The Austrian Court of Audit and the German Federal Court of Auditors have published recommendations for action to the EIB
One way in which the public sector acts is through development banks, which carry out their functions – being in the public interest – by providing funds or guarantees. Development banks aim to foster economic development by supporting socially significant but high-risk investments that would otherwise not be made. The operations carried out by development banks are not part of the government's core budget, but they are only made possible thanks to public funds. For this reason, development banks are subject to special requirements in terms of transparency and accountability so that parliament and government – but also citizens – can understand their actions.
The European Investment Bank (EIB), based in Luxembourg, is the world's largest multilateral development bank. Its mission is to contribute to the balanced and steady development of the EU's single market by funding public and private investments through low-interest loans and guarantees. The EIB's shareholders – the EU Member States – are liable for the bank up to the amount of their subscribed capital. The EU Member States provide the EIB with funds from their respective national budgets. Since its establishment in 1958, the EIB has expanded its activities considerably. This also results in higher liability risks for the shareholders.
Due to the EIB's special position 'between' the EU Member States and the European Union, the European Court of Auditors' audit mandate only covers the small part of operating activities that are financed via the EU budget. The much larger part of the EIB's operations is not audited, not even by the Member States' external audit institutions.
Against this background, the German Federal Court of Auditors and the Austrian Court of Audit carried out a parallel audit to examine whether their respective governments and the relevant ministries at national level are sufficiently committed to ensuring professional structures, adequate risk management and appropriate supervision and control at the EIB.
For the first time ever, our audit addressed this financially significant area. We revealed a number of shortcomings, particularly in the EIB's supervisory and control framework, which we have summarised in this joint report in an independent and evidence-based manner.
Now the relevant authorities have the task to tackle these shortcomings promptly. The main addressees of our recommendations are primarily the German government and the Austrian government. However, all EIB shareholders should feel addressed and respond to the challenges outlined, in the interest of their respective national budgets and the citizens of the European Union.
Dr. Margit Kraker, President of the Austrian Court of Audit
Kay Scheller, President of the German Federal Court of Auditors
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Recommendations for action: European Investment Bank: Strengthening the supervisory and control framework
