
Her main opponent for the office of president is the Spanish Economy Minister Nadia Calviño. The independent politician advertises herself with a similar profile as a prominent reformer and is considered the favorite.
On Saturday, the 27 EU finance ministers want to discuss top personnel at an informal meeting in Santiago de Compostela, Spain. A decision is not yet expected, but an initial impression is expected.
The Spaniard is Vestager’s strongest competitor.
(Photo: dpa)
In addition to Calviño and Vestager, there are three other candidates to choose from: the former Italian central banker Daniele Franco and two deputies of the incumbent EIB President Werner Hoyer: the Pole Teresa Czerwinska and the Swede Thomas Östros. The field is expected to quickly narrow down to the two prominent figures Calviño and Vestager.
The winning candidate must bring together at least 18 countries, which also represent at least 68 percent of the EIB’s capital. Germany, France and Italy have a particular weight, with a share of 18.8 percent each.
EIB boss Hoyer: “I would like to see more courage from shareholders”
The fact that prominent figures like Vestager and Calviño are fighting for the position shows how much the EIB has become more important in recent years. It finances all major European projects from offshore wind farms to the reconstruction of Ukraine.
The increasing importance of the bank can be seen in the numbers: the loan amount rose from 52 billion to 72.5 billion under Hoyer. The number of employees has increased from 1,600 to 4,100.
FDP politician Hoyer, who is leaving at the end of the year after twelve years, says proudly: “Back then, the EIB was well hidden in the forests of Luxembourg. We have brought them to the attention of the political public.”
He rejects Vestager’s implicit criticism of the EIB’s work to date. “The proportion of high-risk projects has increased many times over,” he says.
The FDP politician will step down from his position as EIB President at the end of the year.
(Photo: dpa)
“The fact that we cannot take more risks is also due to the fact that the Commission and the Member States do not always act dynamically. “I sometimes wish our shareholders had a little more courage,” says Hoyer. In any case, he hopes that his successor can take even more risks.
Vestager wants to expand its venture capital arm
Hoyer has long warned that Europe will be left behind in investment by the USA and China. “We rest on the innovations of the past,” he says. “We are falling behind the USA and China every day in terms of investment activity. We’re just too lame.”
The European Investment Fund (EIF), the bank’s venture capital arm, accounted for €9.2 billion of the total loan amount of €72.5 billion last year. This year it is expected to grow to 13 billion euros.
Vestager sees the EIF as a model that can be expanded. The fund shows how the bank can take more risks, she says. Good risk management ensures that the risks are always calculated. Despite her enthusiasm for tech, she emphasizes that the bank’s two biggest tasks remain the fight against climate change and reconstruction in Ukraine.
>>Read here: Development bank finances three mammoth EU projects
She also knows what is important to her audience, the finance ministers. When asked about a possible capital increase by the bank, she said: “First you have to see what you can do with the existing capital. You should have the ambition to do more without asking for additional capital.”
Another personnel decision could be made as early as Wednesday, which could influence the race for the EIB position. The ECB Council in Frankfurt wants to choose the new EU banking supervisor.
The candidates are the German economist Claudia Buch and the Spanish central banker Margarita Delgado. If Delgado wins, Vestager’s chances at the EIB should increase because it is unlikely that two top positions will go to Spain. A victory for Buch, on the other hand, would strengthen Calviño’s role as favorite.
More: Calvino versus Vestager – two doers are fighting for the EIB chairmanship