Viewpoint: Europe Needs Its Own Development Bank
By Erik Berglöf
Europe needs a robust and agile development bank that can cooperate with, but also challenge, the Chinese institutions involved in the Belt and Road Initiative and the United States’ newly reinforced development agencies. With this goal in mind, the European Union recently appointed a “wise persons group” (WPG) to review the European Union’s development-finance architecture. The group, of which I was a member, has devised three stylized options. But there might be a fourth alternative that combines the best features of existing institutions.
The EU needs a development bank so that it can strengthen its capacity to respond to big global and regional challenges – above all, to risks and opportunities in Africa. From a geopolitical standpoint, Europe urgently needs to bolster its economic sovereignty, without abandoning its ambition to forge multilateral coalitions. Development finance is a critical building block in that regard, and, although Europe currently provides close to two-thirds of all global development finance, it would have a much greater impact if EU efforts were better coordinated.
Photo courtesy of martaposemuckel.